Annual Report • May 15, 2014
Annual Report
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Annual Report 2013
Semcon • Annual Report 2013
Semcon AB • 417 80 Göteborg, Sweden • Visiting address: Theres Svenssons gata 15 Phone +46 (0)31 721 00 00 • semcon.com
20 Offer
22 Engineering services
77 History
78 Semcon's shares
cover: zsófia dali, technical writer and e-learning consultant.
Creating the Future
We take on challenges every day with our passion for technology and a desire to discover. We have a long-term effect on the future, providing benefit to both customers and ourselves, through our breadth of knowledge, determination and belief in ourselves.
Semcon is an international technology consultancy company in the field of engineering services and product information. We have 3,000 dedicated employees who create the future together with our customers.
We challenge one another to always be at the forefront of technology and constantly be innovative, chase new solutions and find the competitive edge.
We do this by developing products, solutions, processes and product information – whether it is automotive development, energy solutions, products and quality services for life science, or product and production development for development-intensive industries.
Follow us into the future.
2013 was characterized by relatively weak demand. The company also reported delays in a major project and writedowns in another project, negatively affecting profitability.
A market-oriented organization for engineering services was introduced on 1 January 2014 to further focus on growth and boost cooperation. Restructuring costs as a result of this were reported in Q4, amounting to SEK 10 million. The reorganization is expected to generate annual savings of SEK 6 million. Cash flow has been strong and the financial position good. The Board proposes to raise the share dividend to SEK 2.50 per share.
Customers still have considerable development needs and demand is expected to gradually improve. Semcon has a positive outlook for growth in 2014.
Over the year:
| 2013 | Q1 | Q2 | Q3 | Q4 |
|---|---|---|---|---|
| Operating income | SEK 626 m (685) | SEK 636 m (642) | SEK 592 m (573) | SEK 654 m(671) |
| Organic growth | –7% | 2% | 3% | –2% |
| Operating profit after amortization |
SEK 35 m (72) | SEK 31 m (31) | SEK 37 m (35) | SEK 22 m (55) |
| Operating margin | 5.6% (10.5) | 4.9% (4.8) | 6.3% (6.1) | 3.3% (8.2) |
| Number of employees at end of period |
2,969 (2,953) | 2,989 (2,987) | 3,011 (3,010) | 3,001 (3,000) |
| ¢ Key figures |
2013 | 2012 | 2011 | 2010 | 2009 |
|---|---|---|---|---|---|
| Operating income (SEK m) | 2,508 | 2,571 | 2,452 | 2,091 | 2,281 |
| Operating profit (SEK m) | 125 | 193 | 111 | 3 | −241 |
| Operating margin (%) | 5.0 | 7.5 | 4.5 | 0.1 | −10.6 |
| Equity/assets ratio (%) | 48.5 | 46.6 | 38.4 | 33.0 | 30.5 |
| Debt/equity ratio (times) | – | 0.1 | 0.5 | 0.8 | 0.8 |
| Return on equity (%) | 14.6 | 27.7 | 17.3 | −1.4 | −42.1 |
| Cash flow per share (SEK) | 7.45 | 10.28 | 4.84 | −3.04 | 5.75 |
| EPS (SEK) | 2.50* | 2.00 | – | – | – |
| EPS after dilution (SEK) | 4.86 | 7.80 | 3.83 | −0.29 | −11.52 |
| Share price at year-end (SEK) | 60.50 | 48.00 | 24.00 | 29.40 | 28.50 |
| Number of employees at year-end | 3,001 | 3,000 | 2,894 | 2,703 | 2,631 |
*Board's proposal
Results for each quarter correspond to a rolling four-quarter period, excluding one-off items.
"Semcon is wellprepared for growth and I'm optimistic about progress in 2014."
Markus Granlund President and CEO
2013 was characterized by relatively weak demand from some major industrial customers. Overall, we saw a gradual improvement in demand on all markets, although weaker recovery than expected, mainly on the Swedish market.
Income in 2013 amounted to SEK 2,508 million (2,571), giving organic growth of minus 1 per cent. The operating profit amounted to SEK 125 million (193), and has, apart from falling sales, been affected by delays in major projects, write-downs in another project and restructuring costs.
Over the year we continued focusing on strengthening our financial position. The equity/assets ratio is very good and the Group's net debt has fallen. By year-end the Group had net profit of SEK 7 million (-61). Semcon's strong financial position allows for growth potential, both organically and through strategic acquisitions.
Semcon introduced its new organization in December, where the company has chosen to gather all engineering service activities in a market-oriented organization. This means that from previously having two business areas the company now has three geographically divided business areas, strengthening the Group's local focus and global ability to supply. This also means that our employees have access to more networks, the option of further specializing themselves and increased flexibility in the organization. The new organization came into effect on 1 January 2014.
From an historical perspective Semcon has, and still is, a strong partner in the development-intensive industry. We are one of few independent automotive developers that can carry out major projects for our global customers. In 2013 we signed a number of major project and managed services agreements, in all Semcon's business areas. Examples include signing a long-term agreement with a global German
Over half our income is generated outside Sweden. In 2013 we carried out business in 32 countries.
automotive manufacturer, which will employ around 130 employees and a number of long-term managed services agreements with companies in the Swedish engineering industry. It is our long customer relations and cost-effective solutions that are the basis of being trusted with these
project and undertakings.
Semcon's organization makes use of experience gained from projects in one industry and applies them to others. This is something that we have successfully provided our customers in areas such as the energy and life science industries.
We place a great deal of importance on cooperation and teambuilding, irrespective of whether it is work integrated between our offices or at the customers' places of business. We focus on constantly boosting the value of what we provide. Our customer surveys confirm that we provide great value and that we exceed our internally set objectives. But we always want to improve.
We will be further developing our internal processes in 2014 to guarantee our improved quality of our deliveries. We are focusing more on professional development for our employees to boost our standing as a more attractive employer and thereby also as a partner to our customers. This builds trust, which in turn helps strengthen our brand and a successful Semcon over time. Over the year we also worked at clarifying what sustainability means for Semcon.
We are currently undergoing a positive phase of change with a new market-oriented organization in place and a shift of our offer towards more projects and managed services. This provides opportunities to take market shares on existing and new markets. Semcon is well-prepared for growth and I'm optimistic about progress in 2014.
Markus Granlund President and CEO 14 March 2014
Semcon carries out annual reviews of the company's objectives and strategies to better reflect Semcon's business and future ambitions. This means that the business concept and the company's prioritized strategies are updated and the overall objectives are all put together into a desired position.
Strengthen Semcon's existing local business and continue expanding on prioritized markets. outcome Organic sales fell overall by 1 per cent. Outcome per market:
Sales in Sweden fell by 12 per cent while other markets reported growth. Germany 8 per cent, the UK 7 per cent, Brazil 4 per cent, China 44 per cent, India 44 per cent and Hungary 3 per cent.
Utilize the company's infrastructure by adding services on existing markets.
outcome The German product information company acquired at the end of 2012 has been located with existing activities in Germany. Deliveries to Jaguar Land Rover in the UK have been extended to also include engineering services.
Strengthen Semcon as an attractive employer through internal and external initiatives. outcome Measurements of how attractive the company is as an employer includes the outcome of employee surveys, employee turnover rates and how well we are ranked as an employer by Universum. Semcon has improved its position in all these measurements.
Focus on strengthening the company's profitability and financial position. outcome The weak demand is one of the reasons why profits have not improved. The financial position has strengthened and the equity/assets ratio rose to 49 per cent.
Prioritize organic growth, but also consider strategic acquisitions that strengthen the offer and or market presence.
outcome No acquisitions were made over the year. A new office opened in Luleå to create business opportunities in northern Sweden.
"I'm a specialist with responsibility for spare part production. I have also worked preparing spare parts and as project manager responsible for spare part deliveries to the Chinese auto manufacturer Qoros Auto. In the future I would really like to help companies in other sectors to cut their spare part costs."
S emcon's employees create value every day. This is value in the form of knowledge and expertise, supplied in the form of projects, specialist services and managed services. We help towards customers' success and strive towards providing this according to our core values: Credibility, Responsibility, and Excellence. Being a consultancy company requires being a problem-solver and building trust. Without trust, there's no new business.
Semcon has seen an increasing share of project requests from customers in recent years, something that is expected to continue increasing over the next few years. In 2013 for example Semcon was assigned to start a number of major projects for German automotive customers. This has meant that sales have shifted from providing specialist services to providing projects and managed services.
In assignments where Semcon provides specialist services it is mainly the number of contracted consultants, fees and degree of utilization that decides income growth and profits. In assignments where Semcon provides projects or where Semcon takes over entire functions with customers it is the ability to achieve a high degree of efficiency, quality and security of the deliveries that are crucial.
This means that Semcon has the opportunity of creating an optimal delivery through flexible business solutions, customized to customers' specific requirements.
Semcon assumes overall responsibility for a defined function designed to provide products and services. This means that Semcon takes over customer processes in this area with various offices and expertise at Semcon often being involved.
è DeLaval chose Semcon as a partner in 2013 for its aftermarket information. This meant that Semcon was assigned as the supplier of technical illustrations and
technical documentation. This is a long-term agreement, meaning Semcon will deliver information material for original parts, new products, new services and instruction manuals. The global project organization consists of employees from Semcon's offices in Sweden, the UK and Hungary in a FOBO model, with the front office in Göteborg and back offices in Kineton and Budapest.
Semcon is comprehensively responsible for complete or part projects with the supply consisting of a required result. In projects where Semcon takes responsibility for part of the process, it is a question of improving or developing parts of a product, construction or services for the customer. In cases where Semcon takes overall responsibility the company is responsible for the entire project processes, from planning to delivery.
è Semcon entered a cooperation project in 2013 with a major global German automotive supplier. The project is for developing an existing car model using new architecture by redesigning the complete bodywork. The first phase of the project is expected to run until the end of 2015 with the option of a further cooperation project. Semcon works according to its FOBO model, meaning that one of its offices in Germany will act as the front office, with the back office in Trollhättan.
Semcon provides specialists in a number of areas. We integrate work in our customers' organizations, providing knowledge that strengthens their capacity.
è Semcon's specialists were called upon by ABB in 2013 to work on the Statoil-owned Troll A oil platform. Semcon is responsible for testing the HVDC link control systems under ABB supervision. HVDC is the technology used for transferring power over long distances using marine and land cables. The assignment is being carried out in Norway and at ABB in Ludvika, Sweden.
An important part of Semcon's strategy is being located where our customers are and providing resources and services from an international perspective. Semcon currently has offices at 45 locations around the world. Business was
carried out in 32 countries in 2013, meaning we provide our services globally.
Semcon's proximity to its customers, combined with the Group's ability to supply services internationally, creates opportunities to enjoy the best of two worlds, known as
a FOBO model. The front office assumes responsibility for project coordination and the back office for implementing the actual assignment. The customer could be in Göteborg or Shanghai, but the assignment could be carried out in Bangalore or Budapest.
Semcon also works on satellite projects, involving working on the customer's IT systems from our own offices. Semcon also has a number of skill centres, home to one or more specialist skill areas.
To complement delivery to our customers, Semcon collaborates with many subcontractors.
"This work is built on trust.Customers trust us as experts because we provide them with valuable expertise in certain areas. For me personally,the Mercedes BenzV6 Turbo was an especially exciting project. I was involved as a design engineer and worked on the project from the beginning until shortly before the production stage."
The global engineering services market is growing, as are investments, mainly in countries like China and India. This means more opportunities, as well as each market's specific prerequisites dictating the framework.
Global investments in research and development (R&D) are expected to rise by around 4 per cent, to more than USD 1,600 billion in 2014, according to an analysis carried out by research organization Battelle. Investments in R&D have mainly risen in countries like China and India. In recent years these countries have witnessed higher rates of investment than mature markets like Europe, North America and Japan.
The market for global engineering services depends on economic growth, investing in development, technical advances and more need for sustainable development. The global engineering services market value was USD 674 billion in 2013, an annual increase of 2.3 per cent since 2008, according to a report from analysts Ibisworld.
Not all industries are as inclined as some to take in external resources for development projects. The overall global share of R&D investments in the automotive industry for example was around EUR 840 billion in 2012. Automotive manufacturers' own share of these investments is the biggest (60 per cent), followed by subcontractors (30 per cent) and external engineering services (10 per cent). These investments are expected to increase overall, according to a study by analysts Oliver Wyman and VDA (Verband der Automobilindustrie), to around EUR 1,250 billion by 2025. The share of external engineering services is expected to rise to 20 per cent, corresponding to average annual growth of more than 3 per cent by 2025.
