Quarterly Report • Oct 23, 2013
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
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The figures in this report refer to the third quarter and first nine months of the year 2013 excluding discontinued operations unless otherwise stated. For companies that have not yet reported the results for the third quarter 2013, the figures are included with one quarter's delay. The figures shown within brackets refer to the comparable periods in 2012.
"We are only at the beginning of the digital revolution and Kinnevik is uniquely positioned to benefit from this development. Both Millicom and Tele2 are positioning themselves to capitalise on mobile data and internet growth. In Colombia for example, Millicom will create a leading lifestyle company in the merger with UNE, combining their respective mobile, TV, broadband and telephony businesses. In Tele2, the roll-out of a 4G network in the Netherlands means that Tele2 will have a strong customer proposition in the Dutch market with own fibre access and 4G.
In August, Kinnevik's shares in Zalando were all transferred into direct ownership and following the transfer Kinnevik is the largest owner in the company with an ownership of 36%. With the transfer, we further strengthened the direct control of Zalando. The company is now operating three large warehouses in-house, and following the successful ramp-up Zalando is well positioned to continue to grow within its current 14 markets. The traction in the ecommerce companies in emerging markets including Dafiti and Lamoda also remained strong. In emerging markets,
consumers can increasingly access affordable smartphones, which is an important enabler for supporting a growing e-commerce activity.
In a digital world when viewers want access to content at their own convenience and through any device, unique content creates an important competitive advantage. In the third quarter, MTG continued to invest in content through continued acquisitions of sports rights as well as local content production as a step in the strategy to develop MTG Studios into a major international player in content production and distribution.
Kinnevik has gone through a rapid transformation in the past years and with the successful refocusing of our portfolio I am convinced that our strategy and market positions in growth sectors and growth markets will continue to deliver value to our shareholders."
Mia Brunell Livfors President and Chief Executive Officer
30 September 2013, the figures shown within brackets refer to comparable period previous year.
| Proportional part of | Change compared to | Jan-Sept 2012 | ||
|---|---|---|---|---|
| Jan-Sept 2013 (SEK m) | revenue | EBIT | revenue | EBIT |
| Telecom & Financial Services | 17 693 | 2 142 | 3% | -16% |
| Online | 5 979 | -1 070 | 62% | N/A |
| Media | 2 963 | 259 | -7% | -30% |
| Industry and other investments | 4 031 | 201 | 15% | -9% |
| Total sum of Kinnevik's proportional part | ||||
| of revenue and operating result | 30 666 | 1 533 | 12% | -28% |
The table above is a compilation of the holdings' revenues and operating result reported for the first nine months of the year 2013 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 numbers in the table include discontinued operations.
Revenues and operating results reported by the companies have been translated at constant exchange rates (average rate for 2013) from each company's reporting currency into Swedish kronor. For companies that have not yet reported the results for the first nine months ot the year 2013, the figures are included with one quarter's or one month's delay. The proportional share of revenues and operating result has no connection with Kinnevik's accounting and is only additional information.
Bayport Management Limited ("Bayport") has entered into an agreement with the South African financial services group Transaction Capital Limited ("Transaction Capital") to acquire 100% of the shares in Bayport Financial Services 2010 Proprietary Limited (a South African company not previously owned by Bayport) and Zenthyme Investments Proprietary Limited from Transaction Capital. The cash consideration payable by Bayport to Transaction Capital will total approximately ZAR 1,610m (corresponding to approximately USD 162m). The transaction will mainly be financed through a USD 137m new equity issue in Bayport, of which Helios Investments Partners will invest USD 100m. The remaining portion of the cash consideration to be paid under the agreement will be debt financed. The target companies provide unsecured credit and related products to historically under-served low to middle income individuals in South Africa. The transaction is subject to closing conditions, including that Bayport concludes agreements to raise funds to enable it to discharge the consideration to be paid under the agreement as well as necessary shareholder and regulatory approvals. Following closing of the transaction, Kinnevik will own approximately 30% of the shares in Bayport.
| The Kinnevik share's average annual total return | |||||||
|---|---|---|---|---|---|---|---|
| -- | -------------------------------------------------- | -- | -- | -- | -- | -- | -- |
| Past 30 years | 17% |
|---|---|
| Past 10 years | 20% |
| Past 5 years | 26% |
| Past 12 months | 67% |
Total return is calculated on the assumption that shareholders have reinvested all cash dividends and dividends in kind into the Kinnevik share.
Book and fair value of assets
| Book value | Fair value | Fair value | Fair value | Fair value | ||
|---|---|---|---|---|---|---|
| 2013 | 2013 | 2013 | 2012 | 2012 | Total return | |
| SEK million | 30 Sept | 30 Sept | 30 June | 30 Sept | 31 Dec | 2013 |
| Millicom | 21 472 | 21 472 | 18 278 | 23 061 | 21 283 | 4% |
| Tele2 | 11 138 | 11 138 | 10 664 | 16 124 | 15 867 | 0% |
| Transcom | 325 | 325 | 296 | 251 | 230 | 41% |
| Bayport | 597 | 597 | 650 | 573 | 586 | |
| Milvik/BIMA | 48 | 48 | 49 | 12 | 18 | |
| Other | 164 | 164 | 142 | 121 | 135 | |
| Total Telecom & Financial Services | 33 744 | 33 744 | 30 079 | 40 142 | 38 119 | |
| Zalando | 11 249 | 11 249 | 10 343 | 6 318 | 8 526 | |
| Avito (directly and through Vosvik) | 1 454 | 1 454 | 1 235 | 768 | 923 | |
| Rocket Internet with portfolio companies 1) | 4 776 | 4 776 | 4 182 | 4 683 | 4 776 | |
| CDON Group | 589 | 589 | 594 | 681 | 664 | -31% |
| Other | 250 | 335 | 306 | 213 | 229 | |
| Total Online | 18 318 | 18 403 | 16 660 | 12 663 | 15 118 | |
| MTG | 4 525 | 4 525 | 3 859 | 3 917 | 3 042 | 53% |
| Metro | 863 | 863 | 836 | 961 | 993 | |
| Interest bearing net cash, Metro | 210 | 210 | 243 | 138 | 187 | |
| Total Media | 5 598 | 5 598 | 4 938 | 5 016 | 4 222 | |
| BillerudKorsnäs 2) | 3 353 | 3 353 | 3 286 | 5 276 | 3 161 | 9% |
| Black Earth Farming | 357 | 357 | 363 | 378 | 456 | -22% |
| Rolnyvik | 196 | 250 | 250 | 250 | 250 | |
| Vireo | 134 | 153 | 150 | 118 | 134 | |
| Other | 3 | 3 | 4 | 0 | 4 | |
| Total Industry and other investments | 4 043 | 4 116 | 4 053 | 6 022 | 4 005 | |
| Other interest bearing (net debt)/net cash | -968 | -968 | 409 | -4 239 | -3 008 | |
| Debt unpaid investments | 0 | 0 | -876 | -122 | -110 | |
| Other assets and liabilities | 240 | 240 | 272 | 317 | 423 | |
| Total equity/net asset value | 60 975 | 61 133 | 55 535 | 59 799 | 58 879 | |
| Net asset value per share | 220.44 | 200.26 | 215.74 | 212.00 | ||
| Closing price, class B share | 222.30 | 171.90 | 136.30 | 135.30 |
1) For split, please see page 7.
2) As per 30 September 2012 referring to Korsnäs equity value (i.e. after deduction for net debt in Kinnevik's consolidated balance sheet related to Korsnäs) and Latgran.
Kinnevik's holdings
| Investment (SEK m) | Capital/Votes % | Estimated fair value |
|---|---|---|
| Millicom | 37.9/37.9 | 21 472 |
| Tele2 | 30.4/48.0 | 11 138 |
| Transcom | 33.0/39.7 | 325 |
| Bayport | 42/42 | 597 |
| Milvik/BIMA | 44/44 | 48 |
| Other | 164 | |
| Total | 33 744 |
| Return Telecom & Financial services | 1 year | 5 years |
|---|---|---|
| Average yearly internal rate of return (IRR) | -2% | 13% |
Kinnevik's mobile companies Millicom and Tele2 have in total 64 million subscribers in 23 countries.
Millicom offers digital lifestyle products and services to emerging markets in Latin America and Africa. Through its service brand Tigo, Millicom helps tens of millions of people to stay connected, primarily through their mobile devices.
Tele2 is one of Europe's leading telecom operators, offering mobile services, fixed broadband and telephony, data network services, cable TV and content services.
Both Millicom and Tele2 are focusing on providing superior services as customers increasingly use their phones to access various data services. In Millicom, these services include mobile financial services such as cash transfers through your mobile, as well as various information services and entertainment and online-services in e-commerce, lead generation and payments.
In Tele2, where the markets are more developed, the company is focusing its strategy to become a value champion, i.e. to offer its customers the combination of low price, superior customer experience and a challenger culture.
Transcom is active within outsourcing of Customer Relationship Management (CRM) and Credit Management Services. Today the company has more than 29,000 employees and conducts a global operation in 26 countries.
