Annual Report • Mar 22, 2013
Annual Report
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Mekonomen's formal Annual Report comprises pages 20-62. Only the formal annual report has been reviewed by the company's auditors. A more detailed description of Mekonomen's operations and further, regularly updated financial information is presented on Mekonomen's website, www.mekonomen.com
| Revenue and EBIT | |
|---|---|
| SEK M Revenue 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 |
SEK M EBIT 550 500 450 400 350 300 250 200 150 100 50 |
| 0 2008 2009 2010 2011 2012 | 0 |
Revenue EBIT
| Working capital | |||
|---|---|---|---|
| SEK M | % | ||
| 1,300 | |||
| 1,200 1,100 |
50 | ||
| 1,000 900 |
40 | ||
| 800 700 |
30 | ||
| 600 500 |
20 | ||
| 400 300 |
|||
| 200 100 |
10 |
0 2008 2009 2010 Working capital % of sales 2011* 2012**
*) Net sales for Sørensen og Balchen 2011 have been recalculated for 12 months.
**) Net sales for MECA 2012 have been recalculated for 12 months.
| Key figures | 2012 | 2011 | 2010 |
|---|---|---|---|
| Revenue, SEK M | 5,426 4,237 3,447 | ||
| EBIT, SEK M | 528 | 536 | 485 |
| EBIT margin, % | 10 | 13 | 14 |
| Profit for the year, SEK M | 382 | 380 | 351 |
| Earnings per share, SEK | 10.80 11.39 10.95 | ||
| Cash flow* per share | 14.93 | 7.98 11.60 | |
| Dividend**, SEK | 7.00 | 8.00 | 8.00 |
| Return on shareholders' equity, % | 19 | 27 | 37 |
| Equity/assets ratio, % | 41 | 51 | 55 |
*) From continuing operations.
**) Board's proposal to the 2013 Annual General Meeting.
0
Mekonomen is the leading automotive spare-parts chain in the Nordic region and comprises the three Group companies: MECA Scandinavia, Mekonomen Norden and Sørensen og Balchen.
We offer a broad and accessible range of affordable and innovative solutions and products for consumers and companies.
At the end of the year, Mekonomen had more than 400 stores and more than 2,300 affiliated workshops operating under our brands.
With innovative concepts, high quality and an efficient logistics chain, Mekonomen offers solutions to consumers and companies for an easier CarLife.
We are the first choice for drivers and strive for an easier CarLife.
The Group shall develop with continued healthy profitability and thus generate value growth for shareholders.
Annual sales increase of 10 per cent. Expansion shall occur with retained financial stability.
EBIT margin shall exceed 8 per cent. The longterm equity/assets ratio shall be not less than 40 per cent.
Mekonomen assumes responsibility by contributing to a more sustainable industry, with reduced environmental and climate impact and increased traffic safety.
Customers demand products that take the environment into consideration and offering environmentally adapted car service and care gives Mekonomen a competitive edge in the market in which it operates. Accordingly, Mekonomen's product range includes environmentally labelled products and the company offers products made from recycled materials and imposes demands on its suppliers.
Mekonomen also focuses on developing a motivated organisation whose composition largely reflects society and aims to play an active role in creating a society in which everyone's potential is utilised.
Mekonomen, with Group companies, shall be associated with the concepts of good value, turnkey solutions, innovation, competency and high quality. These concepts shall permeate everything Mekonomen does to achieve the vision of being car owners' first choice and promoting an easier CarLife.
Work to develop and preserve the brands is central to Mekonomen's strategic effort. All types of concept development and communication are based on strengthening the direction of all the brands to higher recognition and perception with respect to good value, turnkey solutions, innovation, competency and high quality for consumers and companies.
There are more than 2,500 employees within Mekonomen, and including all workshop chains, the number is approximately 15,000. The operation is based on common values that are summarised into five principles: customer orientation, business-like, responsibility, competency and flexibility. The employees are Mekonomen's primary ambassadors and brand bearers.
Dividend Share price * Board of Directors' proposal for 2012.
** At the end of the financial year.
There are a total of 421 stores within the Group, of which 71 per cent are proprietary and 29 per cent are partner stores.
Approximately 160 suppliers account for 80 per cent of the supply of goods.
The three Group companies are responsible for their individual wholesale operations.
MECA Scandinavia has a centralised warehouse in Eskilstuna, Sweden. Mekonomen Norden's centralised warehouse is located in Strängnäs, Sweden.
Sørensen og Balchen's centralised warehouse is located in Oslo, Norway.
Five workshop chains are concept-affiliated: MECA CAR Service ∙ Mekonomen Service Centres ∙ MekoPartner ∙ Speedy ∙ BilXtra
At the end of 2012, Mekonomen had slightly more than 2,300 affiliated workshops and also delivered products to approximately 15,000 independent workshops in the Nordic region.
During a weak 2012, we succeeded in increasing our market shares in all markets. Mekonomen also strengthened its position through the acquisition of MECA Scandinavia, which contributed an additional 90 stores and nearly 500 workshops. The integration effort with MECA commenced immediately and has been successful. Integration will remain in focus in 2013 and with concept development and competency-enhancing activities throughout the Group; we are ready to face the future.
The weak macroeconomic trend in the Nordic region during the year had an impact on general consumption. Purchasing propensity declined in essentially all customer groups and car consumers were no exception. While our market displayed an average negative growth of approximately 4 per cent, Mekonomen was able to increase its market shares thanks to the continued development of our strong concepts and effective marketing. The declining demand was offset by cost control in the operations and the utilisation of synergies with respect to purchasing and logistics. Consumers' high awareness of Mekonomen's quality and affordability naturally contributed to a stronger position in the market.
A rapid summary of 2012 in figures shows a 28-per cent increase in revenue to SEK 5,426 M (4,237). EBIT fell 1 per cent to SEK 528 M (536) and the EBIT margin amounted to 10 per cent (13).
new organisational structure The acquisition of MECA was finalised in May, with operations in the Swedish and Norwegian markets. The acquisition of MECA contributed 90 stores, nearly 500 affiliated workshops and annual sales of approximately SEK 1,500 M to the Group. The integration work commenced immediately and has been positive.
As a result of the acquisition, there was a change in the organisation to ensure future growth. The Group structure now comprises a holding company and three Group companies. The Group management operates through the holding company Mekonomen AB and the business activities are performed in the Group companies: MECA Scandinavia, Mekonomen Norden and Sørensen og Balchen. There is full competition between the Group companies in the form of separate business concepts and approaches to the individual markets. To optimise the operation in Denmark, Mekonomen Denmark was incorporated into MECA. One advantage is that MECA's business model is better suited to the price-sensitive Danish market, with a strong focus on Business to Business.
Apart from the acquisition of MECA, there has been organic growth within the Group's concept. Sørensen og Balchen reported its best sales year ever; the integration with MECA was better than anticipated and sales in Mekonomen Norden's fleet operation was at a record high. An important event during the year was the ruling of the Swedish Market Court in the case between the Association of Swedish Wholesalers of Automotive Parts and Accessories and KIA Motors. The demand from KIA Motors that service must be performed by authorised KIA workshops for the new-car guarantee to apply was rejected since it is in contravention of EU's competition regulations. The verdict was a major victory for Swedish car consumers.
For several years, Mekonomen has focused actively on environmental and quality activities throughout the Group, with broad investments in environmental certifications and training. In 2012, all wholly owned MECA units were certified according to ISO 14001 (environment), and all Mekonomen Norden's stores in Sweden and more than 70 workshops underwent training in all three certification areas: ISO 14001 (environment), OHSAS 18001 (work environment) and ISO 9001 (quality). Mekonomen wants to assume responsibility for sustainable development by offering environmentally adapted products and services. Mekonomen wants to generate awareness in customers, while securing competitive advantages now and in the future by remaining one step ahead.
Competition in the Nordic market will remain tough. The brand-dependent players, backed by major car manufacturers, are investing more resources in the marketing of their products and services, with the lock-in effects as their biggest means of competition. At the same time, new players are establishing themselves in the Nordic market.
We will face the future by further developing our strong concepts and allowing them to continue competing independently in the market. We will attract new customers by staying one step ahead and by broadening our range of products and services. In 2013, the new business areas of car-glass, sales of vehicle insurance and home insurance, and Internet sales will be launched. We will invest extensively in Internet solutions with the aim of strengthening our Internet sales.
I am convinced that future successes for Mekonomen are based on the continued development of expertise on all levels. Accordingly, investments in leadership development, extensive training courses for continued competency enhancement throughout the Group, as well as continuous focus on involving all employees are key, not only for consolidating but also providing further impetus to our competitiveness.
The eagerness to make CarLife easier permeates the entire Mekonomen Group and I would like to thank all employees for their excellent input in 2012. The driving force among our employees to go the extra mile to surpass customers' expectations is key to our success.
Our journey continues!
Håkan Lundstedt President and CEO
In May 2012, MECA Scandinavia was acquired. Since October 2012, the Group's Danish operation has been included in MECA. MECA has a clear focus to sell spare parts and workshop equipment on a Business-to-Business basis to automotive workshops in Sweden, Norway and Denmark. MECA has developed the MECA Car Service concept, where the affiliated workshops have access to a strong, distinct and shared profile in the market. Through a nationwide chain of sales and distribution centres, MECA rapidly and efficiently supplies the automotive workshops with a broad range of spare parts, accessories, tools, tyres and diagnosis instruments and workshop equipment, etc.
Since 2009, MECA has been in a profitable growth phase, where the business concept is to provide professional automotive workshops and partners with the appropriate product range, with market-leading service and expertise through efficient distribution. In addition to high-quality products, the
workshop concept also includes IT support, technical support and technical data from car manufacturers, training, profiling, marketing and financial solutions.
In October, the Group's Danish operation was incorporated into the MECA Group. Work was immediately initiated to further develop
Senior executives at MECA Scandinavia
Håkan Bergström Managing Director, MECA Car Parts
Robert Hård Director of HR, Legal and the environment
Patrik Nilsson CFO, MECA
the workshop concept and to streamline the B-2-B model in the Danish market.
In becoming part of the Mekonomen Group, MECA gained improved opportunities to continue the development of its MECA concept.
A financially strong owner, with successful concepts, created an excellent basis for future growth. At the same time, there are significant synergy gains on which to capitalise, particularly with respect to purchasing.
At the end of 2012, there were 546 workshops affiliated to MECA Car Service, of which 334 in Sweden and 212 in Norway. At the end of 2012, there were 219 Mekonomen Autoteknik and 216 MekoPartner workshops in MECA Denmark.
MECA is also a contracted partner to Bosch Car Service. There is a partnership in Sweden and Norway with more than 150 workshops. In addition, there is a multi-year cooperation with OKQ8. In 2012, the cooperation was further expanded to strengthen and develop OKQ8's workshop chain.
The market in Sweden was highly competi-
tive in 2012. MECA's objective was to capture new market shares, which was also achieved. A key success factor in the industry is to ensure high expertise among employees, and the ability to rapidly react to changes. To ensure that the expertise level remains high, MECA allocates major resources to education and technical support, services that are almost exclusively performed by MECA's personnel.
The further development of MECA Denmark is a prioritised activity, where the objective is to expand with profitability. The qualities existing in both companies must be utilised and the task is to coordinate the strengths, as well as to capitalise on the work methods that historically generated good results.
Consistent efforts are also aimed at continuing to develop MECA Car Service in Sweden and Norway. Successes in the partnerships with Bosch Car Service and OKQ8 also boost activities to develop new partner agreements with players in the Nordic market that have excellent market coverage and an interest in conceptually establishing efficient workshops.
Pehr Oscarsson Managing Director, MECA Sweden
Peter Thersthol Logistics Director, MECA
Managing Director, MECA Denmark
MECA Scandinavia operates a nationwide chain of divisions in Sweden and Norway and develops the MECA Car Service workshop concept. In Denmark, the market is cultivated through 41 divisions and affiliated workshops under the Mekonomen Autoteknik and MekoPartner brands. Logistics are controlled from a centralised warehouse in Eskilstuna that stocks more than 50,000 articles.
| Net sales (external), SEK M |
1,702 |
|---|---|
| EBIT, SEK M ** | 92 |
| EBIT margin, % | 5 |
| Number of stores/ of which proprietary |
138/108 |
| Number of MECA Car Service workshops |
546 |
| Number of Mekonomen Autoteknik workshops |
219 |
| Number of MekoPartner workshops |
216 |
| *) Period pertains to 23 May – 31 December |
2012 for MECA Scandinavia and 1 January – 31 December 2012 for MECA Denmark. **) EBIT before amortisation of intangible assets related to the acquisition was
SEK 127 M.
Despite tough competition and a weak general economic trend in mainly Sweden and Finland, Mekonomen Norden was able to increase its market shares in 2012 and strengthen its role as the industry's leading player.
In Sweden, consumers' somewhat weaker demand for spare parts and accessories was offset by cost-efficiency enhancements. At the same time, new stores were opened, both proprietary and partner stores. Marketing campaigns were successful. In Sweden, a strong sales increase was noted in proprietary brands and tyres, and there was a strong inflow of new customers who subscribed for the Mekonomen card.
The concept with Mega and Medium facilities remained strong and the majority of the workshops under the Mekonomen Service Centre and MekoPartner brands improved their positions. A proprietary Mega facility was opened in Luleå. Medium facilities were opened in Strömstad, Partille and Linköping. The net inflow of workshops during the year amounted to 55.
In the warehouse operations, extensive work is in progress to further develop the logistics system, resulting in improved delivery precision.
The market for marine products remained
Senior executives at Mekonomen Norden
Managing Director, Mekonomen Norway
Krister Duwe Managing Director, Mekonomen Sweden Staffan Lindewald Head of New Transactions business area
weak during the year. The operation under the Marinshopen brand was focused to Älvsjö and Västervik. Through the Mekonomen stores, there are an additional 30 sales locations in Sweden. Efficiency enhancements in all phases generated satisfactory results in 2012.
Mekonomen's Fleet operation in Sweden, where service and repairs are offered to companies with small and large fleets, developed well during the year. Several new customers signed agreements, for example, Skanska, the Police Authority in Stockholm County and Peab. Growth for Mekonomen Fleet for 2012 amounted to 40 per cent and demand for packaged solutions is expected to continue to increase.
Competition in Norway became tougher in 2012. A decline in demand was noted for the store chain during the second quarter, resulting in cost savings, which were implemented during the remainder of the year.
Marketing of our concept remained at a high level, generating excellent results.
The concept for the Mega and Medium facilities remained strong during 2012.
In stores, the sales increase continued for products with Mekonomen's own brands and similar to Sweden, a strong increase was noted in new subscriptions for the Mekonomen card, the inflow was more than 50,000 new card customers.
In Finland, the expansion continued. At the end of the year, Mekonomen had seven stores, of which four were proprietary. The Finnish market is price-sensitive and car consumers reduced their purchases in 2012. However, Mekonomen's concept was well received by consumers and workshops. Sales to workshops noted a steady increase during the year, where the two last quarters were the strongest.
Future growth for Mekonomen Norden in the markets in Sweden and Norway is based on utilising existing opportunities to further develop our well-known concept.
By expanding the offering with new
products and services, such as car-glass and insurance for cars and homes, Mekonomen Norden will be perceived even more as a total supplier.
A common feature in the Mekonomen Norden operations is that the investments in education and competency enhancement in stores and affiliated workshops will be intensified. During 2013, Mekonomen will invest additionally to increase the level of expertise. Together with successful marketing campaigns, these investments will strengthen the brands and increase competitiveness.
New establishment of stores in Finland will continue in 2013 and investments will also be made in Mekonomen Service Centres in Finland, resulting in the expansion of the Mekonomen offering.
Anders Molander Managing Director, Mekonomen Grossist Tobias Narvinger Purchasing Manager, Mekonomen Norden
Siri Unander-Scharin HR Manager, Mekonomen Norden
Mekonomen Norden CEO: Petter Torp
Mekonomen Norden has operations in Sweden, Norway and Finland. The stores are collected under the Mekonomen brand and the affiliated workshops are marketed through the Mekonomen Service Centre and MekoPartner chains in Sweden and Norway, as well as Speedy in Sweden. The logistics is controlled from a centralised warehouse in Strängnäs, which stocks approximately 67,000 articles.
| 2012 | 2011 | |
|---|---|---|
| Net sales (external), SEK M |
2,830 | 2,766 |
| EBIT, SEK M | 376 | 438 |
| EBIT margin, % | 13 | 16 |
| Number of stores/ of which proprietary |
204 156 |
202 154 |
| Number of Mekonomen Service Centres |
875 | 821 |
| Number of MekoPartners |
210 | 206 |
| Number of Speedy | 11 | 11 |
The market situation in Norway was divided in 2012. Demand for spare parts and accessories in retail declined slightly, while workshops noted an increase in activity. Despite a market that lacked general growth, Sørensen og Balchen was able to report its best sales year ever.
The 2012 financial year was the first full year for Sørensen og Balchen in the Mekonomen Group. An intense integration effort characterised most of the operation and the results of the efforts were satisfactory, since significant synergy gains were utilised. It is gratifying that the entire organisation remained intact and the previously strong bond to key partners remained solid, entailing opportunities to increase sales and market shares.
The decline in retail accelerated work to implement a cost-efficiency enhancement in the store chain. Work methods and partnerships were evaluated and a number of measures were implemented to improve profitability.
Major emphasis has been placed on concept development and marketing. The BilXtra brand is classified as "top-of-mind" among a large portion of car consumers in Norway and investments in the market are directed at consolidating that position.
With the exception of the traditional newsletter, which is distributed ten times per year to approximately 800,000 households, marketing through television and radio has increased. To additionally improve the service level, an extensive effort has been implemented to establish a web catalogue, where the objective is to enhance the efficiency of deliveries and to be able to respond to price requests even more rapidly.
Senior executives at Sørensen og Balchen
Robert Kolakowski CFO of SogB
Hans Ole Høidal Sales Director of SogB
The BilXtra brand is "top-of-mind" with most car consumers in Norway.
The results of the efforts were good and the positive effect is expected to continue in 2013.
Continuous training for workshop employees remains a high priority. Within Sørensen og Balchen, there are carefully planned programs to improve expertise, which is expected to result in strengthened competitiveness. Resources will also be allocated to develop and market the BilXtra concept. The overall objective is to continue developing the BilXtra concept through direct efforts to improve knowledge about the brand, while increasing the degree of loyalty that already exists among current customers.
Sørensen og Balchen is also focusing on costefficiency enhancements in all phases, all the way from the further development of logistics to the daily cooperation with workshops and stores.
The integration work with the Mekonomen Group will also remain an important part of the entire operation, since cooperation at the back of the chain generates significant economies of scale, most distinct with respect to purchasing.
All in all, the objective of Sørensen og Balchen's work in the coming years is to increase sales and improve earnings.
SEK 97 M (102). Harald Hillesund Purchasing Director, SogB
Martin Helle Marketing Director, SogB
Tom Mathisen Logistics Director, SogB
Sørensen og Balchen
CEO: Morten Birkeland
Sørensen og Balchen is a warehouse operation that operates the BilXtra spare-parts chain, with stores and affiliated workshops in Norway. The logistics are controlled from a centralised warehouse in Oslo, which stocks approximately 61,000 articles.
| 2012 2011* | ||
|---|---|---|
| Net sales (external), SEK M |
748 | 603 |
| EBIT, SEK M ** | 78 | 88 |
| EBIT margin, % | 10 | 15 |
| Number of stores/ of which proprietary |
78 36 |
77 35 |
| Number of BilXtra workshops |
225 | 219 |
*) 2011 pertains to the 11 March – 31
December period. **) EBIT before amortisation of intangible assets related to the acquisition was
Mekonomen's vision is to be car owners' first choice and strive for an easier CarLife. We are also taking up the baton to make our industry more sustainable, with less environmental and climate impact, as well as increased traffic safety. Our objective is for our employees to view us as a long-term employer, where there are opportunities for professional and personal development and where every individual has the opportunity to utilise their full potential.
In recent years, Mekonomen has prioritised work in the areas of sustainability and social responsibility. In 2011, a decision was made to support the UN Global Compact, which entails establishing a stricter Code of Conduct.
The Code of Conduct, within the framework for the UN Global Compact, will comprise a guide for the entire Group. The overall responsibility for sustainability and social responsibility lies with Group management within Mekonomen. In 2012, Global Compact was implemented in Sweden, Norway, Denmark and Finland. Work to coordinate these issues in the three Group companies occurs continuously, where good examples in MECA Scandinavia, Mekonomen Norden and Sørensen og Balchen are utilised, according to the Best Practice principle.
The basis of the Mekonomen Code of Conduct is found in the Group's shared values, formulated as follows:
∙ We place the customer first and satisfy our customers' expectations. We are perceived as a full-service company by our customers.
∙ Internally, responsibility also entails that we have confidence in our employees' qualifications and abilities. We have leadership that contributes to our employees being motivated, loyal and feeling involved in the development of the company.
Mekonomen's products and services are largely about extending the service life of cars, contributing to safe driving, reducing the impact on the environment and facilitating high comfort. The operation within the three Group companies will thus contribute to a more sustainable industry. Since 2009, Mekonomen sells environmentally labelled products and products with reduced negative environmental impact, which are included in the range and marketed under Mekonomen's proprietary brands. We know that customers request environmentally adapted products and that these requests will increase further with stricter environmental legislations, better environmental options and higher awareness and knowledge. To become car owners' first choice in the future market, Mekonomen must be able to satisfy these requirements and wishes.
" There is strong support and interest in environmental issues in all parts of the Group and in the past three years, extensive investments have been made in environmental certification and education"
Companies are asked to support and respect the protection of internationally proclaimed human rights within the sphere they can influence. Principle 2) Make sure that their company is not complicit in human rights abuses. Labour conditions Principle 3) Companies are asked to uphold the freedom of association and the effective recognition of the right to collective bargaining. Principle 4) The elimination of all forms of forced and compulsory labour. Principle 5) The effective abolition of child labour. Principle 6) The elimination of discrimination in respect of employment and occupation. Environment Principle 7) Companies are asked to support a precautionary approach to environmental challenges. Principle 8) Undertake initiatives to promote greater environmental responsibility. Principle 9) Encourage the development and diffusion of environmentally friendly technologies. Anti-corruption
Principle 10) Companies should work against corruption in all its forms, including extortion and bribery.
Strategic environmental effort The environment and quality are prioritised areas and significant to Mekonomen, with respect to business strategy. Mekonomen wants to become involved and assume responsibility for sustainable development by offering environmentally adopted products and services. Mekonomen wants to generate awareness in customers while securing competitive advantages now and in the future by remaining one step ahead.
For several years, Mekonomen has been conducting active environmental and quality work throughout the Group, with broad investments in environmental certification and education. The most important focus areas for the Group are transport, energy consumption and chemicals.
There is strong interest and support in environmental issues in all parts of the Group. Activities have primarily been focused on the Group's proprietary and franchise operations. The long-term vision is for all operations within the Mekonomen Group to have a so-called multi-site certificate, which means certification according to ISO 14001, OHSAS 18001 and ISO 9001 (environment, work environment and quality).
Mekonomen's future environmental objective is that 100 per cent of the distribution vehicles that are delivery vans must have CO2 emissions that are lower than 200 grams/ km, and to successively increase the range of environmentally labelled chemical products that are sold by all stores.
Since mid-2010, comprehensive work has been in progress aimed at certifying Mekonomen Norden's operation in Sweden in accordance with ISO 14001 (environment), OHSAS 18001 (work environment) and ISO 9001 (quality). The objective is to integrate the management system in the ordinary operation to facilitate and streamline work. During 2012, all stores in Sweden and slightly
more than 70 workshops underwent training in all three certification areas.
To ensure that the expertise level remains high after the certification, audits are performed. Within Mekonomen Norden, there are some ten internal auditors who conducted more than 200 audits in the store network and in workshops during the year. External audits were also conducted continuously by independent certification companies. There were very few deviations identified during the external audits performed in 2012.
During 2012, MECA Scandinavia with all subsidiaries became environmentally certified in accordance with ISO 14001.
Within the chemicals area, extensive quality assurance work was performed on content, labelling and information about products and packaging during 2012. Norway is a forerunner with respect to quality assurance with a strict legislation pertaining to product registration, information and management of oils and other chemicals. Our operations in Norway having long had a high quality level regarding these issues.
The training activities with a focus on chemical issues during the year were prioritised to increase knowledge and awareness among employees within the Group. The training effort was partly driven by the EU's chemical project, which impacts the entire value chain in the Group, but also the stringent legislation in the non-EU country of Norway has a positive impact on operations in other countries with respect to the environment. The training includes transport of hazardous goods and chemicals management, as well as the establishment of procedures for product managers to avoid hazardous substances in the stores' product range. In instances where products did not fulfil Mekonomen's internal requirements, these were removed from the range.
" To optimise goods supply, streamline purchasing and increase control, Mekonomen is successfully developing a model for risk assessment and classification of suppliers"
Transport and logistics are a prioritised area, where continuous work is done to achieve higher efficiency and lower environmental impact. The effort also generated a positive financial effect for the Group. When Mekonomen procures transport services, there is high demand on efficiency by, for example, increasing the degree of utilisation and minimising the number of times reloading occurs to thus reduce the number of transports and also fuel consumption.
For Mekonomen, it is imperative to arouse interest in environmental issues and generate excellent prerequisites for the workshops that conduct franchise operations under our brands. The workshops are offered support internally by environmentally trained regional managers in each Group company and through external training units. Mekonomen also has specific instructions, for example, for managing hazardous waste, which are easily accessible to all employees in our stores and workshops.
In terms of size, the entire purchasing organisation within Mekonomen is a key player in Europe.
To reduce risks and ensure high quality, we decided to purchase from major suppliers in the automotive industry. By being a customer of large and recognised suppliers with good references, Mekonomen will be able to capitalise on the strict demands on follow-ups placed on these players. In this manner, Mekonomen will be guaranteed that the suppliers have management systems for quality (ISO 9001), security (TS), environment (ISO 14001) and work environment (OHSAS 18001), and that the management system is reviewed regularly.
The absolute majority of the purchases are from suppliers in Europe. Mekonomen's purchasing organisation is divided into two different supplier categories: spare parts and accessories. Both of these categories of suppliers are found among the major players in the automotive industry. For accessories, there is a slightly higher number of small suppliers and, when dealing with this group, Mekonomen has provided additional clarification and placed demands on the issues pertaining to the environment, quality, respect for human rights and good working conditions.
Mekonomen's earlier demands in this respect are now being successively replaced by demands for compliance with Mekonomen's Code of Conduct and respecting the UN Global Compact. To optimise goods supply, streamline procurement and increase control, we are successively developing a model for risk assessment and classification of suppliers. This work includes product assurance, implemented through quality follow-ups with suppliers. The work is systematic and will include auditing at manufacturers.
The organisations within the Mekonomen Group respond to change quickly and are pragmatic, with great belief in the ability of individuals. We are an entrepreneurial company characterised by a team environment, where all employees feel that they contribute and are able to exert influence. We want our employees to view Mekonomen as a longterm employer, with opportunities for both professional and personal development. We want our employees to have the opportunity to be able to utilise their full potential. Mekonomen has grown rapidly in recent years and there are several strong brands within the Group, which command commitment and create new opportunities. In 2012, several projects were implemented to further systematise work pertaining to employee issues and to develop the Human Resources Management organisation (HRM).
The three Group companies are in various development phases with respect to HRM work. Accordingly, as with the sustainability
issues, Mekonomen will successively coordinate the work between the Group companies. The starting point is to document the work that has been implemented to date within MECA Scandinavia, Mekonomen Norden and Sørensen og Balchen to identify Best Practices, which will be the basis for a future strategy at Group level.
Mekonomen strives for the Group's organisation to be diverse and reflect the society in which we live. As the product and service range expands within MECA Scandinavia, Mekonomen Norden and Sørensen og Balchen and new target groups are defined, the increasing need for diversity will become even more distinct, including the proportion of women. It has been traditionally easier for the Group companies to attract male employees than female, which is a pattern within the automotive industry. Within Mekonomen Norden, there is an important target stipulating that 30 per cent of employees in stores are female.
Employee surveys are conducted annually within all three Group companies. The objective is to document and measure employees' view of their employer. Here, opinions from all employees can be documented and the results will be a basis from which to implement changes in the company, both overall and in individual groups/units.