Semcon's international presence further strengthened in 2013. The company's sales outside Sweden amounted to 55 per cent. This increase has mainly centred on China, with a major project for automotive manufacturer Qoros Auto, and for activities in Germany. Sweden reported fewer sales, while other markets reported organic growth.
Semcon's largest market is Sweden, where turnover for services related to product development and technical information (in industrial technology) amounted to around SEK 22 billion in 2013, according to the trade association Swedish Federation of Consulting Engineers and Architects (STD). Almega's business cycle report (October 2013) mentions a lengthy recovery for both the service sector and industry over the next two years. Semcon is ranked No.2 among the top 50 industrial technology companies, according to STD. Semcon's share of the Swedish market is around 5 per cent.
Germany, which is Semcon's second largest market, reported growth of 8 per cent over the year. Product information activities acquired in December 2012 account for a small percentage. Consolidation took place in 2013 on the engineering services market towards the German automotive industry, resulting in a reduced number of independent companies. The manning directive has had an impact and will affect how services are bought in by industrial customers. This means that sales of individual consultancy services based on hourly rates will fall and the number of projects and managed services will increase. Strategic advisor, Berylls, expects the average increase to be around 7 per cent of the engineering services market in Germany (automotive industry). According to the German market research institute, Lünendonk, the market for engineering services in the automotive sector in Germany amounted to EUR 4 billion in 2013. Semcon's market share amounts to around 3 per cent.
On other markets where Semcon is active the need for engineering development services and product information is expected to be significant. China and India are considered the two countries where growth rate remains very high, while Russia and Brazil, after a relatively weak 2013, are expected to report growth in the future. The UK and Hungary are also expected to report increased growth.
Semcon in China has mainly been working with product information, especially in the telecoms industry,but also now in the automotive industry – areas of significant growth potential in China.
Challenges and opportunities for Semcon – that is how we see the long-term trends affecting our business. This will mean challenges that require proactivity, professionalism, business acumen and that we live up to our core values. Challenges bring with them opportunities, in the form of customers' changing needs, technical shifts and the constant search for new products, services and processes that improve and alter the way we live.
World population growth and people living longer increases the need for pharmaceuticals and med-tech equipment. The world population has doubled over the last 50 years and is expected to reach 9 billion by no later than 2050. That will roughly be when there will be, for the first time, more over-60s than under-16s on the planet. Older people as a demographic are increasing in number five times faster than the rest of the population.
This places new demands, not least in terms of product and service development customized to their consumer patterns. By 2050 or so the ageing population will also be more healthy and stronger than today's over-60s, both physically and financially. These changes will affect every market, as the demographic changes will encompass the entire development chain, from innovation and design to finished products and aftermarket information.
Customers want fewer, larger suppliers with an international presence to achieve project efficiency. A change has been seen in recent year towards more projects and more managed services. This provides opportunities of working with more variables than number of hours and fees, while project methodology and internal processes are becoming increasingly important.
End-users' demands for innovation, plus increasing international competition, has meant that companies now are launching more products and models at tighter intervals. Product lifecycles are thereby shortening.
There are now demands for more models from shorter runs and more versions customized according to various markets' specific needs and demands. As this development progresses faster development processes are required, partly to reach the market more quickly, and partly to reduce development costs through more effective working methods.
There will be a shortage of engineers because of the large number of retirements and that fewer engineers are receiving training in the western world. Studies show that by 2030 there will be a shortage of around 500,000 engineers in Europe, of which 50,000 in Sweden alone.
Products are now more complex than ever and we need comprehensive product information that simply explain how products work and are maintained. For us this means always having the customer's customers in mind, which are often end-users of a product or service. Strict regulatory demands are also placed on traceability and validation in many industries.
Semcon has chosen to focus on the following industries, where we expect our customers to have continued development needs: automotive, industrial, energy and life science. Our employees keep themselves constantly updated with new know-how and expertise in these development areas.
Sales to the automotive industry accounted for around 65 per cent of Semcon's sales in 2013.
According to the international industry organization OICA, around 65.4 million passenger cars and almost 21.8 million commercial vehicles were built in 2013, which is 3.6 per cent up on 2012. According to a report from research firm Oliver Wyman it is the BRIC countries, Brazil, Russia, India and China that are the major growth markets. The report also states that 60 per cent of growth will be seen in these countries until 2017.
Development has mainly benefitted German, Chinese and South Korean manufacturers, which boosted turnover during the financial crisis. Meanwhile, many of the European, US and Japanese manufacturers are facing challenges to achieve the same manufacturing volumes as back in 2007. Germany has a strong position and remains the catalyst of the European automotive industry with Volkswagen, Audi,
Mercedes-Benz and BMW leading the field.
The automotive industry is very cost-effective, with increasing demands for product development, environmental issues and innovation. Automotive manufacturers need to get their models onto the market quickly, which is where external suppliers play a vital role as development partners on a global level.
Sales to the industrial sector accounted for around 22 per cent of Semcon's sales in 2013.
Semcon's customers not only include many world-leading companies in the technology, manufacturing, processing, telecommunications, rail, marine and aviation industries, but also a number of manufacturers of consumer products and other consumer-oriented companies.
The manufacturing industry remains important for Swedish growth. However, growth remained weak in 2013,
with lower order numbers, both for export and the domestic market.
The German manufacturing industry grew by 0.4 per cent in 2013 following a relatively weak start to the year. Growth in Germany in 2014 is expected to be around 2 per cent.
The future trend is for consumer demands for new products, models and increasing competition in the industrial sector to contribute to shortening the lifecycles of products even further, meaning increased investment in technological development and innovative product development.
Sales to the energy sector accounted for around 7 per cent of Semcon's sales in 2013.
World energy demand continues to rise steadily while the effects on the environment are becoming more acute. In addition to political will and financial resources, it will require major technological advances and innovations in order to reduce carbon dioxide emissions worldwide significantly.
The technical challenges involve everything from "clean" coal plants, extracting deep-sea oil, producing more energy-efficient products and extending the life of existing plants, to developing and streamlining renewable energy sources like solar, wind and hydro-electric power. This challenge applies not least in Germany, which is to decommission its nuclear power stations by 2022 and where R&D will be crucial for how well they succeed in replacing nuclear power with new energy sources.
Sales to the life science sector accounted for around 4 per cent of Semcon's sales in 2013.
Medical devices is one of the most important growth industries in the life science sector. On a global level, annual growth is expected to be 7 per cent between 2012 and 2017, according to a report from Epsicom Business Intelligence. Currently, the largest market is the US, followed by France, Germany and the UK in Europe, and China. Among the countries that stand out in terms of medical devices is China, which is expected to overtake Japan and Europe by 2020, according to a report from PricewaterhouseCoopers.
Because it is costly and risky developing new pharmaceuticals, an increasing number of pharmaceutical companies choose to outsource and purchase complete development projects from small and medium-sized research companies, which ensures access to commercially-viable medicines. The global pharmaceutical market, which is a significant part of the life-science sector, has seen annual of growth of around 6 per cent 2011-2013 according to the Global Pharmaceutical Market Forecast.
| Competitor | Country | Website | No. of employees |
Annual sales, SEK m1 |
|---|---|---|---|---|
| Bertrandt 2 | Germany | www.bertrandt.com | 10,829 | 6,767 |
| Edag 2, 3 | Germany | www.edag.de | 3,750 | 3,071 |
| Etteplan | Finland | www.etteplan.com | 1,728 | 1,112 |
| Formula D | Germany | www.formulad.com | 3,300 | 1,124 |
| MB Tech Group 2, 4 | Germany | www.mbtech-group.com | 3,300 | 2,714 |
| Rejlers | Sweden | www.rejlers.com | 1,664 | 1,465 |
| Semcon | Sweden | www.semcon.com | 3,001 | 2,508 |
| Sigma 2, 5 | Sweden | www.sigma.se | 1,489 | 1,373 |
| ÅF | Sweden | www.afconsult.com | 7,043 | 8,337 |
This table shows some of Semcon's major competitors. Common to these is that most operate in Semcon's main markets in Germany and Sweden. The number of employees and annual sales relates to the whole company and not just those parts in direct competition with Semcon.
1) When converting from EUR to SEK an exchange rate of SEK 8.65 has been used, which was the average exchange rate in 2013
3) The Aton Group, owners of Edag, acquired Rücker, merging Edag and Rücker to become one group, now called Edag Engineering AG
4) Part of AKKA Technologies 5) Sigma has been owned by Danir AB since mid 2013
Semcon strives to be at the cutting edge in terms of developing technology, products, construction and information solutions.
Semcon provides engineering services to customers who need help developing products, systems and construction in order to strengthen their competitive edge by providing innovative solutions along the entire development chain, from requirement studies to finished product. Read more on page 22
Complete vehicles Body & interior Styling/design Models & prototypes Powertrain Powertrain calibration Chassis CAE CFD NVH & Sound design Testing Hybrid technology User experience
Quality Management (QM) Quality Assurance (QA) Requirement management Validation & Verification Configuration Management (CM) Document Management (DM) Quality processes Regulatory Affairs (RA) Inspections CE-marking Energy investigations
Structural calculations Crash simulation MBS CFD
Design engineering Hydraulics
HVAC HSE ATEX Electrical & instrumentation Process design Transmission Distribution Control & monitoring Piping Electrical design
Industrial design Models & prototypes Graphic design Strategic brand design
Human factors Interaction design Service design User focused developement
Methodology development Organization development Training Coaching Project management
Software Hardware Architecture Testing & verification Control systems Cabling
Robotic cells Production lines Test systems Control & monitoring systems
Functionality testing Durability testing Safety testing Advanced measuring technology
Fixtures Tools Flow analyses Time studies Equipment design
Noise and vibration solutions Sound design
Climate testing
Semcon's product information business provides complete information solutions for aftermarket, information management and online marketing for supporting customers' products throughout their entire lifecycles. Read more on page 30.
Information management Document administration Configuration management (CM)
Documentation management (DM)
Service information
Repair Maintenance Labour times Diagnostics Service portal
Content management system (CMS) Distribution platform Mobile applications User interface SLA Translation
Design requirements Engineering impact Warranty cost optimization
Curriculum E-learning Classroom training Train the trainer
Spare parts engineering Spare parts information Accessory information
Semcon provides engineering services covering the entire development cycle, from concept to finished product. With extensive industry knowledge, we offer our customers expertise and resources when and where they are needed.
E ngineering services have been the core of Semcon's business since its start in 1980. Semcon helps customers develop products, systems and facilities with innovative solutions for the whole development chain, from needs analyses to finished product. New skills are constantly being added.
This development gives our customers the opportunity to increase market shares, differentiate themselves from their competitors and position themselves for increasing global competition. But this investment must be cost-effective to get the most out of every bit of the investment. Using an external partner like Semcon is a way to streamline development work, in terms of cost, time and quality.
We offer our clients over thirty years of expertise and experience of engineering challenges in a variety of development-intensive industries.
Semcon is one of a few major independent companies with the expertise to develop complete cars and commercial vehicles. The company also complements auto manufacturers' own resources and provides expertise in disciplines like design, construction, interior/exterior, chassis, driveline, modelling, testing, simulation, electronics, embedded systems, acoustics, human factors, software development and hydraulics.
The company also has construction expertise, not
Bill Davis redefined the entire caravan concept – from construction and living space to design and image. Three engineers from Semcon helped him with everything from reinforcing the original chassis to improving the panoramic window's surface quality. The result was a caravan that is unlike any other – and the individual versions are almost infinite, allowing everything from customizing for disabled people to swapping out the oven and refrigerator for a microwave and champagne cooler.
Scottish ATM and Retail Point of Sale company NCR needed to improve the usability of the software for bank staff administering its TCR product, which is cash handling machine. Semcon's integration specialists travelled the world to adapt existing systems for a new, uniform, streamlined system. To manage the scope of the assignment the software can manage more than seven different APIs and a number of programming languages.
To store helium requires storage tanks that can withstand -269°C – just four degrees above absolute zero. One degree warmer and the helium starts to convert to gas form, and risks leaking out and millions of Swedish kronor vanishing. Only a few companies can construct a tank to meet these demands – but Swedish Cryo is one of them. And when an order from Russia came up they needed to customize the 22-meter long tank to suit Russian connections – a task that Semcon's constructors were willing to take on.
The Volvo FH was launched after ten years of hard work. Semcon was involved, among other things, with engine cooling, air-intake systems, cab interior design and instrument panel, cab construction, chassis and software development for both the new electronics and air suspension. The result is a truck that is excellent in terms of roll stability, steering wheel sensitivity and road-holding reliability. Apart from the purely technical elements, Semcon worked at finding and conveying a consistent feel. Everything in the cab had to match and be a home for the person who would be spending many hours there.