Similar to the manner in which Kinnevik developed telecom services in emerging markets through innovative products and distribution networks, Kinnevik is actively looking for investment opportunities in the financial services sector. Bayport is Kinnevik's largest investment in the financial services sector.
| July-Sept | Jan-Sept | ||||
|---|---|---|---|---|---|
| Key data (USD m) | 2013 | 2012 | 2013 | 2012 | |
| Revenue | 1 290 | 1 199 | 3 794 | 3 548 | |
| EBITDA | 459 | 507 | 1 416 | 1 537 | |
| Operating profit, EBIT | 196 | 264 | 634 | 838 | |
| Net profit | -35 | 118 | 162 | 436 | |
| Number of mobile subscribers (million) | 48.9 | 46.0 |
Millicom reported revenues in the third quarter of USD 1,290m, growing 7.6% compared to the second quarter. The transfer of customers into mobile data services continues, with another million new data users added during the quarter. Net customer intake amounted to almost 1.5 million, fuelled by over one million new customers in Africa of which 250,000 in the Kivu province in DRC.
Growth continued in MFS, Mobile Financial Services, which is up 93% compared to the same period last year and now penetrates 11.2% of the total mobile customer base. Cable & Digital Media grew by 11.5%, and reported revenues for the quarter amounted to USD 114m.
Reported EBITDA declined to USD 459m for the quarter as investments increased.
| July-Sept | Jan-Sept | ||||
|---|---|---|---|---|---|
| Key data (SEK m) | 2013 | 2012 | 2013 | 2012 | |
| Revenue | 7 529 | 7 649 | 22 303 22 869 | ||
| EBITDA | 1 523 | 1 771 | 4 529 | 4 796 | |
| Operating profit, EBIT | 225 | 341 | 1 606 | 1 399 | |
| Net profit | -194 | 283 | 486 | 760 | |
| Number of subscribers (million) | 15.3 | 15.3 |
The figures for Tele2 refer to continued operations.
Mobile net sales grew by 3% during the third quarter compared to the corresponding period last year. Net intake was 206,000 (691,000) in the quarter, of which 263,000 (807,000) mobile customers.
The growth in mobile services continued in the Netherlands. Mobile net sales amounted to SEK 463m (234) and underlying mobile service revenue grew by 74% in the third quarter. In Kazakhstan, mobile net sales grew by 32% during the quarter, amounting to SEK 357m (270).
Tele2 Sweden showed steady operational performance, with a mobile EBITDA contribution of SEK 760m (828) during the quarter, equivalent to an EBITDA margin of 30% (33).
Tele2 has revised its financial guidance for 2014-2015 leading to a deviation from its earlier guidance for the years 2013-2015. As a result of the sale of Tele2 Russia and the revised guidance, dividend for 2013 is expected to be around SEK 4.40.
Kinnevik's holdings
Bayport offers micro credits and financial services in six African countries (Botswana, Ghana, Mozambique, Tanzania, Uganda and Zambia) as well as in Colombia. The Company was founded in 2002 and has grown with profitability into a leading micro credit company.
Bayport focuses on providing unsecured consumer credit to employees in the formal sector, predominantly within the public sector and civil service, but also to employees of large multinational companies. The success of its business model centres on payroll based credit extension and collection, whereby instalments are directly collected from payroll prior to payment of salaries. This business model mitigates credit risk and adds greater certainty to cash flows.
Loans are used primarily for financing larger non-recurring expenses, such as school fees, investment in farming or for small business purposes. The loan amount varies by market with the average loan amount being approximately USD 2,000 and the average loan term 49 months. Bayport has around 265,000 customers served by a network of 293 branches and over 2,800 employees. Balance sheet assets amount to around USD 440m and the loan book to around USD 380m.
Milvik offers, under the brand name BIMA, affordable and uniquely designed life and health insurance products via mobile phones. The company was launched in 2011 and has its geographical focus on emerging markets where few viable risk management solutions for the mass market exist and the level of insurance penetration is low. The company is today operating in Ghana, Tanzania, Senegal, Mauritius, Bangladesh, Sri Lanka and Indonesia, and insures more than five million lives.
Kinnevik's holdings
Change in fair va-
| Fair value as per 30 Sept 2013 | lue and dividends received First |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Investment (SEK m) | Direct equity interest |
Indirect equity interest 1) |
Total 4) | Accumulated invested amount |
Direct ownership |
Indirectly held 1) |
Total | Q3 2013 |
nine months 2013 |
||
| Zalando GmbH | 36% | - | 36% | 7 916 6) | 11 249 | - | 11 249 | 923 | 1 989 | ||
| Avito | 18% | 14% | 31% | 336 | 820 | 634 | 1 454 | 220 | 531 | ||
| Bigfoot I (Dafiti, Lamoda, Jabong, partly Namshi) |
27% | 8% | 35% | 1 536 | 1 489 | 152 | 1 641 | 54 | 89 | ||
| Dafiti | 27% | 518 | |||||||||
| Lamoda | 29% | 512 | |||||||||
| Jabong, Namshi and Central cash | mixed | 503 | |||||||||
| Bigfoot II (The Iconic, Zalora, partly Zando and Jumia) |
30% | 10% | 40% | 930 | 434 | - | 434 | -3 | -448 | ||
| Home24 | 23% | 12% | 35% | 791 | 596 | 7 | 603 | 112 | -168 | ||
| Wimdu | 20% | 14% | 34% | 275 | 260 | 37 | 297 | -2 | 5 | ||
| BigCommerce (Lazada, Linio, partly Namshi) | 15% | 13% | 27% | 427 | 332 | 7 | 339 | -2 | -102 | ||
| Rocket Internet with other portfolio compa nies 2) |
mixed | mixed | mixed | -1 309 6) | 584 | 878 | 1 462 | 325) | -1415) | ||
| Other unlisted online companies | mixed | mixed | mixed | 512 | 335 | - | 335 | -6 | 4 | ||
| Total unlisted online investments | 11 414 | 16 099 | 1 715 | 17 814 | 1 328 | 1 759 | |||||
| CDON Group | 25.1% | - | 25.1% | 646 3) | 589 | - | 589 | -5 | -203 | ||
| Total online investments | 12 060 | 16 688 | 1 715 | 18 403 | 1 323 | 1 556 |
1) Held via Rocket Internet GmbH and Vosvik AB (Avito).
2) Invested amount includes net invested amount in Rocket Internet GmbH after dividends received. Fair value includes cash balance in Rocket Internet GmbH.
3) The value of dividends received from MTG when shares distributed and share purchases and new issues made thereafter.
4) The shareholdings in Rocket Internet with portfolio companies has not been adjusted for employee stock option plans.
5) Change in fair value includies dividends received SEK 168m in Q3 2013 from Rocket Internet GmbH.
6) In August 2013, Kinnevik and Rocket Internet agreed to transfer indirectly held shares in Zalando into Kinnevik's direct ownership. Accumulated invested amount for Zalando has been increased by SEK 2.372m as a result of this transfer. The accumulated invested amount in Rocket Internet has been decreased by the same amount.
| Return Online | 1 year | 5 years |
|---|---|---|
| Average yearly internal rate of return (IRR) | 14% | 29% |
The Kinnevik online investments are mainly focused around e-commerce and market places. E-commerce is one of the strongest global growth trends in the world economy, and it is based on a shift in consumer behaviour which we believe is not a short term trend but represents a permanent change in consumer behaviour.
Within e-commerce, Kinnevik has focused its investments in the shoes and fashion segment through companies such as Zalando with geographical presence in Europe and companies such as Lamoda, Dafiti, Jabong and Zalora focused on emerging markets. This particular segment of the e-commerce industry is attractive for several reasons; it is a relatively large part of a household budget, it is a sector with high gross margins and the products offered are easy to package and ship - enabling efficient logistics with free deliveries and returns.
In order to be competitive and become a profitable
online retailer it is important to build size and scale to be the number one choice as the customer goes online. It is also a key competitive advantage to be fully integrated and to control the entire value chain from website to logistics to check out, payment and shipping in order to control the total customer experience.
Kinnevik invested SEK 2,004m within Online during the first nine months of the year, of which SEK 855m in Zalando, SEK 575m in Rocket Internet, SEK 169m in Bigfoot II, SEK 138m in BigCommerce, SEK 129m in CDON and SEK 64m in Saltside Technologies.
At the end of September, investments in Online were valued at a total of SEK 18,403m. The assessed change in fair value recognized in the consolidated income statement for the third quarter, including dividend received from Rocket Internet, amounted to a profit of SEK 1,323m (2,080), as specified in the table above. Exchange rate effects when translating investments in EUR to SEK had a negative effect of SEK 136m on the result. The positive
Kinnevik's holdings
change in fair value of Zalando is a result of a continued strong revenue growth. Further, the Company has in the third quarter raised new equity in a directed share issue which, in combination with the strong sales growth, has resulted in an assessed fair value of EUR 3.7bln at the end of September, compared to EUR 3.2bln at the end of June. The positive change in fair value of Avito is a result of a continued strong revenue growth.
For the first nine months of the year, the assessed change in fair value recognized in the consolidated income statement, including dividend received, amounted to a profit of SEK 1,556m (1,491). Exchange rate effects when translating investments in EUR to SEK had a positive effect of SEK 97m on the result. For further information about valuation principles and assumptions, please see Note 5.
During 2012 and the first nine months of 2013, a number of Rocket's portfolio companies have issued new shares to external investors at price levels that exceed Kinnevik's recognized assessed fair values. Since the newly issued shares have better preference over the portfolio companies' assets in the event of liquidation or sale than Kinnevik's shares have, Kinnevik do not consider these price levels as a relevant base for assessing the fair values in the accounts. The latest transactions that have been made with better preference than Kinnevik's shareholdings, have been made at levels that, applied to Kinnevik's shareholdings, is approximately SEK 6bln higher than Kinnevik's book value as per 30 September 2013.