When planning competency and development activities within Mekonomen, it is important that we not only satisfy current requirements but also look ahead to prepare ourselves for future challenges. This is how we will secure future competitiveness for both the company and individual employees.
During 2012, MECA Scandinavia initiated an activity called "A healthier MECA Heart," which consists of two parts: health check-ups " That Mekonomen is perceived externally as a reliable, stable and attractive business partner is also beneficial in all existing and potential new business relationships"
and employee discussions. The aim of the project is to offer employees activities to reduce stress, undergo anti-tobacco treatment, as well as provide tips on exercises to increase the maximum oxygen consumption.
Within Mekonomen Norden, 2012 was nominated a Health Year, with activities for employees' health and well-being. Through an internal platform, employees were able to register and report their exercise achievements for the competition. The competition was based on employees' being able to choose various forms of exercise from an extensive list, which included everything from judo and cycling to all forms of ball games, running, jogging and walking. Within the framework of Health Year, tips and inspiration were also provided on how food, exercise and stress management do not have to be time consuming. Overall, more than 800 employees in Mekonomen Norden participated in Health Year.
En Frisk Generation is a foundation started in 2011, as a joint initiative by researchers from the Karolinska Institute, private companies and various associated organisations. The purpose was to establish a long-term, viable method to impact public health by the early involvement of entire families in a healthier and more enjoyable lifestyle.
The operation started for families with pupils in Class 2 at Blombacka School in Södertälje. During autumn 2012, another school in Södertälje joined the foundation and so did a school in Haninge in 2013.
En Frisk Generation focuses on increasing knowledge on the importance of exercise and good eating habits through direct contact with families, children and adults, in the areas in which resources may be limited. In cooperation with the children's schools, physical activities are combined with knowledge and motivation to improve the families' attitudes
to lifestyle and health. The objective for the future is to involve more schools and families around Sweden.
The private companies involved in En Frisk Generation include two main sponsors, ICA and Mekonomen, which have both been involved from the start.
To facilitate young people's entrance into the labour market, Mekonomen participates in several collaborations, including with the Public Employment Services, Telge Tillväxt, Farsta High School and the Stockholm School of Economics.
Since 2010, Mekonomen has participated in Telge Tillväxt, which focuses on providing the young people of Södertälje with work experience, contacts, references and information about working life, with the objective to halve youth unemployment in Södertälje within three years. In 2012, Mekonomen Norden in Sweden recruited 21 individuals who worked in accounting administration, tyre replacement, warehouse work and in stores.
Mekonomen's collaboration with Farsta High School, along with the Swedish Trade Federation and Axel Johnson, involves reducing unemployment among young people by offering trainee positions in our stores. Together with the Stockholm School of Economics, we are active in the Centre for Retail programme, a three-year university programme aimed at creating a knowledge centre with a focus on retail. In addition, there is a partnership with various vehicle technology courses.
The Swedish Cancer Fund's Pink Ribbon campaign is held in Sweden in October every year. During 2012, Mekonomen Norden was one of the main sponsors for the third consecutive year. Being active in the Pink Ribbon campaign, together with our employees and
customers, we make a contribution and work for something that is positive for society. Approximately SEK 1.5 M was collected from a number of campaigns for the Swedish Cancer Fund.
By continuing to develop a responsible Mekonomen, value is added to our brands. Focusing on sustainable responsibility will particularly strengthen the Group internally by attracting the best talents, who, in turn, will improve our competitiveness.
That we are perceived externally as reliable, stable and attractive business partners is also beneficial to all existing and potentially new business relations.
Finally, Mekonomen's assuming responsibility generates high credibility for our customers, both in stores and workshops, which increases customer loyalty.
| SEK M | 2012 | 2011 | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|
| Net sales | 5,292 | 4,140 | 3,374 | 3,129 | 2,646 |
| Other revenues | 134 | 97 | 73 | 77 | 45 |
| Goods for resale | -2,475 | -1,866 | -1,607 | -1,530 | -1,317 |
| Other expenses | -2,423 | -1,835 | -1,355 | -1,352 | -1,123 |
| EBIT | 528 | 536 | 485 | 325 | 251 |
| Profit after financial items | 474 | 523 | 485 | 323 | 261 |
| Tax on profit for the year | -92 | -143 | -134 | -86 | -72 |
| PROFIT FOR THE YEAR | 382 | 380 | 351 | 237 | 189 |
| SEK M | 2012 | 2011 | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|
| ASSETS | |||||
| Intangible assets | 3,086 | 1,116 | 348 | 278 | 254 |
| Other fixed assets | 381 | 302 | 207 | 180 | 148 |
| Inventories | 1,203 | 934 | 680 | 620 | 602 |
| Accounts receivable | 495 | 411 | 287 | 265 | 217 |
| Other current assets | 302 | 225 | 162 | 126 | 116 |
| Cash and cash equivalents | 241 | 67 | 74 | 60 | 85 |
| TOTAL ASSETS | 5,708 | 3,054 | 1,758 | 1,529 | 1,423 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||||
| Shareholders' equity, Parent Company's shareholders | 2,303 | 1,539 | 955 | 877 | 833 |
| Non-controlling interest | 13 | 17 | 19 | 18 | 18 |
| Long-term liabilities | 2,059 | 511 | 24 | 29 | 42 |
| Current liabilities | 1,333 | 988 | 760 | 605 | 530 |
| SEK M | 2012 | 2011 | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|
| Cash flow from operating activities | 518 | 259 | 358 | 289 | 209 |
| Cash flow from investing activities | -1,510 | -512 | -184 | -92 | -93 |
| Cash flow from financing activities | 1,165 | 246 | -160 | -222 | -321 |
| CASH FLOW FOR THE YEAR | 173 | -7 | 14 | -25 | -205 |
| Amounts in SEK per share unless otherwise stated | 2012 | 2011 | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|
| Profit | 10.80 | 11.39 | 10.95 | 7.38 | 5.84 |
| Cash flow | 14.93 | 7.98 | 11.60 | 9.38 | 6.77 |
| Shareholders' equity | 64.2 | 46.9 | 30.9 | 28.4 | 27.0 |
| Dividends** | 7 | 8 | 8 | 7 | 6 |
| Share of profit paid, % | 65 | 69 | 73 | 95 | 103 |
| Share price at the end of the year | 206.5 | 225 | 223 | 155 | 70 |
| Share price, highest for the year | 246 | 257.5 | 228 | 159.5 | 151 |
| Share price, lowest for the year | 180 | 157 | 131 | 71.75 | 58.25 |
| Direct yield, % | 3.4 | 3.6 | 3.6 | 4.5 | 8.6 |
| P/E ratio at the end of the year, multiple | 19.1 | 19.8 | 20.4 | 21.0 | 12.0 |
| Average number of shares after dilution effects*** | 34,692,458 | 32,436,258 | 30,868,822 | 30,868,822 | 30,868,822 |
| Number of shares at the end of the period | 35,901,487 | 32,814,605 | 30,868,822 | 30,868,822 | 30,868,822 |
| Number of shareholders at the end of the year | 8,138 | 7,735 | 8,024 | 7,430 | 6,559 |
*) For information on definition of key figures, refer to page 63.
**) Board of Directors' proposal for 2012. ***) No dilution is current.
| 2012 | 2011 | 2010 | 2009 | 2008 | |
|---|---|---|---|---|---|
| Sales growth, % | 28 | 23 | 8 | 19 | 6 |
| Gross margin, % | 53 | 55 | 52 | 51 | 50 |
| EBIT margin, % | 10 | 13 | 14 | 10 | 9 |
| Profit margin, % | 9 | 12 | 14 | 10 | 10 |
| Capital employed, SEK M | 4,432 | 2,203 | 1,060 | 925 | 905 |
| Operating capital, SEK M | 4,191 | 2,136 | 986 | 865 | 820 |
| Return on capital employed, % | 15 | 29 | 49 | 36 | 28 |
| Return on operating capital, % | 17 | 34 | 52 | 39 | 33 |
| Return on shareholders' equity, % | 19 | 27 | 37 | 27 | 20 |
| Return on total capital, % | 11 | 20 | 30 | 22 | 19 |
| Equity/assets ratio, % | 41 | 51 | 55 | 59 | 60 |
| Net debt/equity ratio, multiple | 0.8 | 0.4 | 0 | neg | neg |
| Interest-coverage ratio, multiple | 10 | 26 | 151 | 66 | 33 |
| Net indebtedness, SEK M | 1,875 | 580 | 12 | neg | neg |
| AVERAGE NUMBER OF EMPLOYEES | |||||
| Sweden | 1,287 | 1,076 | 850 | 789 | 732 |
| Norway | 690 | 475 | 251 | 243 | 233 |
| Denmark | 404 | 392 | 358 | 398 | 397 |
| Finland | 24 | 15 | 3 | - | - |
| GROUP | 2,405 | 1,958 | 1,462 | 1,430 | 1,362 |
| NUMBER OF STORES/of which proprietary | |||||
| Mekonomen Sweden | 143/115 | 144/114 | 141/111 | 134/103 | 123/103 |
| Mekonomen Norway | 51/35 | 53/36 | 47/32 | 47/31 | 44/29 |
| Mekonomen Finland | 7/4 | 3/3 | 2/2 | - | - |
| Mekonomen Iceland | 1/0 | 1/0 | - | - | - |
| Marinshopen | 2/2 | 1/1 | - | - | - |
| Total Mekonomen Norden | 204/156 | 202/154 | 190/145 | 181/134 | 167/132 |
| Sørensen og Balchen - Norway | 78/36 | 77/35 | - | - | - |
| MECA Sweden | 64/43 | - | - | - | - |
| MECA Norway | 25/24 | - | - | - | - |
| MECA Denmark | 49/41 | 54/40 | 40/37 | 39/38 | 39/39 |
| Total MECA M by Mekonomen |
138/108 1/1 |
54/40 1/1 |
40/37 1/1 |
39/38 - |
39/39 - |
| GROUP | 421/301 | 334/230 | 231/183 | 220/172 | 206/171 |
| NUMBER OF MEKONOMEN SERVICE CENTRES | |||||
| Sweden | 484 | 438 | 426 | 401 | 363 |
| Norway | 387 | 380 | 352 | 331 | 320 |
| Denmark | 219 | 215 | 195 | 178 | 169 |
| Finland | 4 | 3 | 2 | - | - |
| GROUP | 1 094 | 1 036 | 975 | 910 | 852 |
| NUMBER OF MEKOPARTNERS | |||||
| Sweden | 137 | 128 | 128 | 117 | 75 |
| Norway | 73 | 78 | 63 | 53 | 38 |
| Denmark | 216 | 214 | 172 | 126 | 86 |
| GROUP | 426 | 420 | 363 | 296 | 199 |
| NUMBER OF BILXTRA WORKSHOPS | |||||
| Norway | 225 | 219 | – | – | – |
| GROUP | 225 | 219 | - | - | - |
| NUMBER OF SPEEDY WORKSHOPS | |||||
| Sweden | 11 | 11 | 11 | – | – |
| GROUP | 11 | 11 | 11 | - | - |
| NUMBER OF MECA CAR SERVICE WORKSHOPS | |||||
| Sweden | 334 | - | - | - | - |
| Norway | 212 | - | - | - | - |
| GROUP | 546 | - | - | - | - |
| TOTAL NUMBER OF AFFILIATED WORKSHOPS IN THE GROUP | 2,302 | 1,686 | 1,349 | 1,206 | 1,051 |
*) For information on definition of key figures, refer to page 63.
| Full-year 2012 |
Q4 2012 | Q3 2012 | Q2 2012 | Q1 2012 | Full-year 2011 |
Q4 2011 | Q3 2011 | Q2 2011 | Q1 2011 | |
|---|---|---|---|---|---|---|---|---|---|---|
| NET SALES, SEK M | ||||||||||
| MECA | 1,702 | 612 | 539 | 360 | 191 | 759 | 190 | 187 | 195 | 187 |
| Mekonomen Norden | 2,830 | 721 | 675 | 741 | 692 | 2,766 | 703 | 707 | 744 | 611 |
| Sørensen og Balchen | 748 | 188 | 180 | 194 | 186 | 603 | 176 | 190 | 199 | 39 |
| Other | 12 | 3 | 6 | 3 | 1 | 13 | 5 | 2 | 4 | 2 |
| GROUP | 5,292 | 1,524 | 1,400 | 1,298 | 1,070 | 4,140 | 1,074 | 1,086 | 1,142 | 838 |
| EBIT, SEK M | ||||||||||
| MECA | 92 | 20 | 37 | 26 | 10 | 63 | 1 | 18 | 26 | 17 |
| Mekonomen Norden | 376 | 84 | 95 | 103 | 94 | 438 | 101 | 119 | 126 | 91 |
| Sørensen og Balchen | 78 | 20 | 19 | 27 | 11 | 88 | 25 | 25 | 37 | 2 |
| Other | -18 | 1 | 0 | -15 | -4 | -53 | -23 | 1 | -16 | -15 |
| GROUP | 528 | 125 | 151 | 141 | 111 | 536 | 104 | 163 | 173 | 95 |
| EBIT MARGIN, % | ||||||||||
| MECA | 5 | 3 | 7 | 7 | 5 | 8 | 1 | 10 | 13 | 9 |
| Mekonomen Norden | 13 | 12 | 14 | 13 | 13 | 16 | 14 | 16 | 17 | 15 |
| Sørensen og Balchen | 10 | 11 | 10 | 14 | 6 | 15 | 14 | 13 | 18 | 4 |
| GROUP | 10 | 8 | 11 | 11 | 10 | 13 | 10 | 15 | 15 | 11 |
| QUARTERLY DATA, GROUP | ||||||||||
| Net financial items, SEK M | -54 | -16 | -24 | -8 | -4 | -13 | -4 | -2 | -6 | 0 |
| Profit after financial items, SEK M | 474 | 109 | 127 | 132 | 106 | 523 | 100 | 161 | 167 | 95 |
| Tax, SEK M | -92 | 12 | -36 | -39 | -29 | -143 | -29 | -44 | -45 | -25 |
| Profit for the period, SEK M | 382 | 121 | 91 | 93 | 77 | 380 | 71 | 118 | 122 | 70 |
| Gross margin, % | 53 | 52 | 55 | 52 | 55 | 55 | 56 | 55 | 54 | 54 |
| Earnings per share, SEK | 10.80 | 3.36 | 2.46 | 2.65 | 2.29 | 11.39 | 2.16 | 3.53 | 3.67 | 2.12 |
*) For information on definition of key figures, refer to page 63.
The Board of Directors and President of Mekonomen AB (publ), Corporate Registration Number 556392-1971, hereby submit the Annual Report and Consolidated Accounts for the 2012 financial year.
The Mekonomen Group comprises the three Group companies: MECA Scandinavia, Mekonomen Norden and Sørensen og Balchen. We offer a broad and accessible range of affordable and innovative solutions and products for consumers and companies. The Mekonomen Group includes the leading automotive spare-parts chains in the Nordic region, with proprietary wholesale operations. As of 31 December 2012, the Mekonomen Group had more than 400 stores and about 2,300 affiliated workshops operating under the Mekonomen brand.
The Parent Company has its registered office in Stockholm. The head office is located at Smista Allé 11, SE-141 70 Segeltorp, Sweden. The Parent Company's share is listed on Nasdaq OMX Mid-Cap list. The three largest owners in the Parent Company as of December 31, 2012 are the Axel Johnson AB Group, with 26.5 per cent, Eva Fraim Påhlman, with 5.6 per cent and Threadneedle Investments, with 5.1 per cent.
The 2012 financial year was characterised by weak market growth. However, the Mekonomen Group reported stronger growth than the overall market in the Nordic region, primarily due to successful marketing activities. The Group's revenues for the full-year 2012, including the MECA acquisition, rose 28 per cent to SEK 5,426 M (4,237) while EBIT declined to SEK 528 M (536). EBITA for the full year rose 7 per cent to SEK 602 M (560).
MECA Scandinavia was acquired in May 2012 which contributed an additional 90 stores and nearly 500 MECA Car Service workshops.
During the year, strong focus was on the integration of MECA and Sørensen og Balchen, which was successful. Both MECA and Sørensen og Balchen have recorded favourable earnings since each company was acquired. Following the acquisition of Sørensen og Balchen in 2011 and MECA in 2012, the focus ahead is to consolidate the operations, in addition to continued integration work.
The number of affiliated workshops continue to increase and as at 31 December 2012 amounted to 2,302 (1,686), of which Mekonomen Service Centres increased to 1,094 (1,036), MekoPartner to 426 (420), BilXtra to 225 (219), Speedy to 11 (11) and MECA Car Service to 546 (0). The number of stores in the chain increased by 87, of which 71 were proprietary stores. The total number of stores in the chain at the end of the year was 421 (334), of which 301 (230) are proprietary stores.
Revenues for the full year increased 28 per cent to SEK 5,426 M (4,237). Other revenues include exchange-rate gains of SEK 27 M (14), as well as rental revenue, property-related revenue, licenses, etc. The organic growth, meaning the increase in net sales adjusted for acquisitions, currency effects and the number of workdays, was 2 per cent (2) during 2012.
EBIT amounted to SEK 528 M (536) and the EBIT margin was 10 per cent (13).
Profit after financial items amounted to SEK 474 M (523). Net financial expense amounted to SEK 54 M (expense: 13). Net interest expense amounted to SEK 42 M (expense: 14) and other financial items totalled an expense of SEK 11 M (income: 1). Net financial expense was negatively impacted by currency effects totalling SEK 4 M (pos: 2).
Profit for the year amounted to SEK 382 M (380) and earnings per share to SEK 10.80 (11.39). Of the year's profit, SEK 375 M (370) was attributable to the Parent Company's shareholders and SEK 7 M (10) to non-controlling interests.
Net sales (external) for the entire MECA segment, including MECA Denmark, amounted to SEK 1,702 M. EBIT amounted to SEK 92 M and the EBIT margin was 5 per cent. The number of stores was 138, of which 108 were proprietary stores.
Since 1 October 2012, Mekonomen's Danish operation has been governed by MECA. Denmark's sales and earnings are thus included in the MECA segment for the January – December 2012 period.
Net sales (external) for MECA Scandinavia, excluding MECA Denmark, amounted to SEK 1,000 M for the period 23 May – 31 December. EBIT amounted to SEK 130 M and the EBIT margin was 13 per cent.
Sales and earnings pertaining to the acquisition of MECA Scandinavia applied to the period 23 May – 31 December 2012. Earnings during the period were positively impacted by acquisition synergies. The integration project is progressing well and is ahead of schedule. Furthermore, earnings were charged with amortisation totalling SEK 35 M of intangible fixed assets identified in connection with the acquisition for the 23 May – 31 December period.
Net sales (external) for MECA Denmark amounted to SEK 702 M (759), the operating loss was SEK 38 M (profit: 63) and the EBIT margin was a negative 5 per cent (pos: 8). Earnings were negatively impacted by a lower gross margin and non-recurring effects totalling SEK 12 M (0).
Measures are implemented continuously to adapt the structure and costs in Denmark to the prevailing market situation, with a focus on retaining Mekonomen's strong position in the market, according to MECA's B2B model. It has been deemed that Denmark's earnings will be impacted by further structural costs of SEK 15 M during the first as well as during the second quarter of 2013.
Net sales (external) rose 2 per cent to SEK 2,830 M (2,766). The number of workdays was three fewer in 2012 compared with 2011 as well as the the currency effects to NOK were negative for the full year. The underlying net sales rose 3 per cent (8).
EBIT amounted to SEK 376 M (438) and the EBIT margin was 13 per cent (16). The number of stores amounted to 204 (202), of which 156 (154) were proprietary.
Net sales (external) for Mekonomen Sweden amounted to SEK 1,724 M (1,747) and EBIT was SEK 287 M (323).
Net sales (external) for Mekonomen Norway amounted to SEK 824 M (808) and EBIT was SEK 120 M (132).
Sales to affiliated workshops progressed well during the year, while there was a decline to other workshops. This change generated weaker gross margins in both Sweden and Norway. The year was characterised by a weak market, pertaining mainly to sales to consumers and sales of accessories, which had a negative impact primarily in Sweden. In Norway, the proportion of sales to consumers rose during the year, mainly due to the successful marketing of the Mekonomen card in Norway.
In Finland, a regional warehouse was established in Helsinki in March, which has strengthened the logistics capacity for Mekonomen's continued deployment of units in Finland. This was a key step in Mekonomen's continued investment in the Finnish market, where four new mediumunits were established during the year.
Net sales (external) totalled SEK 748 M (603) and EBIT amounted to SEK 78 M (88), with an EBIT margin of 10 per cent (15). Sørensen og Balchen was acquired in March 2011 and sales and earnings for the comparative period pertained to 11 March–31 December 2011.
Before amortisation of intangible fixed assets related to the full year acquisition, profit was SEK 97 M for the full-year 2012. Net sales for the full year 2011 amounted to SEK 728 M and EBIT was SEK 92 M. The integration effort since the acquisition of Sørensen og Balchen continues successfully and had a positive impact on earnings.
The number of stores amounted to 78 (77), of which 36 (35) are proprietary.
Mekonomen's acquisition of the automotive spare-parts chain MECA Scandinavia was concluded on 23 May following acquisition approval by the Norwegian Competition Authority. Annual synergies, as a direct result of the acquisition, are estimated at SEK 80 M from 2013. MECA will continue to operate as a separate group under the existing brand. Payment comprised 3,086,882 new share issues through a non-cash issue and SEK 1,351 M in cash. MECA is included in Mekonomen's financial reporting from the date of acquisition, 23 May 2012. The total purchase consideration amounted to SEK 2,010 M. The acquisition contributed an additional 90 stores and nearly 500 MECA Car Service workshops in the Swedish and Norwegian markets.
MECA Denmark acquired two partner stores located in Holbæk and Brønderslev, and has started a new store in Skærbæk. During the year, Mekonomen Norden acquired five partner stores in Sweden located in Åmål, Sala, Mölndal, Högsbo and Kungsbacka, and established a new store in Partille. Partnership medium facilities were also opened in Strömstad and Linköping and a store in Akalla converted from proprietary to partner. In addition, Mekonomen Norden acquired and divested non-controlling interests in stores and workshops in Sweden. In Finland, a new store opened in Kuopio and three partner stores were affiliated in Jakobstad, Ekenäs and Mariehamn. Of the four marine stores that Mekonomen took over from Huges, the stores in Roslagen and Orust were discontinued during the third quarter.
In Sørensen og Balchen, a new store was opened in Os, outside Bergen, Norway, during the first quarter.
During the year, investments in tangible fixed assets amounted to SEK 80 M (95). Depreciation of tangible fixed assets for the full year was SEK 73 M (58). In addition to this, investments in new IT systems amounted to SEK 42 M (39) during the year.
Company and business acquisitions amounted to SEK 2,046 M (917)
during the year. Acquired assets in these acquisitions totalled SEK 617 M (372) and acquired liabilities totalled SEK 325 M (127). In addition to goodwill, which amounted to SEK 1,109 M (496), intangible surplus value was identified pertaining to brands SEK 270 M (56), franchise contracts SEK 0 M (47) and customer relations SEK 600 M (136). The deferred tax liability attributable to the acquired intangible assets amounted to SEK 229 M (64). The brand has an indefinite useful life, franchise contracts and customer relations are deemed to have a useful life of ten years. See Note 28 for effects of implemented acquisitions.
Cash and cash equivalents and current investments at the end of the year amounted to SEK 241 M, compared with SEK 67 M as of 31 December 2011. Unutilised short-term credits as of 31 December 2012 amounted to SEK 325 M (192). The equity/assets ratio was 41 per cent (51). At the end of the year, interest-bearing liabilities amounted to SEK 2,116 M (647), of which the current portion amounted to SEK 296 M (198) and net indebtedness amounted to SEK 1,875 M (580). The increase in interest-bearing liabilities was primarily attributable to the acquisition of MECA.
Cash flow for the year was SEK 173 M (neg: 7). Cash flow from operating activities amounted to SEK 518 M (259). The change between the years was primarily due to lower restrictions in working capital compared with the preceding year. Cash flow from investment activities was negative SEK 1,510 M (neg: 512) and mainly due to the acquisition of operations, as well as investments in fixed assets. Cash flow from financing activities amounted to SEK 1,165 M (246). Loans raised during the period amounted to SEK 1,650 M (600), which were amortised by SEK 210 M (78) during the year, including changes in overdraft facility. Dividend paid to shareholders totalled SEK 275 M (276).
The number of employees at the end of the period was 2,572 (2,029) and the average number of employees during the period was 2,405 (1,958).
Remuneration to senior executives is presented in Note 5. The Board of Directors will propose the following guidelines for remuneration of senior executives to the Annual General Meeting.
The company shall strive to offer its senior executives marketbased remuneration, that the criteria shall accordingly be based on the significance of assignments, competency requirements, experience and performance and that remuneration shall comprise the following parts:
The Board's proposal for the principles agrees with the previous years' remuneration principles and is based on agreements already entered into between the company and senior executives. The distribution between basic salary and variable remuneration shall be in proportion to the senior executive's responsibilities and authorities. The variable remuneration for the President and other senior executives is based partly on the Group's profit and partly on individual qualitative parameters and can amount to a maximum of 60 per cent of the basic salary for the President and a maximum of 33 per cent of the basic salary for other senior executives.
Senior executives refer, in addition to the President, to the four indi-
viduals who jointly with the President comprise Group management. Other benefits refer primarily to company cars. Pension premiums are paid in an amount that is based on the ITP plan or a corresponding system for employees abroad. For the President, pension provisions according to the employment agreement are paid in an amount corresponding to 29 per cent of the basic salary. Pensionable salary refers to the basic salary. In the event of termination from the company, severance pay can amount to a maximum of one year's basic salary. In addition, there is a special bonus program that extends for three years and is based on the Group's profits for the 2011-2013 financial years. The bonus program, in its entirety, as a total expense for the company, shall amount to a maximum of SEK 24 M for the period. The criteria for the size of an individual bonus shall be determined by the company's Board of Directors.
Mekonomen's earnings are impacted by a number of factors, such as sales volumes, currency fluctuations on imported goods and sales to foreign subsidiaries, margins on purchased goods, salary changes, etc. As a result of the acquisition of MECA in May 2012, currency exposure in NOK and EUR, as well as exposure to the interest-rate market increased during 2012. Import occurs nearly exclusively from Europe, where the currencies largely consist of EUR, SEK and NOK. Purchases in EUR comprised approximately 23 per cent of the purchased volumes. Due to the high correlation between DKK and EUR, sales and purchases in these currencies can be matched; the table below shows the currency effects on the net flow for each currency. NOK and DKK pertain to internal sales from Mekonomen Grossist AB, as well as from MECA CarParts AB to each country and earnings for the year in Norway and Denmark. Hedging pertaining to the net flows and internal receivables has been done during the year.
| BEFORE TAX, SEK M | Change | Impact *) |
|---|---|---|
| Sales volume | +1% | 32 |
| Exchange-rate fluctuations | ||
| - NOK | +1% | 8 |
| - EUR | +1% | -3 |
| - DKK | +1% | +0 |
| Gross margin | plus one perc. pt. | 59 |
| Personnel expenses | +1% | -14 |
| Interest rate **) | +1% | -19 |
*) All things being equal, profit before tax for the 2012 financial year. Recalculated to include MECA for the full year.
**) Effect based on the Group's net debt as of 31 December 2012.
The market trend for 2012 was characterised by weak market growth, primarily pertaining to sales to consumers and accessories sales.
Mekonomen's primary competitors are players in the so-called branddependent segment, which traditionally had a high market share in the aftermarket for passenger cars.
Competition pertaining to spare-parts sales to workshops is considerable from both brand-dependent and brand-independent players. In the brand-independent trade in Sweden, there are slightly more
than 400 stores, where the five largest players, including Mekonomen Norden and MECA, all have a range that covers most vehicle brands. The situation is similar in both Norway and Denmark with a few large players offering a comprehensive range but with competition from a number of smaller players. Brand-dependent players also compete with Mekonomen in this market. In this market, availability is very important, which means that the rate of delivery is a key competitive factor.
In terms of accessories, Mekonomen competes with a large number of players from various industries, such as petrol stations, conveniencegoods trade, stores for products for children, stores for accessories for pets, electronic chains, etc.