A combination of diesel reform, turning diesel into hydrogen gas and a fuel cell that turns this gas into electricity with the help of air. This is the recipe for Powercell's successful innovation, PowerPac. The result is a quiet, clean and relatively inexpensive way of providing mobile phone masts in deserts, for example, with electricity. Or running air conditioning plants and refrigerators in trucks. PowerCell and Semcon have worked closely on these developments since 2008.
Statoil's Troll A oil platform in the North Sea is a gigantic construction. To ensure energy supply Statoil chose to use two HVDC (high voltage direct current) links from ABB. HVDC technology involves less energy loss compared with conventional AC technology. Semcon has carried out trials of the control systems for two of the links that play a key role in transferring energy and will later be responsible for on-site testing in the middle of the North Sea.
only for constructing test rigs, but also for setting up and developing complete production systems. Semcon also has an extensive construction machinery offer.
Semcon provides complete solutions and expertise in products, production and plants. Engineering development and industrial design are two areas where Semcon has extensive experience with wide-ranging specialist skills. Semcon also has great expertise in embedded systems, which help companies develop intelligent and communicative products with high standards of safety, reliability and durability.
Semcon offers a range of different services in plant and facility design, such as process engineering and electric power. There is also an attractive range of services for the process and food industries, where efficiency and safety demands on production are high.
In telecommunications, Semcon has product development expertise in infrastructure, industrial design and electronics. Semcon also offers the development of embedded systems that have a positive impact on a final product's functionality, reliability and quality. Yet another area where Semcon has experience is project methodology, where the company is developing a successful project culture in telecoms companies around the world, through courses and assignments such as analysis, advisory services and implementation of project models. The company has also developed its own project methodology – XLPM.
Semcon offers complete solutions to both distributors and producers of energy, along with complete studies including programs for large energy use. Semcon has successfully used its expertise from other industries to develop its energy services. One such example is quality methodology within validation and traceability, from the life science industry used in nuclear technology. Another example is experience with turbines, gearboxes and control electron-
Zehnder's air purifier did the job well, but was in need of a design update. Semcon's designers came up with a concept with flexible design signals efficiency and environmental awareness. The air purifier is also built with a common base module, making it easier in assembly and for users. When the air purifier was launched the manual had also received a new design and content from Semcon's technical writers and illustrators.
The Norwegian state railway needed to upgrade its rotary sub-stations – with some dating back to the 1950s. Semcon presented a solution using control technology that allows for continuous upgrades. The assignment has also involved finding solutions to improve safety and ease operation. For example, the handling of the motor generator carriage's overall temperature now takes place inside the panel.
ics within the automotive industry, which has also contributed to innovative solutions in the energy sector.
Semcon's plant and facility design services not only include services for network construction and energy production but also renovations and upgrades of hydro-electric generating stations. For oil and gas Semcon also provides project and quality management and construction in topside and subsea.
Semcon also has solid expertise of product development for developing energy-smart products for various industries.
Semcon has a complete range of services within the life science industry. With more than 20 years' experience of integrating system solutions and quality and project
management in the pharmaceutical and medical device markets, Semcon helps customers meet regulatory requirements, among other things, whilst shortening project times and making production more effective.
Semcon's expertise is aimed at streamlining production and safeguarding the right quality and traceability. This expertise covers the entire drug development process. Semcon's experience and expertise allows us to manage and implement major projects, such as planning entire process areas.
Semcon also has a complete range of services within medical devices and, with its breadth of expertise can take on both individual projects and complete undertakings on behalf of the customer. Such commitments consist of everything from product conceptualization via prototypes to how the product is marked and technical documentation.
Engineering services are provided by the Automotive R&D and Design & Development business areas. Due to the reorganization on 1 January 2014, activities are now divided into three geographic areas. Activities in Sweden are part of the Engineering Services Nordic business area. The German activities form the Engineering Services Germany business area, while activities in the UK, Brazil, Russia, India and China form the Engineering Services International business area.
The business area's 1,800 or so employees provide services to customers in the global automotive industry. Its offer includes focusing on concepts, design, calculation, construction, prototyping, testing, simulations and production. Semcon is a complete service provider and the services provided complement automotive manufacturers' own resources. Implementation and delivery are adapted according to customers' requirements, from participation in customers' teams to in-house development projects.
Acting president: Markus Granlund
The operating profit for Q1 2012 also included revenue recognition of SEK 5 million reported for a major project. The agreement signed in Q1 with a major German automotive manufacturer employed close to 100 people at yearend and is expected to employ close to 130 people in Q2 2014, of whom 30 in Germany and 100 in Sweden.
The business reported good growth in the UK with improved results. The business in Brazil has extended its customer base and also extended an existing contract with its biggest cus-
Activities are run in Germany, Sweden, Brazil, the UK, India, Spain, Russia and China. Customers include many of the world's leading automotive manufacturers such as Audi, BMW, Daimler, Geely, Jaguar Land Rover, MAN, Opel/ GM, Porsche, Scania, Volvo Trucks, Volvo Cars and VW.
The business area reported improved demand following a weak start to the year. Overall sales amounted to SEK 1,436 million (1,428), resulting in organic growth of 1 per cent, of which only overseas units of the business area reporting growth and Swedish activities reporting a drop in sales of 7 per cent.
The operating profit amounted to SEK 50 million (94), giving an operating margin of 3.5 per cent (6.6). The poorer result is attributable to poorer demand at the start of the year, costs for staff cuts in Sweden in Q1 of SEK 3 million, restructuring costs that negatively impacted Q4 by SEK 3 million and the write-down in a major project of SEK 5 million. The business area also reported poor results, mainly attributable to the start of a major project being delayed from end of May until December.
tomer. Deliveries from India to customers in Europe have contributed to a positive sales and results trend.
Semcon is a development partner well-positioned to improve sales on the global automotive market where long-term demand remains strong.
The business area has around 650 employees working with industrial design, product development, plant and facility design and production development. The business area provides expertise and experience for achieving quicker, improved product development. Services include requirement and concept studies, design, construction, embedded systems, testing, prototyping, validation, project management and production development and lean production expertise.
President: Olof Christensson
PEAQ (Project, Engineering and Quality) division has reported an improved operating profit. The division divested its pharmaceutical development business on 1 April, affecting 6 staff.
Olof Christensson was appointed as the new business area president with effect from mid-September 2013. The business area also opened a new office in Luleå in Q3, mainly to provide services to customers in the energy and mining sectors.
Uncertainty on the market has meant that some customers are delaying their investments, negatively affecting utilization levels over the
Business activities are run from Sweden and Germany. Sweden accounts for over 90 per cent of business area sales. Business is mainly focused on the industrial, energy, telecoms and life science sectors. Customers include ABB, Alstom, Astra-Zeneca, Bombardier, Fortum, General Electric, Getinge, Husqvarna, Metso, Rolls-Royce Marine, Saab, Siemens and Vattenfall.
The business area reported a weak year. Sales amounted to SEK 610 million (715), resulting in organic growth of -11%. The product and production development divisions reported weak demand from some industrial customers.
The operating profit was SEK 20 million (48), giving an operating margin of 3.3% (6.7). The main reason for the poorer results is a drop in demand. The business area also introduced staff cuts in Q1, which negatively impacted the business by SEK 3 million and also accumulated restructuring costs of SEK 6 million in Q4. The short-term. Customers' development needs however remain strong and it is believed that demand will gradually improve.
"Helping customers with what I'm good at is a huge responsibility. For me the challenge is to see everything from the customer and enduser's perspective. If a company can run its quality control activities smartly,then it will be successful. That is an attitude that's always reflected my work."
engineering services 29
Semcon offers services and complete solutions in product information. This covers both the production of information and distribution. The information is made available in the most appropriate way for the user – today that means wider distribution via digital solutions such as animations and mobile applications.
T he importance of product information for advanced technology products and systems is increasing. Modern product information has to satisfy all user needs, whether it comes to marketing or selling a product, providing a quick start to understanding and using a product, facilitating service and troubleshooting, ordering the right parts, or effectively carrying out repairs and maintenance.
By prioritizing these areas, a company can add value to their products while developing both the brand and the business.
Semcon's main focus is on two markets for product information services: Europe and China. The global
spread means that assignments can often be solved through front office/back office delivery. More offices involved also means that deliveries are made more effective in terms of cost, expertise and time management.
Product information can be provided through many different media, depending on what is most suitable for different target groups. The current trend is digital media, where product information is integrated into the product, such as in infotainment systems, and presented via mobile applications or animations on the internet. With Semcon's help customers get modern product information solutions, with the option of traceability and reuse, most suited to the respective target groups.
Seven of Assa Abloy's subsidiaries sell the same product – the Cliq lock system, which administers how electronic keys open various doors depending on a number of predetermined factors. Manuals are produced in eight languages, for lots of different markets, often meaning more than 50 versions, as each subsidiary has its own unique graphic profile. Semcon's in-house developed software, Kentucky, proved to be the perfect solution for keeping track of the different versions.
Technology used under the most extreme conditions naturally set strict demands on documentation. In Germany Semcon has developed user and administrator manuals for Secunet, whose products are classed highest up on Germany's national security level, Streng Geheim. Semcon is responsible for all documentation of Secunet's products.
Semcon, together with the global med-tech company Gambro, has come up with an information solution for publishing towards multiple types of units. The solution, Gambro Acute Gateway, is mainly aimed at Gambro's end users, but also for internal use by sales and training staff. The system is web-based, allowing corrections to the material to be made directly via the web reader and also allowing the creation and follow up of campaigns and training. The system is also available as an offline application for iPad, Android, Windows and OS X.
Within product information, Semcon offers complete information solutions, from interactive marketing and training to aftermarket, focusing on the needs of the end-user.
We help our customers by delivering throughout the product information development cycle, from strategy development and design via production to evaluation.
This cycle can be described in the following six steps:
Semcon offers a variety of products and services for every stage of the development cycle, either individually or as part of a complete solution. Our product information services can be characterized in the following four categories:
Semcon's aftermarket services cover everything from information strategy and design through method development and information production to delivery to the end-user and results evaluation. We also offer complete control and management of the entire customer product information development chain. In the development and production of aftermarket information, Semcon also invests in its own production systems, tools and processes.
Semcon provides a standardized cloud service for distributing digital information – Lodges. This service helps our customers cut their distribution costs, boost business benefits and improve users' experience of products.
To achieve this, Semcon has developed an offer consisting of a standardized, effective distribution solution and an easy-to-use user interface. The solution means, for example, that product/service information can be simply made available in various digital platforms such as web-based, tablet or mobile phones and integrated into our customers' products. This also safeguards that the users of customers' information always have access to updated information that is customized according to their specific requirements.
Within information management, Semcon offers services that support customers' development processes. These could be developing configuration and document management plans, support for change management, monitoring and reviewing the final documentation. Moreover, we can help create frameworks for configuration and document management, and ensure that product configuration control is maintained throughout the product lifecycle.
Semcon offers solutions for online marketing and communication, in order to strengthen brands and improve and develop customers' relationships and transactions with their end-users. Services include online strategies, concepts, production and solutions for customers where the online experience is an important part of the brand. The combination of online marketing and aftermarket expertise enables us to deliver information solutions for the product's life cycle with technical depth and strategic elevation, through a variety of media.
The Informatic business area provides product information services. On 1 January 2014 the Informatic business area changed its name to Product Information.
Informatic's 500 plus employees provide complete information solutions for the aftermarket and interactive market communication. The business area supports customers' products throughout the entire product lifecycle, from sales and marketing to installation, maintenance, training and repairs.
The business area now has offices in Sweden, the UK, China, Hungary and
Germany. Our customers are mainly in the automotive, manufacturing, telecoms and IT, energy
and med-tech sectors. Examples of our customers include ABB, AB Volvo, Atlet, Bombardier, Ericsson, Gambro, Jaguar Land Rover, Qoros Auto, Rolls-Royce Marine, Saab, SAP, Siemens and Volvo Cars.
The business area reported a healthy earnings trend over the year. Overall sales rose by SEK 35 million to SEK 463 million (428) with organic growth of 8%. A significant contributory factor to this growth is ongoing deliveries to the Chinese customer Qoros Auto. Of the business area's overall sales nearly half came from markets outside Sweden.
The operating profit improved by SEK 3 million, amounting to SEK 54 million (51). The operating margin was 11.7% (11.9).
Activities in the UK developed well, in terms of sales growth, improved results and more customers. Since the start of the partnership with Jaguar Land Rover, deliveries have gradually increased to involve over 100 people over the year. Semcon's involvement from November dropped by around 30 people.