Kinnevik's proportional part of the unlisted companies' revenue grew by 57% year-on-year and reached SEK 1,799m (1,150) for the third quarter. Revenue growth is strongest
in the second and fourth quarter which is explained by the seasonal variations within the shoes- and fashion industry. Due to the strong growth, short operating history and the fact that all start-up costs are taken to the P&L, most of the unlisted companies within Kinnevik's online portfolio are still unprofitable. However, the larger companies in the portfolio are well capitalised and can afford continued investments until they reach break-even. Kinnevik's proportional part of the companies' cash position amounted to SEK 3,832m at 30 September 2013.
Zalando started its operations in Germany in 2008 and today operates online shops also in the Netherlands, Belgium, France, the United Kingdom, Austria, Switzerland, Italy, Spain, Sweden, Finland, Norway, Denmark and Poland. Zalando has grown rapidly and is today the largest online player by net revenues in the fashion sector in Europe.
The key drivers for becoming successful within shoes and fashion include technology, product sourcing, logistics and marketing. Zalando has over the past five years focused on becoming the industry leader in all these fields in the online sector in its operating markets.
Zalando has developed strong relationships with most of the leading suppliers in the shoes and fashion industry. The company is today a well-established player in the European market which makes it possible to further improve delivery and payment terms with key suppliers. In addition, Zalando has focused on establishing its in-house design labels.
Convenience is one of the most important factors for customers moving online which is why free deliveries and returns for customers are a very important part of the Zalando customer offering. In addition, Zalando has a
| 2013 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Q3 | Q4 | FY2011 | Q1 | Q2 | Q3 | Q4 | FY2012 | Q1 | Q2 | Q3 |
| 435 | 637 | 1 725 | 797 | 1 015 | 1 150 | 1 628 | 4 589 | 1 565 | 1 870 | 1 799 |
| 16% | 47% | 25% | 27% | 13% | 42% | -4% | 20% | -4% | ||
| 188% | 170% | 164% | 155% | 166% | 96% | 84% | 57% | |||
| -370 | -242 | -356 | -401 | -283 | -1 281 | -386 | -326 | -339 | ||
| 11 414 | ||||||||||
| 17 814 | ||||||||||
| 3 832 | ||||||||||
| Fair value as per 30 September 2013 | Accumulated invested amount (net of dividends recei Net proportional part of cash balance 30 September 2013 |
The table above is a compilation of the unlisted online holdings' revenues and operating result reported 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. Revenues and operating result reported by the companies have been translated at constant exchange rates (average rate for 2013) from each company's reporting currency into Swedish kronor. For companies that have not yet reported the results for September 2013, the figures are included with one month's delay. The proportional share of revenues and operating result has no connection with Kinnevik's accounting and is only additional information.
Kinnevik's holdings
generous return policy resulting in an average return rate of around 50%. This makes it very important to have a cost efficient and best in class logistic set up. Zalando has therefore, as part of the company's strategy, decided to operate most of its logistics in-house. The first warehouse operated by the company was opened in 2011 and a second warehouse built in the city of Erfurt in Germany did successfully start to operate during the second half of 2012. To facilitate the company's strong growth, Zalando is currently ramping up a third warehouse in the city of Mönchengladbach in Germany. Test operations were successfully initiated as planned in August 2013.
Zalando reported net sales of EUR 437m in the second quarter of 2013 compared to EUR 257m in the second quarter of 2012. For the first half of 2013, net sales amounted to EUR 809m compared to EUR 471m in the first half of 2012. The company's geographic and category diversification continues with Germany and shoes representing less than 50% of first half 2013 net sales, respectively. The half year numbers are fully audited. For the full year 2012, net sales amounted to EUR 1,159m. Sales growth and margins in the first half year were impacted by the long winter in Europe, delaying the start of the spring season. Margins continued to improve in the first half of 2013 as compared to the first half of 2012, albeit at a slower pace due to the adverse weather effects and continued investment in growth.
With the addition of seven new markets during 2012, Zalando's focus for 2013 continues to be on operational excellence in key areas including logistics and marketing within its current geographical footprint. For example, significant progress has been made with respect to the company's transition towards operating three large warehouses in-house. Also, customer growth was supported by continued high brand awareness in established countries as well as strong developments within the countries entered during 2012.
Following the completion of the first half 2013 Anders Holch Povlsen, the CEO and owner of Bestseller and the Ontario Teachers' Pension Plan (OTPP) joined Zalando's shareholder group in a secondary and primary share transaction, respectively.
Avito is the leading online service for classified advertising in Russia, and also operates early stage online classified businesses in the Ukraine, Morocco, and Egypt.
In Avito's Russian operations, revenue primarily derive from value-added services, display advertising and thirdparty shops. Avito.ru is one of the largest online classified services in the world with 3.9bln (1.9) page views, 11.8 million (5.0) new listings and 40 million (24) unique monthly visitors in September 2013. During Q3 Avito has resumed its marketing investments, particularly targeting Jobs and Services.
Avito reported net revenues of SEK 204m (78) for the first half of 2013, with a positive operating result. Net revenues amounted to SEK 120m (44) for the second quarter. The Russian operations are currently focusing on increasing monetization and growth in core categories Auto, Real Estate, Jobs and Services. Avito had a cash position of more than USD 100m at the end of September.
Rocket Internet is a company that incubates and develops e-commerce and other consumer-oriented online companies. Kinnevik owned 23.9% of the parent company Rocket Internet GmbH as per 30 September and works closely with the management of Rocket Internet in order to foster companies and develop them into leading Internet players.
Besides the investment into Rocket Internet, Kinnevik has also invested directly into a number of companies supported by Rocket Internet in the following segments:
Dafiti was founded in early 2011 and offers a broad assortment of women's and men's shoes and fashion online. The company started in Brazil, and has since expanded to Argentina, Chile, Colombia and Mexico. Latin America, with a total population of 400 million, shows strong consumption growth, and Dafiti has established itself as one of the key online retailers of fashion in the region. Dafiti has in 2013 continued to develop well, with an increased focus on unit economics. Due to Brazilian import duties, a large share of Dafiti's products is produced in Brazil. For being an emerging market, Brazil is relatively well developed on e-commerce with several online players in addition to Dafiti.
Dafiti reported net revenue of SEK 796m (149) in 2012. For the first half of 2013, net revenue amounted to SEK 596m compared to SEK 341m in the first half of 2012.
Kinnevik's holdings
Lamoda was started in early 2011 with its core offering being shoes and fashion in Russia and the CIS. The region has an Internet population of more than 60 million and the company is growing rapidly. Given its comparatively high average order value, Lamoda's unit economics are promising. Lamoda's focus in 2013 has been on further ramping up its own delivery fleet, which now covers 15 of Russia's major cities. The company has in 2013 established in-house warehouse operations which are now fully up and running. Lamoda reported net revenue of SEK 445m (62) in 2012. For the first half of 2013, net revenue amounted to SEK 401m compared to SEK 145m in the first half of 2012.
Jabong is the leading online fashion shop in India and was launched in 2012. There are more than a billion people living in the country with the third largest Internet population in the world, despite a relatively low Internet penetration. Jabong reported net revenue of SEK 156m in 2012.
Namshi is active within shoes and fashion in six markets in the Middle East, namely United Arab Emirates, Saudi Arabia, Bahrain, Kuwait, Oman and Qatar. All markets exhibit high purchase power, high levels of disposable income and high Internet penetration. Namshi reported net revenue of SEK 32m in 2012.
The Iconic is an online store offering shoes and fashion in Australia and New Zealand covering a population of around 30 million and reported net revenues of SEK 218m in 2012.
Zalora started its operations in 2012 and serves a number of emerging markets within shoes and fashion in Southeast Asia, namely Singapore, Malaysia, Indonesia, Thailand, Philippines, Vietnam, and Hong Kong. Zalora reported net revenue of SEK 84m in 2012.
Jumia, founded in 2012, is an online retailer of general merchandise active in Nigeria, Egypt, Morocco, Kenya and Ivory Coast. The company offers products such as mobile phones, video and audio devices, games and consoles, books, toys and beauty products. Jumia reported net revenue of SEK 21m in 2012.
Zando was founded in 2012 and offers shoes and fashion to the South African market with a population of 50 million. The company reported net revenue of SEK 26m in 2012.
Lazada was founded in early 2012 and is active in offering general merchandise in five of the most attractive markets in Southeast Asia – Indonesia, Vietnam, Thailand, Philippines and Malaysia. Lazada reported net revenue of SEK 88m in 2012.
Linio was founded during the first half of 2012 and is the leading general e-commerce platform in Mexico, Colombia, Peru and Venezuela, that boasts a total population of more than 200 million. Reported net revenue was SEK 61m in 2012.
Home24 is an online retailer of furniture and home products. The company is active under the brand Home24 in Germany, Austria, France and Netherlands, and under the brand Mobly in Brazil. Net revenue for the group amounted to SEK 550m (227) in 2012.
Westwing Home & Living was founded in late 2011 and PGGFST nBTI TBMFT PG IPNF EÏDPS GVSOJUVSF BOE MJGFTUZMF products online. The company is today present in several countries including Germany, Russia and Brazil. Westwing has an active customer base, with the average customer making three to four purchases per year, and 70% of orders coming from returning customers. Westwing reported net revenues of SEK 363m in 2012.