During 2012, we noted higher price competition compared with earlier years, primarily from players in the independent sector but also from the brand-dependent sector.
The company is highly aware that the increasingly centralised IT structure could provide the Group with major advantages and improved opportunities. This also entails major risks in the form of the risk of operational stops in central functions pertaining to the Group's systems for order and inventory management.
Major emphasis is placed on the Group's fire prevention work since a fire at any of the Group's centralised warehouses would have a major impact on the service to the Group's customers.
Since Mekonomen's operations include cash management, this entails a risk of theft, with respect to stores and transportation of cash to the bank. Mekonomen strives to provide the same level of solutions for security services, security systems and cash management for all companies within the Group.
Mekonomen's operations include sales and storage of a large number of products. Since a large portion of these products are theft-prone, there is always a risk of shrinkage. At Mekonomen, work is continuously in progress to define scrapping, internal consumption and actual theft. The work to combat shrinkage is based on the idea that it is important to focus on all types of shrinkage, for example, by reviewing order procedures, delivery checks and unpacking of goods. This will improve knowledge of procedures to manage shrinkage, while providing a basis for higher vigilance on goods that are particularly theft-prone.
Through its operations, Mekonomen is exposed to currency, credit, interest-rate and liquidity risks. Refer also to Note 32 for a description of the financial risks identified and managed by Mekonomen.
The Parent Company's operations comprise Group management and Group-wide functions, as well as finance management. The loss after net financial items was SEK 56 M (loss: 18), excluding dividends from subsidiaries totalling SEK 151 M (146). The average number of employees was 68 (76).
During the year, Mekonomen AB sold goods and services to Group companies totalling SEK 109 M (108).
The Group does not conduct any operations that require permits according to the Swedish Environmental Code. The Group complies with an environmental plan that was adopted in 2010 as part of the operational policy.
Environmental activities are concentrated on the best and most efficient way to adapt operations environmentally in terms of the management of chemicals and other hazardous goods, distribution and sorting of packaging material. During 2012, training activities already in progress continued in order to certify as many stores and workshops as possible. We also performed a large number of internal and external audits, where we checked compliance with prevailing legislations and that we comply with the expectations placed on us by our management system. Our certification also includes ISO9001 quality and OHSAS 18001 work environment, in addition to ISO14001 environment. At centralised warehouses and store warehouses, fireproof rooms for chemicals and petroleum products are being constructed and when procuring transport services, considerable emphasis is placed on high efficiency and less reloading to minimise the transport distances.
No significant events occurred after the end of the financial year.
Following the acquisition of Sørensen og Balchen in 2011 and MECA in 2012, the focus has been on consolidating the operations. The 2013 financial year will also be a year of consolidation, with strong focus on improving profitability in both Denmark and the Group as a whole. The total market remained weak and the prevailing market situation continues to be uncertain.
During the financial year, a new share issue was implemented in connection with the acquisition of MECA Scandinavia. The newly issued shares were valued at a closing rate of SEK 213.50 on 22 May 2012. The new issue involved an increase of 3,086,882 in the number of shares and an increase of SEK 8 M in the share capital, as well as an increase of SEK 651 M in other contributed capital. As of 31 December 2012, Mekonomen's share capital amounted to SEK 90 M (82) and comprised 35,901,487 shares (32,814,605) at a quotient value of SEK 2.50 per share (2.50). Each share carries one vote at the Annual General Meeting and all shares carry equal entitlement to a share in the company's profits and assets. Each shareholder is entitled to vote for all their shares with no restrictions and the shares are not included in any transfer restrictions.
Axel Johnson AB represents 26.5 per cent of the voting rights. For information about the ten largest shareholders as of 31 December 2012, refer to the table on page 24.
The Annual General Meeting resolved on 23 May 2012 to authorise the Board, for the period until the next Annual General Meeting, on one or more occasions, with or without preferential rights for shareholders, to make decisions on new share issues of not more than 3,281,461 shares. The decision about new share issues may include provisions that the issued shares may be paid in kind, through offsetting or generally
include terms and conditions pursuant to Chapter 13, Section 5, Paragraph 6 of the Swedish Companies Act. The Board of Directors was also authorised to make decisions pertaining to general terms and conditions for the new share issue. The purpose of the authorisation was to allow the company to issue shares as purchase-consideration payment in connection with acquisition of other companies and/or assets deemed by the Board to be of value to Mekonomen's operation.
At the end of the financial year, no new shares were issued supported by the above authorisation.
It is the Board's intention that Mekonomen will pay dividends corresponding to not less than 50 per cent of profit after tax. When determining future dividends, consideration will primarily be made to investment needs, but also to other factors deemed significant by Mekonomen's Board of Directors.
As far as the Board of Mekonomen is aware, no shareholder agreements exist or other agreements between Mekonomen's shareholders for joint influence over the company. As far as the Board of Mekonomen is aware, there are no agreements or similar that may result in a change in the control of the company.
The Board proposes a dividend of SEK 7.00 (8.00) based on earnings per share for the year, which is 65 (69) per cent of earnings per share.
At the Annual General Meeting in May 2012, it was resolved that the Board shall comprise seven ordinary members with no deputy members. All existing Board members, Fredrik Persson, Marcus Storch, Antonia Ax:son Johnson, Kenny Bräck, Anders G Carlberg, Wolff Huber and Helena Skåntorp were re-elected. Fredrik Persson was re-elected Chairman of the Board.
During 2012, the Board held ten (10) meetings, of which one was a statutory meeting. At the Board meetings, it was primarily the company's financial development, the launch of new concepts and major acquisitions that were addressed.
Within Mekonomen's Board, there is a Remuneration Committee that focuses on remuneration of Company Management. This Committee, which held four meetings in 2012, comprises Fredrik Persson, Marcus Storch and Anders G Carlberg. Other matters are handled by the Board in its entirety.
The auditor for the company is elected annually at the Annual General Meeting. According to a resolution of the Annual General Meeting, auditors' fees are paid against approved invoices. The company's auditor participates in Board meetings in conjunction with the third-quarter report and at the Board meeting at which year-end reports are presented, and in this connection, submits the report from the audit of the company's financial position and internal control. At the 2012 Annual General Meeting, the auditing firm of Deloitte AB, with Authorised Public Accountant Thomas Strömberg as the Auditor in Charge, was elected for the period ending with the 2013 Annual General Meeting.
The following profit is available for distribution by the Annual General Meeting, SEK 000s:
| TOTAL | 1,817,023 |
|---|---|
| Profit for the year | 227,066 |
| Share premium reserve | 651,332 |
| Profit brought forward | 938,625 |
Board of Directors and President propose that profits be distributed as follows:
| Dividend to shareholders (SEK 7/share) | 251,310 |
|---|---|
| To be carried forward | 1,565,713 |
| TOTAL | 1,817,023 |
Following the proposed dividend, the Parent Company's equity/assets ratio will amount to 45 per cent and the Group's equity/assets ratio to 38 per cent calculated on the balance-sheet date, 31 December 2012. The equity/assets ratio is satisfactory considering that the company's and the Group's operations continue to operate profitably, which means that the equity/assets ratio following dividend payment in April 2013 will exceed the above-stated levels. It is estimated that cash and cash equivalents in the company and the Group will remain at a satisfactory level.
The Board is of the opinion that the proposed dividends do not prohibit the Parent Company or other Group companies from fulfilling their obligations in the short or long term. Neither do the dividends influence the Group's ability to implement required investments. Accordingly, the proposed dividend can be justified by what is stated in the prudence principle, Chapter 17, Section 3, Paragraphs 1-3 of the Swedish Companies Act.
For further information regarding the company's and the Group's earnings, refer to the following income statement, balance sheet, cash-flow statements and accompanying notes.
This report was prepared in accordance with the Swedish Companies Act and the Swedish Code of Corporate Governance. If companies included in the Code in no way apply the Code, this must be clearly stated and the reasons explained. Any deviations from the Code by Mekonomen and associated explanations are reported in the running text.
The share capital amounted to SEK 89,753,718 on 31 December 2012, represented by 35,901,487 shares. Each share represents one voting right at the Annual General Meeting. The total market value for the company on 31 December 2012 amounted to SEK 7.4 billion, based on the closing price of SEK 206.50.
The number of shareholders on 31 December 2012 was 8,138. At the same date, the ten largest shareholders controlled 54.9 per cent of the capital and voting rights and the participation of foreign owners accounted for 30.0 per cent of the capital and voting rights.
| Shareholders | Number of shares |
% of votes and capital |
|---|---|---|
| Axel Johnson AB with subsidiaries | 9,516,235 | 26.5 |
| Eva Fraim Påhlman | 2,009,176 | 5.6 |
| Threadneedle Investments | 1,832,278 | 5.1 |
| SHB Funds (Finland) | 1,272,000 | 3.5 |
| Kempen European Participations N.V. | 1,091,483 | 3.0 |
| Ing-Marie Fraim Sefastsson | 1,000,000 | 2.8 |
| Enter Funds | 821,912 | 2.3 |
| SEB Funds | 734,983 | 2.0 |
| Swedbank Robur Funds | 721,522 | 2.0 |
| Alecta | 700,000 | 1.9 |
| TOTAL | 19,699,589 | 54.9 |
The Annual General Meeting is Mekonomen's highest governing body, at which every shareholder is entitled to participate. The Annual General Meeting shall be held within six months of the close of the financial year. The Annual General Meeting approves the income statement and balance sheet, the appropriation of the company's profit, decides on discharge from liability, elects the Board of Directors and auditors, and approves fees, addresses other statutory matters, as well as making decisions pertaining to proposals from the Board and shareholders. The company announces the date and location of the Annual General Meeting as soon as the Board has made its decision, but not later than in connection with the third-quarter report. Information pertaining to the location and time is available on the company's website. Shareholders that are registered in Euroclear's shareholders register on the record date and have registered participation in adequate time are entitled to participate in the Annual General Meeting and vote according to their shareholdings. All information concerning the company's meetings, such as registration, entitlement for items to be entered in the agenda in the notification, minutes, etc., are available on the company's website.
With regard to participation in the Annual General Meeting, the Board has deemed it is currently not financially justifiable to allow
shareholders to participate in the Annual General Meeting through any means other than physical presence. It is the company's ambition that the Annual General Meeting shall be a consummate body for shareholders, in accordance with the intentions of the, for example, Swedish Companies Act, which is why the objective is that the Board in its entirety, the representative of the Nomination Committee, the President, auditors and other management executives must always be present at the Annual General Meeting.
In accordance with a resolution at the Annual General Meeting on 23 May 2012, Mekonomen has established a Nomination Committee. The Nomination Committee shall prepare and submit proposals to the Annual General Meeting on 16 April 2013 pertaining to:
The Nomination Committee, prior to the 2013 Annual General Meeting, consists of Göran Ennerfelt, representing the Axel Johnson AB Group, Eva Fraim Påhlman, representing own shareholdings, Annika Andersson, representing Swedbank Robur Funds and Leif Törnvall, representing Alecta. The Nomination Committee elected Göran Ennerfelt as its Chairman. Mekonomen's Chairman, Fredrik Persson, has been co-opted to the Nomination Committee.
The Nominating Committee is entitled to charge the company with such costs as recruitment consultants and other consultants required to allow the Nominating Committee to fulfil its assignments. The Nominating Committee shall, in connection with its assignments otherwise, fulfil the tasks that rest upon the Nominating Committee in accordance with the Swedish Code for Corporate Governance.
Mekonomen has not established any specific age limit for Board members or time limits pertaining to the length of time Board members may sit on the Board. Auditors are elected annually when the matter is submitted to the Annual General Meeting.
According to the Articles of Association, the Board of Directors shall comprise three to seven members and not more than three deputy members.
The Board of Directors shall be elected annually at the Annual General Meeting. At the Annual General Meeting on 23 May 2012, it was decided that the Board shall comprise seven ordinary members with no deputy members. All existing Board members, Fredrik Persson, Marcus Storch, Antonia Ax:son Johnson, Kenny Bräck, Anders G Carlberg, Wolff Huber and Helena Skåntorp were re-elected. Fredrik Persson was elected Chairman of the Board.
All ordinary members are independent in relation to the company and its management in accordance with the definition in the Swedish Code of Corporate Governance. Three of the Board members are independent also in relation to major shareholders. The President is not a member of the Board, nor is any other member of the Management Group.
It is the opinion of the Nomination Committee that the Board's structure in terms of competency, experience and background is compatible with the company's operations, development phase and circumstances.
The Chairman of the Board, Fredrik Persson, is not employed by the company and does not have any assignments for the company beyond his chairmanship. It is the opinion of the Board that Fredrik Persson ensures that the Board conducts its assignments efficiently and also fulfils its duties in accordance with applicable laws and regulations.
The Board is responsible for the company's organisation and management and shall also make decisions pertaining to strategic issues. During 2012, the Board held ten meetings, of which one was a statutory meeting. The minutes of the meetings were recorded by the Board's secretary, who is the company's CFO. Relevant meeting documentation was sent to all members prior to each meeting, which were then held in accordance with the approved agenda. On occasions, other senior executives have participated in the Board Meetings in a reporting capacity, as necessary. No deviating views to be recorded in the minutes were expressed at any of the meetings during the year. Matters of high significance that were discussed during the year primarily concerned the company's financial development, the launch of new concepts and major acquisitions.
| Board of Directors | Present at Board meetings |
Dependent/ independent * |
Board member since |
|---|---|---|---|
| Fredrik Persson, Chairman | 10/10 | D | August 2006 |
| Marcus Storch, Vice Chairman |
10/10 | D | August 2006 |
| Wolff Huber | 9/10 | I | August 2006 |
| Kenny Bräck | 9/10 | I | May 2007 |
| Anders G Carlberg | 10/10 | D | August 2006 |
| Helena Skåntorp | 10/10 | I | May 2004 |
| Antonia Ax:son Johnson | 8/10 | D | August 2006 |
*) According to the definition in the Swedish Code of Corporate Governance. All Board members are independent of the company and its management.
I = Board members considered independent of major shareholders in the company. D = Board members considered dependent of major shareholders in the company.
In accordance with the requirements of the Code, the Board's ambition was to devote particular attention to establishing overall goals for the operation and decide on strategies by which to achieve the said goals, and in part to continuously evaluate the operating management, with the aim of securing the company's governance, management and control. The Board strives to ensure that there are functioning systems for the monitoring and control of the company's financial position in relation to the established goals, that control of compliance with laws and other regulations is implemented and that the provision of external information is open, objective and relevant.
There are written instructions that regulate the distribution of assignments between the Board and the President, and for the reporting process. The instructions are reviewed annually and are primarily:
The Board evaluates its work every year and it is the duty of the Chairman of the Board to ensure that this is done. The evaluation involves individual meetings between the Chairman of the Board and all Board members. The collective opinion is that the Board's work during 2012 functioned well and that the Board fulfilled the requirements of the Code pertaining to the Board's assignment.
The Annual General Meeting resolved, in accordance with the proposal from the Nomination Committee, to allocate Board fees amounting to SEK 1,700,000, of which SEK 400,000 to the Chairman of the Board and SEK 300,000 to the Executive Vice Chairman, with the remaining amount to be distributed equally among the other Board members.
The entire Board of Mekonomen assumes responsibility for ensuring that the Group has acceptable procedures for internal control and highquality, correct financial reporting. Twice per year, in connection with preparation of the financial accounting for the third quarter and annual financial statements, the company's auditors report to the Board their opinion on how the company's accounting, management and financial control functioned. Following the formal report, the President and CFO leave the Board meeting to allow Board members to discuss with auditors without the participation of company officials.
The Board of Directors has a Remuneration Committee comprising Fredrik Persson as Chairman, Marcus Storch and Anders G Carlberg. The work of the Remuneration Committee is based on resolutions by the Annual General Meeting pertaining to guidelines for remuneration to senior executives. Four meetings were held during the year and all members were present at these meetings. In addition, the President of the company, Håkan Lundstedt, was present at two of these meetings.
The President is appointed and may be discharged by the Board and his work is continuously evaluated by the Board, which occurs without the presence of Company Management. Mekonomen's President and CEO, Håkan Lundstedt, is also a member of the Board of Vanna AB, Dialect AB, as well as the foundation En Frisk Generation and has no shareholdings or ownership in companies with significant business ties with Mekonomen.
A presentation of the company Management is found on page 29.
Mekonomen's Board of Directors makes decisions pertaining to remuneration of the President. Håkan Lundstedt has a basic salary per month and a variable salary portion, which is based on the company's profits and can amount to a maximum of 60 per cent of the basic annual salary. Under the pension terms, payment of pension premiums is made in the amount corresponding to 29 per cent of the basic salary. Other benefits consist of a company car. The period of notice is 12 months if termination is on the part of the company and six months on the part of the employee. If termination is initiated by the company, severance pay amounting to six months' salary is paid. Issues pertaining to remuneration of other senior executives are also prepared by the Remuneration Committee. The principle for remuneration is based on the senior executives being offered market-based remuneration. The criteria shall accordingly be based on the significance of assignments, competency requirements, experience and performance and that remuneration shall comprise the following parts:
The distribution between basic salary and variable remuneration shall be in proportion to the senior executive's responsibilities and authorities. The variable remuneration for senior executives is based partly on the Group's profit and partly on individual qualitative parameters and can amount to a maximum of four months' salary. Other benefits refer primarily to company cars. Pension premiums are paid in an amount that is based on the ITP plan or a corresponding system for employees abroad. Pensionable salary refers to the basic salary. Severance pay for termination on the part of the company may amount to one annual salary. At the 2011 Annual General Meeting, it was also resolved that company management may receive a cash bonus from the company. The bonus will be profit-based and calculated on the Group's profit for the 2011-2013 financial years. The bonus program, in its entirety, as a total expense for the company, shall amount to a maximum of SEK 24 M for the period. The criteria for the size of an individual bonus shall be determined by the Board of Directors.
The Board has not made any decisions pertaining to share or shareprice based incentive programs for Company Management.
The auditors are appointed at the Annual General Meeting and are charged with reviewing the company's financial reporting and the Board's and President's management of the company. Deloitte AB, which has an organisation comprising broad and specialised competency that is well-suited to Mekonomen's operations, has been the company auditor since 1994. At the 2012 Annual General Meeting, Deloitte AB, with Authorised Public Accountant Thomas Strömberg as Auditor in Charge, was appointed as the auditing firm until the 2013 Annual General Meeting. In addition to Mekonomen, Thomas Strömberg is also the auditor of Karolinska Development, Tele 2 and Rezidor Hotel Group AB.
| Remuneration to Deloitte, SEK M | 2012 | 2011 |
|---|---|---|
| Remuneration for audit assignments | 7 | 6 |
| Audit related services other than the audit assignment | 0 | 0 |
| Tax advice | 0 | 0 |
| Other services | 0 | 0 |
The Board supervises the quality of the financial reporting through Instructions to the President. Jointly with the CFO, the President's assignment is to review and quality-assure all external financial reporting including financial statements, interim reports, annual reports and press releases with financial content, as well as presentation material in connection with meetings with the media, shareholders and financial institutions.
The entire Board of Mekonomen assumes responsibility for the Group having acceptable procedures for internal control and high-quality, correct financial reporting. With regard to the preparation of the Board's work, the Board estimates that quality assurance of the financial reporting, which is conducted within the framework of the company's own internal control, corresponds to current requirements. The company's auditors present their plans, risk assessments and controls, as well as findings from the audit at two Board meetings during the year. At these meetings, the President and CFO leave after presenting their formal reports to enable Board members to conduct discussions with auditors without the participation of company officials. The Board continuously evaluates the need to elect a specific Audit Committee.
In accordance with the Swedish Companies Act and the Swedish Code of Corporate Governance, the Board of Directors is responsible for internal control. This report was prepared in accordance with the Swedish Code of Corporate Governance, and FAR's guidance to the Swedish Code of Corporate Governance. The report is limited to addressing internal control pertaining to financial reporting.
The control environment represents the basis for the internal control pertaining to financial reporting. An important part of the control environment is that decision paths, authorities and responsibilities must be clearly defined and communicated between various levels in the organisation and that the control documents are available in the form of internal policies, handbooks, guidelines and manuals. Thus, a key part of the Board's assignment is to prepare and approve a number of fundamental policies, guidelines and frameworks. These include the Board's working procedures, instructions for the President, investment policies, financial policies and the insider policy. The aim of these policies is to create a basis for sound internal control. Furthermore, the Board focuses on ensuring that the organisational structure provides distinct roles, responsibilities and processes that benefit the effective management of the operation's risks and facilitate target fulfilment. Part of the responsibility structure includes an obligation for the Board to evaluate the operation's performance and results on a monthly basis, through appropriate report packages containing income statements, balance sheets, analyses of important key ratios, comments pertaining to the business status of each operation and also quarterly forecasts for future periods. As a contribution to strengthening the internal control, Mekonomen prepared a financial handbook that provides an overall picture of existing policies, rules and regulations and procedures within the financial area. This is a living document, which will be updated continuously and adapted to changes within the Mekonomen operation. In addition to the financial handbook, there are instructions that provide guidance for the daily work in stores and the rest of the organisation, for example, pertaining to stock-taking and cash-register reconciliation, etc.
Mekonomen conducts continuous surveys of the Group's risks. During these surveys, a number of items were identified in the income statement and balance sheet in which the risks of errors in the financial reporting are elevated. The company works continuously on these risks by strengthening controls. Furthermore, risks are addressed in a special forum, including questions related to start-ups and acquisitions.
Risks of errors in the financial reporting are reduced through good internal control of the financial reporting, with specific focus on significant areas defined by the Board of Directors. The aim of the appropriate control activities is to detect, prevent and correct errors and deviations in the reporting. The control activities include reconciliation of accounts, analytic follow-up, comparison between income statements and balance sheets and control stock-taking in warehouses and stores.
Mekonomen has an internal audit function, which is an independent and objective hedging and advice unit that generates value and improves the Group's operations. This is done by evaluating and proposing improvement in such areas as risk management, compliance with policies and efficiency in the internal control of financial reporting. The function works throughout the Group. The Head of the internal audit reports to the Board of Directors, the CEO and CFO and informs management in each business area and other units on the results of the audits performed.
Policies and guidelines are particularly important for accurate accounting, reporting and dissemination of information. Within Mekonomen, policies and guidelines are continuously updated pertaining to the financial process. This occurs primarily within respective Group functions aimed at the various operations through e-mails, but also in connection with quarterly control meetings in which all financial managers/controllers participate. For communication with internal and external parties, there is a communications policy that states guidelines for conducting communication. The aim of the policy is to ensure that all information obligations are complied with in a correct and complete manner.
The Board continuously evaluates the information submitted by Company Management and auditors. The CEO and CFO hold monthly reviews with individual Heads of Operations pertaining to the financial position. Group accounting also cooperates closely with the subsidiaries' controllers on matters pertaining to accounts and reporting. The follow-up and feedback concerning possible deviations arising in the internal controls are a key part of the internal control work, since this is an efficient manner for the company to ensure that errors are corrected and that the control is further strengthened.
Chairman of the Board. Born 1968. Graduate in Business Administration, the Stockholm School of Economics and studies at Wharton School in the US. Other assignments: Chairman of the Board of Axfood AB, Axstores AB and Svensk Bevaknings-Tjänst AB. Deputy Chairman of Martin & Servera AB and Svensk Handel. Board member of Axel Johnson International AB, AxFast AB, Novax AB, Lancelot Asset Management, the Confederation of Swedish Enterprise and Electrolux AB. Furthermore, Fredrik Persson is also President of Axel Johnson AB. SHARES IN MEKONOMEN: 1,000. Board member since 2006.
Executive Vice Chairman of the Board. Born 1942
Graduate Engineer, Royal Swedish Institute of Technology, Stockholm, Medicine Dr h.c.
Other assignments: Chairman of the Board of the Nobel Foundation, Storch & Storch AB and KEBRIS AB. Vice Chairman of Axel Johnson AB and Axfood AB. Board member of Nordstjernan AB, Investment AB Öresund, as well as member of the Royal Swedish Academy of Sciences (KVA) and the Royal Swedish Academy of Engineering Sciences (IVA).
SHARES IN MEKONOMEN: 0. Board member since 2006.
Born 1943. B.Sc., University of Stockholm. Other assignments: Chairman of the Board of Axel Johnson AB, as well as the Axel and Margaret Ax:son Johnson's Foundation. Deputy Chairman of Nordstjernan AB. Board member of Axel Johnson Inc., Axfast AB, Axfood AB, NCC AB, Axel and Margareta Ax:son Johnson's Foundation for Public Service, the Royal Swedish Academy of Engineering Sciences (IVA), as well as Antonia Ax:son Johnson's Foundation for Environment and Development, etc. SHARES IN MEKONOMEN: 9,516,235 through companies.
Board member since 2006.
Upper Secondary School Education. Other assignments: Own company and previously professional racing car driver.
SHARES IN MEKONOMEN: 1,000. Board member since 2007.
MBA Economics, Lund.
Other assignments: Chairman of the Board of Höganäs AB. Board member of Sweco AB (publ), Sapa AB, AxFast AB, Beijer Alma AB, Axel Johnson Inc., SSAB AB, Investmentaktiebolaget Latour, Erik Penser Bankaktiebolag, Recipharm AB (publ), Smilbandsbolaget AB and Åda Golfintressenter AB.
SHARES IN MEKONOMEN: 1,000. Board member since 2006.
Born 1942. Other assignments: Previously President of Bil Sweden, Volvo Car Europe and IBM Svenska AB. SHARES IN MEKONOMEN: 0. Board member since 2006.
Helena Skåntorp Born 1960. Graduate in Business Administration, University of Stockholm. Other assignments: Board member of 2E Group AB, as well as President of Lernia AB. Furthermore, Helena Skåntorp is also Chairman of the Board of a number of Lernia AB's subsidiaries, as well as Chairman of the Board and President of Skåntorp & Co AB. SHARES IN MEKONOMEN: 2,000. Board member since 2004.
Håkan Lundstedt President and CEO Born 1966.
Experience: President of Lantmännen AXA AB, Cerealia Foods AB and Kungsörnen AB. Founder and Chairman of the Board of Gooh AB.
Other assignments: Board member of Vanna AB, Dialect AB and the foundation En Frisk Generation. SHARES IN MEKONOMEN: 47,600. Employed 2007.
International Business Director Born 1966. Experience: CFO of Mekonomen (publ), Finance Director of CashGuard AB, Finance Director of Enea AB, Vice President of Finance & Controlling Fresenius Kabi Parenteral Nutrition, Finance Manager of Electrolux Professional AB, Finance Manager of Electrolux Storkök AB. Other assignments: Board member of Infranord AB. SHARES IN MEKONOMEN: 6,000. Employed 2007.
Born 1951. Experience: President of Tillbryggerier Umeå AB, Administrative Manager of the Tillbryggeri Group, President of Åreliftarna AB, President of Bilbolaget Trucks & Buses, President of Bilbolaget Passenger Cars, General Manager of Bilia, Personnel Manager Bilia. SHARES IN MEKONOMEN: 1,300. Employed 2005.
CFO Born 1967
Experience: Partner of Centigo, Associate Director of Arkwright, Consultant at Accenture, Invest in Sweden Agency. SHARES IN MEKONOMEN: 1,000 Employed 2007.