Business activities in Sweden continue to report improved results with two new long-term partnerships signed in Q2 with companies in the manufacturing
President: Johan Ekener industry. These new partnerships were fully staffed at year-end. Both partnerships used the business area's FOBO solution, where offices in Sweden act as the front office and the office in Hungary acts as the back office. Around 25 individuals are involved in both these partnerships.
The first car model from Chinese Qoros Auto went on sale at the end of the year and the business area's involvement in developing owner and aftermarket information had, at year-end, been cut by around 15 people
according to plan, to adapt to the continued expected level of demand.
The acquisition in Germany in Q4 2012 was integrated during the year in the business area's activities. Integration and restructuring costs impacted results by around SEK 3 million over the year.
The business area expects continued high potential for growth in all markets where the business area is currently active.
SUSTAINABILITY AT SEMCON
ENVIRONMENT
CUSTOM
To clarify the meaning of sustainable business at Semcon we launched the "Sustainability at Semcon" platform this year.
S emcon has chosen to present sustainability from the five perspectives relevant to our business. For us, sustainability is a matter of acting professionally, creating long-term relationships with our employees and customers, respecting the environment and taking social responsibility for the world around us. In this way Semcon will make a difference. In autumn 2013 the "Sustainability at Semcon" platform was launched to employees and externally at semcon.se. As part of our extensive focus on sustainability concrete examples of projects and initiatives are highlighted on our intranet. This is done to inspire and encourage participation concerning sustainabili-EMPLOYEES
ty issues internally, allowing all employees to be informed of what we are doing in this area.
Semcon is helping best towards a sustainable society by creating the innovative, technical solutions of the future. Examples include taking part in various research projects focusing on energy, sustainable transport and vehicles of the future.
All these projects aim at reducing carbon footprints and more effective use of resources. We help our customers create smart services and products. For cars this might include a signal when it is time for a service, meaning avoiding
unnecessary maintenance, while optimizing the vehicle's operational life. This might also include helping design extremely fuel-efficient cars that use less than 0.1 litres of fuel per 10km. We are also helping on technology that encourages eco-friendly use in product information, which also communicates functions that reduce energy consumption.
The most important environmental aspect from our own perspective as a business
is how we travel. We therefore always try to reduce the number of unnecessary journeys and opt for eco-classed company cars. Wherever possible we choose rail travel instead of air travel. As a consultancy firm we also use various kinds of digital meeting forums, meaning that the number of business journeys have dramatically fallen in recent years.
Business acumen is central for creating long-term profitability and a sustainable business. Semcon places great
Our business in India has been helping for many years with local initiatives linked to social responsibility. Over the year they have run projects together with school children, focusing on sustainability. The aim of the collaboration has been to increase awareness among the children about how people affect the environment.
emphasis on building long-term customer relationships. We set our sights high in the customer satisfaction surveys that we carry out and always try to do better.
Our customers give us high marks for how we understand their activities that we provide solutions customized to their needs and that we provide quality.
As an international consultancy firm we handle risks by acting on a number of markets in various industries and in different customer segments. The move from specialist services to project business and managed services in highly competitive areas provides Semcon with more opportunities to achieve good levels of profitability, such as through effective supplies according to our FOBO model and our satellite offices.
Sustainability is also about taking responsibility for our employees. We are proud that our employees like working at Semcon. We get high marks in our annual employee survey in terms of employee satisfaction. Our employees feel respected by management and colleagues. They appreciate the working climate, which is characterized by openness, fairness and professionalism.
Health care and a good working environment are
important for giving everyone at Semcon a healthier life. A variety of activities are carried out to encourage various keep-fit activities. Sick leave throughout the company remains low.
Semcon's Code of Conduct is the foundation of our business. It summarizes the joint rules and policies that everyone at Semcon must work to. It is not only meant as an internal guide, but also externally for our business partners, customers, shareholders and other interested parties. All employees should act responsibly and within the framework of national legislation in all countries where the Group is represented. These rules of ethics are based on the UN's Global Compact Principles.
Semcon involves its employees in the choice of charities that the company sponsors and all employees were asked to nominate organizations. SOS Children's Villages was one of the charities most highly chosen and the cooperation means that Semcon helps towards developing SOS Children's Villages' activities. Apart from our contribution to SOS Children's Villages we carry out local initiatives linked to social responsibility.
Group manager and product developer – embedded systems
"I have chosen to concentrate on embedded systems because I find it fun working with the combination of hardware and software. I like visual things and working with stuff that's seen. It might be that it's easier to get constructive feedback from the person who is going to use the product."
As a consultancy firm we actively work so our 3,000 employees can develop with us, and over the past year we intensified this work. We have, for example, carried out a number of activities that make the company more attractive as an employer. The competition for employees is tough and it is not enough just to attract new employees. It is just as important to retain, motivate and develop the ones already employed.
Acomprehensive concept was developed over the year to strengthen Semcon's offer as employer. This work will be launched in spring 2014. The result will be an inspiring and clearer method of brand communication as an employer, to
ensure that we attract the right employees.
Our core values: Credibility,Responsibility and Excellence Our core values and culture permeate everything we do. They act as guidelines for how we act, not only towards one
another internally, but also towards our customers and other interested parties around the world. The core values are included as an evaluation in the objectives and development plans of every employee. These make it clear how employees can achieve individual goals and how the respective employees can help towards more overall objectives within the Group.
Semcon's HR work is built on a number of basic principles that are common throughout the Group.
■ Other 135 (124)
"As a coach you do not teach, you just ask strong questions to help others become aware of what they want and how to achieve it. I can often see after the first day that the person has more energy. I think this is because they have set a path and they want to know how much they can affect themselves."
*as of 31 December 2013
As Semcon is a multi-cultural company with operations in many countries around the world HR work is adapted according to the markets' specific requirements. The annual employee survey provides us good insight into our business, what works well and any improvement potential that exists. The 2013 employee survey (ESI) and leadership study (LSI) reported a better than comparable average. A great deal of importance is placed on follow-ups and evaluations, with results improving in recent years. Results also remain better than the industry's average.
All employees are given the chance of having an impact on their skills development. We value ambition and support our employees with their individual development in existing and new areas of expertise. We encourage open dialogue in terms of individual targets and expectations. Semcon offers employees the chance of specializing in one or more areas of expertise. Semcon also offers the chance of working on international projects and deliveries.
Semcon strives for an open climate of communication, characterized by feedback and dialogue. Semcon introduced an intranet in early 2012 with social functions aimed at creating dialogue between all parts of the organization. The intranet acts as a platform to promote employees not only using the information but also actively contributing. Semcon's sustainability platform and brand platform was also launched over the year. The brand platform consists of three perspectives describing Semcon's strategic direction, culture, core values and positioning "Creating the future".
Semcon Brains are nominated from throughout the organization and highlight employees that live up to the Semcon brand through their passion for technology and innovative ideas. The concept highlights the diversity of specialists at Semcon and shows how employees contribute with their unique expertise in order to create future solutions. Three new Semcon Brains are presented in each issue of our customer magazine Future by Semcon.
The individuals portrayed as Semcon Brains are used in recruitment campaigns and market communication.
| ¢ Key figures |
2013 | 2012 | 2011 | 2010 | 2009 |
|---|---|---|---|---|---|
| Total number of employees 31 Dec | 3,001 | 3,000 | 2,894 | 2,703 | 2,631 |
| Average number of employees | 2,873 | 2,891 | 2,727 | 2,474 | 2,791 |
| Average age | 38 | 38 | 37 | 38 | 38 |
| Staff turnover (%) * | 20 | 23 | 24 | 23 | 32 |
* Average for the Group due to major variations occurring between countries.
| Directors' report | 41 |
|---|---|
| Consolidated income statements and statements of comprehensive income |
46 |
| Consolidated balance sheets | 47 |
| Consolidated reports of changes to shareholders' equity |
48 |
| Consolidated cash flow statements | 49 |
| Parent company's income statements and statements of comprehensive income |
50 |
| Parent company's balance sheets | 51 |
| Parent company's changes to shareholders' equity |
52 |
| Parent company's cash flow statements | 52 |
| Notes | 53 |
| Auditors' report | 75 |
| Notes | ||
|---|---|---|
| Note 1 | General information | 53 |
| Note 2 | Accounting policies | 53 |
| Note 3 | Financial risks | 57 |
| Note 4 | Critical estimations and assessments | 58 |
| Note 5 | Segment reporting | 59 |
| Note 6 | Net sales | 60 |
| Note 7 | Remuneration to auditors | 60 |
| Note 8 | Employees | 61 |
| Note 9 | Interest income and similar items | 62 |
| Note 10 Interest expenses and similar items | 62 | |
| Note 11 Tax | 63 | |
| Note 12 Earnings per share | 64 | |
| Note 13 Intangible assets | 65 | |
| Note 14 Tangible assets | 66 | |
| Note 15 Shares in Group companies | 67 | |
| Note 16 Shares in associated companies | 67 | |
| Note 17 Accounts receivable | 68 | |
| Note 18 Accrued non-invoiced income and invoiced but non-processed income |
68 | |
| Note 19 Prepaid expenses and accrued income | 69 | |
| Note 20 Share capital | 69 | |
| Note 21 Pension obligations | 69 | |
| Note 22 Borrowings | 71 | |
| Note 23 Overdraft facilities | 71 | |
| Note 24 Accrued expenses and prepaid income | 71 | |
| Note 25 Pledged assets | 72 | |
| Note 26 Contingent liabilities | 72 | |
| Note 27 Information concerning acquisitions and divestment of companies |
72 | |
| Note 28 Transactions with related parties | 73 | |
| Note 29 Operational leasing | 73 | |
| Note 30 Events after the balance sheet date | 74 | |
The Board and CEO of Semcon AB (publ) co.reg.no. 556539-9549 herewith present the annual report and consolidated accounts for the 2013 financial year.
Semcon is an international technology company with engineering services and product information activities at more than 45 sites in Sweden, Germany, the UK, Brazil, Hungary, India, China, Spain and Russia.
In 2013 Semcon was organized into three business areas - Automotive R&D, Design & Development and Informatic.
Automotive R&D and Design & Development, both active in engineering services, work with design, product development, plant and production development. The Informatic business area works with product information and develops information solutions for the entire product lifecycle.
The operating income was SEK 2,508 million (2,571), giving organic growth of -1 per cent. The Informatic business area reported good growth over the year. For other business areas it is the relatively poor demand from some industrial customers that negatively affected sales.
The operating profit amounted to SEK 125 million (193),
giving an operating margin of 5.0 per cent (7.5). The decline is attributable to lower revenues, costs arising from staff cuts in Q1 of SEK 6 million, restructuring costs of around SEK 10 million and impairment of a major project of SEK 5 million in Q4. The Automotive R&D business area also reported poor results due to the start of a major project being delayed by six months. Major revenue recognition was reported last year of SEK 5 million in an Automotive R&D business area project.
Net financial items totalled SEK -7 million (-7) giving a profit before tax of SEK 118 million (186). Tax costs for the period stood at SEK -30 million (-45). The profit after tax was SEK 88 million (141) and EPS after dilution was SEK 4.86 (7.80).
The Automotive R&D business area reported improved demand following a weak start to the year. Overall sales amounted to SEK 1,436 million (1,428), resulting in organic growth of 1 per cent. The business area's share of the Group's overall sales was 57 per cent (55). The operating profit amounted to SEK 50 million (94), giving an operating margin of 3.5 per cent (6.6).
The Design & Development business area reported a lacklustre year. Sales amounted to SEK 610 million (715), resulting in organic growth of -11 per cent. The business area's share of the Group's overall sales was 24 per cent (28). The operating profit was SEK 20 million (48), giving an operating margin of 3.3 per cent (6.7)
The Informatic business area reported a healthy earnings trend over the year. Overall sales rose by SEK 35 million to SEK 463 million (428) with organic growth of 8 per cent. The business area's share of the Group's overall sales was 19 per cent (17). The operating profit improved by SEK 3 million, amounting to SEK 54 million (51). The operating margin was 11.7 per cent (11.9).
Due to the reorganization on 1 January 2014, the Automotive R&D and Design & development businesses are now divided into three geographic areas. Activities in Sweden are part of the Engineering Services Nordic business area.
Activities in Germany form the Engineering Services Germany business area, while activities in the UK, Brazil, India and China form the Engineering Services International business area.
The Engineering Services Nordic business area reported sales of SEK 1,024 million (1,162), giving organic growth of -12 per cent. The business area's share of the Group's overall sales was 39 per cent (44). The operating profit amounted to SEK 34 million (85), giving an operating margin of 3.3 per cent (7.3).