Wimdu is a marketplace for brokering short-term vacation housing and was founded in 2011. The company addresses the growing market of rentals of secondary homes with efforts mainly focused on Western Europe. Revenue is derived from commission as intermediary in the rental process. Net revenues for Wimdu amounted to SEK 55m in 2012.
Saltside is a company that since 2012 operates a number of online marketplaces in emerging markets. Key markets where a prominent position has been seized are Bangladesh, Sri Lanka, and Ghana, where Saltside operates under the brand names Bikroy.com, Ikman.lk, and Tonaton.com respectively.
Kinnevik's holdings
CDON Group is a leading e-commerce company with some of the most well-known and appreciated brands in the Nordic area.
| July-Sept | Jan-Sept | ||||
|---|---|---|---|---|---|
| Key data (SEK m) | 2013 | 2012 | 2013 | 2012 | |
| Revenue | 950 | 983 | 2 970 | 2 889 | |
| Operating profit/loss, EBIT | -18 | -8 | -75 | -63 | |
| Net profit/loss | -21 | -11 | -83 | -61 |
CDON Group reported a solid sales growth for three out of four segments during the third quarter. Particularly, the Sports & Health segment displayed a continued strong growth of 37% with stable profitability while sales within the Fashion segment increased by over 14%. Also, the Home & Garden segment continued to grow in the quarter.
The inventory reduction of computer products continued within CDON.com, which affected results negatively by approximately SEK 13m during the quarter. Consequently, the Entertainment segment showed an underlying operating profit during the period. CDON Group's ambition is to transform CDON.com into a full range retailer online and CDON Group continue to deliver on its strategy to defend its market leading position and to continuously broaden its product offering.
The efficiency enhancing initiatives within the Fashion segment continued and a new technology platform was launched. At the end of the third quarter, the majority of the internal reinforcement and restructuring measures had been completed within Nelly.com. Despite a strong focus on these efficiency enhancing measures and a market which was weakened somewhat by the warm weather, the Fashion segment grew by over 14%.
Profitability for CDON Group's fastest growing segment, Sports & Health, showed continued strength with an operating margin of approximately 9% despite continued investments in new markets. Private label products accounted for 46% of total sales and an entirely new product category was launched.
| Investment (SEK m) | Capital/Votes % | Estimated fair value |
|---|---|---|
| Modern Times Group MTG | 20.3/48.0 | 4 525 |
| Metro | 99/991) | 1 073 |
| Total | 5 598 | |
| 1) Fully diluted. | ||
| Return Media | 1 year | 5 years |
|---|---|---|
| Average yearly internal rate of return (IRR) | 14% | 6% |
The media sector is changing fast as both TV and newspaper consumers move their media consumption online. Consumers can now choose between the TV set, the computer, the smartphone, the tablet and the games console. Kinnevik's media companies are focusing on meeting the consumers changing habits. For example, MTG has launched a new initiative, MTGx, to provide world class video on demand experiences, building a portfolio of new entertainment services and providing centralized digital skills and platforms.
| July-Sept | Jan-Sept | |||
|---|---|---|---|---|
| Key data (SEK m) | 2013 | 2012 | 2013 | 2012 |
| Revenue | 3 204 | 2 940 | 10 047 | 9 716 |
| Operating profit/loss, EBIT | 289 | 422 | 1 321 | 1 648 |
| Net profit/loss | 196 | 308 | 907 | 1 216 |
MTG reported net sales of SEK 3,204m (2,940) for the third quarter, a 9% year-on-year growth at constant exchange rates. All business segments reported local currency sales growth on a quarterly basis for the first time since the first quarter 2011.
The segment Free-TV Emerging Markets reported net sales of SEK 457m (369), corresponding to a 21% year-onyear growth at constant exchange rates. The performance primarily reflects strong underlying sales growth in the Czech Republic and Bulgaria.
Viaplay's subscriber base continued to grow in the Nordic region and the segment Pay-TV Nordic reported year-on-year sales growth of 7% at constant exchange rates for the quarter.
During the third quarter MTG signed an agreement to acquire a majority stake in Nordic's largest independent group of production companies, Nice Entertainment Group. The closing of the transaction is expected by the end of October 2013 and is subject to regulatory approval by the Swedish and Norwegian competition authorities.
Kinnevik's holdings
Metro's strategy is to invest in emerging markets while at the same time focus on cost savings in existing operations in more mature markets.
Metro is published in over 150 major cities in 23 countries across Europe, Asia, North and South America. Metro's global readership is approximately 18.3 million daily readers.
In 2013, newspaper advertising expenditure is expected to decline in Western Europe, whereas the newspaper advertising market is expeced to increase in Latin America.
The table below gives the details on operational results:
| July-Sept | Jan-Sept | |||
|---|---|---|---|---|
| SEK m | 2013 | 2012 | 2013 | 2012 |
| Revenue | ||||
| Europe | 95 | 163 | 384 | 703 |
| Emerging Markets | 181 | 174 | 510 | 491 |
| Headquarters | 16 | 12 | 45 | 45 |
| Total | 292 | 349 | 939 | 1 239 |
| Operating profit/loss, EBIT | ||||
| Europe | -13 | -5 | -9 | 48 |
| Emerging Markets | 13 | 19 | 23 | 48 |
| Share of Associates Income | 3 | 2 | 10 | 3 |
| Headquarters | -4 | -25 | -31 | -64 |
| Total | -1 | -9 | -7 | 35 |
Revenue for the third quarter of 2013 decreased by SEK 57m compared to the same period previous year. The decrease is mainly the result of Metro's sale of the newspaper operations in Denmark and Holland. Sales in Metro Sweden is down 7% compared to the same quarter last year. The decline in Sweden is mainly the result of a weaker advertising market. Sales in Latin America has continued to increase.
The improved EBIT is explained by lower costs for Metro's headquarters.
| Investment (SEK m) | Capital/ Votes % |
Estimated fair value |
|---|---|---|
| BillerudKorsnäs | 25.1 | 3 353 |
| Black Earth Farming | 24.9 | 357 |
| Rolnyvik | 100 | 250 |
| Vireo Energy | 78 | 153 |
| Other | 3 | |
| Total | 4 116 |
| Return Industry and other investments | 1 year | 5 years |
|---|---|---|
| Average yearly internal rate of return (IRR) | 45% | 23% |
BillerudKorsnäs offers primary fibre-based packaging materials and packaging solutions. The company holds a prominent position in several attractive product segments, both in primary fibre-based materials for consumer packaging and for industrial purposes.
BillerudKorsnäs will release its interim report for the third quarter on 30 October 2013.
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 South-west Russia.
In the second quarter of 2013, Black Earth Farming reported net sales of USD 19.0m (17.9) and an operating profit of USD 16.9m (3.1) including a gain on revaluation of biological assets of USD 21.7m. Progress on key initiatives remain on track. Results are starting to come through and underlying operational performance is expected to be improved this year.
The figures in this report refer to the third quarter and first nine months of the year 2013. The figures shown within brackets refer to the comparable periods in 2012 excluding discontinued operations. Metro is included in the Group's revenue and earnings from the second quarter 2012.
The Group's total revenue during the third quarter amounted to SEK 340m, compared with SEK 410m in the third quarter 2012. The decrease in revenue refer mainly to Metro, see further on page 12.
The change in fair value of financial assets, including dividends received, amounted to SEK 5,748m (1,920), of which a profit of SEK 4,439m (loss of 165) was related to listed holdings and a profit of SEK 1,309m (2,085) to unlisted financial assets, see Note 5 for further details.
Net profit amounted to SEK 5,622m (1,805), corresponding to a profit of SEK 20.36 (6.51) per share.
The Group's total revenue during the first nine months of the year amounted to SEK 1,120m (1,061).
Other operating income includes a revaluation of SEK 44m of the shares in Milvik due to a reclassification from subsidiary to financial asset.
The change in fair value of financial assets, including dividends received, amounted to SEK 4,426m (loss of 1,384), of which a profit of SEK 2,616m (loss of 3,502) was related to listed holdings and a profit of SEK 1,810m (profit of 2,118) to unlisted financial assets, see Note 5 for further details.
Net profit amounted to SEK 4,171m (loss of 1,670), corresponding to a profit of SEK 15.16 (loss of 6.02) per share.
The Group's cash flow from operations amounted to negative SEK 58m (negative 200) during the period January - September.
During the period, Kinnevik signed agreements to invest SEK 1.960m in other shares and securities, see further Note 5.
In January the divestment of Metro Denmark was finalized resulting in a positive cash flow effect of SEK 53m.
The Group's net debt including debt for unpaid investments amounted to SEK 790m at 30 September 2013 (SEK 2,950m at 31 December 2012).
Kinnevik's total credit facilities (including issued bonds) amounted to SEK 8,070m as at 30 September 2013 whereof SEK 6,500m related to a revolving credit facility and SEK 1,200m related to a bond.
The Group's available liquidity, including short-term investments and available credit facilities, totalled SEK
7,239m at 30 September 2013 and SEK 5,029m at 31 December 2012. For further information regarding the Group's interest-bearing loans, see Note 7.
The Annual General Meeting will be held on 12 May 2014 in Stockholm. Shareholders wishing to have matters considered at the Annual General Meeting should submit their proposals in writing to [email protected] or to The Company Secretary, Investment AB Kinnevik, Box 2094, SE-103 13 Stockholm, Sweden, at least seven weeks before the Annual General Meeting, in order that the proposal may be included in the notice to the meeting. Further details on how and when to register will be published in advance of the Meeting.