Marcus Larsson Executive Vice President Born 1970. Experience: Sales Manager, Business Development Manager of the Volkswagen Group. Other assignments: Board member of Telge Inköp AB. SHARES IN MEKONOMEN: 1,000. Employed 2003.
| SEK M | Note | 2012 | 2011 |
|---|---|---|---|
| Net sales | 2 | 5,292 | 4,140 |
| Other operating revenue | 134 | 97 | |
| TOTAL REVENUES | 5,426 | 4,237 | |
| OPERATING EXPENSES | |||
| Goods for resale | -2,475 | -1,866 | |
| Other external costs | 4, 8 | -1,060 | -786 |
| Personnel expenses | 5 | -1,216 | -966 |
| Depreciation of tangible fixed assets | 6 | -73 | -58 |
| Amortisation of intangible fixed assets | 6 | -74 | -25 |
| EBIT | 528 | 536 | |
| FINANCIAL INCOME AND EXPENSES | |||
| Income from divestment of subsidiaries | 0 | 2 | |
| Interest income | 8 | 7 | |
| Interest expenses | -51 | -21 | |
| Other financial items | 8, 19 | -11 | -1 |
| PROFIT AFTER FINANCIAL ITEMS | 474 | 523 | |
| Tax on profit for the year | 9 | -92 | -143 |
| PROFIT FOR THE YEAR | 382 | 380 | |
| Profit for the year attributable to: | |||
| Parent Company's shareholders | 375 | 370 | |
| Non-controlling interest | 7 | 10 | |
| Profit for the year | 382 | 380 | |
| Earnings per share before dilution attributable to Parent Company's shareholders, SEK * | 10.80 | 11.39 | |
| Average number of shares * | 34,692,458 | 32,436,258 |
*) No dilution is applicable. For further information on data per share, refer to page 17.
| SEK M | 2012 | 2011 |
|---|---|---|
| Profit for the year | 382 | 380 |
| Other comprehensive income | ||
| Exchange-rate difference from translation of foreign subsidiaries | 4 | 16 |
| Actuarial gains and losses | -6 | 1 |
| Other comprehensive income/expense, net after tax | -2 | 17 |
| PROFIT FOR THE YEAR | 380 | 397 |
| Comprehensive income for the period attributable to | ||
| Parent Company's shareholders | 373 | 387 |
| Non-controlling interest | 7 | 10 |
| 380 | 397 |
| SEK M | Note | 2012 | 2011 |
|---|---|---|---|
| OPERATING ACTIVITIES | |||
| Profit after financial items | 474 | 523 | |
| Adjusted for items not affecting liquidity | 27 | 139 | 78 |
| 613 | 601 | ||
| Tax paid | -196 | -161 | |
| CASH FLOW FROM OPERATING ACTIVITIES BEFORE CHANGE IN WORKING CAPITAL | 417 | 440 | |
| CASH FLOW FROM CHANGES IN WORKING CAPITAL | |||
| Decrease (+)/increase(–) of inventories | 39 | -69 | |
| Decrease (+)/increase(–) of receivables Decrease (–)/increase(+) of liabilities |
89 -27 |
-115 3 |
|
| INCREASE (–)/DECREASE(+) RESTRICTED WORKING CAPITAL | 101 | -181 | |
| CASH FLOW FROM OPERATING ACTIVITIES | 518 | 259 | |
| INVESTMENTS | |||
| Acquisition of subsidiaries Divestment of subsidiaries |
28 28 |
-1,380 11 |
-383 8 |
| Acquisition of tangible fixed assets | 10, 12 | -80 | -95 |
| Divestment of tangible fixed assets | 1 | 5 | |
| Acquisition of intangible fixed assets | 13 | -42 | -39 |
| Increase (–)/decrease(+) of long-term lending | -20 | -7 | |
| CASH FLOW FROM INVESTING ACTIVITIES | -1,510 | -512 | |
| FINANCING ACTIVITIES | |||
| Change in overdraft facilities | -43 | 51 | |
| Loans raised | 19 | 1,650 | 600 |
| Amortisation of loans | -167 | -129 | |
| Dividends paid | -275 | -276 | |
| CASH FLOW FROM FINANCING ACTIVITIES | 1,165 | 246 | |
| CASH FLOW FOR THE YEAR | 173 | -7 | |
| CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR | 67 | 74 | |
| Exchange-rate difference in cash and cash equivalents | 1 | 0 | |
| CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR | 18 | 241 | 67 |
Interest received amounted to SEK 8 M (7) and interest paid amounted to SEK 51 M (21).
| SEK M | Note | 31 Dec. 2012 | 31 Dec. 2011 |
|---|---|---|---|
| ASSETS | |||
| FIXED ASSETS | |||
| INTANGIBLE ASSETS | 13 | ||
| Goodwill | 1,903 | 789 | |
| Brands | 331 | 63 | |
| Franchise contracts | 40 | 44 | |
| Customer relationships | 681 | 128 | |
| Capitalised expenditure for IT systems | 131 | 92 | |
| TOTAL INTANGIBLE ASSETS | 3,086 | 1,116 | |
| TANGIBLE FIXED ASSETS | |||
| Improvement costs, third-party property | 10 | 48 | 41 |
| Equipment and transport | 12 | 212 | 191 |
| Leased equipment and transport | 12 | 27 | 3 |
| TOTAL TANGIBLE FIXED ASSETS | 287 | 235 | |
| FINANCIAL FIXED ASSETS | |||
| Other long-term receivables | 15 | 94 | 67 |
| TOTAL FINANCIAL FIXED ASSETS | 94 | 67 | |
| TOTAL FIXED ASSETS | 3,467 | 1,418 | |
| CURRENT ASSETS | |||
| Goods for resale | 1,203 | 934 | |
| Current receivables | 16, 17 | 797 | 636 |
| Cash and cash equivalents | 18 | 241 | 67 |
| TOTAL CURRENT ASSETS | 2,241 | 1,637 | |
| TOTAL ASSETS | 5,708 | 3,054 |
| SEK M | Note | 31 Dec. 2012 | 31 Dec. 2011 |
|---|---|---|---|
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| SHAREHOLDERS' EQUITY | 25 | ||
| Share capital, 35,901,487 (32,814,605) shares | 90 | 82 | |
| Other capital contributions | 1,456 | 805 | |
| Translation reserve | 4 | 0 | |
| Profit brought forward including profit for the year | 753 | 652 | |
| TOTAL SHAREHOLDERS EQUITY ATTRIBUTABLE TO PARENT COMPANY'S SHAREHOLDERS | 2,303 | 1,539 | |
| Non-controlling interest | 13 | 17 | |
| TOTAL SHAREHOLDERS' EQUITY | 2,316 | 1,556 | |
| LONG-TERM LIABILITIES | |||
| Liabilities to credit institutions, interest-bearing | 19 | 1,809 | 449 |
| Deferred tax liabilities | 14 | 230 | 53 |
| Provisions | 20 | 20 | 9 |
| TOTAL LONG-TERM LIABILITIES | 2,059 | 511 | |
| CURRENT LIABILITIES | |||
| Liabilities to credit institutions, interest-bearing | 19, 21 | 296 | 198 |
| Tax liabilities | 87 | 83 | |
| Other current liabilities, non-interest-bearing | 21, 22 | 950 | 707 |
| TOTAL CURRENT LIABILITIES | 1,333 | 988 | |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 5,708 | 3,054 | |
| MEMORANDUM ITEMS | |||
| Pledged assets | 23 | 17 | Inga |
| Contingent liabilities | 23 | 22 | 20 |
| SEK M | Note | 2012 | 2011 |
|---|---|---|---|
| Net sales | 2, 29 | 130 | 129 |
| Other operating revenue | 59 | 46 | |
| TOTAL REVENUES | 189 | 175 | |
| OPERATING EXPENSES | |||
| Goods for resale | -30 | -21 | |
| Other external costs | 4, 8 | -93 | -90 |
| Personnel expenses | 5 | -72 | -72 |
| Depreciation/amortisation of tangible and intangible fixed assets | 6 | -17 | -13 |
| EBIT | -23 | -21 | |
| FINANCIAL INCOME AND EXPENSES | |||
| Dividend on shares in subsidiaries | 151 | 146 | |
| Income from divestment of participations in subsidiaries | 0 | 1 | |
| Interest income | 26 | 24 | |
| Interest expenses | -52 | -22 | |
| Other financial items | 19 | -7 | 0 |
| PROFIT AFTER FINANCIAL ITEMS* | 95 | 128 | |
| Appropriations * | 7 | 160 | 215 |
| Tax on profit for the year | 9 | -28 | -53 |
| PROFIT FOR THE YEAR | 227 | 290 |
*) From 1 January 2012, the new RFR 2 regulations pertaining to Group contributions have been applied in advance according to the alternative rule, entailing that Group contributions are recognised as appropriations instead of financial income/expense in the income statement. Comparable year 2011 has been reclassified, entailing a reclassification of SEK 228 M from profit after financial items to appropriations.
| SEK M | 2012 | 2011 |
|---|---|---|
| Profit for the year | 227 | 290 |
| Exchange-rate difference, net investment in foreign operations | -1 | - |
| COMPREHENSIVE INCOME FOR THE YEAR | 226 | 290 |
| SEK M Note |
2012 | 2011 |
|---|---|---|
| OPERATING ACTIVITIES | ||
| Profit after financial items * | 95 | 128 |
| Adjustment for items not affecting liquidity * 27 |
16 | 13 |
| 111 | 141 | |
| Tax paid | -93 | -58 |
| CASH FLOW FROM OPERATING ACTIVITIES BEFORE | ||
| CHANGES IN WORKING CAPITAL | 18 | 83 |
| CASH FLOW FROM CHANGES IN WORKING CAPITAL | ||
| Decrease (+) /increase (-) of inventories | 1 | 0 |
| Decrease (+) /increase (-) of receivables | 41 | 93 |
| Decrease (-) /increase (+) of liabilities | 144 | 8 |
| INCREASE (-)/DECREASE(+) RESTRICTED WORKING CAPITAL | 186 | 101 |
| CASH FLOW FROM OPERATING ACTIVITIES | 204 | 184 |
| INVESTMENTS | ||
| Acquisition of subsidiaries 24, 28 |
-1,375 | -327 |
| Divestment of subsidiaries | - | 1 |
| Acquisition of tangible fixed assets 12 |
-10 | -2 |
| Acquisition of intangible fixed assets 13 |
-32 | -39 |
| Increase (-) /decrease (+) of long-term loans ** | -13 | -12 |
| CASH FLOW FROM INVESTING ACTIVITIES | -1,430 | -378 |
| FINANCING ACTIVITIES | ||
| Loans raised 19 Amortisation of loans |
1,650 -162 |
600 -142 |
| Dividends paid | -263 | -263 |
| CASH FLOW FROM FINANCING ACTIVITIES | 1,225 | 195 |
| CASH FLOW FOR THE YEAR | -1 | 1 |
| CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR | 1 | 0 |
| CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 18 |
0 | 1 |
*) From 1 January 2012, the new RFR 2 regulations pertaining to Group contributions have been applied in advance according to the alternative rule, entailing that Group contributions are recognised as appropriations instead of financial income/expense in the income statement. Comparable year 2011 has been reclassified.
**) Compared with the 2011 annual report, a deficit of SEK 12 M in the cash-flow statement for 2011 was reclassified between cash flow from investing activities and cash flow from financing activities, pertaining to long-term lending. The reclassification did not have any impact on the total cash flow.
Interest received amounted to SEK 26 M (24) and interest paid amounted to SEK 52 M (22).
| SEK M | Note | 31 Dec. 2012 | 31 Dec. 2011 |
|---|---|---|---|
| ASSETS | |||
| FIXED ASSETS | |||
| INTANGIBLE FIXED ASSETS | 13 | ||
| Capitalised expenditure for IT systems | 111 | 92 | |
| TOTAL INTANGIBLE FIXED ASSETS | 111 | 92 | |
| TANGIBLE FIXED ASSETS | |||
| Improvement expenses for third-party properties | 10 | 1 | 1 |
| Equipment and transportation | 12 | 13 | 7 |
| TOTAL TANGIBLE FIXED ASSETS | 14 | 8 | |
| FINANCIAL FIXED ASSETS | |||
| Participation in Group companies | 24 | 3,154 | 1,120 |
| Receivables in Group companies | 29 | 25 | 12 |
| TOTAL FINANCIAL FIXED ASSETS | 3,179 | 1,132 | |
| TOTAL FIXED ASSETS | 3,304 | 1,232 | |
| CURRENT ASSETS | |||
| INVENTORIES | |||
| Goods for resale | 0 | 1 | |
| TOTAL INVENTORIES | 0 | 1 | |
| CURRENT RECEIVABLES | |||
| Accounts receivable | 21 | 14 | |
| Receivables in Group companies | 29 | 789 | 690 |
| Tax assets | 48 | - | |
| Other receivables | 2 | 2 | |
| Prepaid expenses and accrued income | 17 | 79 | 106 |
| TOTAL CURRENT RECEIVABLES | 939 | 812 | |
| Cash and cash equivalents | 18 | 0 | 1 |
| TOTAL CURRENT ASSETS | 939 | 814 | |
| TOTAL ASSETS | 4,243 | 2,046 |
| SEK M | Note | 31 Dec. 2012 | 31 Dec. 2011 |
|---|---|---|---|
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| SHAREHOLDERS' EQUITY | 25 | ||
| RESTRICTED SHAREHOLDERS' EQUITY | |||
| Share capital, 35,901,487 (32,814,605) shares | 90 | 82 | |
| Statutory reserve | 3 | 3 | |
| TOTAL RESTRICTED SHAREHOLDERS' EQUITY | 93 | 85 | |
| NON-RESTRICTED SHAREHOLDERS' EQUITY | |||
| Fund at fair value | -1 | - | |
| Share premium reserve | 651 | 462 | |
| Profit brought forward | 940 | 450 | |
| Profit for the year | 227 | 290 | |
| TOTAL NON-RESTRICTED SHAREHOLDERS' EQUITY | 1,817 | 1,202 | |
| TOTAL SHAREHOLDERS' EQUITY | 1,910 | 1,287 | |
| UNTAXED RESERVES | 178 | 159 | |
| PROVISIONS | 20 | 1 | 2 |
| LONG-TERM LIABILITIES | |||
| Liabilities to credit institutions | 19 | 1,797 | 445 |
| TOTAL LONG-TERM LIABILITIES | 1,797 | 445 | |
| CURRENT LIABILITIES | |||
| Liabilities to credit institutions | 19 | 196 | 60 |
| Accounts payable | 14 | 22 | |
| Liabilities to Group companies | 29 | 127 | 28 |
| Tax liabilities | - | 17 | |
| Other liabilities | 2 | 8 | |
| Accrued expenses and deferred income | 22 | 18 | 18 |
| TOTAL CURRENT LIABILITIES | 357 | 153 | |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 4,243 | 2,046 | |
| MEMORANDUM ITEMS | |||
| Pledged assets | 23 | None | None |
| Contingent liabilities | 23 | 21 | 20 |
| SEK M | Share capital |
Other capital contributions |
Translation reserve |
Profit brought forward |
Total attributable to Parent Com pany owners |
Non controlling interest |
Total shareholders' equity |
|---|---|---|---|---|---|---|---|
| OPENING BALANCE ON 1 JANUARY 2011 | 77 | 343 | -16 | 551 | 955 | 19 | 974 |
| Comprehensive income for the year | |||||||
| Profit for the year | 370 | 370 | 10 | 380 | |||
| Other comprehensive income | |||||||
| - Translation difference pertaining to foreign operations |
16 | 16 | 0 | 16 | |||
| - Actuarial profits and losses | 1 | 1 | - | 1 | |||
| Total other comprehensive income | 16 | 1 | 17 | 0 | 17 | ||
| COMPREHENSIVE INCOME FOR THE YEAR | 16 | 371 | 387 | 10 | 397 | ||
| Dividends | -263 | -263 | -13 | -276 | |||
| New share issue | 5 | 462 | 467 | 467 | |||
| Acquisition/divestment of non-controlling interest | -7 | -7 | 1 | -6 | |||
| CLOSING BALANCE ON 31 DECEMBER 2011 | 82 | 805 | 0 | 652 | 1,539 | 17 | 1,556 |
| OPENING BALANCE ON 1 JANUARY 2012 | 82 | 805 | 0 | 652 | 1,539 | 17 | 1,556 |
| Comprehensive income for the year | |||||||
| Profit for the year | 375 | 375 | 7 | 382 | |||
| Other comprehensive income | |||||||
| - Translation difference pertaining to foreign operations |
4 | 4 | 0 | 4 | |||
| - Actuarial profits and losses | -6 | -6 | 0 | -6 | |||
| Total other comprehensive income | 4 | -6 | -2 | 0 | -2 | ||
| COMPREHENSIVE INCOME FOR THE YEAR | 4 | 369 | 373 | 7 | 380 | ||
| Dividends | -263 | -263 | -12 | -275 | |||
| New share issue | 8 | 651 | 659 | 659 | |||
| Acquisition/divestment of non-controlling interest | -5 | -5 | 1 | -4 | |||
| CLOSING BALANCE ON 31 DECEMBER 2012 | 90 | 1,456 | 4 | 753 | 2,303 | 13 | 2,316 |
| Statutory | Fond at | Share Premium |
Profit brought | Total shareholders' |
||
|---|---|---|---|---|---|---|
| SEK M | Share capital | reserve | fair value | Reserve | forward | equity |
| OPENING BALANCE ON 1 JANUARY 2011 | 77 | 3 | - | - | 713 | 793 |
| Profit for the year | 290 | 290 | ||||
| COMPREHENSIVE INCOME FOR THE YEAR | 290 | 290 | ||||
| Dividends | -263 | -263 | ||||
| New share issue | 5 | 462 | 467 | |||
| CLOSING BALANCE ON 31 DECEMBER 2011 | 82 | 3 | - | 462 | 740 | 1,287 |
| Profit for the year | 227 | 227 | ||||
| Other comprehensive income | ||||||
| - Exchange-rate difference, net investment in foreign operations |
-1 | -1 | ||||
| Total other comprehensive income/loss | -1 | 0 | -1 | |||
| COMPREHENSIVE INCOME/LOSS FOR THE YEAR | -1 | 227 | 226 | |||
| Reversal according to appropriations of profits | -462 | 462 | 0 | |||
| Dividends | -263 | -263 | ||||
| New share issue | 8 | 651 | 0 | 659 | ||
| CLOSING BALANCE ON 31 DECEMBER 2012 | 90 | 3 | -1 | 651 | 1,167 | 1,910 |
The number of shares as at 31 December 2012 amounted to 35,901,487 (32,814,605) with a quotient value of SEK 2.50 (2.50) per share.
The most important accounting policies that were applied during the preparation of these consolidated accounts are stated below. These policies were consistently applied for all years presented, unless otherwise stated.
The consolidated accounts were prepared in accordance with International Financial Reporting Standards (IFRS) as approved by the EU and interpretations issued by IFRS' Interpretations Committee that apply for years beginning with 1 January 2012 or later. Furthermore, the Swedish Financial Reporting Board's recommendation RFR 1, Supplementary Accounting Regulations for Groups, has been applied. The functional currency of the Parent Company is Swedish kronor (SEK), which is also the Group's reporting currency. All amounts are stated in SEK M, unless otherwise indicated.
The items in the Annual Report are measured at cost, with the exception of certain financial instruments, which are measured at fair value.
The Parent Company's accounts were prepared in accordance with the Annual Accounts Act and RFR 2, Accounting for legal entities.
Preparing reports in accordance with IFRS requires the use of certain key estimates for accounting purposes. Furthermore, management is required to make certain assessments in the application of the consolidated accounting policies. The areas that include a high degree of complicated assessments or areas where assumptions and estimates are materially significant to the consolidated accounts are stated in Note 3.
None of the IFRS interpretations that are mandatory for the first time for the financial year beginning on 1 January 2012 had any significant impact on the Mekonomen Group's financial reports for 2012.
A number of new standards and amendments of interpretations and existing standards gained legal force in the financial year commencing after 1 January 2012 and were not applied in the preparation of the consolidated financial reports. The most important amendments for Mekonomen are:
IAS 19 "Remunerations to employees" was revised in June 2011. Costs for service in previous years will be recognised immediately. Interest expense and anticipated return on plan assets will be replaced by a net interest calculated using the discount interest rate, based on the net surplus or net deficit in the defined-benefit plan. The Group intends to apply IAS 19 for the financial year commencing on 1 January 2013. The amendment has been deemed to only have negligible impact on the Group's profits and position.
IFRS 9 "Financial instruments" covers classifications, measurements and recognition of financial liabilities and assets. IFRS 9 was issued in November 2009 for financial assets and in October 2010 for financial liabilities and replaces the sections in IAS 39 that are related to classification and measurement of financial instruments. IFRS 9 stipulates that financial assets must be classified in two different categories; measurement at fair value or measurement at amortised cost. Classification is established on the first accounting occasion based on the company's business model, as well as the characteristic properties in the contractual cash flows. There were no major changes in financial liabilities compared with IAS 39. The most significant change pertains to liabilities identified at fair value. For these, the portion of the fair value change that is attributable to the internal credit risk must be recognised in other comprehensive income/loss instead of profit/loss unless it does not result in an accounting mismatch. The Group will evaluate the effects of the remaining phases in IFRS 9 when they have been concluded by the IASB. IFRS 9 will be applied for financial years commencing 1 January 2015 or later.
Other new standards, amendments or interpretations of existing standards that have not gained legal force are not relevant to the Group at present or deemed to have any material effect on the Group's profits or financial position.
The consolidated accounts include the Parent Company and all companies over which the Parent Company has a controlling influence. Controlling influence refers to companies in which Mekonomen has a right to formulate financial and operational strategies. This normally occurs through ownership and voting rights of more than 50 per cent. The existence and effect of potential voting rights, which are currently available for exercise or conversion, are taken into account when an assessment is made of whether the Group can exercise controlling influence over another company. Subsidiaries are included in the consolidated accounts from the point in time at which controlling influence is achieved and excluded from the consolidated accounts from the point in time at which the controlling influence is lost.
The purchase method was used for reporting Group business acquisitions. The purchase consideration for the acquisition of a subsidiary is measured at fair value on transferred assets, liabilities arising in the Group from previous owners of the acquired company and the shares issued by the Group. The purchase consideration also includes the fair value of all assets or liabilities resulting from an agreement on conditional purchase consideration. Identifiable acquired assets and overtaken liabilities in a business acquisition are initially measured at fair value on the date of acquisition. For each acquisition - meaning, acquisition by acquisition - the Group decides whether the non-controlling interests in the acquired company are recognised at fair value or proportionate to the holding's share of the carrying amount of the acquired company's identifiable net assets.
Acquisition-related costs are recognised in profit or loss as they arise. If the business acquisition is implemented in several steps, the earlier equity shares in the acquired company are re-measured to its fair value on the date of acquisition. Any profit or loss arising is recognised in the profit or loss statement.
Each conditional purchase consideration to be transferred by the Group will be recognised at fair value on the date of acquisition. The subsequent changes in fair value of a conditional purchase consideration are recognised in the profit or loss. Conditional purchase consideration classified as shareholders' equity is not re-measured and the subsequent adjustment is recognised in shareholders' equity.
Goodwill is initially measured at the amount by which the total purchase consideration and fair value for the non-controlling interests exceeds the fair value of identifiable acquired assets and overtaken liabilities. If the purchase consideration is lower than the fair value of the acquired company's net assets, the difference is recognised directly in profit or loss.
When necessary, subsidiaries' accounting is adjusted to comply with the same policies applied by the other Group companies. All internal transactions between Group companies and Group intermediaries are eliminated when preparing the consolidated financial statements.
Transactions with non-controlling interests that will not result in a loss of control are recognised as shareholders' equity transactions – meaning, transactions with shareholders in their roles as owners. In acquisitions from non-controlling interests, the difference between the fair value of purchase consideration paid and the actual acquired portion of the carrying amount of the subsidiary's net assets is recognised in shareholders' equity. Profits or losses from divestments to non-controlling interests are also recognised in shareholders' equity.
When the Group no longer has controlling influence, each remaining holding is measured at fair value on the date controlling influence was lost. The change in the carrying amount is recognised in profit or loss. The fair value is used as the first carrying amount and is the basis for continued recognition of the remaining holding in associated companies, joint ventures or financial assets. All amounts pertaining to the divested unit previously recognised in Other comprehensive income will be recognised as though the Group directly divested the assets or liabilities in question. This may result in the reclassification of the amount earlier recognised in Other comprehensive income to earnings.
Transactions in foreign currencies are translated into Swedish Kronor (SEK) based on the exchange rate on the date of the transaction. Monetary items (assets and liabilities) in foreign currencies are translated into SEK according to the exchange rate on the balance-sheet date. Exchange-rate gains and losses that arise in connection with such translations are recognised in profit or loss as Other operating revenues and/or Other operating expenses. Exchange-rate differences that arise in foreign long-term loans and liabilities are recognised in financial income and expenses.
When the consolidated accounts were prepared, the Group's foreign operations' balance sheets were translated from their functional currencies to SEK based on the exchange rates on the balance-sheet date. The income statements and other comprehensive income were translated at the average exchange rate for the period. Translation differences that arose were recognised through other comprehensive income against the translation reserve in shareholders' equity. The accumulated translation differences were transferred and recognised as part of capital gains or capital losses in cases where foreign operations were divested. Goodwill and adjustments to fair values attributable to acquisitions of operations using functional currencies other than SEK are treated as assets and liabilities in the acquired operations' currencies and translated at the exchange rates on the balance-sheet date.
Operating segments have been reported to correspond with the internal reporting that was submitted to the highest decision-making authority. The highest decision-making authority is the function responsible for the allocation of resources and assessing the results of the operating segments. In the Group, this function has been identified as the company's President and CEO.
To adapt segment reporting to the changed internal organisation and governance, a new segment division was implemented during the year. From the fourth quarter of 2012, the Group is now governed and reports from three segments, MECA, Mekonomen Norden and Sørensen og Balchen. According to this new segment distribution, the first reporting will be in 2012; comparative figures have been recalculated.
Sales of goods are recognised at delivery/handover of products to the customer, in accordance with conditions of sale. Sales are recognised net after deduction of discounts and value-added tax. Sales from the centralised warehouse to stores occur in the currency of the receiving country. Consequently, exchange-rate fluctuations only affect the wholesale operation in each Group company. Intra-Group sales are eliminated in the consolidated accounts.
Interest revenues are recognised on an accrued basis over the term by applying the effective interest method.
A financial leasing contract is an agreement according to which the financial risks and benefits that are connected to ownership of an object are essentially transferred from the lessor to the lessee. The leasing object refers primarily to the warehousing systems in the Group's centralised warehouse, company vehicles, distribution vehicles and forklift trucks.
The Group's operational lease contracts consist primarily of leased premises.
Assets held under financial leasing agreements are recognised as fixed assets in the consolidated balance sheets at fair value at the beginning of the leasing period or at the present value of minimum leasing fees if this is lower. The liability that the lessee has to the lessor is recognised in the balance
sheet under the heading "Lease agreement" divided into long-term and short-term liabilities. Leasing payments are divided between interest and amortisation of debt. Interest is divided over the leasing period so that each reporting period is charged with an amount corresponding to a fixed interest rate of the liability recognised during each period. Interest expenses are recognised directly in profit or loss. Lease fees that are paid during operating lease agreements are systematically expensed over the leasing period.
The Group has both defined-contribution and defined-benefit pension plans. A defined-benefit pension plan is a pension plan whereby the Group guarantees an amount, which the employee receives as pension benefits upon retirement, normally based on several different factors, for example, salary and period of service. A defined-contribution pension plan is a pension plan in which the Group, after having paid its pension premium to a separate legal entity, has fulfilled its commitments towards the employee.
Defined-contribution plans are recognised as an expense in the period to which the premiums paid are attributable.
Pension expenses for defined-benefit plans are calculated using the Projected Unit Credit Method whereby expenses are distributed over the employee's period of employment. These commitments, meaning the liabilities that are recognised, are measured at the present value of expected future payments, taking estimated future salary increases into account, applying a discount rate corresponding to the interest on first-class corporate bonds issued in the same currency as the pension is to be paid in, with a remaining duration that is comparable to the current commitment and with deductions for the fair value of plan assets. In countries where there are no functioning markets for corporate bonds, a discount rate corresponding to the interest rate on government bonds is used. Consequently, a discount rate established by referring to the interest rate on government bonds is used for the Group's defined-benefit pension plans in Norway. The most important actuarial assumptions are stated in Note 20. Should a net asset arise, this will be recognised only to the extent that it represents future financial benefits, for example, in the form of repayments or reduced future premiums.
One of the Group's defined-benefit pension plans comprises a so-called multi-employer defined-benefit pension plan (ITP plan in Alecta). In accordance with Mekonomen's accounting policies, a multi-employer definedbenefit plan is recognised based on the rules of the plans and recognises its proportional share of the defined-benefit pension obligations and of plan assets and expenses related to the plan in the same manner as for any other similar defined-benefit pension plan. However, Alecta has not been able to present sufficient information to facilitate reporting as a defined-benefit plan, which is why the ITP plan is recognised as a defined-contribution plan in accordance with IAS 19.30. In addition to the defined-benefit pension plans via Alecta described above, additional defined-benefit pension plans have been added in the Group due to the acquisition of Sørensen og Balchen in 2011 and MECA in 2012. Calculation and measurement according to the Projected Unit Credit Method was done on the date of acquisition and taken into account in each acquisition assessment. Actuarial gains and losses arising thereafter are recognised in their entirety in other comprehensive income/expense during the period in which they arose.