The Engineering Services Germany business area reported sales of SEK 923 million (861), giving organic growth of 7 per cent. The business area's share of the Group's overall sales was 36 per cent (33). The operating profit amounted to SEK 30 million (47), giving an operating margin of 3.3 per cent (5.5). The Engineering Services International business area reported sales of SEK 190 million (186), giving organic growth of 2 per cent. The business area's share of the Group's overall sales was 7 per cent (7). The operating profit amounted to SEK 5 million (1), giving an operating margin of 2.6 per cent (0.5).
The Product Information business area reported sales of
■ Engineering Services Nordic 39 (44)
SEK 463 million (428), giving organic growth of 8 per cent. The business area's share of the Group's overall sales was 18 per cent (16). The operating profit amounted to SEK 54 million (51), giving an operating margin of 11.7 per cent (11.9).
The operating cash flow from current activities was SEK 135 million (186) and the Group's liquid assets stood at SEK 153 million (116). In addition, unutilized credit guarantees amounted to SEK 262 million (306) as of 31 December. A new credit agreement was signed at the start of Q3. The new credit agreement consists of a three-year revolving credit facility of EUR 22.8 million (32.8) that runs until July 2016. There is also a bank overdraft facility of SEK 153 million (153).
Shareholders' equity amounted to SEK 633 million (579) with an equity/assets ratio of 49 per cent (47). Share dividends were paid in Q2 to shareholders of SEK 36 million (-). The Group's net borrowing fell over the past year by SEK 68 million, meaning that by year-end the Group had net cash in hand of SEK 7 million (-61) with a debt/equity ratio of zero (0.1) and an interest coverage ratio of 22.0 times (26.8).
Investment in hardware, licences and office equipment amounted to SEK 24 million (22).
No acquisitions or divestments of companies were made over the period.
There were 3,001 (3,000) employees on 31 December, of which 2,851 (2,887) in active service.
There was an average of 2,874 (2,891) employees, of which 1,298 in Sweden, 1,045 in Germany, 155 in Brazil, 127 in the UK, 119 in India, 81 in Hungary, 47 in China and 2 in Spain.
Employee training is carried out regularly with the aim of meeting employees' needs and the expertise that Semcon believes its customers will expect in the future. As of 31 December, 65 per cent (71) of employees had a university or college education, 45 per cent (44) had worked for the Semcon Group for more than 3 years, 37 per cent (34) between 1 and 3 years and 18 per cent (22) less than 1 year. 25 per cent (24) of Semcon's employees are women. In Sweden the figure was 28 per cent (29).
The respective number of employees per business area are as follows: Automotive R&D 1,816 (1,772), Design & Development 676 (701) and Informatic 509 (527).
The majority of Semcon's development costs concern development within the framework of customer projects. Other development costs are registered directly in the accounts. These amounts are not large. Exceptions are made for costs for development of specific programs or technical platforms, which are activated in accordance with IAS 38. Semcon also takes part in several external research projects in the fields of energy, sustainable transport and automotive in order to ensure a prominent position in terms of expertise.
Semcon's main contribution for reducing environmental impact is in the products and services the company develops with customers. Semcon's extensive, specific expertise throughout products' lifecycles and its broad infrastructure means that the company can create sustainable, complete so¬lutions covering energy efficiency, both small and largescale, light constructions, smart products, lean product development and user behaviour. This provides technology that encourages eco-friendly use or communicates energy-saving functions in such a way that users understand. To reduce the company's own environmental impact, Semcon minimizes the number of journeys its employees make and encourages the use of eco-classed company cars and carries out digital meetings to a great extent.
Equity/assets ratio (%)
Semcon is exposed to a number of risks that may affect the
Group's results. Semcon has chosen to divide the risks the company faces into financial and business-related risks. Sem¬con evaluates and identifies significant risks continually at the organization and in strategic planning.
The company has identified a number of financial risks that could affect earnings including:
For further information about financial risks, see Note 3 on page 57.
The company has identified the following business-related risks that could affect earnings including:
Semcon's customers are affected to varying degrees by a poor economic climate as this can negatively affect demand for Semcon's services. Semcon constantly works to broaden its customer base to minimize dependency on individual customers affected by a poor economic climate. Semcon's customer base consists mainly of leading European companies in the automotive industry and Nordic industrial companies in vari¬ous industries even though new customers from other geographic markets, like China, India and Brazil have arrived in recent years.
Semcon's business is affected to varying degrees by developments and dependency on individual industries. To minimize the dependency from the automotive industry Semcon is prioritizing growth in other industries, such as life science and energy.
A customer can end an assignment/project at short notice or gradually cut back on business volumes. This can cause a risk, as Semcon cannot always guarantee full cost coverage, especially for the employees that cannot immediately take on an assignment. Semcon works continuously to broaden its customer base in order to minimize its dependency on single customers. The Group's aim is that no single customer should represent more than 10 per cent of overall sales.
There is always a risk that key employees or a large number of employees choose to leave the company. Semcon prioritizes activities to be an attractive employer and thereby improve employees' job satisfaction. Resources are set aside fro training, recruiting and induction activities. There is huge
competition for expert employees, which generally means that salaries rise above the agreed contracts, both for groups of employees and individual key employees.
The risk of being exposed to price pressure is high in development-intensive industries. Semcon offers competitive prices on all markets and also gives customers the opportunity of utilizing Semcon's entire network or local and international offices. Price pressure remains high but there are variations between the various areas. Semcon is continuing to its set plan of moving away from hourly-based invoicing towards more project invoicing and fixed-price assignments. This can increase the risk but also provides opportunities to improve profitability. Each rise or fall of 1 per cent of the overall fee over a year affects results by SEK 23 million. Each rise or fall of 1 per cent of the coverage ratio will affect Semcon's results by +/- SEK 26 million.
Fixed price projects expose the company to risks if projects cannot be completed to budget and/or if the project cannot be completed on time. Meanwhile, projects give the Group the potential of improving profits through efficiency gains and by using employees from various Semcon offices on projects. All projects are planned, budgeted and carried out according to joint, fixed working methods. The Semcon Group actively works with project management and is ISO 9001 and ISO 14001 certified.
There is a risk that incorrectly carried out assignments and projects can affect results. The Group is insured according to industry practice for such eventualities. Over the years Semcon has only ever used its insurance on a few occations.
A change in the following variable would affect sales and results as follows:
| Profit | |||
|---|---|---|---|
| Variable | Change | Sales | before tax |
| Utilization level | ± 1 % | SEK 26 m | SEK 26 m |
| Fees | ± 1 % | SEK 23 m | SEK 23 m |
| Staff costs | ± 1 % | – | SEK 17 m |
| Working days | ± 1 day | SEK 10 m | SEK 8 m |
| Interest | ± 1 % | – | SEK 1 m |
The number of working days per quarter vary year on year, which is an important factor to consider when analysing the revenues for the various quarters. Each working day repre¬sents around SEK 10 million in revenue.
| Number of working days | |||||
|---|---|---|---|---|---|
| Sweden | Q1 | Q2 | Q3 | Q3 | Total |
| 2009 | 62 | 59 | 66 | 63 | 250 |
| 2010 | 62 | 59 | 66 | 64 | 251 |
| 2011 | 63 | 59 | 66 | 64 | 252 |
| 2012 | 64 | 58 | 65 | 62 | 249 |
| 2013 | 62 | 59 | 66 | 62 | 249 |
| 2014 | 62 | 58 | 66 | 62 | 248 |
| 2015 | 62 | 59 | 66 | 63 | 250 |
Semcon did not have any share-related incentive schemes in 2013.
The work of the Board of Directors is described in the section headed "Corporate Governance" on page 80.
Remuneration to the Board is decided by the AGM following proposals from the nominations committee. Remuneration to the Board until the AGM 2014 amounted to SEK 1,500,000, of which SEK 500,000 for the Chairman and SEK 250,000 for other Board members not employed by the company. The Board decides remuneration to the CEO. Semcon has decided that the Board in its entirety will carry out the remuneration committee's assignments. All senior executives in the Group management team are entitled to a fixed salary and a flexible remuneration of no more than six months' salary, based on how well they meet their respective targets. The remuneration shall be reasonable, competitive and in line with market conditions. The fixed salary is set every calendar year. In addition to following current collective agreements etc. senior executives have the right to individually arrange a pension, upon which salary or bonus sacrifices can be carried out to boost pension provisions given it does not affect costs for the company over time. All pension solutions agreed upon henceforth will be premium-based. Remuneration guidelines included the individuals, who during the time the guidelines applied, were part of the Group management team. The Board has the right to deviate from the guidelines if there is just cause to do so in special circumstances. Senior executives' remuneration and bonuses are reported in Note 8 on page 61.
At year-end 2013 Semcon's share capital was SEK 18.1 million, or 18,112,534 shares all with a quotient value of SEK 1. All shares carry the right to one vote and are of the same class. Every share entitles the holder to equal shares in the company's assets and profits. There are no limits to the shares transfer. As of 31 December 2013 the JCE Group owned 22.2 per cent (30.5)
of Semcon's shares, Swedbank Robur Fonder 8.4 per cent (8.4), Nordea Investment Funds 6.3 per cent (-) and Handelsbanken Fonder 5.7 per cent (3.7). As of 31 December 2013 the ten biggest shareholders owned 61.2 per cent (64.3) of the capital and voting rights in the company. Semcon owned 142,718 (142,718) of the company's shares. Semcon had 3,782 (3,828) shareholders, of whom 27.3 per cent (17.0) were registered abroad.
The objectives aim at creating long-term shareholder value. Semcon governs the business towards the following financial objectives:
No significant events have taken place since year-end 2013.
According to Semcon's financial objectives a share dividend should be paid to shareholders and be around one third of the profit after tax. From the reported profit for 2013 the Board of Directors proposes an increased share dividend of SEK 2.50 per share (2.0). The proposed dividend makes up a total of 51 per cent of the company's profit after tax and amounts to SEK 45 million. The record day for the right to a share dividend is proposed as Friday, 2 May.
Customers' development needs remain strong with demand expected to gradually improve. Semcon's outlook for development in 2014 is positive.
Income amounted to SEK 26 million (26) and the profit after financial items was SEK 112 million (44).
The AGM has the following profit at its disposal in the parent company:
| SEK | ||||||
|---|---|---|---|---|---|---|
| Profit brought forward and capital contribution | 299,434,359 | |||||
| Profit for the year according to the income statement |
52,123,224 | |||||
| Total | 351,557,583 | |||||
| The Board proposes that the profits be disposed of as follows: | ||||||
| Dividend to shareholders | 45,281,335 |
| Total | 351,557,583 |
|---|---|
| Carried forward | 306,276,248 |
| Dividend to shareholders | 45,281,335 |
For additional results of the Group and parent company and their financial position, we refer to the following income statements, balance sheets, statements of comprehensive income, changes in shareholders' equity and cash flow statements, along with the accompanying accounting policies and notes.