In accordance with the resolution of the 2013 Annual General Meeting, Cristina Stenbeck has convened a Nomination Committee consisting of members appointed by the largest shareholders in Kinnevik that have chosen to appoint a member to the Nomination Committee. The Nomination Committee is comprised of Cristina Stenbeck, Max Stenbeck appointed by Verdere Sàrl, Wilhelm Klingspor appointed by the Klingspor family, Ramsay Brufer appointed by Alecta, and Edvard von Horn appointed by the von Horn 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 Secretary, Investment AB Kinnevik, Box 2094, SE-103 13 Stockholm, Sweden.
The year-end release for 2013 will be published on 14 February 2014.
Stockholm 23 October 2013
Mia Brunell Livfors President and Chief Executive Officer
Kinnevik discloses the information provided herein pursuant to the Securities Market Act (Sw. lagen om värdepappersmarknaden (2007:528)). The information was submitted for publication at 8.00 CET on 23 October 2013.
We have reviewed the interim report for Investment AB Kinnevik for the period January 1 - September 30, 2013. The Board of Directors and the President are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
We conducted our review in accordance with the Standard on Review Engagements (SÖG) 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review has a different focus and is substantially less in scope than an audit conducted in accordance with ISA and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit.
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not, in all material respects, prepared for the Group in accordance with IAS 34 and the Annual Accounts Act, and for the Parent Company in accordance with the Annual Accounts Act.
Stockholm 23 October 2013 Deloitte AB
Jan Berntsson Authorized Public Accountant
Mia Brunell Livfors, President and Chief Executive Officer, tel +46 (0)8 562 000 00
5PSVO -JU[ÏO *OGPSNBUJPO BOE *OWFTUPS 3FMBUJPOT tel +46 (0)8 562 000 83, mobile +46 (0)70 762 00 83
Kinnevik was founded in 1936 and thus embodies more than 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 the following business sectors; Telecom & Financial Services, Online, Media and Industry and other investments.
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.
| 2013 1 Jul- |
2012 1 Jul |
2013 1 Jan |
2012 1 Jan |
2012 Full |
||
|---|---|---|---|---|---|---|
| Note | 30 Sept | 30 Sept | 30 Sept | 30 Sept | year | |
| CONTINUING OPERATIONS | ||||||
| Revenue | 340 | 410 | 1 120 | 1 061 | 1 591 | |
| Cost of goods sold and services | -110 | -239 | -560 | -623 | -957 | |
| Gross profit/loss | 230 | 171 | 560 | 438 | 634 | |
| Selling and administration costs | -331 | -222 | -771 | -517 | -771 | |
| Other operating income | 11 | 15 | 83 | 35 | 92 | |
| Other operating expenses | -6 | -30 | -22 | -44 | -53 | |
| Operating profit/loss | 3 | -96 | -66 | -150 | -88 | -98 |
| Share of profit/loss of associates accounted for using the equity method |
3 | 0 | 10 | 0 | 10 | |
| Dividends received | 6 | 168 | 294 | 5 828 | 2 833 | 4 264 |
| Change in fair value of financial assets | 5 | 5 580 | 1 626 | -1 402 | -4 217 | -6 910 |
| Interest income and other financial income | -2 | 8 | 9 | 35 | 55 | |
| Interest expenses and other financial expenses | -25 | -53 | -98 | -189 | -255 | |
| Profit/loss after financial items | 5 628 | 1 809 | 4 197 | -1 626 | -2 935 | |
| Taxes | -6 | -4 | -26 | -44 | -56 | |
| NET PROFIT/LOSS FROM CONTINUING OPERATIONS | 5 622 | 1 805 | 4 171 | -1 670 | -2 991 | |
| Net profit from discontinued operations | - | 203 | - | 518 | 3 473 | |
| NET PROFIT/LOSS FOR THE PERIOD | 5 622 | 2 008 | 4 171 | -1 152 | 482 | |
| Of which attributable to: | ||||||
| Equity holders of the Parent Company | ||||||
| Net profit/loss from continuing operations | 5 646 | 1 813 | 4 203 | -1 662 | -2 984 | |
| Net profit/loss from discontinued operations | - | 202 | - | 510 | 3 462 | |
| Non-controlling interest | ||||||
| Net profit/loss from continuing operations | -24 | -9 | -32 | -9 | -7 | |
| Net profit/loss from discontinued operations | - | 1 | - | 8 | 11 | |
| Earnings per share | ||||||
| Earnings per share before dilution, SEK | 20.36 | 7.27 | 15.16 | -4.16 | 1.72 | |
| Earnings per share after dilution, SEK | 20.35 | 7.27 | 15.14 | -4.16 | 1.72 | |
| From continuing operations: | ||||||
| Earnings per share before dilution, SEK | 20.36 | 6.51 | 15.16 | -6.02 | -10.77 | |
| Earnings per share after dilution, SEK | 20.35 | 6.51 | 15.14 | -6.02 | -10.77 | |
| Average number of shares before dilution | 277 318 298 | 277 183 276 | 277 250 787 | 277 183 276 | 277 183 276 | |
| Average number of shares after dilution | 277 628 045 | 277 483 975 | 277 563 290 | 277 474 307 | 277 483 454 |
| 2013 1 Jul 30 Sept |
2012 1 Jul 30 Sept |
2013 1 Jan 30 Sept |
2012 1 Jan 30 Sept |
2012 Full year |
|
|---|---|---|---|---|---|
| Net profit/loss for the period | 5 622 | 2 008 | 4 171 | -1 152 | 482 |
| OTHER COMPREHENSIVE INCOME | |||||
| Items that will not be reclassified to profit and loss | - | - | - | - | - |
| Items that may be reclassified to profit and loss | |||||
| Translation differences | -5 | -50 | -27 | -63 | -31 |
| Cash flow hedging | |||||
| - profit/loss during the year | -1 | 4 | 21 | 5 | - |
| - reclassification of amounts accounted for through profit and loss |
- | - | - | - | 5 |
| Tax attributable to items that will be reclassified to profit and loss |
0 | -1 | 0 | -1 | -1 |
| Total items that will be reclassified to profit and loss | -6 | -47 | -6 | -59 | -27 |
| Total other comprehensive income for the period | -6 | -47 | -6 | -59 | -27 |
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 5 616 | 1 961 | 4 165 | -1 211 | 455 |
| Total comprehensive income for the period attributable to: | |||||
| Equity holders of the Parent Company | 5 638 | 1 973 | 4 197 | -1 203 | 453 |
| Non-controlling interest | -22 | -12 | -32 | -8 | 2 |
| Note | 2013 1 Jul 30 Sept |
2012 1 Jul 30 Sept |
2013 1 Jan 30 Sept |
2012 1 Jan 30 Sept |
2012 Full year |
|
|---|---|---|---|---|---|---|
| CONTINUING OPERATIONS | ||||||
| Operating profit/loss | -96 | -63 | -150 | -79 | -98 | |
| Adjustment for non-cash items | 32 | 34 | -4 | 58 | 114 | |
| Taxes paid | 1 | -34 | -28 | -77 | -88 | |
| Cash flow from operations before change in working capital | -63 | -63 | -182 | -98 | -72 | |
| Change in working capital | -59 | -94 | 124 | -102 | -150 | |
| Cash flow from operations | -122 | -157 | -58 | -200 | -222 | |
| Acquisition of subsidiaries | 5 | 0 | -53 | 0 | -527 | -532 |
| Sale of subsidiaries | 0 | 98 | 53 | 98 | 106 | |
| Investments in tangible and intangible fixed assets | -15 | -37 | -78 | -69 | -92 | |
| Investments in shares and other securities | 5 | -1 443 | -508 | -1 960 | -4 806 | -7 462 |
| Sales of shares and other securities | 36 | 0 | 46 | 569 | 572 | |
| Dividends received | 6 | 168 | 294 | 5 828 | 2 833 | 4 264 |
| Changes in loan receivables | 0 | 144 | -1 | 210 | 219 | |
| Interest received | 4 | 22 | 9 | 25 | 55 | |
| Cash flow from investing activities | -1 250 | -40 | 3 897 | -1 667 | -2 883 | |
| Change in interest-bearing liabilities | -452 | -617 | -1 862 | 2 739 | 1 093 | |
| Interest paid | -13 | -37 | -56 | -140 | -255 | |
| Contribution from holders of non-controlling interest | 0 | 15 | 9 | 15 | 32 | |
| Dividend paid to equity holders of the Parent company | 0 | 0 | -1 803 | -1 524 | -1 524 | |
| Dividend paid to holders of non-controlling interest | 0 | 0 | -23 | 0 | -4 | |
| Cash flow from financing activities | -465 | -639 | -3 735 | 1 090 | -658 | |
| CASH FLOW FOR THE PERIOD FROM CONTINUING OPERA TIONS |
-1 837 | -836 | 104 | -777 | -3 763 | |
| Cash flow for the period from discontinued operations | - | 222 | - | 1 046 | 4 035 | |
| CASH FLOW FOR THE PERIOD | -1 837 | -614 | 104 | 269 | 272 | |
| Exchange rate differences in liquid funds | 0 | 0 | 0 | 0 | 0 | |
| Cash and short-term investments, opening balance | 2 395 | 1 065 | 454 | 182 | 182 | |
| Cash and short-term investments, closing balance | 558 | 451 | 558 | 451 | 454 |
.