Remuneration in connection with termination of employment can be paid when an employee has been served notice of termination prior to the expiration of the normal pension date or when an employee accepts voluntary retirement. The Group recognises liabilities and expenses in connection with a termination of employment, when Mekonomen is unquestionably obligated to either terminate employment prior to the normal termination date or to voluntarily pay remuneration to encourage early retirement.
Mekonomen recognises a liability and an expense for bonuses when there are legal or informal obligations, based on earlier practice, to pay bonuses to employees.
The Group's total tax expense comprises current tax and deferred tax. Current tax is tax that shall be paid or received pertaining to the current year and adjustments of prior years' current tax. Deferred tax is calculated based on the difference between the carrying amounts and the values for tax purposes of company assets and liabilities. Deferred tax is recognised according to the balance-sheet method. Deferred tax liabilities are recognised in principle on all taxable temporary differences, while deferred tax assets are reported to the extent that is probable that the amount can be utilised against future taxable surplus.
The carrying amount on deferred tax assets is assessed at each accounting year-end and reduced to the extent that it is no longer probable that sufficient taxable surplus will be available to be utilised either in its entirety or partially against the deferred tax asset.
Deferred tax is calculated based on the tax rates that are expected to apply for the period when the asset is recovered or the debt settled. Deferred tax is recognised as revenues or expenses in profit or loss, except in cases when it pertains to transactions or events that are recognised against other comprehensive income or directly against shareholders' equity. The deferred tax is then also recognised against other comprehensive income or directly against shareholders' equity. Deferred tax assets and tax liabilities are offset when they are attributable to income tax that is debited by the same authority and when the Group intends to pay the tax with a net amount.
Goodwill is initially measured as the amount by which the total purchase consideration and fair value for the holding with no controlling interests exceeds the fair value of the identifiable acquired assets and liabilities taken over. Should the purchase consideration be lower than the fair value of the acquired company's net assets, the difference is recognised directly in profit or loss. Goodwill has an indefinite useful period and is recognised at cost less any accumulated impairments. In the divestment of an operation, the portion of goodwill attributable to this operation is recognised in the calculation of gain or loss on the divestment.
Expenditure for the development and implementation of IT systems can be capitalised if it is probable that future financial benefits will accrue to the company and the cost for the asset can be calculated in a reliable manner.
Brands, customer relations and franchise contracts acquired through business acquisitions are recognised at fair value on the date of acquisition.
Acquired brands attributable to the acquisitions of Sørensen og Balchen and MECA have been deemed to have an indefinite useful period and are recognised at cost less any accumulated impairment losses. Customer relations, other brands, franchise contracts and IT investments have definite useful periods and are recognised at cost less accumulated amortisation. Amortisation is applied according to the straight-line method across the assets' estimated useful period. Customer relations, other brands and franchise contracts are deemed to have a useful period of five to ten years.
IT investments are deemed to have a useful period of three to five years from the start of operation.
Tangible fixed assets are recognised as assets in the balance sheet if it is probable that future financial benefits will be accrued to the company and the cost of the asset can be calculated in a reliable manner. Tangible fixed assets, primarily comprising equipment, computers and means of transport, are recognised at cost less accumulated depreciation and any impairment. Depreciation of tangible fixed assets is recognised as an expense so that the asset's value is depreciated according to the straight-line method over
its estimated useful period. The following percentages were applied for depreciation:
| FIXED ASSETS | Per cent |
|---|---|
| Improvement costs to third-party property* | 5–10 |
| Equipment | 10–20 |
| Vehicles | 20 |
| Servers | 20 |
| Workplace computers | 33 |
*) Depreciation occurs over the shorter period corresponding to 10 per cent and the remaining duration of the contract.
The residual value of assets and the useful period are tested at the end of each reporting period and adjusted when necessary.
An asset's carrying amount is immediately depreciated to its recoverable amount if the asset's carrying amount exceeds its assessed recoverable value.
Gains and losses from divestments are established by comparing the sales revenue and the carrying amount and recognised net in profit or loss.
Assets with an indefinite useful period, for example, goodwill and intangible assets that are not ready for use are not impaired but tested annually for any impairment requirements. The brands that were added through the acquisitions of Sørensen og Balchen and MECA have been deemed to have indefinite useful periods, which is why these are also tested annually for any impairment requirements. Assets depreciated or amortised are measured in terms of value decline whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If this occurs, a calculation of the assets recoverable value is done.
The recoverable value comprises the highest of the useful value of the asset in the operation and the value that would be received if the asset was divested to an independent party, net realisable value. The useful value comprises the present value of all in and out payments attributable to the asset during the period it is anticipated to be used in the operation, plus the present value of the net realisable value at the end of the useful period. If the assessed recovery value falls below the carrying amount, an impairment is made to the asset's recoverable value. The impairment is recognised in profit or loss in the period it is determined.
Refer also to Note 13 for information on how impairment testing is performed. Previously recognised impairments are reversed only if there has been a change with respect to the assumption that served as the basis for determining the recovery value in connection with the impairment. If this is the case, a reversal will be conducted to increase the carrying amount of the impaired asset to its recovery value. A reversal of an earlier impairment occurs in an amount that does not allow the new carrying amount to exceed what would have been the carrying amount (after impairment) if the impairment had not taken place. Impairment pertaining to goodwill is never reversed.
Inventories are recognised at the lower of the cost and net realisable value. The cost is established by using the first in/first out principle (FIFO).
A provision for estimated obsolescence in inventories is established when there is an objective basis to assume that the Group will be unable to receive the carrying amount when inventories are sold in the future. The size of the provision amounts to the difference between the asset's carrying amount and the value of expected future cash flows. The reserved amount is recognised in profit or loss. The inventory value was reduced by the value included in the inter-company profit from goods sold from the Group's centralised warehouse to the company's own stores on the goods that are still in stock. Furthermore, the inventory value was also reduced by the value of the remaining portion of the supplier bonus on goods that are still in stock.
Financial assets recognised as assets in the balance sheet include loan receivables, accounts receivable and cash and cash equivalents. Liabilities in the balance sheet include long-term and short-term loans and accounts payable. A currency derivative is recognised either as an asset or liability, depending on changes in the exchange rate. A financial asset or financial liability is recognised in the balance sheet when the company becomes party to the contractual conditions. Accounts receivable are recognised when an invoice is sent and accounts payable are recognised when an invoice has been received. With the exception of cash and cash equivalents, only an insignificant portion of the financial assets is interest-bearing, which is why interest exposure is not recognised. The maximum credit risk corresponds to the carrying amount of the financial assets. The terms for long-term and short-term loans are stated in separate note disclosures; other financial liabilities are non-interest-bearing. A financial asset, or portion thereof, is eliminated when the rights contained in the contract are realised or mature. A financial liability, or portion thereof, is eliminated as it is regulated when the commitment in the agreement has been fulfilled or has been terminated in another manner.
When establishing the fair value of derivatives, official market listings on the balance-sheet date are used. If no such information is available, a measurement is conducted applying established methods, such as discounting future cash flows to the quoted market rate for each term. Translation to SEK is based on the quoted exchange rate on the balance-sheet date.
Long-term receivables comprise primarily deposits and lease-purchase agreements. These are recognised at the accrued cost.
Accounts receivable are recognised net after provisions for possible bad debts. The expected term of accounts receivable is short, which is why the amount is recognised at nominal value without discounting in accordance with the method for accrued cost. A provision for possible bad debts on accounts receivable is made when there are objective indications to assume that the Group will not be able to receive all the amounts that are due for payment in accordance with the receivables' original conditions. The size of the provision consists of the difference between the asset's carrying amount and the value of estimated future cash flows. The reserved amount is recognised in profit or loss.
Cash and cash equivalents comprise cash funds held at financial institutions and current liquid investments with a term from the date of acquisition of less than three months, which are exposed to only an insignificant risk of fluctuations in value. Cash and cash equivalents are recognised at nominal value.
Mekonomen applies hedge accounting with regard to receivables in foreign currencies. Hedging is conducted using forward contracts with a maximum term of three months. Hedged receivables in foreign currencies are recognised at the interest rate applying on the balance-sheet date and hedging instruments are recognised separately at fair value in the balance sheet and the change in value is recognised in profit or loss.
The expected term for accounts payable is short, which is why the debt is recognised at nominal value without discounting according to the method for accrued cost.
Liabilities to credit institutions, overdraft facilities and other liabilities (loans) are initially recognised at fair value net after transaction costs. Thereafter, loans are recognised at accrued cost. Possible transaction costs are distributed over the loan period applying the effective interest method. Long-term liabilities have an estimated term longer than one year, while short-term liabilities have a term of less than one year.
Ordinary shares are classified as share capital. Transaction costs in connection with a new rights issue are recognised as a deduction, net after tax, from proceeds from the rights issue.
The cash-flow statement was prepared in accordance with the indirect method. The recognised cash flow comprises only transactions that resulted in inward and outward payments.
The Parent Company complies with the Swedish Annual Accounts Act and the Swedish Financial Reporting Board's recommendation RFR 2, Accounting for Legal Entities. Application of RFR 2 means that the Parent Company shall, in the annual accounts for a legal entity, apply all of the IFRS and statements that have been approved by the EU where this is possible within the framework of the Swedish Annual Accounts Act and the law on safeguarding of pension commitments and taking into account the link between accounting and taxation. The recommendation specifies which exceptions and additions shall be made from IFRS. The differences between the Group's and the Parent Company's accounting policies are stated below.
The policies have been applied consistently for all years presented, unless otherwise stipulated.
During 2012, the Swedish Financial Reporting Board issued a new version of the RFR 2 Accounting for Legal Entities. The amendments include new policies pertaining to recognition of Group contributions. The Board has introduced a principal rule and an alternative rule for recognising Group contributions. Mekonomen has decided to apply the alternative rule in advance, which means that all Group contributions, both paid and received, will be recognised as appropriations. The comparative year 2011 has been reclassified.
Other amendments to RFR 2 have not had any material impact on the Parent Company's financial statements.
Participations in subsidiaries are recognised in the Parent Company according to the cost method. Acquisition-related costs for subsidiaries, expensed in the consolidated accounting, are included as part of the cost for participations in subsidiaries.
Conditional purchase considerations are measured based on the probability that the purchase consideration will be paid. Any changes in the provision/receivable will be added/deducted from the cost. In the consolidated accounting, conditional purchase considerations are recognised at fair value with value changes in profit or loss. The carrying amount for participations in subsidiaries is tested pertaining to any impairment requirements when there are indications of impairment needs.
The amounts reserved as untaxed reserves consist of taxable temporary differences. Due to the link between accounting and taxation, the deferred tax liabilities that are attributable to the untaxed reserves are not recognised separately in a legal entity. The changes in untaxed reserves are recognised in accordance with Swedish practice in profit or loss for individual companies under the heading "Appropriations." The accumulated value of provisions are recognised in the balance sheet under the heading "Untaxed reserves," of which 22 per cent is regarded as deferred tax liabilities and 78 per cent as restricted shareholders' equity.
Shareholders' contribution paid is recognised as an increase in the value of shares and participations. An assessment is then conducted as to whether impairment requirements exist for the value of the shares and participations in question.
Group contributions are recognised according to the alternative rule, entailing that all Group contributions, both paid and received, will be recognised as appropriations.
Defined-benefit and defined-contribution pension plans are recognised in accordance with the present Swedish accounting standard, which is based on the regulations in the law on safeguarding of pension commitments.
All leasing agreements, regardless of whether they are financial or operational, are recognised as operational leasing agreements (rental agreements), which means that the leasing charges are distributed according to the straight-line method across the leasing period.
The financial reports are stated in SEK M, unless otherwise stipulated. Rounding off may result in some tables not being summarised.
Operating segments have been reported to correspond with the internal reporting that was submitted to the highest decision-making authority. The highest decision-making authority is the function responsible for the allocation of resources and assessing the results of the operating segments. In the Group, this function has been identified as the company's President and CEO.
Mekonomen's expansion in recent years generated the need for a change in organisation and control. Consequently, in 2012, a new operating unit, Mekonomen Norden, was formed whereby all operations included in the original Mekonomen's stores, workshops, administration functions and warehouse operations, excluding Denmark, are collected. Group management now has three Group companies, Mekonomen Norden, Sørensen og Balchen and MECA, which are governed in a similar manner, through the Board of Directors.
The Group companies have separate organisations that act independently in the market with individual brands, competition between themselves and governed through Boards of Directors. Since 1 October 2012, the operation in Denmark has been included in the MECA Group and is now called MECA Denmark.
The highest decision-making authority monitors the operation based on this distribution. The new organisation and the amended internal governance have resulted in a new segment division with the three segments: MECA, Mekonomen Norden and Sørensen og Balchen.
Reporting according to the new segment distribution will occur for the first time in 2012, comparative figures have been recalculated.
MECA represents a new segment for the Group in 2012 and the information presented pertaining to MECA Scandinavia applies to the 23 May – 31 December 2012 period.
MECA Scandinavia was acquired on 23 May 2012, which is why the comparative figures for 2011 only pertain to MECA Denmark (formerly Mekonomen Denmark).
Mekonomen Norden includes the previous segments Mekonomen Sweden, Mekonomen Norway and parts of Others comprising Mekonomen Fleet, Speedy, Marinshopen, Mekonomen Finland, Mekonomen BilLivet, as well as administrative functions for Mekonomen Norden AB.
Others comprise Mekonomen AB, as well as Group-wide and eliminations. Mekonomen AB, including previous administrative functions such as IT, product divisions, etc., is governed by Mekonomen Norden from 1 October 2012. Group management, finance management and M by Mekonomen still report under Mekonomen AB.
The CEO assesses the results of the operating segments at an EBIT level. Financial items are not distributed in segments since they are impacted by measures implemented by central finance management.
| MECA* | Mekonomen Norden | Sørensen og Balchen** |
Other | Group | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | |
| REVENUES | ||||||||||
| External net sales | 1,702 | 759 | 2,830 | 2,766 | 748 | 603 | 12 | 13 | 5,292 | 4,140 |
| Internal revenues | 5 | 11 | 298 | 335 | 8 | 6 | -311 | -352 | 0 | 0 |
| Other revenues | 19 | 0 | 68 | 63 | 7 | 4 | 40 | 30 | 134 | 97 |
| TOTAL REVENUES | 1,726 | 770 | 3,196 | 3,164 | 763 | 613 | -259 | -309 | 5,426 | 4,237 |
| EBIT | 92 | 63 | 376 | 438 | 78 | 88 | -18 | -53 | 528 | 536 |
| Financial items, net | -54 | -13 | ||||||||
| PROFIT BEFORE TAX | 474 | 523 | ||||||||
| Assets | 3,081 | 448 | 1,838 | 1,833 | 1,168 | 1,057 | -378 | -284 | 5,708 | 3,054 |
| TOTAL ASSETS | 3,081 | 448 | 1,838 | 1,833 | 1,168 | 1,057 | -378 | -284 | 5,708 | 3,054 |
| Liabilities | 547 | 216 | 1,470 | 1,327 | 125 | 79 | 1,250 | -124 | 3,392 | 1,498 |
| TOTAL LIABILITIES | 547 | 216 | 1,470 | 1,327 | 125 | 79 | 1,250 | -124 | 3,392 | 1,498 |
| Investments, tangible assets | 21 | 27 | 55 | 63 | 4 | 4 | 80 | 95 | ||
| Investments, IT systems | 10 | 32 | 39 | 42 | 39 | |||||
| Depreciation (tangible assets) | 20 | 12 | 47 | 41 | 6 | 5 | 73 | 58 | ||
| Amortisation (intangible assets) *** | 41 | 14 | 10 | 19 | 15 | 74 | 25 | |||
| Average number of employees for the period | 780 | 392 | 1,341 | 1,343 | 268 | 208 | 16 | 15 | 2,405 | 1,958 |
| Number of own stores | 108 | 40 | 156 | 154 | 36 | 35 | 1 | 1 | 301 | 230 |
| Number of partnership stores | 30 | 14 | 48 | 48 | 42 | 42 | 0 | 0 | 120 | 104 |
| NUMBER OF STORES IN THE CHAIN | 138 | 54 | 204 | 202 | 78 | 77 | 1 | 1 | 421 | 334 |
| KEY FIGURES | ||||||||||
| EBIT margin, %**** | 5 | 8 | 13 | 16 | 10 | 15 | 10 | 13 | ||
| Sales increase, %**** | 124 | -2 | 2 | 7 | 24 | - | 28 | 23 | ||
| Sales/employee, SEK 000s | ||||||||||
| (converted into one-year balance) | 2,213 | 1,964 | 2,383 | 2,356 | 2,847 | 2,947 | 2,256 | 2,164 | ||
| Operating profit/loss per employee, SEK 000s | ||||||||||
| (converted into one-year balance) | 118 | 161 | 280 | 326 | 291 | 423 | 220 | 274 |
*) All comparative figures for 2011 pertain to MECA Denmark. Sales and revenue for 2012 include MECA Scandinavia for the period 23 May – 31 December.
**) Sales and revenue for comparative year 2011 pertain to the 11 March – 31 December 2011 period.
***) Including amortisation of acquisition-related intangible assets.
****) When calculating EBIT margin and sales increase for the segment, internal sales were excluded.
Sales between segments occur on market-based terms and conditions. Revenue from external customers that is reported to Group management is measured in the same manner as in the income statement.
The amounts reported to the CEO pertaining to total assets and liabilities are measured in the same manner as in the annual report. These assets and liabilities are distributed based on the segment operation.
Net sales from external customers derived primarily from the sale of goods, representing approximately 97 per cent (97) of the net sales. The remaining net sales derived from workshop services, as well as annual and license fees to affiliated stores and workshops.
Net sales derived from the sale of goods from external customers are
| ANALYSIS OF NET SALES BY CUSTOMER GROUPS, % |
2012 | 2011 |
|---|---|---|
| - Consumers via stores | 28% | 33% |
| - Consumers via workshops | 31% | 30% |
| - Other workshops | 41% | 37% |
| TOTAL | 100% | 100% |
The company has its registered office in Sweden. The distribution of revenue from external customers in Sweden and other geographic markets is presented in the table below:
| NET SALES | 2012 | 2011 |
|---|---|---|
| Sweden | 2,534 | 1,968 |
| Norway | 2,040 | 1,411 |
| Denmark | 702 | 759 |
| Other | 16 | 2 |
| TOTAL | 5,292 | 4,140 |
distributed according to the following customer groups: The Group has no individual customers that account for 10 per cent or more of the Group's revenue.
All fixed assets, other than financial instruments and deferred tax assets (there are no assets in connection with benefits after terminated employment or rights according to insurance agreements), located in Sweden amounted to SEK 2,350 M (475) and the total of such fixed assets located in other countries amounted to SEK 1,117 M (943), of which SEK 962 M (824) in Norway and SEK 146 M (116) in Denmark.
The preparation of the annual accounts and application of various accounting standards are based to a certain extent on management's assessments or assumptions and appreciations that are considered reasonable under the circumstances. These assumptions and appreciations are frequently based on historic experience but also on other factors, including expectations on future events. The results could differ if other assumptions and appreciations were used and the actual outcome will, in terms of definition, rarely agree with the estimated outcome. The assumptions and appreciations made by Mekonomen in the 2012 annual accounts, and which had the greatest impact on results and assets and liabilities, are discussed below.
When assessing the impairment requirement for goodwill and other intangible assets with an indefinite useful period, the carrying amount must be compared with the recoverable amount. The recoverable amount is the highest of an asset's net selling price and the value in use. Since there are normally no listed prices that may be used to assess the net selling price of an asset, the value in use will normally be the value that is used to compare with the carrying amount. Calculation of the value in use is based on assumptions and assessments. Key assumptions are the future trends for revenue and margins, including trends for prices and volumes, utilisation of operating capital employed, as well as yield requirements, which are used to discount future cash flows. These assumptions are described in more detail in Note 13 Intangible fixed assets. On the whole, this means that the measurement of goodwill and intangible assets items with an indefinite useful period is subject to significant appreciations and assessments.
In conjunction with acquisitions, analyses are prepared in which all identifiable assets and liabilities, including intangible assets, are identified and measured at fair value at the acquisition date. In accordance with IFRS 3, acquired identifiable intangible assets, for example, customers, franchise contracts, brands and customer relations, shall be separated from goodwill. This applies if these fulfil the criteria as assets, meaning, they are possible to separate or are based on contractual or other formal rights, and that their fair values can be established in a reliable manner.
An examination is conducted at each acquisition. The remaining surplus value is allocated to goodwill. Measuring identifiable assets and liabilities in acquisition assessments is subject to important appreciations and assessments.
The Group operates in several geographic markets, with sales to consumers and companies and with a wide range to many different customer groups. In order to satisfy customers' needs, there must be a sufficiently large inventory of products and also various types of guarantees that the products function as they should. With this type of operation that is conducted within the Group, there is a risk of customer loss and that some of the Group's stocked products cannot be sold at their carrying amounts, and also the risk that the company has guarantee commitments that extend further than the reserves for these commitments. The Group has established policies for reserves for accounts receivable, obsolescence provisions and provisions for sureties. These policies per se are appreciations of historic outcome and evaluated continuously to ensure that they correspond to actual outcome in terms of customer losses, obsolescence and guarantee commitments.
| Group | Parent Company | |||
|---|---|---|---|---|
| 2012 | 2011 | 2012 | 2011 | |
| DELOITTE | ||||
| Audit assignment | 7 | 6 | 1 | 1 |
| Audit related services other than the audit assignment |
0 | 0 | 0 | 0 |
| Tax advice | 0 | 0 | 0 | 0 |
| Other services | 0 | 0 | 0 | 0 |
| TOTAL | 7 | 6 | 1 | 1 |
| 2012 | 2011 | |||
|---|---|---|---|---|
| AVERAGE NUMBER OF EMPLOYEES | No. of employees | Of whom, men % | No. of employees | Of whom, men % |
| PARENT COMPANY | ||||
| Sweden | 68 | 76 | 76 | 75 |
| Total in Parent Company |
68 | 76 | 76 | 75 |
| SUBSIDIARIES | ||||
| Sweden | 1,219 | 83 | 1,000 | 80 |
| Denmark | 404 | 84 | 392 | 84 |
| Norway | 690 | 82 | 475 | 85 |
| Finland | 24 | 83 | 15 | 80 |
| Total in subsidiaries |
2,337 | 82 | 1,882 | 82 |
| GROUP TOTAL | 2,405 | 82 | 1,958 | 82 |
| Soc. Security | Soc. Security | |||
| SALARIES, REMUNERATION, ETC., SEK 000s | Salaries and other remuneration |
expenses (of which pension costs) |
Salaries and other remuneration |
expenses (of which pension costs) |
| Parent Company | 46,823 | 22,847 | 46,362 | 21,396 |
| Subsidiaries | 918,570 | (6,121) 225,548 |
722,748 | (5,325) 170,952 |
| (56,018) | (37,942) | |||
| GROUP TOTAL | 965,393 | 248,395 (62,139) |
769,110 | 192,348 (43,267) |
| SALARIES AND OTHER REMUNERATION | ||||
| DISTRIBUTED BETWEEN THE PRESIDENT AND BOARD MEMBERS | Board and President * |
Board and President * |
||
| AND OTHER EMPLOYEES, SEK 000s | (of which bonus, etc.) | Other employees | (of which bonus, etc.) | Other employees |
| PARENT COMPANY | ||||
| Mekonomen AB | 7,396 | 39,427 | 7,786 | 38,576 |
| (270) | (952) | (1,200) | (1,032) | |
| TOTAL IN PARENT COMPANY | 7,396 | 39,427 | 7,786 | 38,576 |
| (270) | (952) | (1,200) | (1,032) | |
| SUBSIDIARIES IN SWEDEN | 29,971 | 371,387 | 26,568 | 312,871 |
| (2,407) | (1,330) | (2,719) | (2,517) | |
| SUBSIDIARIES ABROAD | ||||
| Denmark | 2,042 | 165,786 | 1,796 | 149,130 |
| (0) | (0) | (53) | (0) | |
| Norway | 23,083 | 320,143 | 22,682 | 205,399 |
| (198) | (1,679) | (1,688) | (2,787) | |
| Finland | 6,158 | 4,302 | ||
| (0) | (0) | (-) | (-) | |
| TOTAL IN SUBSIDIARIES | 55,096 | 863,474 | 51,046 | 671,702 |
| (2,605) | (3,009) | (4,460) | (5,304) | |
| GROUP TOTAL | 62,492 (2,875) |
902,901 (3,961) |
58,832 (5,660) |
710,278 (6,336) |
*) Remuneration to the Board of Directors and President includes the Parent Company and, where appropriate, subsidiaries in each country.
Notes
Fees are paid to the Chairman of the Board and Board members in accordance with the resolution of the Annual General Meeting. The annual Board fee totalling SEK 1,700,000 (1,700,000) was established in accordance with the resolution of the 2012 Annual General Meeting. From this, SEK 400,000 (400,000) represents fees to the Chairman of the Board and SEK 300,000 (300,000) to the Vice Chairman, as well as SEK 200,000 (200,000) to each of the remaining Board members.
No fees are paid to the Boards of other subsidiaries.
The President, Håkan Lundstedt, has a basic salary of SEK 460,000 per month and a variable salary portion, which is based on the company's profits and can amount to a maximum of 60 per cent of the basic annual salary. Pension provisions are paid in an amount corresponding to 29 per cent of the basis salary.
Other benefits consist of a company car. The period of notice is 12 months if termination is initiated by the company and six months if initiated by the employee. If termination is initiated by the company, severance pay amounting to six months' salary is paid. For other senior executives, remuneration follows the policies adopted at the 2012 Annual General Meeting. This means that the company shall strive to offer its senior executives market-based remuneration, that the criteria shall accordingly be based on the significance of assignments, competency requirements, experience and performance and that remuneration shall comprise the following parts: fixed basic salary, variable remuneration, pension benefits, other benefits and severance pay. The variable remuneration for other senior executives, excluding the President, is based partly on the Group's profit and partly on individual qualitative parameters and can amount to a maximum of four months' salary. Other benefits refer primarily to company cars. Pension premiums are paid in an amount that is based on the ITP plan or a corresponding system for employees abroad. Pensionable salary refers to the basic salary. Severance pay for termination on the part of the company can total a maximum of one annual salary. Matters pertaining to remuneration of Board members
shall be prepared and resolved by the Board of Directors. At the 2011 Annual General Meeting, it was also resolved, upon approval by the Board of Directors, that company management receive a cash bonus from the company. The bonus shall be profit-based and calculated on the consolidated profit for the 2011–2013 financial years. The bonus programme shall, in its entirety, as a total expense for the company, amount to a maximum of SEK 24 M for the period. No bonus was reserved as at 31 December 2011 or 31 December 2012 pertaining to this bonus programme. The criteria for the size of an individual bonus shall be determined by the Board of Directors.
The Board has not made any decisions pertaining to share or share-price based incentive programs for Company Management.