| SEK m | Note | 2013 | 2012 |
|---|---|---|---|
| operating income | |||
| Net sales | 5, 6 | 2,508.4 | 2,570.9 |
| operating expenses | |||
| Purchase of goods and services | –461.8 | –467.2 | |
| Other external expenses | 7, 29 | –230.5 | –232.7 |
| Staff costs | 8 | –1,668.6 | –1,655.6 |
| Amortization of intangible assets | 13 | –6.6 | –6.4 |
| Amortization of tangible assets | 14 | –15.1 | –17.3 |
| Results from shares in associated companies | 16 | –1.0 | 1.6 |
| Operating profit | 124.8 | 193.3 | |
| financial items | |||
| Interest income and similar items | 9 | 1.3 | 1.9 |
| Interest expenses and similar items | 10 | –8.3 | –9.3 |
| Profit/loss before tax | 117.8 | 185.9 | |
| Tax | 11 | –29.7 | –44.7 |
| profit/loss for the year | 88.1 | 141.2 | |
| Of which attributable to parent company's shareholders | 88.1 | 141.2 | |
| EPS before dilution, SEK | 12 | 4.90 | 7.86 |
| REPS after dilution, SEK | 12 | 4.86 | 7.80 |
| Number of shares at year-end | 12 | 18,112,534 | 18,112,534 |
| Average number of shares | 12 | 18,112,534 | 18,112,534 |
| Average number of shares excluding number of own shares | 12 | 17,955,797 | 17,955,797 |
| 2013 | 2012 |
|---|---|
| 88.1 | 141.2 |
| –2.8 | – |
| 0.6 | – |
| –2.2 | – |
| 9.7 | –13.6 |
| –3.1 | 13.1 |
| –5.0 | –0.5 |
| 1.8 | –3.3 |
| 3.4 | –4.3 |
| 1.2 | –4.3 |
| 89.3 | 136.9 |
| SEK m | Note | 31 Dec 2013 | 31 Dec 2012 |
|---|---|---|---|
| assets | |||
| Fixed assets | |||
| Intangible assets | 13 | ||
| Goodwill | 440.3 | 433.3 | |
| Other intangible assets | 16.6 | 17.7 | |
| Tangible fixed assets | 14 | ||
| Plant and machinery | 16.1 | 15.0 | |
| Inventory, computers and equipment | 23.1 | 20.4 | |
| Financial assets | |||
| Shares in associated companies and joint ventures | 16 11 |
18.8 44.5 |
19.1 50.1 |
| Deferred tax recoverable Total fixed assets |
559.4 | 555.6 | |
| Current assets | |||
| Current assets | 17 | 371.3 | 346.6 |
| Current tax receivables | 2.0 | 4.4 | |
| Other receivables | 17.2 | 19.8 | |
| Accrued non-invoiced income | 18 | 172.7 | 174.4 |
| Prepaid expenses and accrued income | 19 | 29.7 | 26.9 |
| Cash and bank balances Total current assets |
153.3 746.2 |
115.6 687.7 |
|
| total assets | 1,305.6 | 1,243.3 | |
| shareholders' equity and liabilities | |||
| Shareholders' equity | |||
| Share capital | 20 | 18.1 | 18.1 |
| Other shareholders' contribution | 34.5 | 34.5 | |
| Statutory reserve | –4.3 | –6.4 | |
| Profit brought forward including profit for the year | 585.1 | 532.9 | |
| Total shareholders' equity | 633.4 | 579.1 | |
| Of which minority share | – | – | |
| Long-term liabilities | |||
| Pension obligations | 21 | 51.4 | 47.6 |
| Deferred tax | 11 | 27.1 | 34.2 |
| Borrowings | 22, 23 | – | 129.2 |
| Total long-term liabilities | 78.5 | 211.0 | |
| Current liabilities | |||
| Accounts payable | 87.0 | 85.0 | |
| Current tax liability | 31.0 | 15.5 | |
| Borrowings | 22 | 94.7 | – |
| Other liabilities | 92.6 | 76.8 | |
| Non-accrued invoiced income | 18 | 57.2 | 51.4 |
| Accrued expenses and prepaid income | 24 | 231.2 | 224.5 |
| Total current liabilities | 593.7 | 453.2 | |
| total shareholders' equity and liabilities | 1,305.6 | 1,243.3 | |
| Pledged assets Contingent liabilities |
25 26 |
2.4 3.8 |
2.3 3.7 |
| SEK m | Share capital |
Other capital contribution |
Reserves | Profit brought forward |
Total | Minority share |
Total share holders' equity |
|---|---|---|---|---|---|---|---|
| Opening balance on 1 January 2012 | 18.1 | 34.5 | –2.1 | 391.5 | 442.0 | – | 442.0 |
| Comprehensive income | |||||||
| Profit for the year | – | – | – | 141.2 | 141.2 | – | 141.2 |
| Other comprehensive income | |||||||
| Exchange rate differences for the year | – | – | –13.6 | – | –13.6 | – | –13.6 |
| Hedging of net investments | – | – | 13.1 | – | 13.1 | – | 13.1 |
| Cash flow hedging | – | – | –0.5 | – | –0.5 | – | –0.5 |
| Tax relating to hedging of net investments | – | – | –3.3 | – | –3.3 | – | –3.3 |
| Total other comprehensive income | – | – | –4.3 | – | –4.3 | – | –4.3 |
| Total comprehensive income | – | – | –4.3 | 141.2 | 136.9 | – | 136.9 |
| Transactions with company owners | |||||||
| Share savings scheme | – | – | – | 0.2 | 0.2 | – | 0.2 |
| Total transactions with company owners | – | – | – | 0.2 | 0.2 | – | 0.2 |
| Opening balance on 1 January 2013 | 18.1 | 34.5 | –6.4 | 532.9 | 579.1 | – | 579.1 |
| Comprehensive income | |||||||
| Profit for the year | – | – | – | 88.1 | 88.1 | – | 88.1 |
| Effect of accounting policy change | – | – | 0.9 | – | 0.9 | – | 0.9 |
| Items that cannot be reclassified for the results | |||||||
| Actuarial gains and losses | – | – | –2.8 | – | –2.8 | – | –2.8 |
| Tax | – | – | 0.6 | – | 0.6 | – | 0.6 |
| Total | – | – | –2.2 | – | –2.2 | – | –2.2 |
| Items that can be reclassified for the results | |||||||
| Exchange rate differences for the year | – | – | 9.7 | – | 9.7 | – | 9.7 |
| Hedging of net investments | – | – | –3.1 | – | –3.1 | – | –3.1 |
| Cash flow hedging | – | – | –5.0 | – | –5.0 | – | –5.0 |
| Tax relating to hedging of net investments and cash flow hedging |
– | – | 1.8 | – | 1.8 | – | 1.8 |
| Total | – | – | 3.4 | – | 3.4 | – | 3.4 |
| Total other comprehensive income | – | – | 1.2 | – | 1.2 | – | 1.2 |
| Total comprehensive income | – | – | 2.1 | 88.1 | 90.2 | – | 90.2 |
| Total comprehensive income | |||||||
| Share dividend | – | – | – | –35.9 | –35.9 | – | –35.9 |
| Total transactions with company owners | – | – | – | –35.9 | –35.9 | – | –35.9 |
| Closing balance on 31 December 2013 | 18.1 | 34.5 | –4.3 | 585.1 | 633.4 | – | 633.4 |
| SEK m | Note | 2013 | 2012 |
|---|---|---|---|
| current activities | |||
| Operating profit/loss | 124.8 | 193.3 | |
| Depreciation/impairment | 13, 14 | 21.7 | 23.7 |
| Profit from machinery sold | –0.1 | –0.1 | |
| Shares in associated companies | 0.3 | –1.4 | |
| Other items not affecting cash flow | 0.6 | –1.1 | |
| Prepaid pensions and paying into pension plans | 21 | –3.1 | –2.8 |
| Interest received and similar items | 1.2 | 1.8 | |
| Interest paid and similar items | –5.6 | –4.7 | |
| Income tax paid | –9.3 | –6.4 | |
| Cash flow from current activities before changes to working capital | 130.5 | 202.3 | |
| changes in working capital | |||
| Changes in work in progress | 3.0 | –51.0 | |
| Changes in current receivables | –19.7 | 3.1 | |
| Changes in current liabilities | 21.2 | 31.8 | |
| Total changes in working capital | 4.5 | –16.1 | |
| total changes in working capital | 135.0 | 186.2 | |
| investment activities | |||
| Acquisition of subsidiaries | 27 | – | –2.5 |
| Investments in intangible assets | 13 | –5.9 | –3.4 |
| Investments in tangible fixed assets | 14 | –18.2 | –18.5 |
| Payment from sales of fixed assets | 0.2 | 0.5 | |
| cash flow from investment activities | –23.9 | –23.9 | |
| financing activities | |||
| Changes to overdraft facilities | 5.1 | – | |
| Repayment of loans | 22 | –47.7 | –83.2 |
| Share dividend | –35.9 | – | |
| cash flow from financing activities | –78.5 | –83.2 | |
| cash flow for the year | 32.6 | 79.1 | |
| Cash and bank balances at the start of the year | 115.6 | 39.7 | |
| Translation differences | 5.1 | –3.2 | |
| cash and bank balances at year-end | 153.3 | 115.6 |
| SEK m | Note | 2013 | 2012 |
|---|---|---|---|
| operating income | |||
| Net sales | 6 | 26.3 | 26.3 |
| operating expenses | |||
| Other external expenses | 7, 29 | –21.2 | –20.4 |
| Staff costs | 8 | –21.6 | –25.6 |
| Depreciation of tangible fixed assets | 14 | –0.3 | –0.3 |
| Operating loss | –16.8 | –20.0 | |
| financial items | |||
| Interest income and similar items | 9 | 26.0 | 23.7 |
| Group contribution received | 57.0 | 112.5 | |
| Interest expenses and similar items | 10 | –2.8 | –4.3 |
| Profit after financial items | 63.4 | 111.9 | |
| appropriations | |||
| Transfer to tax allocation reserve | 9.1 | –9.1 | |
| Group contribution paid | –5.5 | –21.3 | |
| Profit before tax | 67.0 | 81.5 | |
| Tax | 11 | –14.9 | –20.8 |
| profit for the year | 52.1 | 60.7 |
| SEK m | 2013 | 2012 |
|---|---|---|
| Profit for the year | 52.1 | 60.7 |
| Other comprehensive income | ||
| Other comprehensive income | – | – |
| total other comprehensive income | 52.1 | 60.7 |
| SEK m | Note | 31 Dec 2013 | 31 Dec 2012 |
|---|---|---|---|
| assets | |||
| Fixed assets | |||
| Tangible fixed assets | 14 | ||
| Equipment, computers and inventory | 0.2 | 0.5 | |
| Financial assets | |||
| Shares in Group companies | 15 | 84.1 | 84.1 |
| Shares in Group companies | 0.7 | 0.7 | |
| Receivables in Group companies | 369.2 | 389.1 | |
| Total fixed assets | 454.2 | 474.4 | |
| Current assets | |||
| Receivables in Group companies | 151.6 | 135.2 | |
| Other receivables | 0.6 | 0.4 | |
| Other receivables | 2.6 | 2.1 | |
| Cash and bank balances | – | 38.3 | |
| Total current assets | 154.8 | 176.0 | |
| total assets | 609.0 | 650.4 | |
| shareholders' equity and liabilities | |||
| Shareholders' equity | |||
| Restricted shareholders' equity | |||
| Share capital | 20 | 18.1 | 18.1 |
| Statutory reserve | 25.1 | 25.1 | |
| Unrestricted shareholders' equity | |||
| Share premium reserve | 12.9 | 12.9 | |
| Profit brought forward | 286.6 | 261.7 | |
| Profit for the year | 52.1 | 60.7 | |
| Total shareholders' equity | 394.8 | 378.5 | |
| Untaxed reserves | |||
| Tax allocation reserves | – | 9.1 | |
| Additional depreciation | 0.2 | 0.2 | |
| Total untaxed reserves | 0.2 | 9.3 | |
| Long-term liabilities | |||
| Borrowings | 22 | – | 153.6 |
| Total long-term liabilities | – | 153.6 | |
| Current liabilities | |||
| Accounts payable | 0.9 | 1.5 | |
| Liabilities to Group companies | 83.9 | 91.1 | |
| Current income tax liabilities | 17.2 | 6.3 | |
| Borrowings | 22, 23 | 98.9 | – |
| Other liabilities | 0.6 | 0.4 | |
| Accrued expenses and prepaid income | 24 | 12.5 | 9.7 |
| Total current liabilities | 214.0 | 109.0 | |
| total shareholders' equity and liabilities | 609.0 | 650.4 | |
| Pledged assets | – | – | |
| Contingent liabilities | 26 | 0.5 | 0.7 |
| SEK m | Share capital |
Statutory reserve |
Share premium reserve |
Profit brought for ward incl. profit/loss for the year |
Total share holders' equity |
|---|---|---|---|---|---|
| Opening balance on 1 January 2012 | 18.1 | 25.1 | 12.9 | 261.7 | 317.8 |
| Comprehensive income | |||||
| Profit/loss for the year | – | – | – | 60.8 | 60.8 |
| Total other comprehensive income | – | – | – | – | – |
| Total other comprehensive income | – | – | – | 60.8 | 60.8 |
| Opening balance on 1 January 2013 | 18.1 | 25.1 | 12.9 | 322.5 | 378.6 |
| Comprehensive income | |||||
| Profit/loss for the year | – | – | – | 52.1 | 52.1 |
| Total other comprehensive income | – | – | – | – | – |
| Total comprehensive income | – | – | – | 52.1 | 52.1 |
| Transactions with shareholders | |||||
| Transactions with shareholders | – | – | – | –35.9 | –35.9 |
| Total transactions with shareholders | – | – | – | –35.9 | –35.9 |
| Closing balance on 31 December 2013 | 18.1 | 25.1 | 12.9 | 338.7 | 394.8 |
| SEK m | Note | 2013 | 2012 |
|---|---|---|---|
| current activities | |||
| Operating profit/loss | –16.8 | –20.0 | |
| Impairment | 14 | 0.3 | 0.3 |
| Interest received and similar items | 26.0 | 23.6 | |
| Interest paid and similar items | –2.8 | –4.3 | |
| Income tax received | – | 0.9 | |
| Income tax paid | –4.9 | – | |
| Cash flow from current activities before changes in working capital | 1.8 | 0.5 | |
| changes in working capital | |||
| Changes in current receivables | 59.6 | 152.9 | |
| Changes in current liabilities | –9.1 | –40.6 | |
| Total change in working capital | 50.5 | 112.3 | |
| cash flow from current activities | 52.3 | 112.8 | |
| financing activities | |||
| Financing activities | 22 | 5.3 | – |
| Repayment of loans | 22 | –60.0 | –85.3 |
| Share dividend | –35.9 | – | |
| cash flow from financing activities | –90.6 | –85.3 | |
| cash flow for the year | –38.3 | 27.5 | |
| Cash and bank balances at the start of the year | 38.3 | 10.8 | |
| cash and bank balances at the start of the year | 0 | 38.3 |
Semcon AB (publ) is a Swedish listed public company registered with the Swedish Companies Registration Office with Company Registration No. 556539-9549. The company is registered in Göteborg, Sweden. The company is listed on the NASDAQ OMX Stockholm Small Cap list under the SEMC ticker.