| 2013 | 2012 | 2012 | ||
|---|---|---|---|---|
| ASSETS | Note | 30 Sept | 30 Sept | 31 Dec |
| Fixed assets | ||||
| Intangible fixed assets | 954 | 1 037 | 1 044 | |
| Tangible and biological fixed assets | 318 | 265 | 281 | |
| Financial assets accounted to fair value through profit | ||||
| and loss | 5 | 60 402 | 57 112 | 59 953 |
| - whereof interest-bearing | 41 | 19 | 28 | |
| Investments in companies accounted for using the | ||||
| equity method | 95 | 61 | 79 | |
| Deferred tax assets | 5 | 0 | 18 | |
| 61 774 | 58 475 | 61 375 | ||
| Current assets | ||||
| Inventories | 72 | 61 | 64 | |
| Trade receivables | 296 | 341 | 372 | |
| Tax receivables | 0 | 0 | 36 | |
| Other current assets | 199 | 324 | 331 | |
| Short-term investments | 8 | 2 | 1 | |
| Cash and cash equivalents | 550 | 387 | 453 | |
| 1 125 | 1 115 | 1 257 | ||
| Assets classified as held for sale | - | 10 782 | - | |
| TOTAL ASSETS | 62 899 | 70 372 | 62 632 | |
| SHAREHOLDERS' EQUITY AND LIABILITIES | ||||
| Shareholders' equity | ||||
| Equity attributable to equity holders of the Parent | ||||
| Company | 60 975 | 56 912 | 58 573 | |
| Equity attributable to non-controlling interest | 46 | 92 | 67 | |
| 61 021 | 57 004 | 58 640 | ||
| Long-term liabilities | ||||
| Interest-bearing loans | 7 | 1 204 | 4 381 | 1 174 |
| Provisions for pensions | 37 | 39 | 37 | |
| Other provisions | 4 | 4 | 4 | |
| Deferred tax liability | - | - | 0 | |
| Other liabilities | 17 | 17 | 14 | |
| 1 262 | 4 441 | 1 229 | ||
| Short-term liabilities | ||||
| Interest-bearing loans | 7 | 169 | 73 | 2 111 |
| Provisions | 25 | 1 | 28 | |
| Trade payables | 109 | 155 | 156 | |
| Income tax payable | 8 | 19 | 59 | |
| Other payables | 305 | 469 | 409 | |
| 616 | 717 | 2 763 | ||
| Liabilities directly associated with assets classified as | ||||
| held for sale | - | 8 210 | - | |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 62 899 | 70 372 | 62 632 |
| 2013 1 Jul 30 Sept |
2012 1 Jul 30 Sept |
2013 1 Jan 30 Sept |
2012 1 Jan 30 Sept |
2012 Full year |
|
|---|---|---|---|---|---|
| Equity, opening balance | 55 405 | 55 035 | 58 640 | 59 687 | 59 687 |
| Total comprehensive income for the period | 5 616 | 1 961 | 4 165 | -1 211 | 455 |
| Acquisitions from non-controlling interest | -2 | -5 | -3 | -25 | -25 |
| Business combination, non-controlling interest | 0 | - | 0 | 56 | 59 |
| Contribution from non-controlling interest | 0 | 7 | 9 | 12 | 32 |
| Dividend paid to owners of non-controlling interest | 0 | - | -23 | - | -4 |
| Sale of shares, non-controlling interest | 0 | - | 28 | - | -47 |
| Discontinued operations | 0 | - | 0 | - | -2 |
| Dividend paid to shareholders of the Parent company | 0 | - | -1 803 | -1 524 | -1 524 |
| Effect of employee share saving programme | 2 | 6 | 8 | 9 | 9 |
| Equity, closing amount | 61 021 | 57 004 | 61 021 | 57 004 | 58 640 |
| Equity attributable to the shareholders of the Parent Company |
60 975 | 56 913 | 60 975 | 56 913 | 58 573 |
| Equity attributable to non-controlling interest | 46 | 91 | 46 | 91 | 67 |
| KEY RATIOS | 2013 30 Sept |
2012 30 Sept |
2012 31 Dec |
|---|---|---|---|
| Debt/equity ratio | 0.02 | 0.08 | 0.06 |
| Equity ratio | 97% | 81% | 94% |
| Net debt (including debt unpaid investments) | 790 | 4 206 | 2 950 |
| 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 and debt unpaid in vestments less interest bearing receivables, short-term investments and cash and cash equivalents. |
| Operating margin | Operating profit after depreciation divided by revenue. |
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.
Kinnevik apply from 2013 IFRS 13, "Fair Value Measurement". IFRS 13 is a framework for fair value measurement, but does not change which items that should be measured at fair value. The new standard includes more extensive disclosure requirements on fair value measurement. The new standard has not had any effect on Kinnevik's financial statements. The standard has, however, had effect on the disclosures in note 5, Financial assets.
Other accounting principles and calculation methods applied in this report are the same as those described in the 2012 Annual Report.
The IASB has published three new standards relating to consolidation; IFRS 10 Consolidated Financial Statements , IFRS 11, Joint Arrangements and IFRS 12 Disclosures of interests in Other Entities, as well as amended IAS 27 and IAS 28. EU requires that the new standards and amendments are applied as from 1 January 2014. Kinnevik will adopt the new standards and amendments as from 1 January 2014.
Kinnevik has made the assessment that the new standards not will have any effect on Kinnevik except for additional supplementary disclosures.
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 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, Russia and Eastern Europe.
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 2012 Annual Report.
Related party transactions for the interim period are of the same character as the transactions described in the 2012 Annual Report.
During 2013 Kinnevik has acquired shares in Zalando from Rocket Internet and management in Zalando for 72 MEUR.
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:
Metro - following the acquisition of Metro on 29 March 2012, Metro is an accounting segment from the second quarter 2012.
Other operating subsidiaries - Rolnyvik, Vireo Energy, Duego Technologies, Saltside and G3 Good Governance Group. The figures for 2012 also include Relevant Traffic, disposed during the fourth quarter and Milvik, that is accounted to fair value through profit and loss from 2013.
Parent Company & other - all other companies and financial assets (including change in fair value of financial assets). This distribution coincides with the internal structure for controlling and monitoring used by Kinnevik's management.
| Other | Parent | |||
|---|---|---|---|---|
| operating | company & | Total | ||
| 1 Jan-30 Sept 2013 | Metro | subsidiaries | other | Group |
| Revenue | 938 | 177 | 5 | 1 120 |
| Operating costs | -941 | -244 | -115 | -1 300 |
| Depreciation | -13 | -16 | -2 | -31 |
| Other operating income and expenses | 0 | 56 | 5 | 61 |
| Operating profit/loss | -16 | -27 | -107 | -150 |
| Share of profit/loss of associates accounted | ||||
| for using the equity method | 10 | 0 | 0 | 10 |
| Dividends received | 0 | 0 | 5 828 | 5 828 |
| Change in fair value of financial assets | 0 | 0 | -1 402 | -1 402 |
| Financial net | 3 | -7 | -85 | -89 |
| Profit/loss after financial items | -3 | -34 | 4 234 | 4 197 |
| Investments in subsidiaries and financial fixed | ||||
| assets | 12 | - | 1 948 | 1 960 |
| Investments in tangible and intangible fixed | ||||
| assets | 18 | 57 | 3 | 78 |
| 1 Jan-30 Sept 2012 | Metro | Other operating subsidiaries |
Parent Company & other |
Total Group |
|---|---|---|---|---|
| Revenue | 797 | 258 | 6 | 1 061 |
| Operating costs | -759 | -273 | -83 | -1 115 |
| Depreciation | -15 | -8 | -2 | -25 |
| Other operating income and expenses | 2 | -11 | 0 | -9 |
| Operating profit/loss | 25 | -34 | -79 | -88 |
| Dividends received | 0 | - | 2 833 | 2 833 |
| Change in fair value of financial assets | 4 | - | -4 221 | -4 217 |
| Financial net | -47 | - | -107 | -154 |
| Profit/loss after financial items | -18 | -34 | -1 574 | -1 626 |
| Investments in subsidiaries and financial fixed assets |
826 | 105 | 4 436 | 5 367 |
| Investments in tangible and intangible fixed assets |
7 | 60 | 2 | 69 |
| Impairment of goodwill | - | -18 | - | -18 |
Kinnevik's unlisted holdings are valued using IFRS 13 and the International Private Equity and Venture Capital Valuation Guidelines, whereby a collective assessment is made to establish the valuation method that is most suitable for each individual holding. Firstly, it is considered whether any recent transactions have been made at arm's length in the companies. For new share issues, consideration is taken to if the newly issued shares have better preference to the company's assets than earlier issued shares if the company is being liquidated or sold. For companies where no or few recent arm's length transactions have been performed, a valuation is conducted by applying relevant multiples to the company's historical and forecast key figures, such as sales, profit, equity, or a valuation based on future cash flows. When performing a valuation based on multiples, consideration is given to potential adjustments due to, for example, difference in size, historic growth and geographic market between the current company and the group of comparable companies.
Work to measure Kinnevik's unlisted holdings at fair value is performed by the financial department and based on financial information reported from each holding. The correctness of the financial information received is ensured through continuous contacts with management of each holding, monthly reviews of the accounts, as well as internal audits performed by auditors engaged by Kinnevik. Prior to decisions being made about the valuation method to be applied for each holding, and the most suitable peers with which to compare the holding, the financial department obtains information and views from the investment team, as well as external sources of information. Information and opinions on applicable methods and groups of comparable companies are also obtained periodically from well-renowned, valuation companies in the market. The results from the valuation is discussed firstly with the CEO and the Chairman of the Audit Committee, following which a draft is sent to all members of the Audit Committee, who analyze and discuss the outcome before it is approved at a meeting attended by the company's external auditors.