Commitments for old-age pension and family pension for salaried employees in Sweden are secured through insurance with Alecta. According to a statement from the Swedish Financial Reporting Board, UFR 3, this is a defined-benefit plan that comprises several employers. In the 2012 financial year, the company did not have access to such information that made it possible to report this plan as a defined-benefit plan. ITP pension plans that are secured through insurance with Alecta are therefore reported as defined-contribution plans. The annual fees for pension policies signed with Alecta amounted to SEK 3 M (2). Alecta's surplus can be distributed to policyholders and/or the insured. At the end of 2012, Alecta's surplus, in the form of the collective consolidation level, amounted to 129 per cent (113). The collective consolidation level comprises the market value of Alecta's assets as a percentage of insurance commitments calculated according to Alecta's actuarial calculation commitments, which are not in agreement with IAS 19. In addition to the above-mentioned defined-benefit plans via Alecta, additional defined-benefit pension plans have been introduced to the Group as a result of the acquisition of Sørensen og Balchen in 2011 and MECA in 2012. These pension commitments pertain to employees in the subsidiary in Norway.
| EXECUTIVES/OCCUPATION CATEGORY, SEK 000s | Basic salary ** 2012 (2011) |
Bonus 2012 (2011) |
Board fees 2012 (2011) |
Other benefits 2012 (2011) |
Pension premiums 2012 (2011) |
|---|---|---|---|---|---|
| Fredrik Persson, Chairman of the Board | 400 (400) | ||||
| Marcus Storch, Vice Chairman of the Board | 300 (300) | ||||
| Antonia Ax:son Johnson, Board member | 200 (200) | ||||
| Kenny Bräck, Board member | 200 (200) | ||||
| Anders G Carlberg, Board member | 200 (200) | ||||
| Wolff Huber, Board member | 200 (200) | ||||
| Helena Skåntorp, Board member | 200 (200) | ||||
| President | 5,426 (4,886) | 270 (1,200) | 81 (71) | 1,543 (1,370) | |
| Other senior executives, 4 (8)* | 11,739 (11,725) | 1,313 (1,612) | 638 (818) | 2,360 (2,243) | |
| TOTAL | 17,165 (16,611) | 1,583 (2,812) | 1,700 (1,700) | 719 (889) | 3,903 (3,613) |
*) The composition of management group changed during the year. From 8 November 2012, the management group consists of four individuals, in addition to the President. The average number of individuals in the management group, in addition to the President, was about seven in 2012.
**) The basic salary in this table includes holiday bonus.
Of all the company's senior executives, one is a woman. The number of senior executives is five, who also comprised the Group's management team. In addition to the President, they are the Executive Vice President, the CFO, the International Business Director and the Head of business establishment.
| NOTE 6 Depreciation/amortisation of tangible and intangible fixed assets |
|||
|---|---|---|---|
| ----------------------------------------------------------------------------- | -- | -- | -- |
| Group | Parent Company | |||
|---|---|---|---|---|
| 2012 | 2011 | 2012 | 2011 | |
| Planned depreciation of tangible fixed assets | 73 | 58 | 4 | 4 |
| Amortisation, brands | 1 | 1 | - | - |
| Amortisation customer relationships | 49 | 11 | - | - |
| Amortisation franchise contracts | 5 | 4 | - | - |
| Amortisation of capitalised expenditure for IT systems | 18 | 9 | 13 | 9 |
| TOTAL | 147 | 83 | 17 | 13 |
| Parent Company | ||
|---|---|---|
| 2012 | 2011 | |
| Group contributions received/paid, net | 179 | 228 |
| Changes in tax allocation reserve | -5 | - |
| Changes in excess depreciation/amortisation | -14 | -13 |
| Total | 160 | 215 |
| Group | Parent Company | |||||
|---|---|---|---|---|---|---|
| NET PROFIT/NET LOSS | 2012 | 2011 | 2012 | 2011 | ||
| Of which, financial instruments categorised as: | ||||||
| Holdings for trading, derivatives | -1 | 1 | 0 | 0 | ||
| Accounts receivable, impairments | -31 | -5 | -1 | 0 |
| Group | Parent Company | ||||
|---|---|---|---|---|---|
| CURRENT TAX | 2012 | 2011 | 2012 | 2011 | |
| Sweden | -47 | -75 | -28 | -53 | |
| Other countries | -80 | -77 | |||
| TOTAL CURRENT TAX | -127 | -152 | -28 | -53 | |
| Changes in deferred tax temporary differences | 35 | 9 | |||
| RECOGNISED TAX EXPENSES | -92 | -143 | -28 | -53 | |
| TAX ON PROFIT FOR THE YEAR | |||||
| Recognised profit before tax | 474 | 523 | 255 | 343 | |
| Tax according to applicable tax rate | -129 | -139 | -67 | -90 | |
| Tax on standard interest on tax allocation reserves | 0 | -1 | 0 | -1 | |
| Tax effects on expenses that are not tax deductible | |||||
| Other non-deductible expenses | -8 | -7 | -1 | -1 | |
| Other non-taxable revenue | 0 | 1 | 40 | 39 | |
| Effects on adjustments from the preceding year | 0 | 3 | - | - | |
| Effects on non-capitalised loss-carry forward | 8 | - | - | - | |
| Effects on changes in the Swedish tax rate | 36 | - | - | - | |
| RECOGNISED TAX EXPENSES | -92 | -143 | -28 | -53 |
| Group | Parent Company | |||
|---|---|---|---|---|
| 2012 | 2011 | 2012 | 2011 | |
| OPENING ACCUMULATED COST, 1 JANUARY | 53 | 32 | 2 | 2 |
| Purchase, rebuilding and extensions, conversions | 15 | 21 | 0 | 0 |
| Translation difference, currency | 0 | 0 | - | - |
| CLOSING ACCUMULATED COST, 31 DECEMBER | 68 | 53 | 2 | 2 |
| OPENING ACCUMULATED DEPRECIATION, 1 JANUARY | -12 | -5 | -1 | 0 |
| Depreciation for the year | -9 | -7 | 0 | -1 |
| Translation difference, currency | 0 | 0 | - | - |
| CLOSING ACCUMULATED DEPRECIATION, 31 DECEMBER | -21 | -12 | -1 | -1 |
| CLOSING CARRYING AMOUNT 31 DECEMBER | 48 | 41 | 1 | 1 |
| Classification of financial assets and liabilities, 31 Dec 2012 | Loan receivables and accounts receivables |
Other liabilities | Derivative instruments |
Non-financial assets/liabilities |
Total |
|---|---|---|---|---|---|
| Amortised cost | Amortised cost | Fair value | |||
| ASSETS | |||||
| Intangible fixed assets | - | - | - | 3,086 | 3,086 |
| Tangible fixed assets | - | - | - | 287 | 287 |
| Deposits paid | 7 | - | - | - | 7 |
| Hire-purchase contract | 86 | - | - | - | 86 |
| Other financial fixed assets | 1 | - | - | - | 1 |
| Inventories | - | - | - | 1,203 | 1,203 |
| Accounts receivables | 495 | - | - | - | 495 |
| Other current receivables | - | - | - | 93 | 93 |
| Other assets (derivatives) | - | - | 0 | - | 0 |
| Prepaid expenses and accrued income | - | - | - | 209 | 209 |
| Cash and cash equivalents | 241 | - | - | - | 241 |
| TOTAL ASSETS | 830 | 0 | 0 | 4,878 | 5,708 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||||
| Shareholders' equity | - | - | - | 2,316 | 2,316 |
| Provisions | - | - | - | 20 | 20 |
| Long-term liabilities to credit institutions | - | 1,809 | - | - | 1,809 |
| Deferred tax liabilities | - | - | - | 230 | 230 |
| Current liabilities | - | - | - | 88 | 88 |
| Current liabilities to credit institutions | - | 296 | - | - | 296 |
| Accounts payable | - | 552 | - | - | 552 |
| Current tax liabilities | - | - | - | 87 | 87 |
| Other liabilities (derivatives) | - | - | 0 | - | 0 |
| Accrued expenses and deferred income | - | - | - | 310 | 310 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 0 | 2,657 | 0 | 3,051 | 5,708 |
| Classification of financial assets and liabilities, 31 Dec 2011 | Loan receivables and accounts receivables |
Other liabilities | Derivative instruments |
Non-financial assets/liabilities |
Total |
|---|---|---|---|---|---|
| Amortised cost | Amortised cost | Fair value | |||
| ASSETS | |||||
| Intangible fixed assets | - | - | - | 1,116 | 1,116 |
| Tangible fixed assets | - | - | - | 235 | 235 |
| Deposits paid | 7 | - | - | - | 7 |
| Hire-purchase contract | 59 | - | - | - | 59 |
| Other financial fixed assets | 1 | - | - | - | 1 |
| Inventories | - | - | - | 934 | 934 |
| Accounts receivables | 411 | - | - | - | 411 |
| Other current receivables | - | - | - | 26 | 26 |
| Other assets (derivatives) | - | - | 0 | - | 0 |
| Prepaid expenses and accrued income | - | - | - | 199 | 199 |
| Cash and cash equivalents | 67 | - | - | - | 67 |
| TOTAL ASSETS | 545 | 0 | 0 | 2,510 | 3,054 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||||
| Shareholders' equity | - | - | - | 1,556 | 1,556 |
| Provisions | - | - | - | 9 | 9 |
| Long-term liabilities to credit institutions | - | 449 | - | - | 449 |
| Deferred tax liabilities | - | - | - | 53 | 53 |
| Current liabilities | - | - | - | 60 | 60 |
| Current liabilities to credit institutions | - | 198 | - | - | 198 |
| Accounts payable | - | 438 | - | - | 438 |
| Current tax liabilities | - | - | - | 83 | 83 |
| Other liabilities (derivatives) | - | - | 0 | - | 0 |
| Accrued expenses and deferred income | - | - | - | 209 | 209 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 0 | 1,085 | 0 | 1,970 | 3,054 |
| Equipment and transport Group |
Financial leasing Group |
Total Group |
||||
|---|---|---|---|---|---|---|
| 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | |
| OPENING ACCUMULATED COST, 1 JANUARY | 488 | 404 | 33 | 29 | 521 | 433 |
| Purchases | 65 | 74 | 4 | 4 | 69 | 78 |
| Purchase in connection with acquired operation | 22 | 32 | 26 | - | 48 | 32 |
| Sales/disposals | -41 | -21 | - | - | -41 | -21 |
| Translation difference, currency | -2 | -1 | - | - | -2 | -1 |
| CLOSING ACCUMULATED COST, 31 DECEMBER | 532 | 488 | 63 | 33 | 595 | 521 |
| OPENING ACCUMULATED DEPRECIATION, 1 JANUARY | -297 | -265 | -30 | -26 | -327 | -291 |
| Sales/disposals | 35 | 14 | - | - | 35 | 14 |
| Depreciation for the year | -58 | -47 | -6 | -4 | -64 | -51 |
| Translation difference, currency | 0 | 1 | 0 | - | 0 | 1 |
| CLOSING ACCUMULATED DEPRECIATION, 31 DECEMBER | -320 | -297 | -36 | -30 | -356 | -327 |
| CLOSING CARRYING AMOUNT, 31 DECEMBER | 212 | 191 | 27 | 3 | 239 | 194 |
Operational leasing contracts pertain primarily to leased premises.
| Group | Parent Company | ||||
|---|---|---|---|---|---|
| Information about leasing expenses, operational leasing | 2012 | 2011 | 2012 | 2011 | |
| Rent for premises | 326 | 224 | 8 | 8 | |
| Leasing expenses, other | 33 | 22 | 3 | 2 |
| Group | Parent Company | |||
|---|---|---|---|---|
| Future leasing fees for irrevocable leasing contracts falling due for payment: | 31 Dec 2012 | 31 Dec 2011 | 31 Dec 2012 | 31 Dec 2011 |
| Within one year | 336 | 224 | 11 | 7 |
| Later than one year but within five years | 999 | 593 | 9 | 14 |
| After five years | 475 | 216 | - | - |
| TOTAL | 1,810 1,033 20 |
21 |
Of the future leasing fees, leased premises represent SEK 1,776 M (1,013) for the Group and SEK 10 M (16) for the Parent Company.
| Parent Company | ||||
|---|---|---|---|---|
| EQUIPMENT AND TRANSPORT | 2012 | 2011 | ||
| OPENING COST, 1 JANUARY | 48 | 47 | ||
| Purchases | 10 | 2 | ||
| Sales/disposals | –24 | -1 | ||
| CLOSING ACCUMULATED COST, 31 DECEMBER | 34 | 48 | ||
| OPENING DEPRECIATION, 1 JANUARY | –41 | –38 | ||
| Sales/disposals | 24 | 0 | ||
| Depreciation for the year | –4 | –3 | ||
| CLOSING ACCUMULATED DEPRECIATION, 31 DECEMBER | –21 | –41 | ||
| CLOSING CARRYING AMOUNT, 31 DECEMBER | 13 | 7 |
| Goodwill | Brands | contracts | Franchise | relations | Customer | IT | investments | Total | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | |
| OPENING ACCUMULATED COST, 1 JANUARY | 789 | 281 | 64 | 5 | 48 | - | 139 | - | 123 | 84 | 1,163 | 370 |
| Acquisitions | - | - | - | - | - | - | - | - | 42 | 39 | 42 | 39 |
| Acquisitions through purchasing | 1,109 | 500 | 270 | 57 | - | 47 | 600 | 136 | 15 | - | 1,994 | 740 |
| Divestments | - | - | -3 | - | - | - | - | - | - | - | -3 | - |
| Translation differences, currency | 5 | 8 | 1 | 1 | 1 | 1 | 2 | 3 | - | - | 9 | 13 |
| CLOSING ACCUMULATED COST, 31 DECEMBER | 1,903 | 789 | 332 | 64 | 49 | 48 | 741 | 139 | 180 | 123 | 3,205 | 1,163 |
| OPENING ACCUMULATED AMORTISATION, 1 JANUARY | - | - | -1 | - | -4 | - | -11 | - | -31 | -22 | -47 | -22 |
| Divestments | - | - | 1 | - | - | - | - | - | - | 1 | - | |
| Amortisation for the year | - | - | -1 | -1 | -5 | -4 | -49 | -11 | -18 | -9 | -74 | -25 |
| Translation differences, currency | - | - | 0 | 0 | 0 | 0 | 0 | 0 | - | - | - | - |
| CLOSING ACCUMULATED AMORTISATION, 31 DECEMBER | - | - | -1 | -1 | -9 | -4 | -60 | -11 | -49 | -31 | -120 | -47 |
| CLOSING CARRYING AMOUNT, 31 DECEMBER | 1,903 | 789 | 331 | 63 | 40 | 44 | 681 | 128 | 131 | 92 | 3,086 | 1,116 |
The carrying amounts of the intangible fixed assets are distributed according to the following operating segments:
| Goodwill | Brands | contracts | Franchise | relations | Customer | IT | investments | Total | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Carrying amount for operating segment for | 31 Dec 2012 |
31 Dec 2011 |
31 Dec 2012 |
31 Dec 2011 |
31 Dec 2012 |
31 Dec 2011 |
31 Dec 2012 |
31 Dec 2011 |
31 Dec 2012 |
31 Dec 2011 |
31 Dec 2012 |
31 Dec 2011 |
| MECA | 1,117 | 22 | 270 | - | - | - | 565 | - | 20 | - | 1,972 | 22 |
| Mekonomen Norden | 322 | 309 | 3 | 5 | - | - | - | - | 111 | 92 | 436 | 406 |
| Sørensen og Balchen | 464 | 458 | 58 | 58 | 40 | 44 | 116 | 128 | - | - | 678 | 688 |
| CLOSING CARRYING AMOUNT, 31 DECEMBER | 1,903 | 789 | 331 | 63 | 40 | 44 | 681 | 128 | 131 | 92 | 3,086 | 1,116 |
Goodwill is distributed among the Group's cash-generating units (CGU) identified by operating segments. In addition to goodwill, the Group also has acquired brands that have been deemed to have an indefinite useful period. The useful period is deemed indefinite when it pertains to well-established brands in their individual markets, which the Group intends to retain and further develop. The brands that have been identified and evaluated pertain
to the acquisition of MECA in 2012 and the acquisition of Sørensen og Balchen in 2011, with the associated BilXtra brand. Other brands are amortised and their carrying amount at the end of the year was SEK 3 M (5). A summary of goodwill and brands with indefinite useful period at operating segment level is shown in the table below:
| Goodwill | Brands (indefinite useful period) |
|||||
|---|---|---|---|---|---|---|
| Operating segment | Test level CGU | 31 Dec 2012 | 31 Dec 2011 | 31 Dec 2012 | 31 Dec 2011 | |
| MECA | MECA Scandinavia | 1,091 | - | 270 | - | |
| MECA Denmark | 26 | 22 | - | - | ||
| Operating segment | 1,117 | 22 | 270 | - | ||
| Mekonomen Norden | Sweden | 261 | 249 | - | - | |
| Norway | 61 | 60 | - | - | ||
| Finland | - | - | - | - | ||
| Operating segment | 322 | 309 | - | - | ||
| Sørensen og Balchen | Operating segment | 464 | 458 | 58 | 58 | |
| Total | 1,903 | 789 | 328 | 58 |
Testing impairment requirements for goodwill and other intangible assets with indefinite useful period occurs in the fourth quarter annually or more frequently if there are indications of value depreciation. The recoverable amount for a cash-generating unit is established based on calculations of the value in use. The value in use is the present value of the estimated future cash flows.
Cash-flow forecasts are based on an assessment of the anticipated growth rate and the trend of the EBITDA margin (operating margin before depreciation/amortisation and impairment of tangible and intangible assets), based on the budget that was adopted in November for the next year, forecasts for the next three years, management's long-term expectations for the operation, as well as the historic trend. The cash-flow forecasts for the second to fourth years are based on an annual growth rate of 3 per cent (2-5). Cash flows beyond this four-year period were extrapolated using an assessed growth rate of 3 per cent (2 per cent in the preceding year, with the exception of Sørensen og Balchen, where 2.5 per cent applied).
Calculated value in use is most sensitive to changes in assumptions for growth-rate, EBITDA margin and the relevant discount rate (WACC, Weigthed Average Cost of Capital), which is used to discount future cash flows. The significant assumptions used to calculate the value in use for 2012 and 2011, respectively, were summarised as follows:
| 31 Dec 2012 | 31 Dec 2011 | |
|---|---|---|
| Discount rate (WACC) before tax | 10.3% | 13.6% |
| Discount rate (WACC) after tax | 8.1% | 10.0% |
| Growth rate beyond the forecast period 1) | 3.0% | 2.0% |
| Total price and volume trend | 3.0% | 2-5% |
1) Growth rate beyond the forecast period for Sørensen og Balchen was deemed to be 2.5 per cent as at 31 December 2011.
The present value of the forecasted cash flows was calculated by applying a discount rate of 8.1 per cent (10) after tax, corresponding to a discount rate before tax of approximately 10.3 per cent (13.6). When calculating the discount rate, the Swedish corporate tax of 22 per cent was used for all operating segments, while the weigthed tax rate was applied when calculating the present value for each unit. The conditions that apply for the various markets in which Mekonomen is active do not deviate significantly from each other, which is why the same rate is used for all units.
The discount rate corresponds to Mekonomen's assessed average cost of capital, meaning the weigthed total of required return on shareholders' equity and costs for externally raised capital. The required return on shareholders' equity is based on the assumption of a risk-free interest rate of 1.15 per cent (2.40), market-based risk premium of 7.0 per cent (7.0) and a so-called beta value of 1.0 (1.0), as well as a company-specific risk premium of 4.0 per cent (6.0). The beta value depicts the connection between the price of the Mekonomen share and changes in the comparative index. The debt/equity ratio was assumed to be 44 per cent (44). The change in
the discount rate between 2012 and 2011 was primarily due to the change in management's assessment that the company-specific risk premium had decreased and the reduction of the risk-free interest rate.
The growth rate does not exceed the long-term growth rate for the markets in which each cash-generating unit is active.
In the event of a change, assumptions about future price and volume trends have major impact on the cash flow. In plans that are used as the basis for the cash flows, management assumes that the price trend will only amount to a few per cent per year. The volume trend is calculated to be 3.0 per cent annually until 2016, meaning a more cautious assumption than Mekonomen's target of 10 per cent growth. Assessments are made taking into account earlier experience and external information sources.
It has been assumed that the gross margin will remain at a current and historic level throughout the forecast period, which is a cautious assessment, where the anticipated additional synergy effects from the MECA acquisition have not been included. With respect to the operations' other costs, it is assumed that these will follow the same growth rate as revenue, except for MECA Denmark, where measures implemented are expected to reduce other costs.
An increase in the discount rate by 2 percentage points, a reduction in the assumed long-term growth rate by 2 percentage points or a decrease in the EBITDA margin by 2 percentage points would individually result in no impairment requirement arising.
According to implemented impairment-requirement testing, there are no impairment requirements for goodwill or other intangible assets with an indefinite useful period as at 31 December 2012.
| Parent Company | |||||
|---|---|---|---|---|---|
| IT INVESTMENTS | 2012 | 2011 | |||
| OPENING COST | 123 | 84 | |||
| Purchases | 32 | 39 | |||
| Sales/disposals | - | - | |||
| CLOSING ACCUMULATED COST | 155 | 123 | |||
| OPENING AMORTISATION | -31 | -22 | |||
| Sales/disposals | - | - | |||
| Amortisation for the year | -13 | -9 | |||
| CLOSING ACCUMULATED AMORTISATION | -44 | -31 | |||
| CLOSING CARRYING AMOUNT | 111 | 92 |
Group 31 Dec 2012 31 Dec 2011
Deferred tax assets and liabilities are offset when there is a legal right of set-off for current tax assets and tax liabilities and when deferred taxes pertain to the same tax authority. The net carrying amounts are as follows:
| DEFERRED TAX ASSETS (+) | Group | ||||
|---|---|---|---|---|---|
| /TAX LIABILITIES (-), NET | 31 Dec 2012 | 31 Dec 2011 | |||
| Untaxed reserves | -49 | -48 | |||
| Surplus value in fixed assets (through acquisition) | -244 | -60 | |||
| Temporary differences on reversed net asset goodwill | -19 | -20 | |||
| Temporary differences on inter-company profits | 57 | 48 | |||
| Temporary differences on pension commitments | 3 | 0 | |||
| Temporary differences, other | 22 | 27 | |||
| TOTAL | -230 | -53 |
| GROSS CHANGE IN DEFERRED TAX ASSETS | Group | |
|---|---|---|
| /TAX LIABILITIES | 2012 | 2011 |
| Opening balance | -53 | -18 |
| Translation difference, currency | -4 | -1 |
| Acquisition of subsidiaries | -208 | -43 |
| Recognition in profit or loss | 35 | 9 |
| Tax on recognition in the comprehensive income | 2 | 0 |
| AT THE END OF THE YEAR | -230 | -53 |
At the end of the financial year, tax loss-carry forwards amounted to SEK 0 M (0) in the Parent Company and SEK 21 M (10) in the Group. All loss-carry forwards have no deadlines. Deferred tax assets pertaining to tax loss-carry forwards in the Group amounted to SEK 0 M (1) on the balance-sheet date. The deferred tax asset on the remaining deficit was not assigned a value in the balance sheet.
| TOTAL | 797 | 636 |
|---|---|---|
| Prepaid expenses and accrued income | 209 | 199 |
| Other receivables | 36 | 26 |
NOTE 16 Current receivables
| Group | |||
|---|---|---|---|
| ACCOUNTS RECEIVABLE | 31 Dec 2012 | 31 Dec 2011 | |
| Accounts receivable | 543 | 437 | |
| Provisions for bad debts | -48 | -26 | |
| TOTAL | 495 | 411 |
Accounts receivables 495 411 Tax assets 57 0
| Group | ||
|---|---|---|
| PROVISIONS FOR BAD DEBTS | 2012 | 2011 |
| Provision for bad debts at the beginning of the year | -26 | -21 |
| Incurred through acquisition | -3 | -4 |
| Net change in provision | -31 | -5 |
| Recovered prior impairment losses | 12 | 4 |
| TOTAL | -48 | -26 |
| RECEIVABLES THAT ARE DUE | Group | |||
|---|---|---|---|---|
| BUT NOT IMPAIRED | 31 Dec 2012 | 31 Dec 2011 | ||
| Accounts receivable | ||||
| Receivables due between 0–30 days | 58 | 50 | ||
| Receivables due between 31–60 days | 5 | 12 | ||
| Receivables due longer than 61 days | 6 | 13 | ||
| TOTAL | 69 | 75 |
Interest income on accounts receivable during the year was SEK 7 M (5).
| Group | |||
|---|---|---|---|
| 31 Dec 2012 | 31 Dec 2011 | ||
| Rental deposits paid | 7 | 7 | |
| Hire-purchase contract | 86 | 59 | |
| Other receivables | 1 | 1 | |
| TOTAL | 94 | 67 |
Impairment of long-term receivables amounted to SEK 0 M (0) during the year.
| Group | Parent Company | |||
|---|---|---|---|---|
| 31 Dec 2012 | 31 Dec 2011 31 Dec 2012 | 31 Dec 2011 | ||
| Prepaid rents | 44 | 41 | 0 | 2 |
| Prepaid leasing fees | 1 | 0 | - | - |
| Prepaid insurance | 4 | 4 | 0 | 0 |
| Accrued supplier bonus | 107 | 92 | 69 | 84 |
| Other interim receivables | 53 | 62 | 10 | 20 |
| TOTAL | 209 | 199 | 79 | 106 |
| Group | Parent Company | |||
|---|---|---|---|---|
| 31 Dec 2012 | 31 Dec 2011 31 Dec 2012 | 31 Dec 2011 | ||
| Cash and bank balances | 241 | 67 | 0 | 1 |
| TOTAL | 241 | 67 | 0 | 1 |
| Group | Parent Company | |||
|---|---|---|---|---|
| Long-term | 31 Dec 2012 | 31 Dec 2011 31 Dec 2012 | 31 Dec 2011 | |
| Liabilities to credit institutions, bank borrowing | 1,802 | 448 | 1,797 | 445 |
| Liabilities to leasing companies | 7 | 1 | – | – |
| TOTAL LONG-TERM LIABILITIES, INTEREST-BEARING | 1,809 | 449 | 1,797 | 445 |
| Current | 31 Dec 2012 | 31 Dec 2011 31 Dec 2012 | 31 Dec 2011 |
| Liabilities to credit institutions, bank borrowing | 197 | 61 | 196 | 60 |
|---|---|---|---|---|
| Overdraft facility | 92 | 135 | 0 | 0 |
| Liabilities to leasing companies | 7 | 2 | – | – |
| TOTAL CURRENT LIABILITIES, INTEREST-BEARING | 296 | 198 | 196 | 60 |
| TOTAL BORROWING | 2,105 | 647 | 1,993 | 505 |
| Overdraft facility limit | 417 | 277 | 417 | 277 |
All interest rates are variable or have a maximum commitment period of three months. During the financial year, the interest level varied within the 2–4 per cent interval.
The debt increase in 2012 was primarily attributable to the acquisition of MECA. In connection with the acquisition, management deemed that the financing of the cash portion of the acquisition totalling SEK 1,351 M, as well as an additional supplementary cash reserve, entailing loans totalling SEK 1,600 M would occur over a three-year period. This gave the Group optimum loan conditions, the lowest impact on earnings and sustainable manoeuvrability. The total loan amortisation amounts to SEK 196 M per year and management believes that the conditions are very good for financing the Group's future capital requirements including the refinancing of loans outstanding.
During the financial year, the Group's interest-bearing liabilities were amortised by a total of SEK 210 M, including a reduction in the utilised credit facilities.
Opening charges for the loans had a negative impact of SEK 7 M on other financial items for the financial year.
| Group | Parent Company | |||
|---|---|---|---|---|
| 31 Dec 2012 | 31 Dec 2011 31 Dec 2012 | 31 Dec 2011 | ||
| Provision guarantees for divested properties |
1 | 2 | 1 | 2 |
| Provision for other guarantees |
5 | - | - | - |
| Provision for pensions | 10 | 2 | - | - |
| Provisions for sup plementary purchase considerations |
4 | 5 | - | - |
| TOTAL | 20 | 9 | 1 | 2 |
In conjunction with the divestment of the Group's properties in 2007, a guarantee provision totalling SEK 3 M was made in the Parent Company pertaining to consulting responsibility for property inspections performed. This provision was reduced by SEK 1 M in 2009 and by SEK 1 M in 2012, and amounted to SEK 1 M at 31 December 2012. Mekonomen's guarantee commitment totalled SEK 22 M and the remaining SEK 21 M is recognised as a contingent liability in memorandum items.