The Group's main business is providing product development services and product information, which are described in the Directors' Report in this Annual Report. The Consolidated Accounts for the financial year ending 31 December 2013 were approved by the Board on 14 March 2014 and will be presented to the AGM on 28 April 2014 for final approval.
The most important accounting policies applied when these Consolidated Accounts were prepared are stated below. These policies have been applied consistently for each year represented, unless otherwise stated.
The Consolidated Accounts have been prepared in accordance with the Inter- national Financial Reporting Standards (IFRS) as adopted by the EU, IFRIC interpretations, the Swedish Annual Accounts Act and recommendation RFR 1.3 of the Swedish Financial Accounting Standards Council (Additional consolidated accounting regulations). Recommendations that come into effect after the closing day will not have any significant effect on either the results or the financial position of the company. The parent company's annual accounts have been prepared in accordance with the Swedish Annual Accounts Act and recommendation RFR 2.2 (Accounting for legal entities).
The parent company's functional currency is SEK, which is also the Group's reporting currency. All sums in the financial report are given in SEK millions, unless otherwise stated. The Consolidated Accounts have been prepared in accordance with the acquisition method. Preparing reports in accordance with IFRS requires using a number of important estimates for accounting purposes. It is also necessary for senior management to make a number of estimates when applying the Group's accounting policies. The areas that require a high degree of assessment, which are complex or are such areas where assumptions and estimates are of considerable significance for the Consolidated Accounts appear in Note 4, page 58.
The following are the standards that the Group applied for the first time for the financial year beginning 1 January 2013 and that had some effect on the Group's financial statements:
New standards and interpretations not yet applied by the Group A number of new standards and interpretations come into force for financial years beginning after 1 January 2014. None of these have been applied in drawing up this financial report and are not expected to have any significant effect on the Group's financial reports.
In addition to the parent company, the Group consists of all subsidiaries where the Group owns shares and directly or indirectly has the majority of voting rights, or through agreements has a controlling influence. Acquired companies are included in the consolidated accounts from the acquisition date. These consolidated accounts have been prepared in accordance with the purchase method, which means that the acquisition value of the shares in Group companies is divided into identifiable assets and liabilities at the time of the acquisition at the fair value. The difference between the purchase price and the calculated value of equity at the time of the acquisition is reported as consolidated goodwill. All transaction costs relating to acquisitions are expensed. An allowance is made in the acquisition analysis for deferred tax on acquired untaxed reserves. In addition, deferred tax is seen as the difference between the fair values of assets and liabilities and taxable residual value. Untaxed reserves accumulated after acquisition are divided into deferred tax liability and the remaining part, which is reported under profit brought forward. The consolidated shareholders' equity includes the parent company's equity and the part of the subsidiaries' equity accumulated after the date of acquisition.
The current method was used for calculating the income statement and balance sheets. This method means that the balance sheets are translated at the closing day rate and the income statements are translated at the average rate for the year. Translation differences are reported in other comprehensive income.
Pricing of services between companies in the Group follow market norms.
Affiliated transactions follow market norms.
Associated companies are included where the Group has a significant but not decisive influence over operations and financial control and the company is neither a subsidiary nor a share in a joint venture.
A significant influence is considered to exist if the company has a minimum holding of between 20 per cent and 50 per cent of the voting rights, or in any other way has a significant influence, but where there is no parent/ subsidiary relationship. Holdings in associate companies are reported in the consolidated income statement and balance sheet according to the equity method from the time that a significant influence is established. The equity method means that shares in a company are reported at the acquisition value at the time of acquisition and then adjusted using the Group's share of the change in the company's net assets. Semcon's share of the associate company's earnings after tax is reported in the consolidated income statement. Unrealized profits on transactions between the Group and associate companies are eliminated in relation to the Group's holding in the associate company.
Operating segments are reported so they correspond to the internal reports submitted to the highest executive function. The highest executive function is the CEO who runs the operation along with the rest of group management.
The cash flow statement is produced using the indirect method. Reported cash flow includes only those transactions that have involved payments into or out of the company.
Work in progress is taken up as revenue in line with work being carried out. Fixed-rate work is taken up as revenue in proportion to the respective assignment's degree of completion (successive revenue recognition) on the closing date after reservation for loss risk. The degree of completion is assessed without accrued assignment expenses for work carried out in relation to the assignment's estimated total costs. On account invoices received are reported net against activated assignment expenses. If the net of the expenses paid on account invoices received is positive then the project is reported as an asset in the balance sheet as "Processed but non-invoiced income". Projects are reported as liabilities for which on account invoices received exceed assignment expenses paid as "Invoiced but nonprocessed income".
Income from the sale of hardware and software, which is not of significant value, is reported upon delivery, which coincides with the time when risks and benefits accrue to the buyer.
One-off items are reported separately in the financial statements when it is necessary to explain the Group's results. One-off items include significant income or cost items reported separately due the significance of their character or amount.
Receivables and liabilities in foreign currencies are valued at the closing day rates. Exchange rate differences in current receivables and liabilities are included in the operating profit/ loss while the differences in financial receivables and liabilities are included under financial items.
The majority of Semcon's development costs concern development in the framework of customer projects. In other cases the company's development costs are of an ongoing nature and are carried as an expense in the period they occur. These costs are not considered to be significant. Exceptions to this are costs incurred for the development of specific computer programs, which are reported as tangible assets. See below for more information.
Tangible fixed assets mainly consisting of computers, inventory, property and investments in leased premises have been valued at the purchase price with deductions for accumulated depreciation and impairment losses.
Depreciation is based on the acquisition value and is carries out over the expected utilization period. Depreciation according to plan has been based on the expected utilization period as follows:
Acquired goodwill has an indeterminate utilization period and is valued at its acquisition value with deductions for accumulated impairment. Goodwill is distributed among cash-generating units and is tested for possible impairment annually.
Other intangible assets include programs developed internally, acquired licenses and technical platforms. Other acquired intangible assets are valued at acquisition value with deductions made for accumulated depreciation and impairment losses. Acquisition value comprises activated costs that arise from the date when the program or platform is considered to be commercially viable and other criteria according to IAS 38 are fulfilled. Expenses are depreciated over the expected utilization period of 3-8 years. Expenses for internally developed goodwill, trademarks and similar rights are reported as they arise.
The company's management continually assesses the value of any impairment requirement. Impairment is made in cases where an asset's reported value exceeds its estimated recoverable value. Recoverable value is the higher of the utilization value of the asset in the business and the net sales value. The utilization value is the current value of all inward and outward payments relating to the asset during the period it is expected to be used in the business, plus the current net sales value at the end of the utilization period. A previous impairment is
returned when the assumptions used to establish the asset's recovery value have changed, meaning the impairment is no longer appropriate. Returns of previous impairments are tested individually and are reported in the income statement. Impairment of goodwill is not however returned in successive periods.
Financial instruments are valued and reported in the Group according to regulations in IAS 39. Financial instruments reported in the balance sheet include, among assets, account receivables, receivables from associate companies and cash and bank balances. Liabilities and shareholders' equity includes accounts payable - trade, borrowings plus convertibles. Financial instruments are initially reported at their acquisition value equivalent to the instruments' actual value with additional transaction costs for all financial instruments, except concerning those belonging to the financial assets (liabilities) category reported at their actual value in the income statement. Reporting and valuing then takes place according to how the financial instrument has been classified.
Trade date reporting is applied when buying and selling of money market and capital market instruments on the spot market. Other financial assets and liabilities are reported in the balance sheet when the company becomes party to the instruments contracted terms. Accounts receivable are reported in the balance sheet when the invoice has been issued. Liabilities are taken up in the balance sheet when the counter- party has performed its agreed liability to pay, even if the invoice has not yet been received. Accounts payable are reported in the balance sheet when the invoice has been received. A financial asset is removed from the balance sheet when the rights of the agreement have been reached, fall due or the company loses control over them. The same applies for parts of financial assets. A financial liability is removed from the balance sheet when the liabilities of the agreement are met or in any other way become extinct. The same applies for parts of a financial liability
Official market listings on the closing date are used when setting the fair value of financial instruments. If listings are not available, valuation is carried out by using generally accepted methods such as discounting future cash flow at the quoted market price for the respective validity. Translation to SEK is made at the price quoted at the end of the accounting period. Unless otherwise stated the booked value will be a good approximation of the instrument's actual value due to the asset's or liability's short-term nature or fixed-interest term.
The accrued acquisition value is calculated using the effective interest method, meaning that any premiums or discounts and directly attributable costs or income is distributed over the term of the contract with the help of the estimated effective interest. The effective interest is the interest that provides the instrument's acquisition value as a result when current value estimating future cash flow.
Financial assets and liabilities are offset and reported with a net amount in the balance sheet when there is a legal right to offset and when it is intended to regulate the items with a net amount or to realize the asset and regulate the liability.
Accounts receivable and current receivables in associated companies and joint ventures are categorized as "Loan receivables and accounts receivable", which means reporting the accrued acquisition value. The account receivable's expected duration is short, which is why the value is reported at a nominal amount without discounts with deductions for any possible write- down. Unreliable accounts receivable are considered individually and any possible write-down is reported in the company's liabilities.
Liquid assets reported in the balance sheets and cash flow statements include cash and bank balances as well as other current investments with the due date within three months of the acquisition date. Liquid assets are made up of bank balances categorized as "Loan receivables and accounts receivable", whereby reporting takes place at the accrued acquisition value. Because bank balances are payable on demand the accrued acquisition value is equivalent to the nominal amount.
Accounts payable – trade are categorized as "Other financial liabilities", meaning reporting them at their accrued acquisition value. Accounts payable - trade are expected to have a short duration, which is why the liability is reported at a nominal amount without discounting.
Liabilities to credit institutions, overdraft facilities and other liabilities are categorized as "Other financial liabilities" and valued at their accrued acquisition values. For liabilities in foreign currencies reported in accordance with the hedging method of net investments, the exchange rate gains and exchange rate losses are reported under equity.
When a formal or informal commitment exists as a result of an event that has occurred and it is possible that resource will be required to fulfil the commitment and a reliable estimate can be made of the amount required, then such a commitment is reported as a provision if the amount and payment date are uncertain.
The Group's tax expense and tax income are reported as current tax, changes in deferred tax as well as tax in changes to untaxed reserves.
Current tax is the tax estimated on the taxable results for the period in accordance with the tax regulations in each country. Current tax also includes possible adjustments from previous taxation.
This tax is calculated on the basis of the taxable and taxdeductible temporary differences respectively between the reported and fiscal value of assets and liabilities. Deferred tax liability of loss carry-forwards have only been taken into account to the extent where it is probable that the loss carry-forwards can be deducted from the taxable surplus in future.
The Group does not have any financial leasing contracts. The Group rents offices, cars and some office equipment. Rental agreements in which the risks and benefits associated with ownership remain to a significant extent with the lease provider are reported as operational leasing agreements. The costs are reported directly in the income statement during the rental period.
Employees' remuneration is reported as earned and paid wages plus bonus earned. Full remuneration is paid for various commitments such as non-utilized holiday entitlement and payroll overheads.