Below is a summary of the valuation methods applied in the accounts as per 30 September 2013.
| Company | Valuation method | Valuation assumptions |
|---|---|---|
| Zalando | Valuation based on sales multiples for a group of comparable companies. The peer group includes, among others, Amazon, Asos, CDON and Yoox. |
Last 12 months historical sales has been multiplied with a sales multiple |
| The average sales multiple for the peer group has been reduced due to Zalando's lower profi tability. |
of 2.0. The entire company has been valued at EUR 3.7bln. |
|
| Value in transactions in the company's shares (sale of secondary shares as well as directed new share issue) has been considered when establishing fair value in the accounts as per 30 September. |
||
| Avito | Valuation based on sales multiples for a group of comparable companies. The peer group includes, among others, HomeAway, Rightmove and Trade Me Group. |
Last 12 months historical sales has been multiplied with a sales multiple of 9.9. The entire company has been valued at SEK 4.7bln. |
| Bigfoot I, Bigfoot II, BigCommerce, Home24, Wimdu |
Valuation based on sales multiples for a group of comparable companies. The peer group includes, among others: |
Applied sales multiples for last 12 months historical sales: |
| - for Bigfoot I, Bigfoot II and BigCommerce: Amazon, Asos, CDON and Yoox; - for Home24: Amazon, CDON, Williams-Sanoma and Bed, Bath & Beyond; and - for Wimdu: HomeAway, Priceline, Expedia and Tripadvisor. |
- Bigfoot I: 1.4-2.0 - Bigfoot II: 1.4 - BigCommerce: 0.8-1.3 - Home24: 1.0 |
|
| The average sales multiple for the peer group has been reduced to reflect factors such as lack of profitability and early e-commerce market. |
- Wimdu: 2.5 | |
| For the holding companies Bigfoot I, Bigfoot II and BigCommerce, the underlying operating businesses (e.g. Dafiti and Lamoda) have been valued separately. |
||
| The valuations also consider what preference the owned shares have in case of liquidation or sale of the entire company. |
||
| Rocket Internet GmbH Portfolio companies valued as per above, cash balance and other assets as per Rocket finan cial statements. |
N/A | |
| Bayport Management | Valuation based on net profit, book value and growth compared to peers. | Price/Earnings 11 Price/Book value 2.5 Return on equity 27.5% Terminal growth 8% Cost of equity 15% |
| Milvik/BIMA | Latest transaction value. | USD 17m for the entire company. |
| Other portfolio com panies |
Fair value corresponds to cost. | N/A |
For the companies in the table above that are valued based on sales multiples (i.e. direct and indirect ownership in Zalando, Bigfoot I, Bigfoot II, Home24, BigCommerce, Wimdu and Avito), an increase in the multiple by 10% would have increased estimated fair value by SEK 1,361m. Similarly, a decrease in the multiple by 10% would have decreased estimated fair value by SEK 1,358m.
When establishing the fair value of other financial instruments, methods that in every individual case are assumed to provide the best estimation of fair value have been used. For assets and liabilities maturing within one year, a nominal value
adjusted for interest payments and premiums is assumed to provide a good approximation to fair value.
Information is provided in this note per class of financial instruments that are valued at fair value in the balance sheet, distributed in the levels stated below:
Level 1: Fair value established based on listed prices in an active market for the same instrument.
Level 2: Fair value established based on valuation techniques with observable market data, either directly (as a price) or indirectly (derived from a price) and not included in Level 1.
Level 3: Fair value established using valuation techniques, with significant input from data that is not observable in the market.
| 2013 1 Jul 30 Sept |
2012 1 Jul 30 Sept |
2013 1 Jan 30 Sept |
2012 1 Jan 30 Sept |
2012 Full year |
|
|---|---|---|---|---|---|
| Millicom | 3 193 | -1 570 | 189 | -3 026 | -4 805 |
| Tele2 | 474 | 1 653 | -4 729 | -2 005 | -2 263 |
| Transcom | 29 | 28 | 95 | 61 | 41 |
| Bayport Management | -22 | 6 | 47 | 52 | 65 |
| Seamless | 20 | 19 | 28 | 34 | 30 |
| Other | - | -2 | 3 | - | - |
| Telecom & Financial Services | 3 694 | 134 | -4 367 | -4 884 | -6 932 |
| Zalando1) | 923 | 1 518 | 1 740 | 1 475 | 1 563 |
| Avito2) | 220 | -6 | 531 | 362 | 538 |
| Bigfoot I1) | -14 | -56 | 10 | -78 | -48 |
| Bigfoot II1) | -3 | -149 | -443 | -158 | -53 |
| Home 241) | 109 | -29 | -158 | -44 | -37 |
| Wimdu1) | -2 | -13 | 2 | -16 | -16 |
| BigCommerce1) | -3 | -5 | -93 | -8 | -3 |
| Groupon1) | - | - | - | -628 | -628 |
| Rocket Internet and other portfolio | |||||
| companies | -65 | 533 | -4 | 247 | -165 |
| CDON Group | -6 | -1 | -204 | 52 | 35 |
| Other | -4 | -6 | 7 | -7 | 1 |
| Online | 1 155 | 1 786 | 1 388 | 1 197 | 1 187 |
| Metro3) | - | - | - | 39 | 39 |
| Modern Times Group MTG | 666 | -393 | 1 483 | -519 | -1 394 |
| Media | 666 | -393 | 1 483 | -480 | -1 355 |
| BillerudKorsnäs | 68 | - | 192 | - | 294 |
| Black Earth Farming | -5 | 99 | -98 | -50 | -104 |
| Industry and other investments | 63 | 99 | 94 | -50 | 190 |
| Parent Company and other | 2 | - | - | - | - |
| Total | 5 580 | 1 626 | -1 402 | -4 217 | -6 910 |
| -of which traded in an active market, level 1 |
4 439 | -165 | -3 044 | -6 042 | -8 755 |
| -of which fair value established using valuation techniques, level 3 |
1 141 | 1 791 | 1 642 | 1 825 | 1 845 |
1) Direct shareholding only.
2) Direct shareholding and indirect shareholding via Vosvik.
3) Metro became a subsidiary to Kinnevik on 29 March 2012. The change in fair value for 2012 relates to the period from 1 January
until the bid was published on 6 February.
| listed companies | |||||
|---|---|---|---|---|---|
| Class | Class | 2013 | 2012 | 2012 | |
| A shares | B shares | 30 Sept | 30 Sept | 31 Dec | |
| Millicom | 37 835 438 | 21 472 | 23 061 | 21 283 | |
| Tele2 | 18 430 192 | 117 065 945 | 11 138 | 16 124 | 15 867 |
| Transcom | 247 164 416 | 163 806 834 | 325 | 250 | 230 |
| Bayport Management | 597 | 573 | 586 | ||
| Milvik/BIMA | 48 | 0 | - | ||
| Seamless | 3 898 371 | 94 | 51 | 65 | |
| Other | 70 | 66 | 71 | ||
| Telecom & Financial services | 33 744 | 40 125 | 38 102 | ||
| Zalando1) | 11 249 | 3 703 | 6 279 | ||
| Avito2) | 1 454 | 769 | 923 | ||
| Bigfoot I1) | 1 489 | 1 448 | 1 479 | ||
| Bigfoot II1) | 434 | 595 | 708 | ||
| Home 241) | 596 | 738 | 754 | ||
| Wimdu1) | 260 | 338 | 345 | ||
| BigCommerce1) | 332 | 280 | 286 | ||
| Groupon1) | - | - | - | ||
| Rocket Internet and other portfolio | |||||
| companies | 1 665 | 3 899 | 3 451 | ||
| CDON Group | 24 959 410 | 589 | 681 | 664 | |
| Other | 218 | 155 | 179 | ||
| Online | 18 286 | 12 606 | 15 068 | ||
| Modern Times Group MTG | 4 461 691 | 9 042 165 | 4 525 | 3 917 | 3 042 |
| Other | 84 | 82 | 84 | ||
| Media | 4 609 | 3 999 | 3 126 | ||
| BillerudKorsnäs | 51 827 388 | 3 353 | 0 | 3 161 | |
| Black Earth Farming | 51 811 828 | 357 | 378 | 456 | |
| Other | 4 | 3 | 3 | ||
| Industry and other investments | 3 714 | 381 | 3 620 | ||
| Parent Company and other | 49 | 1 | 37 | ||
| Total | 60 402 | 57 112 | 59 953 | ||
| -of which traded in an active market, | |||||
| level 1 | 41 853 | 44 462 | 44 768 | ||
| -of which fair value established using valuation techniques, level 3 |
18 549 | 12 650 | 15 185 |
1) Direct shareholding only.