Due dates for total borrowing are as follows:
| Group Parent Company |
||||
|---|---|---|---|---|
| Liabilities to credit institutions |
31 Dec 2012 31 Dec 2011 31 Dec 2012 31 Dec 2011 | |||
| 1–12 months | 296 | 198 | 196 | 60 |
| 1–2 years | 272 | 63 | 271 | 60 |
| 2–3 years | 1,537 | 386 | 1,526 | 385 |
| TOTAL | 2,105 | 647 | 1,993 | 505 |
Future interest payments were not included in the above duration analysis. The Group's long-term borrowing occurs mainly under credit frameworks with long-term lines of credits, but with short-term fixed-interest periods. The Group's interest payments pertaining to borrowing amounted to SEK 50 M (20) in 2012. Refer also to the sensitivity analysis pertaining to interestrate risks in the sensitivity analysis section in the Administration Report and in Note 32. Existing overdraft facilities are in SEK, NOK, EUR and DKK. Other loans are entirely in SEK.
All pension commitments pertain to employees in the subsidiary in Norway. The most important actuarial assumptions used in calculating pension provisions are as follows:
| 31 Dec 2012 | 31 Dec 2011 | |
|---|---|---|
| Discount rate | 2.20% | 3.30% |
| Anticipated future return on plan assets | 3.60% | 4.80% |
| Future salary increases | 3.00% | 3.50% |
| Future pension increases | 0.10% | 0.70% |
The assumption pertaining to future service life is based on public statistics and experience from mortality surveys in the country concerned and used in consultation with actuarial experts.
The amounts recognised in the balance sheet have been calculated as follows:
| 31 Dec 2012 | 31 Dec 2011 | |
|---|---|---|
| Present value of funded commitments | 52 | 37 |
| Fair value on plan assets | -42 | -35 |
| Deficit in funded plans | 10 | 2 |
| Present value in unfunded commitments | - | - |
| Net debt in the balance sheet | 10 | 2 |
| Group | ||
|---|---|---|
| 31 Dec 2012 | 31 Dec 2011 | |
| Overdraft facility | 92 | 135 |
| Short-term portion of bank borrowing | 197 | 61 |
| Liabilities to leasing companies | 7 | 2 |
| TOTAL CURRENT LIABILITIES, INTEREST-BEARING | 296 | 198 |
| Accounts payable | 552 | 438 |
| Other liabilities | 88 | 60 |
| Accrued expenses and deferred income | 310 | 209 |
| TOTAL CURRENT LIABILITIES, NON-INTEREST-BEARING |
950 | 707 |
| Group | Parent Company | ||||
|---|---|---|---|---|---|
| PLEDGED ASSETS | 31 Dec 2012 | 31 Dec 2011 31 Dec 2012 | 31 Dec 2011 | ||
| Chattel mortgages, other liabilities |
17 | - | - | - | |
| TOTAL | 17 | 0 | 0 | 0 | |
| CONTINGENT LIABILI TIES |
|||||
| Guarantee commitment, divested properties |
21 | 20 | 21 | 20 | |
| Other sureties | 1 | - | - | - | |
| TOTAL | 22 | 20 | 21 | 20 |
| Group | Parent Company | ||||
|---|---|---|---|---|---|
| 31 Dec 2012 | 31 Dec 2011 31 Dec 2012 | 31 Dec 2011 | |||
| Accrued salaries | 12 | 12 | 3 | 4 | |
| Accrued holiday pay | 130 | 98 | 5 | 5 | |
| Accrued social security contributions |
51 | 39 | 5 | 7 | |
| Accrued bonus /contract expense |
57 | 28 | - | - | |
| Accrued interest expenses | 5 | 1 | 5 | 1 | |
| Prepaid rental revenue | 7 | 8 | - | - | |
| Other interim liabilities | 48 | 23 | 0 | 1 | |
| TOTAL | 310 | 209 | 18 | 18 |
| Parent Company | ||
|---|---|---|
| 2012 | 2011 | |
| Opening cost | 1,145 | 305 |
| Acquisitions during the year | 2,033 | 840 |
| Closing accumulated cost | 3,179 | 1,145 |
| Opening impairments | -25 | -25 |
| Impairments | - | - |
| Closing accumulated impairments | -25 | -25 |
| Closing planned residual value | 3,154 | 1,120 |
| NAME OF COMPANY/REGISTERED OFFICE, SWEDEN | Corp. Reg. No. | Share of equity, % |
No. of stores | Carrying amount, 31 Dec 2012 |
Carrying amount, 31 Dec 2011 |
|---|---|---|---|---|---|
| MECA Scandinavia AB/Malmö | 556218-3037 | 100 | 2,033 | - | |
| Mekonomen Norden AB/Stockholm | 556724-9254 | 100 | 0 | 0 | |
| Mekonomen Grossist AB/Stockholm | 556062-4875 | 100 | 40 | 40 | |
| Mekonomen Detaljist AB/Stockholm | 556157-7288 | 100 | 5 | 5 | |
| Mekonomen Finans AB/Stockholm | 556179-9676 | 100 | 1 | 1 | |
| Mekonomen Fleet AB/Stockholm | 556720-6031 | 100 | 2 | 2 | |
| Speedy Autoservice AB/Malmö | 556575-9858 | 100 | 31 | 31 | |
| Mekonomen Nya Affärer AB /Stockholm | 556821-5981 | 100 | 0 | 0 | |
| Mekonomen Services AB/Stockholm | 556840-9428 | 100 | 0 | - | |
| NAME OF COMPANY/REGISTERED OFFICE, FINLAND | |||||
| Mekonomen Oy/Helsinki | 2259452-4 | 100 | 0 | 0 | |
| NAME OF COMPANY/REGISTERED OFFICE, DENMARK | |||||
| Mekonomen A/S/Odense | 30 07 81 28 | 100 | 37 | 177 | 177 |
| NAME OF COMPANY/REGISTERED OFFICE, NORWAY | |||||
| Mekonomen AS/Oslo | 980 748 669 | 100 | 24 | 24 | |
| Sørensen og Balchen AS/Oslo | 916 591 144 | 100 | 840 | 840 | |
| PARTICIPATIONS IN GROUP COMPANIES, TOTAL | 3,154 | 1,120 |
| Share of | Share of | ||||||
|---|---|---|---|---|---|---|---|
| INDIRECT PARTICIPATIONS IN SUBSIDIARIES |
Corp. Reg. No. |
equity, % |
No. of stores |
INDIRECT PARTICIPATIONS IN SUBSIDIARIES |
Corp. Reg. No. |
equity, % |
No. of stores |
| MECA | Mekonomen Högsbo AB/Gothenburg | 556887-1999 | 51 | 1 | |||
| MECA Car Parts AB/Malmö | 556169-0412 | 100 | - | Mekonomen Infra City AB/Stockholm | 556840-4437 | 60 | 1 |
| MECA Sweden AB/Malmö | 556356-5612 | 100 | 43 | Mekonomen Järfälla AB/Stockholm | 556660-3196 | 100 | 1 |
| MECA Norway AS/Gjövik | 935 682 525 | 100 | 24 | Mekonomen Jönköping AB/Jönköping | 556237-5500 | 91 | 2 |
| 67 | Mekonomen Kalmar AB/Kalmar | 556236-8349 | 91 | 1 | |||
| Mekonomen Karlshamn AB/Karlshamn | 556649-9090 | 100 | 1 | ||||
| DENMARK | Mekonomen Karlskoga AB/Karlskoga | 556196-2605 | 100 | 1 | |||
| Mekonomen Brønderslev ApS/Odense | 34 05 53 86 | 51,25 | 1 | Mekonomen Karlskrona AB/Karlskrona | 556649-9082 | 91 | 1 |
| Mekonomen Holbæk A/S/Odense | 34 21 38 36 | 100 | 1 | Mekonomen Karlstad AB/Karlstad | 556786-9457 | 100 | 1 |
| Mekonomen Kolding A/S/Odense | 33 49 47 85 | 70 | 1 | Mekonomen Katrinelund AB/Malmö | 556530-7237 | 100 | 1 |
| Mekonomen Valby ApS/Odense | 33 37 78 86 | 100 | 1 | Mekonomen Kramfors AB/Kramfors | 556496-1810 | 91 | 1 |
| Mekonomen OE dele ApS/Padborg | 32 88 08 43 | 51,25 | - | Mekonomen Kristianstad AB/Kristianstad | 556171-9203 | 100 | 1 |
| BilXtra A/S/Odense | 33 49 46 45 | 100 | - | Mekonomen Kungsbacka AB/Kungsbacka | 556887-2336 | 51 | 1 |
| Mekonomen Grossist Danmark A/S/Odense | 33 38 01 27 | 100 | - | Mekonomen Landskrona AB/Landskrona | 556646-4813 | 100 | 1 |
| Fleet Danmark A/S/Odense | 33 25 63 96 | 100 | - | Mekonomen Lidköping AB/Lidköping | 556761-3012 | 75 | 1 |
| Mekonomen Linköping AB/Linköping | 556202-9545 | 91 | 1 | ||||
| 4 | Mekonomen Ljungby Odlaren AB/Ljungby | 556111-9719 | 100 | 1 | |||
| Mekonomen Ljusdal AB/Ljusdal | 556786-1066 | 51 | 2 | ||||
| Mekonomen Ludvika AB/Ludvika | 556470-4210 | 91 | 1 | ||||
| FINLAND – MEKONOMEN NORDEN | Mekonomen Luleå AB/Luleå | 556338-4071 | 91 | 1 | |||
| Mekonomen Viiki Oy/Helsinki | 2359722-5 | 100 | 1 | Mekonomen Lund AB/Lund | 556531-0108 | 91 | 1 |
| Mekonomen Tammisto Oy/Vantaa | 2359731-3 | 100 | 1 | Mekonomen Lycksele AB/Lycksele | 556687-8095 | 75 | 1 |
| Mekonomen Renkomäki Oy/Lahti | 2429678-2 | 100 | 1 | Mekonomen Malmö Fosie AB/Malmö | 556493-7018 | 91 | 1 |
| Mekonomen Levänen Oy/Kuopio | 2462875-9 | 100 | 1 | Mekonomen Mariestad AB/Mariestad | 556261-0179 | 75 | 1 |
| Mekonomen Grossist Oy/Vantaa | 2445185-0 | 100 | - | Mekonomen Mjölby AB/Mjölby | 556362-0565 | 91 | 1 |
| 4 | Mekonomen Mora AB/Mora | 556363-2487 | 100 | 1 | |||
| Mekonomen Motala AB/Motala | 556311-8750 | 91 | 1 | ||||
| SWEDEN – MEKONOMEN NORDEN | Mekonomen Märsta AB/Sigtuna | 556596-3674 | 100 | 1 | |||
| Mekonomen Alingsås AB/Alingsås | 556596-3690 | 95 | 1 | Mekonomen Mölndal AB/Mölndal | 556887-2294 | 51 | 1 |
| Mekonomen Anderstorp AB/Anderstorp | 556775-9849 | 100 | 0 | Mekonomen Nacka AB/Nacka | 556204-0294 | 100 | 1 |
| Mekonomen Arvika AB/Arvika | 556528-3750 | 80 | 3 | Mekonomen Norrköping AB/Norrköping | 556376-2797 | 75 | 2 |
| Mekonomen B2C AB/Stockholm | 556767-7405 | 100 | - | Mekonomen Norrtull AB/Stockholm | 556821-6088 | 100 | 0 |
| Mekonomen Backaplan AB/Gothenburg | 556226-1338 | 91 | 1 | Mekonomen Norrtälje AB/Stockholm | 556178-9719 | 60 | 1 |
| Mekonomen Barkarby AB/Stockholm | 556758-7679 | 100 | 1 | Mekonomen Nyköping AB/Nyköping | 556244-0650 | 75 | 1 |
| Mekonomen Bilverkstad AB/Stockholm | 556607-1493 | 100 | - | Mekonomen Nässjö AB/Nässjö | 556187-8637 | 100 | 1 |
| Mekonomen Bollnäs AB/Bollnäs | 556827-3675 | 91 | 1 | Mekonomen Osby AB/Osby | 556408-8044 | 91 | 1 |
| Mekonomen Boländerna AB/Uppsala | 556767-8916 | 100 | 1 | Mekonomen Oskarshamn AB/Oskarshamn | 556631-8589 | 75 | 1 |
| Mekonomen Borås City AB/Borås | 556078-9447 | 91 | 2 | Mekonomen Partille AB/Gothenburg | 556731-1401 | 91 | 2 |
| Mekonomen Bromma AB/Stockholm | 556230-5101 | 100 | 1 | Mekonomen Piteå AB/Piteå | 556659-8966 | 100 | 1 |
| Mekonomen BV Härlöv AB/Kristianstad | 556758-7646 | 100 | 0 | Mekonomen Ronneby AB/Ronneby | 556649-9017 | 100 | 1 |
| Mekonomen Enköping AB/Enköping | 556264-2636 | 91 | 1 | Mekonomen Sala AB/Sala | 556882-0905 | 91 | 1 |
| Mekonomen Eskilstuna AB/Eskilstuna | 556613-5637 | 91 | 1 | Mekonomen Sandviken AB/Sandviken | 556201-1295 | 91 | 1 |
| Mekonomen Falkenberg AB/Falkenberg | 556213-1622 | 91 | 1 | Mekonomen Segeltorp AB/Huddinge | 556580-2351 | 100 | 1 |
| Mekonomen Falköping AB/Falköping | 556272-1497 | 100 | 1 | Mekonomen Sisjön AB/Gothenburg | 556509-7861 | 100 | 1 |
| Mekonomen Falun AB/Falun | 556559-3927 | 100 | 2 | Mekonomen Skellefteå AB/Skellefteå | 556389-4095 | 91 | 1 |
| Mekonomen Farsta AB/Stockholm | 556528-4766 | 100 | 1 | Mekonomen Skåne Ystad AB/Ystad | 556565-3085 | 100 | 1 |
| Mekonomen FKV AB/Stockholm | 556775-9831 | 75 | 0 | Mekonomen Sollefteå AB/Sollefteå | 556216-9424 | 80 | 1 |
| Mekonomen Flen AB/Flen | 556769-8542 | 75 | 2 | Mekonomen Sollentuna AB/Sollentuna | 556462-0416 | 100 | 0 |
| Mekonomen Gislaved AB/Gislaved | 556261-4676 | 100 | 1 | Mekonomen Solna AB/Stockholm | 556213-3073 | 100 | 1 |
| Mekonomen Globen AB/Stockholm | 556794-8905 | 100 | 1 | Mekonomen Sundsvall Birsta AB/Sundsvall | 556201-1675 | 91 | 1 |
| Mekonomen Gränby AB/Uppsala | 556821-6062 | 100 | 1 | Mekonomen Sundsvall Nacksta AB/Sundsvall | 556777-4863 | 91 | 1 |
| Mekonomen Gärdet AB/Stockholm | 556821-6104 | 100 | 1 | Mekonomen Söderhamn AB/Söderhamn | 556509-4132 | 75 | 1 |
| Mekonomen Gärdet Café AB/Stockholm | 556840-9436 | 100 | 0 | Mekonomen Södertälje AB/Södertälje | 556405-5498 | 91 | 2 |
| Mekonomen Gävle AB/Gävle | 556353-6803 | 91 | 1 | Mekonomen Sölvesborg AB/Sölvesborg | 556216-4250 | 75 | 1 |
| Mekonomen Gothenburg Ringön AB/Gothenburg | 556561-6751 | 100 | 0 | Mekonomen Torslanda AB/Gothenburg | 556583-3893 | 91 | 2 |
| Mekonomen Hedemora AB/Hedemora | 556308-8011 | 91 | 1 | Mekonomen Tranås AB/Tranås | 556770-0041 | 100 | 1 |
| Mekonomen Helsingborg AB/Helsingborg | 556044-4159 | 75 | 1 | Mekonomen Trollhättan AB/Trollhättan | 556515-0298 | 91 | 2 |
| Mekonomen Helsingborg Södra AB/Helsingborg | 556613-6007 | 100 | 1 | Mekonomen Täby AB/Täby | 556632-9958 | 91 | 1 |
| Mekonomen Hudiksvall AB/Hudiksvall | 556428-1102 | 100 | 0 | Mekonomen Uddevalla AB/Uddevalla | 556550-5004 | 100 | 1 |
| Mekonomen Häggvik AB/Stockholm | 556840-9410 | 100 | 1 | Mekonomen Umeå AB/Umeå | 556483-3084 | 81,8 | 1 |
| Mekonomen Härnösand AB/Härnösand | 556217-2261 | 80 | 1 | Mekonomen Upplands Väsby AB/Upplands-Väsby | 556777-4871 | 100 | 0 |
| Mekonomen Hässleholm AB/Hässleholm | 556678-0622 | 91 | 1 | Mekonomen Uppsala AB/Uppsala | 556092-4218 | 100 | 2 |
| Share of | |||
|---|---|---|---|
| INDIRECT PARTICIPATIONS IN SUBSIDIARIES |
Corp. Reg. No. |
equity, % |
No. of stores |
| Mekonomen Högsbo AB/Gothenburg | 556887-1999 | 51 | 1 |
| Mekonomen Infra City AB/Stockholm | 556840-4437 | 60 | 1 |
| Mekonomen Järfälla AB/Stockholm | 556660-3196 | 100 | 1 |
| Mekonomen Jönköping AB/Jönköping | 556237-5500 | 91 | 2 |
| Mekonomen Kalmar AB/Kalmar | 556236-8349 | 91 | 1 |
| Mekonomen Karlshamn AB/Karlshamn | 556649-9090 | 100 | 1 |
| Mekonomen Karlskoga AB/Karlskoga | 556196-2605 | 100 | 1 |
| Mekonomen Karlskrona AB/Karlskrona | 556649-9082 | 91 | 1 |
| Mekonomen Karlstad AB/Karlstad | 556786-9457 | 100 | 1 |
| Mekonomen Katrinelund AB/Malmö | 556530-7237 | 100 | 1 |
| Mekonomen Kramfors AB/Kramfors | 556496-1810 | 91 | 1 |
| Mekonomen Kristianstad AB/Kristianstad | 556171-9203 | 100 | 1 |
| Mekonomen Kungsbacka AB/Kungsbacka | 556887-2336 | 51 | 1 |
| Mekonomen Landskrona AB/Landskrona | 556646-4813 | 100 | 1 |
| Mekonomen Lidköping AB/Lidköping | 556761-3012 | 75 | 1 |
| Mekonomen Linköping AB/Linköping | 556202-9545 | 91 | 1 |
| Mekonomen Ljungby Odlaren AB/Ljungby | 556111-9719 | 100 | 1 |
| Mekonomen Ljusdal AB/Ljusdal | 556786-1066 | 51 | 2 |
| Mekonomen Ludvika AB/Ludvika | 556470-4210 | 91 | 1 |
| Mekonomen Luleå AB/Luleå | 556338-4071 | 91 | 1 |
| Mekonomen Lund AB/Lund | 556531-0108 | 91 | 1 |
| Mekonomen Lycksele AB/Lycksele | 556687-8095 | 75 | 1 |
| Mekonomen Malmö Fosie AB/Malmö | 556493-7018 | 91 | 1 |
| Mekonomen Mariestad AB/Mariestad | 556261-0179 | 75 | 1 |
| Mekonomen Mjölby AB/Mjölby | 556362-0565 | 91 | 1 |
| Mekonomen Mora AB/Mora | 556363-2487 | 100 | 1 |
| Mekonomen Motala AB/Motala Mekonomen Märsta AB/Sigtuna |
556311-8750 556596-3674 |
91 100 |
1 1 |
| Mekonomen Mölndal AB/Mölndal | 556887-2294 | 51 | 1 |
| Mekonomen Nacka AB/Nacka | 556204-0294 | 100 | 1 |
| Mekonomen Norrköping AB/Norrköping | 556376-2797 | 75 | 2 |
| Mekonomen Norrtull AB/Stockholm | 556821-6088 | 100 | 0 |
| Mekonomen Norrtälje AB/Stockholm | 556178-9719 | 60 | 1 |
| Mekonomen Nyköping AB/Nyköping | 556244-0650 | 75 | 1 |
| Mekonomen Nässjö AB/Nässjö | 556187-8637 | 100 | 1 |
| Mekonomen Osby AB/Osby | 556408-8044 | 91 | 1 |
| Mekonomen Oskarshamn AB/Oskarshamn | 556631-8589 | 75 | 1 |
| Mekonomen Partille AB/Gothenburg | 556731-1401 | 91 | 2 |
| Mekonomen Piteå AB/Piteå | 556659-8966 | 100 | 1 |
| Mekonomen Ronneby AB/Ronneby | 556649-9017 | 100 | 1 |
| Mekonomen Sala AB/Sala | 556882-0905 | 91 | 1 |
| Mekonomen Sandviken AB/Sandviken | 556201-1295 | 91 | 1 |
| Mekonomen Segeltorp AB/Huddinge | 556580-2351 | 100 | 1 |
| Mekonomen Sisjön AB/Gothenburg | 556509-7861 | 100 | 1 |
| Mekonomen Skellefteå AB/Skellefteå | 556389-4095 | 91 | 1 |
| Mekonomen Skåne Ystad AB/Ystad | 556565-3085 | 100 | 1 |
| Mekonomen Sollefteå AB/Sollefteå | 556216-9424 | 80 | 1 |
| Mekonomen Sollentuna AB/Sollentuna | 556462-0416 | 100 | 0 |
| Mekonomen Solna AB/Stockholm | 556213-3073 | 100 | 1 |
| Mekonomen Sundsvall Birsta AB/Sundsvall | 556201-1675 | 91 | 1 |
| Mekonomen Sundsvall Nacksta AB/Sundsvall | 556777-4863 | 91 | 1 |
| Mekonomen Söderhamn AB/Söderhamn | 556509-4132 | 75 | 1 |
| Mekonomen Södertälje AB/Södertälje | 556405-5498 | 91 | 2 |
| Mekonomen Sölvesborg AB/Sölvesborg | 556216-4250 | 75 | 1 |
| Mekonomen Torslanda AB/Gothenburg | 556583-3893 | 91 | 2 |
| Mekonomen Tranås AB/Tranås | 556770-0041 | 100 | 1 |
| Mekonomen Trollhättan AB/Trollhättan | 556515-0298 | 91 | 2 |
| Mekonomen Täby AB/Täby | 556632-9958 | 91 | 1 |
| Mekonomen Uddevalla AB/Uddevalla | 556550-5004 | 100 | 1 |
| Mekonomen Umeå AB/Umeå | 556483-3084 | 81,8 | 1 |
| Mekonomen Upplands Väsby AB/Upplands-Väsby | 556777-4871 | 100 | 0 |
| Share of | ||||
|---|---|---|---|---|
| INDIRECT PARTICIPATIONS IN SUBSIDIARIES |
Corp. Reg. No. |
equity, % |
No. of stores |
|
| Mekonomen Varberg AB/Varberg | 556261-0161 | 75 | 1 | |
| Mekonomen Verkstadscenter Luleå AB/Luleå | 556770-0033 | 100 | 0 | |
| Mekonomen Vetlanda AB/Vetlanda | 556653-4219 | 91 | 1 | |
| Mekonomen Vilande Tjugo AB/Stockholm | 556840-9444 | 100 | 0 | |
| Mekonomen Vimmerby AB/Vimmerby | 556232-5877 | 91 | 1 | |
| Mekonomen Vårby AB/Huddinge | 556594-1951 | 100 | 0 | |
| Mekonomen Vänersborg AB/Vänersborg | 556770-0058 | 91 | 1 | |
| Mekonomen Värnamo Norra AB/Värnamo | 556530-9266 | 75 | 1 | |
| Mekonomen Västberga AB/Stockholm | 556192-0314 | 91 | 1 | |
| Mekonomen Västerås AB/Västerås | 556344-5492 | 75 | 2 | |
| Mekonomen Växjö AB/Växjö | 556192-0439 | 60 | 1 | |
| Mekonomen Åkersberga AB/Österåker | 556632-9966 | 91 | 1 | |
| Mekonomen Älvsjö AB/Huddinge | 556758-7661 | 100 | 1 | |
| Mekonomen Örebro AB/Örebro | 556344-0717 | 91 | 2 | |
| Mekonomen Örnsköldsvik AB/Örnsköldsvik | 556465-6287 | 91 | 1 | |
| Mekonomen Östersund AB/Östersund | 556296-5243 | 100 | 2 | |
| Primexxa Strängnäs AB/Stockholm | 556422-3872 | 100 | 1 | |
| Meko Fleet System AB/Stockholm | 556791-8643 | 80 | - | |
| Marinshopen RM AB/Stockholm | 556829-5066 | 100 | 2 | |
| 117 | ||||
| SWEDEN – BilLivet – MEKONOMEN NORDEN | ||||
| Mekonomen BilLivet AB/Stockholm | 556845-2196 | 100 | - | |
| Mekonomen BilLivet Akalla AB/Stockholm | 556882-0772 | 100 | - | |
| Mekonomen BilLivet Bromma AB/Stockholm | 556864-3455 | 100 | - | |
| Mekonomen BilLivet Gävle AB/Gävle | 556864-3448 | 100 | - | |
| Mekonomen BilLivet Haninge AB/Stockholm | 556882-0947 | 91 | - | |
| Mekonomen BilLivet Infra City AB/Stockholm | 556864-3471 | 100 | - | |
| Mekonomen BilLivet Johanneshov AB/Stockholm | 556882-0780 | 100 | - |
Mekonomen BilLivet Katrinelund AB/Malmö 556882-0954 91 - Mekonomen BilLivet Sisjön AB/Gothenburg 556863-9909 91 - Mekonomen BilLivet Högsbo AB/Gothenburg 556909-4906 91 - Mekonomen BilLivet Södertälje AB/Stockholm 556882-0939 100 - Mekonomen BilLivet Täby AB/Stockholm 556882-0962 91 - Mekonomen BilLivet Backaplan AB/Gothenburg 556756-1146 91 - Mekonomen BilLivet Gärdet AB/Stockholm 556821-6047 91 - Promotor i Åkersberga AB/Åkersberga 556819-5019 70 -
Mekonomen Arendal AS/Arendal 982 434 696 100 1 Mekonomen Alta AS/Alta 945 481 668 51 1 Mekonomen Askim AS/Askim 974 209 772 100 1 Mekonomen Björkelangen AS/Björkelangen 989 903 551 100 1 Mekonomen Bodö AS/Bodö 986 489 576 100 1 Mekonomen Drammen AS/Drammen 924 843 543 100 1 Mekonomen Elverum AS/Elverum 993 562 629 100 1 Mekonomen Fredrikstad AS/Fredrikstad 881 509 032 100 1 Mekonomen Grenland AS/Porsgrund 984 690 703 100 1 Mekonomen Hadeland AS/Hadeland 996 446 956 100 1 Mekonomen Hamar AS/Hamar 984 006 047 100 1 Mekonomen Harstad AS/Harstad 982 952 379 100 1 Mekonomen Haugesund AS/Haugesund 983 509 622 100 1 Mekonomen Horten AS/Horten 990 815 798 100 1 Mekonomen Jessheim AS/Jessheim 987 696 109 100 1 Mekonomen Kongsberg AS/Kongsberg 937 161 786 75 1 Mekonomen Kongsvinger AS/Kongsvinger 992 102 217 100 1 Mekonomen Lillestrøm AS/Lillestrøm 993 561 428 100 1 Mekonomen Molde AS/Molde 985 793 417 100 1 Mekonomen Moss AS/Moss 939 161 260 100 1 Mekonomen Oslo AS/Oslo 938 215 103 100 2
| Mekonomen Sandefjord AS/Sandefjord | 990 815 844 | 91 | 1 |
|---|---|---|---|
| Mekonomen Sandnes AS/Sandnes | 992 302 577 | 100 | 1 |
| Mekonomen Sandvika AS/Sandvika | 982 707 862 | 100 | 1 |
| Mekonomen Sarpsborg AS/Sarpsborg | 910 155 520 | 100 | 2 |
| Mekonomen Ski AS/Ski | 983 098 525 | 91 | 1 |
| Mekonomen Stavanger AS/Stavanger | 983 935 214 | 100 | 1 |
| Mekonomen Steinkjer AS/Steinkjer | 984 318 677 | 100 | 1 |
| Mekonomen Sörlandsparken AS/Kristiansand | 981 508 939 | 91 | 1 |
| Mekonomen Tromsö AS/Tromsö | 942 591 322 | 100 | 1 |
| Mekonomen Trondheim AS/Trondheim | 979 462 026 | 100 | 2 |
| Mekonomen Tönsberg AS/Tönsberg | 934 256 867 | 75 | 1 |
| Mekonomen Fleet AS/Oslo | 895 917 052 | 100 | - |
| 35 | |||
| NORWAY – Sørensen og Balchen | |||
| Rønneberg Autoindustri AS/Ålesund | 981 015 150 | 100 | 5 |
| BilXtra Kristiansund AS/Kristiansund | 999 255 876 | 91 | 1 |
| Bilvarehusene Nor AS/ Skårer | 880 553 852 | 100 | 9 |
| BilXtra AS/Moss | 983 032 133 | 100 | 6 |
| BilXtra Kristiansand AS/Kristiansand | 979 438 761 | 100 | 1 |
| Bilutstyr Arendal AS/Arendal | 961 171 067 | 100 | 1 |
| Østfold Bilutstyr AS /Sarpsborg | 987 586 788 | 100 | 1 |
| Telemark Bilutstyr AS/Skien | 986 980 415 | 100 | 1 |
| Rogaland Rekvisita AS/Stavanger | 936 043 119 | 100 | 2 |
| Jahre Motor Hamar AS/Hamar | 935 614 031 | 91 | 1 |
| Askim Bilrekvisita AS/Askim | 885 049 702 | 100 | 1 |
| Steglet Bilutstyr AS /Kongsberg | 988 210 196 | 100 | 1 |
| Jøntvedt Bilutstyr AS/Tønsberg | 887 813 752 | 100 | 1 |
| Oppland Bilutstyr AS/Gjøvik | 987 600 659 | 100 | 1 |
| Høistad Bildeler AS/Lillehammer | 981 015 142 | 100 | 1 |
| Vest Bilutstyr AS/Bergen | 980 281 450 | 100 | 2 |
| 995 080 125 | 50 | 1 | |
| Autoproducts AS/Trondheim |
INDIRECT PARTICIPATIONS IN SUBSIDIARIES
0
The Mekonomen Group includes a total of 209 companies, 301 proprietary stores and 22 proprietary workshops. At present, 86 wholly owned companies operate 214 stores and 74 partner companies operate 87 stores. Furthermore, eight wholly owned companies and seven partner companies jointly operate 22 service centres.