2) Direct shareholding and indirect shareholding via Vosvik.
| Investments in shares and securities | 2013 1 Jul |
2012 1 Jul |
2013 1 Jan |
2012 1 Jan |
2012 Full |
|---|---|---|---|---|---|
| SEKm | 30 Sept | 30 Sept | 30 Sept | 30 Sept | year |
| Subsidiaries | |||||
| Metro (net of acquired cash balance) | - | 53 | - | 438 | 438 |
| G3 Group (net of acquired cash balance) | - | - | - | 89 | 89 |
| Other | - | - | - | - | 5 |
| Cash flow from investments in subsidiaries | - | 53 | - | 527 | 532 |
| Other shares and securities | |||||
| Bayport | - | 96 | - | 116 | 116 |
| Seamless | - | - | - | 16 | 35 |
| Other | - | - | 10 | 32 | 36 |
| Total Telecom & Financial services | - | 96 | 10 | 164 | 187 |
| Zalando | -20 | 29 | 855 | 1 169 | 3 658 |
| Avito | - | - | - | 50 | 50 |
| Bigfoot I | - | - | - | 1 003 | 1 003 |
| Bigfoot II | - | 172 | 169 | 533 | 532 |
| Home24 | - | - | - | 428 | 428 |
| Wimdu | - | - | - | 88 | 86 |
| BigCommerce | - | 140 | 138 | 289 | 289 |
| Rocket Internet with other portfolio companies | 575 | 52 | 614 | 663 | 631 |
| CDON | - | - | 129 | - | - |
| Other | - | - | 33 | 41 | 67 |
| Total Online | 555 | 393 | 1 938 | 4 264 | 6 744 |
| Metro | - | - | 12 | - | 19 |
| Total Media | - | - | 12 | - | 19 |
| Black Earth Farming | - | 8 | - | 8 | 132 |
| Total Industry and other investments | - | 8 | - | 8 | 132 |
| Total investments other shares and securities | 555 | 497 | 1 960 | 4 436 | 7 082 |
| -of which traded in an active market, level 1 | - | 8 | 129 | 24 | 167 |
| -of which fair value established using valuation techniques, | |||||
| level 3 | 555 | 489 | 1 831 | 4 412 | 6 915 |
| - of which paid during the period | 555 | 489 | 1 960 | 4 316 | 6 972 |
| Paid on investments made in earlier periods | 888 | 19 | - | 490 | 490 |
| Cash flow from investments in other shares and securities | 1 443 | 508 | 1 960 | 4 806 | 7 462 |
| Financial assets valued accounted to fair value, level 3 | 2012 | ||||
| 2013 1 Jul |
2012 1 Jul |
2013 1 Jan |
2012 1 Jan |
Full | |
| 30 Sept | 30 Sept | 30 Sept | 30 Sept | year | |
| Opening balance, book value | 16 883 | 10 608 | 15 185 | 7 243 | 7 243 |
| Acquisitions | 555 | 490 | 1 831 | 4 413 | 6 981 |
| Reclassification | - | -100 | 49 | 28 | - |
| Disposals | -35 | - | -155 | -656 | -656 |
| Amortization on loan receivables | - | -144 | - | -210 | -210 |
| Change in value through the income statement | 1 141 | 1 791 | 1 642 | 1 825 | 1 804 |
| Fx gain/losses and other | 5 | 5 | -3 | 7 | 23 |
| Closing balance, book value | 18 549 | 12 650 | 18 549 | 12 650 | 15 185 |
| 2013 1 Jul 30 Sept |
2012 1 Jul 30 Sept |
2013 1 Jan 30 Sept |
2012 1 Jan 30 Sept |
2012 Full year |
|
|---|---|---|---|---|---|
| Millicom | - | - | 665 | 656 | 1 407 |
| Tele2 | - | - | 4 756 | 1 761 | 1 761 |
| MTG | - | - | 135 | 122 | 122 |
| Rocket Internet | 168 | 294 | 168 | 294 | 974 |
| BillerudKorsnäs | - | - | 104 | - | - |
| Total dividends received | 168 | 294 | 5 828 | 2 833 | 4 264 |
| Of which ordinary dividends | - | - | 1 866 | 1 659 | 1 659 |
| 2012 | 2012 | 2013 | |
|---|---|---|---|
| 31 Dec | 30 Sept | 30 Sept | |
| Interest-bearing long-term loans | |||
| - | 4 420 | 21 | Liabilities to credit institutions |
| 1 199 | 0 | 1 200 | Capital markets issues |
| -25 | -39 | -17 | Accrued borrowing cost |
| 1 174 | 4 381 | 1 204 | |
| Interest-bearing short-term loans | |||
| 1 268 | 73 | 20 | Liabilities to credit institutions |
| 843 | 0 | 149 | Capital markets issues |
| 2 111 | 73 | 169 | |
| 3 285 | 4 454 | 1 373 | Total long and short-term interest-bearing loans |
Kinnevik's total credit facilities (including issued bonds) amounted to SEK 8,070m as at 30 September 2013 whereof SEK 6,500m related to a revolving credit facility and SEK 1,200m related to a bond.
Out of the total amount of outstanding loans as per 30 September 2013, SEK 149m related to short-term funding under a commercial paper program. The refinancing risk of these short term loans is minimized by always keeping the same amount available under Kinnevik's revolving credit facility.
At 30 September 2013 the Group had not provided any security for any of its outstanding loans.
The outstanding loans carry an interest rate of Stibor or similar base rate with an average margin of 1.7% (1.2%). All bank loans have variable interest rates (up to 3 months) while financing from the capital markets vary between 1 to 12 months for the loans under the commercial paper program and 5 years fixed for the outstanding bond (as per date of issue). As per 30 September 2013, the average remaining duration was 2.5 years for all credit facilities including the bond (but excluding the unutilized one year extension option related to the Group's SEK 6.500m credit facility).
Of the Group's interest expenses and other financial costs of SEK 98m (189), interest expenses amounted to SEK 56m (147). The average interest rate for the first nine months of the year was 3.0% (3.1%) (calculated as interest expense in relation to average interest-bearing liabilities).
| 2013 1 Jul 30 Sept |
2012 1 Jul 30 Sept |
2013 1 Jan 30 Sept |
2012 1 Jan 30 Sept |
2012 Full year |
|
|---|---|---|---|---|---|
| Revenue | 5 | 4 | 9 | 14 | 20 |
| Administration costs | -39 | -25 | -123 | -80 | -121 |
| Other operating income | 0 | 0 | 6 | 0 | 0 |
| Operating loss | -34 | -21 | -108 | -66 | -101 |
| Dividends received | - | - | 10 626 | 3 756 | 3 900 |
| Result from financial assets | 0 | 0 | -5 488 | 111 | -10 |
| Net interest income/expense | 105 | 88 | 300 | 255 | 327 |
| Profit/loss after financial items | 71 | 67 | 5 330 | 4 056 | 4 116 |
| Group contributions | - | - | - | - | -300 |
| Profit/loss before taxes | 71 | 67 | 5 330 | 4 056 | 3 816 |
| Taxes | 0 | 0 | 0 | -18 | -24 |
| Net profit/loss for the period | 71 | 67 | 5 330 | 4 038 | 3 792 |
| Total comprehensive income for the period | 71 | 67 | 5 330 | 4 038 | 3 792 |
| 2013 30 Sept |
2012 30 Sept |
2012 31 Dec |
|
|---|---|---|---|
| ASSETS | |||
| Tangible fixed assets | 5 | 3 | 3 |
| Financial fixed assets | 49 424 | 50 144 | 51 704 |
| Short-term receivables | 85 | 53 | 290 |
| Cash and cash equivalents | 15 | 0 | 12 |
| TOTAL ASSETS | 49 529 | 50 200 | 52 009 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| Equity | 44 522 | 41 232 | 40 986 |
| Provisions | 30 | 31 | 30 |
| Long-term liabilities | 4 439 | 8 609 | 3 177 |
| Short-term liabilities | 538 | 328 | 7 816 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 49 529 | 50 200 | 52 009 |
The Parent Company's liquidity, including short-term investments and unutilized credit facilities, totalled SEK 6,696m at 30 September 2013 and SEK 4,587m at 31 December 2012. The Parent Company's interest bearing external liabilities amounted to SEK 1,375m (3,257) on the same dates.
Investments in tangible fixed assets amounted to SEK 3m (2) during the period.
Distribution by class of shares on 30 September 2013 was as follows:
| Number of shares |
Number of votes |
Par value (SEK 000s) |
|
|---|---|---|---|
| Outstanding Class A shares, 10 votes each | 42 369 312 | 423 693 120 | 4 237 |
| Outstanding Class B shares, 1 vote each | 234 948 986 | 234 948 986 | 23 495 |
| Class B shares in own custody | 449 892 | 449 892 | 45 |
| Registered number of shares | 277 768 190 | 659 091 998 | 27 777 |
The total number of votes for outstanding shares in the Company amounted at 30 September 2013 to 658,642,106, excluding the 449,892 Class B treasury shares which may not be represented at general meetings.
During June, following approval at the AGM in May, 185,000 class C shares held in treasury were newly issued to ensure future delivery to participants in incentive programs. Thereafter all 449,892 class C shares held in treasury were converted to class B shares held in treasury in accordance with the provision in the Articles of Association regarding conversion of class C shares.
In accordance with the proposal on reclassification, approved by an Extraordinary General Meeting held on 18 June this year, owners of 6,296,012 Class A shares in Kinnevik required reclassification of those Class A shares to Class B shares. The reclassification was registered at the Swedish Company Registration Office in July.
The company has been informed that the agreement between Verdere S.à.r.l., SMS Sapere Aude Trust, Sophie Stenbeck and HS Sapere Aude Trust regarding coordinated voting of their shares has expired. After reclassification, Verdere S.à.r.l control 44.8% of the votes and 10.6% of the capital in Kinnevik.
The Board has authorization to repurchase a maximum of 10% of all shares in the Company. The Board has not used the authorization during 2013. There are no convertibles or warrants in issue.
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