No. of stores
Corp. Reg. No.
Share of equity, %
NORWAY – MEKONOMEN NORDEN
Specification of changes to shareholders' equity is found in the report on Changes in the Group and Parent Company's shareholders' equity (see page 38).
During the financial year, a new share issue was implemented in conjunction with the acquisition of MECA. The new shares were valued at the closing rate of SEK 213.50 on 22 May 2012. New issues entail an increase of 3,086,882 in the number of shares and an increase of SEK 8 M in the share capital, as well as an increase of SEK 651 M in other contributed capital. At the end of the financial year, the share capital amounted to KSEK 89,754 (82,037) and consisted of 35,901,487 shares (32,814,605) at a quotient value of SEK 2.50 per share (2.50).
There were no outstanding shareholders' equity instruments that could result in a dilution of the share capital as of 31 December 2012 and 31 December 2011, respectively.
Other capital contributions included contributions the company received from shareholders and which are not recognised as share capital.
The item consists of translation differences attributable to the translation of foreign subsidiaries in accordance with IAS 21. The translation differences are distributed by country as follows:
| Group | ||
|---|---|---|
| Translation difference, foreign subsidiaries | 31 Dec 2012 | 31 Dec 2011 |
| Accumulated translation differences in Norway | 47 | 35 |
| Accumulated translation differences in Denmark | -43 | -35 |
| Accumulated translation differences in Finland | -1 | |
| TOTAL | 4 | 0 |
The profit brought forward item corresponds to the accumulated profits and losses generated in total in the Group.
The Board of Directors proposes a dividend of SEK 7.00 per share (8.00), which gives a total dividend of SEK 251,310,409 (262,516,840).
Mekonomen manages its capital to ensure that the units in the Group are able to continue operating, while dividends to shareholders are maximised through a good balance between liabilities and shareholders' equity. The Group's capital comprises shareholders' equity, as well as short and longterm borrowing. The proportions of shareholders' equity and changes during the year are described in the Group's changes in shareholders' equity on page 38 and Note 25, Shareholders' equity. At least once a year, the Board of Directors reviews the capital structure and takes this into account when making decisions on, for example, dividends or raising new loans.
| Group | Parent Company | |||||
|---|---|---|---|---|---|---|
| 2012 | 2011 | 2012 | 2011 | |||
| Depreciation/amortisation | 147 | 83 | 17 | 13 | ||
| Capital gain/loss from divestment of fixed assets |
-2 | -5 | - | - | ||
| Other items not affecting liquidity | -6 | 0 | -1 | - | ||
| TOTAL | 139 | 78 | 16 | 13 |
A major acquisition, MECA, was implemented during the year. Mekonomen's acquisition of all shares in MECA Scandinavia was finalised on 23 May 2012. Payment included 3,086,882 newly issued shares through a non-cash issue, as well as SEK 1,351 M in cash. The newly issued shares were valued at the closing rate of SEK 213.50 on 22 May 2012. MECA is included in Mekonomen's financial reporting from the acquisition date 23 May 2012. The total purchase consideration amounted to SEK 2,010 M.
With the exception of MECA, which is reported separately below, information about corporate acquisitions has been submitted in aggregated form since the size of each individual acquisition is not deemed to be significant enough to warrant separate reporting. All other acquisitions were paid in cash.
During 2012, the acquired companies had an impact on net sales totalling SEK 1,063 M, as well as EBIT of SEK 157 M, excluding acquisition costs of SEK 12 M. Had the acquisition of MECA been implemented on 1 January 2012, the impact on the Group's net sales would have amounted to SEK 1,640 M, and the impact on EBIT to SEK 165 M, of which EBIT for the period according to this calculation, would have been charged with planned amortisation of intangible assets identified in connection with the acquisition totalling SEK 60 M. The total of other acquisitions would have had an insignificant impact on sales and earnings had they been implemented at the beginning of the year.
Acquisition-related expenses amounted to SEK 12 M for 2012. The total acquisition expenses pertaining to MECA, including costs for 2011, amounted to SEK 23 M. These costs are not included in the total purchase consideration in the table below; instead, they are recognised as other costs in the Group's profit or loss.
Compensation in the acquisition of holdings with non-controlling interests was recognised as a transaction between the minority shareholder and the Parent Company's shareholders within shareholders' equity.
Below is an acquisition analysis pertaining to operations acquired in 2012:
| ACQUISITIONS DURING 2012 | MECA | Other acquisitions |
Total acquisitions |
|---|---|---|---|
| VALUE OF ACQUIRED ASSETS AND LIABILITIES |
|||
| Intangible fixed assets | 15 | - | 15 |
| Tangible fixed assets | 46 | 2 | 48 |
| Financial fixed assets | 7 | - | 7 |
| Deferred tax assets | 23 | - | 23 |
| Inventories | 306 | 12 | 318 |
| Current receivables | 199 | - | 199 |
| Cash and cash equivalents | 7 | 0 | 7 |
| Long-term liabilities | -27 | 1 | -26 |
| Current liabilities | -298 | -1 | -299 |
| ACQUIRED NET ASSETS | 278 | 14 | 292 |
| Brands | 270 | - | 270 |
| Customer relations | 600 | - | 600 |
| Goodwill | 1,091 | 18 | 1,109 |
| Deferred tax liabilities | -229 | - | -229 |
| Acquired non-controlling interest, surplus value recognised against shareholders' equity |
- | 4 | 4 |
| TOTAL IDENTIFIABLE NET ASSETS AND GOODWILL |
2,010 | 36 | 2,046 |
| Total purchase price | 2,010 | 36 | 2,046 |
| - of which, non-cash issue | 659 | - | 659 |
| - of which, cash portion | 1,351 | 36 | 1,387 |
| Cash and cash equivalents in the acquired companies |
7 | 0 | 7 |
| IMPACT ON THE GROUP'S CASH AND CASH EQUIVALENTS |
1,344 | 36 | 1,380 |
Fair value on acquired receivables amounted to SEK 199 M.
The MECA brand, recognised at SEK 270 M, has an indefinite useful period and customer relations, which according to the above amounted to SEK 600 M, are deemed to have a useful period of ten years.
In addition to the control premium included in the acquisition price, accrued Goodwill is primarily attributable to the benefits of anticipated synergies, as well as MECA's position and experience in the B2B segment in Sweden and Norway. These advantages have not been recognised separately from goodwill since they do not meet the criteria for recognition of identifiable intangible assets. Annual synergies, as a direct result of the acquisition, are calculated at SEK 80 M from 2013. Of the goodwill accrued in connection with the acquisitions, SEK 6 M is anticipated to be tax-deductible.
In Sweden, 15 store and workshop managers (8) became partners in their respective store companies. Their shareholdings amounted to 9 per cent per company. The total purchase consideration for these participations amounted to SEK 3.5 M (7).
| ACQUIRED SUBSIDIARIES/ | Acquisition | Share holding and share of voting |
||
|---|---|---|---|---|
| OPERATIONS 2012 | Country | date | rights | Object |
| Mekonomen partner store Holbæk | Denmark | January | 100 | Assets and liabilities |
| Mekonomen partner store, Åmål | Sweden | February | 100 | Assets and liabilities |
| Company and assets and |
||||
| Mekonomen partner store, Sala | Sweden | March | 100 | liabilities |
| Mekonomen partner store, Mölndal | Sweden | May | 51 | Company |
| Mekonomen partner store, Högsbo | Sweden | May | 51 | Company |
| Mekonomen partner store, | ||||
| Kungsbacka | Sweden | May | 51 | Company |
| MECA Scandinavia AB | Sweden | May | 100 | Company |
A major acquisition, Sørensen og Balchen, was implemented during 2011. Mekonomen's acquisition of all shares in Sørensen og Balchen was finalised on 11 March 2011. Payment included 1,945,783 newly issued shares through a non-cash issue, as well as SEK 273 M in cash. Sørensen og Balchen is included in Mekonomen's financial reporting from the acquisition date 11 March 2011. The total purchase consideration amounted to SEK 826 M.
With the exception of Sørensen og Balchen, which is reported separately below, information about corporate acquisitions has been submitted in aggregated form since the size of each individual acquisition is not deemed to be significant enough to warrant separate reporting. All other acquisitions were paid in cash.
During 2011, the acquired companies had an impact on net sales totalling SEK 730 M, as well as EBIT of SEK 78 M, excluding acquisition costs of SEK 15 M. Had the acquisition of Sørensen og Balchen been implemented on 1 January 2011, the impact on the Group's net sales would have amounted to SEK 726 M, and the impact on EBIT to SEK 90 M. Other acquired units were deemed to not have any significant impact on the consolidated net sales and EBIT if they had been consolidated from 1 January 2011.
During the year, Mekonomen AB sold products and services to Group companies totalling SEK 109 M (108). Receivables from Group companies amounted to SEK 814 M (702) on the balance-sheet date and liabilities to Group companies amounted to SEK 127 M (28). For information on remuneration to senior executives, refer to Note 5.
Below is an acquisition analysis pertaining to operations acquired in 2011:
| ACQUISITIONS DURING 2011 | Sørensen og Balchen |
Other acquisitions |
Total acquisitions |
|---|---|---|---|
| VALUE OF ACQUIRED ASSETS AND LIABILITIES |
|||
| Tangible fixed assets | 19 | 13 | 32 |
| Intangible fixed assets | 4 | 1 | 5 |
| Financial fixed assets | 31 | - | 31 |
| Deferred tax assets | 21 | - | 21 |
| Inventories | 158 | 36 | 194 |
| Current receivables | 72 | 3 | 75 |
| Cash and cash equivalents | 13 | 1 | 14 |
| Long-term liabilities | -5 | - | -5 |
| Current liabilities | -94 | -28 | -122 |
| ACQUIRED NET ASSETS | 219 | 26 | 245 |
| Brands | 56 | - | 56 |
| Franchise contracts | 47 | - | 47 |
| Customer relations | 136 | - | 136 |
| Goodwill | 442 | 54 | 496 |
| Deferred tax liabilities | -64 | - | -64 |
| Other long-term liabilities | -10 | - | -10 |
| Acquired non-controlling interest, surplus value recognised against shareholders' equity |
- | 11 | 11 |
| TOTAL IDENTIFIABLE NET ASSETS AND GOODWILL |
826 | 91 | 917 |
| Total purchase price | 826 | 91 | 917 |
| - of which, cash portion of purchase price | 311 | 86 | 397 |
| Cash and cash equivalents in the acquired companies |
13 | 1 | 14 |
| IMPACT ON THE GROUP'S CASH AND CASH EQUIVALENTS |
298 | 85 | 383 |
The BilXtra brand (Sørensen og Balchen), recognised at SEK 56 M, has an indefinite useful period and customer relations, recognised at SEK 136 M, as well as franchise contracts, recognised at SEK 47 M, have been deemed to have a useful period of ten years. Goodwill is primarily attributable to future synergies.
| Share holding and share |
||||
|---|---|---|---|---|
| ACQUIRED SUBSIDIARIES/ OPERATIONS 2011 |
Country | Acquisition date |
of voting rights |
Object |
| Mekonomen partner store, Bollnäs | Sweden January | 100 | Assets and liabilities |
|
| Marinshopen RM AB | Sweden February | 100 | Assets and liabilities |
|
| Mekonomen partner store, Hadeland Norway | February | 100 | Assets and liabilities |
|
| Mekonomen Kolding A/S | Denmark February | 70 | Assets and liabilities |
|
| Sørensen og Balchen AS/Oslo | Norway | March | 100 | Company |
| BilLivet AB | Sweden April | 100 | Assets and liabilities |
|
| Acquired store, Ski | Norway | April | 100 | Assets and liabilities |
| Acquired store, Gislaved | Sweden May | 100 | Assets and liabilities |
|
| Acquired store, Hadeland | Norway | September | 100 | Assets and liabilities |
| Acquired workshop, Bromma | Sweden November | 100 | Assets and liabilities |
|
| Acquired workshop, Åkersberga | Sweden November | 100 | Assets and liabilities |
|
| Acquired workshop, Sisjön | Sweden December | 100 | Company | |
| Mekonomen partner store, Häggvik | Sweden December | 100 | Assets and liabilities |
|
| Mekonomen Brønderslev ApS | Denmark December | 51.25 | Assets and liabilities |
No significant events occurred after the end of the financial year.
The annual accounts and consolidated accounts were approved for issue by the Board of Directors on 16 March 2013. The consolidated income statement, the statement of comprehensive income and balance sheet and the Parent Company's income statement, statement of comprehensive income and balance sheet will be subject to approval by the Annual General Meeting on 16 April 2013.
Mekonomen AB is exposed to risks in terms of currency, credit, interest rates and liquidity through its operations. The management of these risks is regulated in accordance with the finance policy adopted by the Board of Directors.
Exchange-rate risks occur when exchange-rate fluctuations have a negative impact on the Group's profit and shareholders' equity. Currency exposure arises in connection with cash flows in foreign currencies (transaction exposure), as well as in translation of loans/receivables in foreign currencies and in the translation of foreign subsidiaries' balance sheets and income statements into SEK (translation exposure). During 2012, exchange-rate fluctuations had a positive impact on the Group's income before tax totalling SEK 6 M (2). The most important currency in terms of transaction exposure is EUR, which represents slightly less than 23 per cent of goods purchases in the Group, as well as NOK and DKK pertaining to internal sales from wholesale companies within Mekonomen and MECA to Norway and Denmark. Due to the acquisition of MECA, currency exposure in NOK and EUR rose during 2012. NOK and DKK are the most important currencies in terms of translation exposure. For more detailed information on currency exposure, refer also to the sensitivity analysis section in the Administration Report. The finance policy permits hedging of the net currency flows using external financial contracts. Since negative exchange-rate fluctuations are expected to be offset in customer pricing within one to three months, the hedging horizon shall not exceed three months. With regard to financial assets and liabilities, the policy states that internal loans and investments in foreign currencies shall be matched by external loans and investments in the same currency. If for some reason matching is not achieved, hedging shall be implemented using foreign-exchange forward contracts. With regard to foreign shareholders' equity, the principal rule is that Mekonomen shall not hedge this exposure. However, if major foreign investments are made that require separate financing, the decision can be made to recognise all or part of the financing in the acquisition currency.
| FACTORS PERTAINING TO PROFIT BEFORE TAX | Change | Impact * |
|---|---|---|
| Sales volume | +1% | 32 |
| Exchange-rate fluctuations | ||
| - NOK | +1% | 8 |
| - EUR | +1% | -3 |
| - DKK | +1% | +0 |
| plus one | ||
| Gross margin | perc. pt. | 59 |
| Personnel expenses | +1% | -14 |
| Interest rate**) | +1% | -19 |
*) All things being equal, profit before tax for the 2012 financial year. Recalculated to include MECA for the full year.
**) Effect based on the Group's net debt as of 31 December 2012.
The Group's financial transactions give rise to credit risks in relation to financial counterparties. Credit risks or counterparty risks refer to the risk of loss if the counterparty does not fulfil its commitments. Mekonomen's credit risks primarily comprise accounts payable, which are distributed over a large number of counterparties and a small portion of long-term instalment contracts. For each new customer, or in the event an existing customer wants to increase the credit limit, a credit rating is conducted according to the Group's established policies. The credit rating is conducted with the assistance of external players. The maximum credit risk corresponds to the carrying amount of financial assets. Specifications pertaining to impairment of accounts payable for the year are found in Note 16.
Interest-rate risks refer to the risk that changes in market interest rates will have a negative impact on the Group's net interest income/expense. The speed at which interest rate changes affect the net interest income/expense depends on the period of fixed interest for the loan. During the 2012 financial year, interest-bearing liabilities rose compared with the low levels in prior financial years. This increase was primarily attributable to the acquisition of MECA. According to the financial policy, Mekonomen shall maintain an average fixed-interest term of a maximum of 18 months. Within this time frame, it is estimated that increased financial expenses, as an effect of changed interest rates, could be offset through changes in retail prices. In order to manage possible interest-rate risks, relevant instruments in the market can be used. As at 31 December 2012, Mekonomen's net debt is SEK 1,875 M. The period of fixed interest at the end of the year does not exceed three months in any of the loans outstanding. For more information, refer to the table in the section on Currency risks.
Financing risk is seen as the risk of the cost being higher and financing opportunities limited when loans are renewed and that the ability to pay cannot be met as a result of insufficient liquidity or difficulties in securing financing. According to the finance policy, refinancing risks shall be managed by signing long-term and flexible credit agreements.
As of 31 December 2012, the Group's total loan financing amounted to SEK 2,105 M (647), of which the long-term portion is SEK 1,809 M (449). The debt increase in 2012 is mainly attributable to the acquisition of MECA. In conjunction with the acquisition of MECA, management decided that the financing of the cash portion of the acquisition totalling SEK 1,351 M, and an additional liquidity reserve, entailing loans totalling SEK 1,600 M, would extend over a period of three years. This provided the Group with optimal loan terms and conditions, the lowest earnings effect, as well as sustainable manoeuvrability. Total amortisation of the loans is SEK 196 M per year and management believes that the conditions are highly favourable for financing the Group's future capital requirements including refinancing of loans outstanding.
In addition to this, the Group has overdraft facilities totalling SEK 417 M. The Group's cash and cash equivalents are invested short term and any excess liquidity shall primarily be used for amortising loans. Investments may be made in SEK, NOK and DKK with the objective of matching future loans that mature, or large disbursements. In cases where the company is not aware of any large disbursements, the maturity period for investments shall not exceed one month. Investments may occur at or in securities issued by the Swedish Government or Swedish and foreign banks with not less than an A rating, according to the definition of Standard & Poor's (S&P).
No financial assets or liabilities were recognised at a value that significantly deviated from fair value.
The Board of Directors and President hereby certify that the annual report was prepared in accordance with the Annual Accounts Act and RFR 2 and provides a true and fair view of the company's financial position and results and that the Administration Report provides a true and fair view of the development of the Group's operations, position and results and describes significant risks and uncertainties facing the company.
The Board of Directors and President hereby certify that the consolidated accounts were prepared in accordance with International Financial Reporting Standards (IFRS), as approved by the EU, and provide a true and fair view of the Group's financial position and results and that the Administration Report for the Group gives a true and fair view of the development of the Group's operations, position and results and describes significant risks and uncertainties facing the companies included in the Group.
Stockholm 16 March 2013
Fredrik Persson Chairman of the Board
Antonia Ax:son Johnson Board member
Anders G Carlberg Board member
Helena Skåntorp Board member
Marcus Storch Executive Vice Chairman of the Board
Kenny Bräck Board member
Wolff Huber Board member
Håkan Lundstedt President and CEO
Our Auditors' Report was submitted on 16 March 2013
Deloitte AB
Thomas Strömberg Authorised Public Accountant
We have conducted an audit of the annual accounts and consolidated accounts of Mekonomen AB for the 2012 financial year, with the exception of the Corporate Governance Report on pages 24–27. The annual accounts and consolidated accounts of the company are included in the printed version of this document on pages 20-61.
The Board of Directors and the Managing Director are responsible for the preparation and fair presentation of these annual accounts and consolidated accounts in accordance with International Financial Reporting Standards, as adopted by the EU, and the Annual Accounts Act, and for such internal control as the Board of Directors and the Managing Director determine is necessary to enable the preparation of annual accounts and consolidated accounts that are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these annual accounts and consolidated accounts based on our audit. We conducted our audit in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the annual accounts and consolidated accounts are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the annual accounts and consolidated accounts. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the annual accounts and consolidated accounts, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company's preparation and fair presentation of the annual accounts and consolidated accounts in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors and the Managing Director, as well as evaluating the overall presentation of the annual accounts and consolidated accounts.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the parent company as of 31 December 2012 and of its financial performance and its cash flows for the year then ended in accordance with the Annual Accounts Act. The consolidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the Group as of 31 December 2012 and of their financial performance and cash flows in accordance with
International Financial Reporting Standards, as adopted by the EU, and the Annual Accounts Act. Our opinion does not include the Corporate Governance Report on pages 24–27. The statutory Administration Report is consistent with the other parts of the annual accounts and consolidated accounts.
We therefore recommend that the annual meeting of shareholders adopt the income statement and balance sheet for the parent company and the group.
In addition to our audit of the annual accounts and consolidated accounts, we have examined the proposed appropriations of the company's profit or loss and the administration of the Board of Directors and the Managing Director of Mekonomen AB for the 2012 financial year. We have also performed a statutory review of the Corporate Governance Report.
The Board of Directors is responsible for the proposal for appropriations of the company's profit or loss, and the Board of Directors and the Managing Director are responsible for administration under the Companies Act and for ensuring that the Corporate Governance Report on pages 24–27 has been prepared in accordance with the Annual Accounts Act.
Our responsibility is to express an opinion with reasonable assurance on the proposed appropriations of the company's profit or loss and on the administration based on our audit. We conducted the audit in accordance with generally accepted auditing standards in Sweden.
As a basis for our opinion on the Board of Directors' proposed appropriations of the company's profit or loss, we examined the Board of Directors' reasoned statement and a selection of supporting evidence in order to be able to assess whether the proposal is in accordance with the Companies Act.
As a basis for our opinion concerning discharge from liability, in addition to our audit of the annual accounts and consolidated accounts, we examined significant decisions, actions taken and circumstances of the company in order to determine whether any member of the Board of Directors or the Managing Director is liable to the company. We also examined whether any member of the Board of Directors or the Managing Director has, in any other way, acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In addition, we have read the Corporate Governance Report and based on this information and our knowledge of the company and the Group, we believe that we have sufficient grounds for our opinion. This means that the focus and scope of our statutory review of the Corporate Governance Report is significantly smaller compared with the focus and scope of an audit according to International Standards on Auditing and generally accepted auditing standards in Sweden.
We recommend to the annual meeting of shareholders that the profit be appropriated in accordance with the proposal in the statutory administration report and that the members of the Board of Directors and the Managing Director be discharged from liability for the financial year.
A Corporate Governance Report has been prepared and its statutory information is compliant with the provisions of the Companies Act and the other features of the annual accounts and consolidated accounts.
Stockholm, 16 March 2013 Deloitte AB
Thomas Strömberg Authorized Public Accountant
The Annual General Meeting will be held on 16 April 2013 at 3:00 p.m. at the Maxim Theatre, Karlaplan 4 in Stockholm.
Shareholders registered in the shareholders' register on the record day and who have informed Mekonomen of their intention to attend in advance are entitled to participate in the Annual General Meeting.
Shareholders' must be registered in the shareholders' register maintained by Euroclear Sweden AB not later than Wednesday, 10 April 2013. Shareholders whose shares are registered in
the name of a nominee must have temporarily registered their shares in their own name with Euroclear, to be able to participate at the Annual General Meeting. This means that shareholders wishing such reregistration must inform the nominee in adequate time before 10 April 2013.
Shareholders wishing to participate at the Annual General Meeting should register not later than 4:00 p.m. on Wednesday, 10 April at:
Mekonomen's Annual General Meeting c/o Euroclear Sweden AB Box 7842 SE-103 98 Stockholm Tel: +46 (0)8-402 90 47, or Mekonomen's website: www.mekonomen.com
The Board of Directors proposes a dividend of SEK 7.00 (8.00) per share. As record date for the dividend, the Board proposes Friday 19 April 2013. If the Annual General Meeting adopts the proposal, the dividend is expected to be paid on 24 April 2013.
Interim report January–March: 8 May Interim report April–June: 27 August Interim report July–September: 7 November Year-end report for the full financial year 2013: 13 February 2014
Profit for the year as a percentage of average shareholders' equity, excluding non-controlling interest.
EBIT as a percentage of average operating capital.
Profit after net financial items plus interest expenses as a percentage of average capital employed.
Profit after net financial items plus financial costs as a percentage of the average total assets.
Gross profit, meaning net sales less expenses for goods for resale, as a percentage of net sales.
Operating profit after planned amortisation but before amortisation of intangible assets.
Shareholders' equity excluding non-controlling interest, adjusted for convertible debentures, in relation to the number of shares at the end of the year.
The average of the number of shares adjusted for splits, bonus issues and full dilution of the convertible loans, taking into account the date on which the changes occurred during the year.
Average full-year employees during the year.
Cash flow from operating activities adjusted for interest on convertibles, in relation to the average number of shares.
Interest-bearing liabilities less cash and cash equivalents and short-term investments.
Net Indebtedness divided by shareholders' equity including non-controlling interest.
Sales in relation to the average number of employees.
Increase in total revenues as a percentage of the preceding year's total revenues.
Capital employed reduced by cash and cash equivalents and short-term investments.
Net sales increase adjusted for currency effect and the number of workdays.
Profit after net financial items plus interest expenses divided by interest expenses.
EBIT margin
Equity/assets ratio
Shareholders' equity including non-controlling interest as a percentage of total assets.
Total assets reduced by non-interest-bearing provisions and liabilities, including deferred tax liability.
Dividend per share in relation to earnings per share attributable to the Parent Company's shareholders.
Sales adjusted for the number of comparable working days and currency effects.
Profit after net financial items as a percentage of the total revenues.
Profit for the year attributable to the Parent Company´s shareholders in relation to the average number of shares.
P.O. Box 6077 SE-141 06 Kungens Kurva Tel: +46 8-464 00 00 Fax: +46 8-464 00 66 Visiting address: Smista allé 11 SE-141 70 Kungens Kurva www.mekonomen.com
Stenåldersgatan 27 SE-213 76 Malmö Tel: +46 40 671 60 60 Fax: +46 40 94 10 88 www.meca.se
Postboks 134 Holmlia NO-1203 Oslo Tel: +47 22 76 44 00 Fax: +47 22 61 073 52 Visiting address: Rosenholmveien 12 NO-1252 Oslo www.sogb.no
Mekonomen's 2012 Annual Report was prepared by Mekonomen in cooperation with 3BL Stockholm. Print: Edita. Translation: The Bugli Company AB. Photo: BILDARKIVET; Stefan Berglund, Thomas Adolfsen, Susanne Lindholm, Rebecca Wallin, Johan Alp. iStockphoto.com; Antagain, Artedetimo, Fotostorm. Johnér; Matton Collection. MASKOT; Christel Åslund.
P.O. Box 6077 SE-141 06 Kungens Kurva Tel: +46 8-464 00 00 Fax: +46 8-464 00 66 Visiting address: Smista allé 11 SE-141 70 Kungens Kurva www.mekonomen.com
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