For pensions, Semcon reports remuneration to employees according to IAS 19. According to IFRS, pensions are divided between defined contribution and defined benefit pensions. Defined contribution plans are defined as plans where the company pays a fixed amount to a third party and where the company no longer becomes liable once the payment has been made. Such plans are reported as a cost when the premium is paid. Other plans include defined benefit plans where the liability remains within the Group. These liabilities and costs concerning work during the current period are estimated as actuarial with application of the "Projected unit credit method". External actuaries are used for these estimates. The liability reported in the balance sheets for defined benefit pension plans is the current value of the defined benefit obligations at the end of the reporting period minus the fair value of the plan assets. The current value of the defined benefit obligations are set by discounting the estimated future cash flow by using the interest rate for first-class company bonds issued in the same currency as the remuneration paid, with a duration comparable with the actual pension obligation. Actuarial gains and losses as a result of experience-based adjustments and changes to actuarial assumptions are reported in other comprehensive income over the period they arise. Commitments for retirement pensions and family pensions for salaried employees in Sweden are safeguarded via insurance with Alecta. According to a statement from the Swedish Financial Reporting Board, UFR 3, this is a defined- benefit plan that encompasses several employers. As in previous years the company has not had access to information to enable it to report this plan as a defined benefit plan, which means that the ITP pension plans secured via insurance with Alecta are therefore reported as defined contribution plans.
Redundancy pay is paid when employment ceases before reaching retirement age, or when an employee terminates employment in return for redundancy pay. The Group reports redundancy pay when it is clear that it is either a case of voluntary redundancy in accordance with the set plan without the possibility of reprisals or that the redundancy offer given was
to encourage the voluntary redundancy and accepted by the person who received the offer. Benefits that fall due for payment more than 12 months after the closing date are discounted to the current value, if they are significant.
The Group reports liabilities and costs for bonus payments when they are linked to a contract or when there is an established practice that has created an informal duty.
The parent company has drawn up its Annual Report in accordance with the Annual Accounts Act and RFR 2.2 (Accounting for legal entities) of the Swedish Financial Accounting Standards Council. The same accounting policies and calculation methods have been applied for 2013 as for 2012. The differences between the Group and parent company's accounting policies appear below.
Participations in Group companies are reported at the acquisition value in the parent company's financial reports. Dividends are reported as income for the part they refer to profits generate after the acquisition. Dividends in excess of these profits are considered as repayment of investments and thereby cut the reported value of participations in the Group companies.
The parent company applies the exception rule in RFR 2 to avoid applying the rules in IAS 39 for financial guarantees concerning Group and associate companies. In these cases rules in IAS 37 are applied meaning that financial guarantee agreements must be reported as an allocation in the balance sheet when Semcon has a legal or informal commitment as a result of a previous event and it is likely that an outflow of resources will be required to regulate such an action. It must also be possible to carry out a reliable estimate of the value of such an action.
In the parent company, untaxed reserves are reported including deferred tax liabilities, as opposed to the consolidated accounts where untaxed reserves are divided into deferred tax liabilities and shareholders' equity.
The company reports Group contributions according to a statement from the Swedish Financial Reporting Board, RFR 2. Group contribution paid in order to minimize the Group's total tax reported under appropriations. Group contributions paid classed the same as dividends are reported as financial income with the recipient. All Group contributions to the parent company can be classed the same as dividends and therefore can be reported in the income statement.
Financing risks are risks associated with financing the Group's capital needs and refinancing of outstanding loans made more difficult or more expensive. Credit agreements consist of an overdraft facility of SEK 153 million (153) and a revolving credit facility of EUR 22.8 million (32.8). The loan falls due on 17 July 2016. The loan is conditional on the customary covenants being fulfilled in the form of equity/assets ratio, debt/equity ratio and net loan debt (excluding pensions) in relation to the operating profit/loss before amortization. All loan conditions were met by healthy margins as of 31 December 2013.
Interest risks are the risks associated with effects on profit and cash flow in case of long-term changes to the market rates. Profit sensitivity can however be limited by selected interest maturity structure. The Group's average fixed interest rate term on loans will not exceed two years. At year-end the fixed interest term was 7 days. During 2013 the short-term 7-day interest rate was lower than the longer-term interest rates. An alteration in market rates of +/- 1 per cent would affect future profit by around SEK 1 million based on the borrowings as of 31 December.
Liquidity risks are the risks associated with not having access to liquid assets or unutilized credits to fulfil payment commitments. The Group's liquid assets at year-end amounted to SEK 153 million (116). In addition, the Group has an unused overdraft facility of SEK 262 million (306). Liquidity in the Group will be placed in cash pools. Cash pools allow Semcon centralized liquidity management at national levels. These cash pools match the excess and shortfalls in the local subsidiaries for the respective countries and currency.
| The Group, SEK m | Up to 3 months |
3–12 months |
Over 12 months |
|---|---|---|---|
| Liabilities to credit institutions |
94.7 | – | – |
| Accounts payable | 87.0 | – | – |
| Other | 92.5 | – | – |
In addition, interest is payable on any unutilized credit. Based on the current interest and currency exchange rates on 31 December 2013 the annual interest payments are around SEK 2 million, calculated on utilized amounts as at year-end.
Semcon's accounting takes place in Swedish kronor, but the Group has business in a number of countries around the world. This means that the Group is exposed to currency risks. The majority of the currency risk is made up of translation differences that arise when foreign companies' income statements are translated to SEK. A change in EUR against the SEK of +/- 10 per cent would affect profits before tax by around SEK 5-7 million and the profit after tax and shareholders' equity by around SEK 3-5 million.
Semcon has export income and expenses in a number of currencies, meaning the Group is therefore exposed to currency fluctuations. This currency risk is currently very limited and known as transaction exposure and affects the Group's operating profit.
The foreign subsidiaries' net assets make up an investment in foreign currency that upon consolidation causes translation difference. To limit the negative effects of the translation differences on the Group's shareholders' equity most of the hedging takes place through loans in the equivalent foreign currency.
Exchange rate changes also affect the Group's profit in connection with translation of the income statements in foreign subsidiaries to Swedish kronor. Expected future profits in foreign subsidiaries are not hedged.
Most financial assets consist of accounts receivable and processed but non-utilized income. The creditworthiness of these items that have neither fallen for payment due or in need of impairment have been assessed according to external credit ratings (if available) or the customer's payment history. All new customers are checked with respect to their creditworthiness, and monitoring is also carried out for existing customers. The Group's accounts receivable are largely made up of receivables of large international Swedish and German companies whose financial position is considered good. Certain customers have a particular credit insurance policy where the self-risk part is 10 per cent. Larger customers have a bank guarantee as security. Of the Group's total accounts receivable most are accounts receivable not fallen due for payment. The majority of the due and non-reserved accounts receivable have very short maturity date. The joint credit risk is considered small. The maximum credit exposure is countered by the assets' booked value. The maturity structure of accounts receivable is explained in Note 17 on page 68.
Cash and bank balances are made up of bankable funds at all the major European banks and the assets are not considered to pose any risk. The maximum credit exposure is countered by the assets' booked value.
The Group's aim regarding its capital structure is to safeguard the Group's ability to continue its business, so that it can continue to generate dividends for shareholders and benefits to other interested parties, and maintain an optimal capital structure to keep capital costs down. One of Semcon's financial aims is to have an equity/assets ratio of over 30 per cent. This key figure is calculated as shareholders' equity divided by total assets. At the end of 2013, the equity/assets ratio was 48.5 per cent (46.6). To
maintain or adjust the capital structure, the Group can change the dividend paid to shareholders, repay capital to shareholders, issue new shares, or sell assets to reduce liabilities. Loans are restricted by financial covenants in the loan agreement with the bank that is more clearly described in the section "Financing risks".
For accounts receivable, accounts payable and other non interest-bearing receivables and liabilities, reported at the accrued acquisition value with deductions for possible impairment, the fair value is judged to correspond to the reported value.
The Group's borrowing is mainly carried out with short-term fixed interest rates. The fair value is therefore judged to correspond with the reported value.
The Group's currency forward agreements are set by using currency forward rates on the balance sheet day, where the resulting value is discounted to the present value. The fair value of these contracts amounts to SEK –6.6 million (3.0).
There are no other financial liabilities which are measured at fair value through the income statement or any financial assets that can be sold.
When compiling the annual report in accordance with IFRS and good accounting practices, the Group has made estimations and assessments about the future, which affect the reported values of the assets and liabilities. These estimations and assessments are valued on an ongoing basis and are based on historical experience and other factors considered reasonable under the prevailing conditions. In cases where it is not possible to fix the reported value of assets and liabilities through information from other sources these estimations and assessments are the basis of the valuation. Using other estimations and assessments the result can differ and the actual result will, according to definition, rarely be equivalent to the actual result. The estimations and assessments have the greatest influence over Semcon's results and position as detailed below.
Every year the Group tests impairment for goodwill in accordance with Note 2 on page 53 above concerning accounting policies. The examination requires an estimate of parameters that affect the future cash flow and stipulation of a discount factor. The recoverable amount of the cash-generating units has thereafter been set using an estimate of the value in use. In Note 13 on page 65 there is an account of the significant estimations carried out upon examining the need for goodwill impairment. As of 31 December 2013 the reported value of the consolidated goodwill was SEK 440.3 million.
The reported deferred tax assets in the Group concerning loss carry-forwards amounted to SEK 40.7 million on 31 December 2013. The reported value of these tax assets was examined on the balance sheet date and it is judged likely that the tax relief can be used against future tax. The tax assets refer to Germany where loss carry-forwards can be used for an unlimited period. A positive result in 2013 means that the Group's business in this country is expected to generate a surplus and therefore it is considered that the loss carry-forwards attributable to the tax assets may be used against future taxable surplus.
Changes to estimations about forecasted future taxable profit might result in differences in valuing deferred tax assets. If the future taxable profit in Germany deviates by 10 per cent from management's estimate then the Group would be forced to cut its deferred tax asset by SEK 4 million.
Reporting of provisions for defined benefit pension plans and other pension benefits, is based on actuarial estimates that use the assessments for discount rates, future wage increased, staff turnover and demographic conditions. The assessments made concerning these estimates affect the value of the total pension obligations and major changes to the estimates would be able to affect the Group's results and position. The same is true of a change to the estimates concerning whether pension insurances in Alecta should be reported as a defined-contribution plan or not. On 31 December 2013 the Group's pension allocations amounted to SEK 51.4 million. If the discount rate changed by 0.25 per cent then the current value of the pension obligations would need to be adjusted by around SEK 2 million. Actuarial assumptions appear in Note 21 on page 69.
The assessment of loss risks in projects is based on estimates of the results of projects in progress. Some projects stretch over the long-term, which is why it cannot be discounted that the result of the projects in progress can have an effect on the Group's results and position.
The Group's three business areas, Automotive R&D, Design & Development and Informatic make up the Group's reportable operating segments. Automotive R&D provides services aimed at concept, design, calculation, construction, prototyping, testing, simulation and production for customers mainly in the global automotive industry. Design & Development works mainly with industrial design, product development, plant design and production development. Informatic provides complete information solutions for interactive market communication and aftermarket. These three segments are the highest level at which management and the Board carries out follow-ups. The highest executive position in the Group is CEO, who together with the rest of the senior executives, runs the business. The two first operating segments receive revenues mainly from engineering services for designing, developing products and production, while Informatic mainly receives its revenues by developing product information for entire product lifecycles. No other information concerning income divided between services
is given as it is not part of financial reporting, and the cost of producing the information is not justifiable.
The segments' accounting policies follow the same policies as when compiling the consolidated accounts, which appear in Note 2 on page 53.
The Group reports sales between the segments at current market prices. These sales between the segments are meanwhile relatively small and have been eliminated directly in each segment, i.e. sales that are reported are for sales to external customers. The senior executives follow up the segments' earnings based on the operating profit. Financial items are not divided by segment because they are affected by measures taken by the central financial manager. Taxes aren't divided by segment either. The segments' assets and liabilities include directly attributable items together with such items that can reliably be allocated to the respective segment. The Group's long-term borrowing is not considered as a liability by the segments and instead refers to the financial management.
| Automotive R&D | Design & Development |
Informatic | Non-allocated items |
The Group total | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| SEK m | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 |
| Income | 1,435.5 | 1,428.4 | 609.6 | 714.9 | 463.3 | 427.6 | – | – | 2,508.4 | 2,570.9 |
| Operating profit/loss | 50.5 | 94.2 | 20.1 | 48.0 | 54.2 | 51.0 | – | – | 124.8 | 193.3 |
| Net financial items | –7.0 | –7.4 | –7.0 | –7.4 | ||||||
| Profit/loss before tax | 50.5 | 94.2 | 20.1 | 48.0 | 54.2 | 51.0 | –7.0 | –7.4 | 117.8 | 185.9 |
| Other disclosures | ||||||||||
| Non interest-bearing assets | 612.3 | 562.1 | 297.3 | 311.9 | 121.2 | 121.8 | – | – | 1,030.8 | 995.8 |
| Shares in associated companies | – | – | 18.8 | 19.1 | – | – | – | – | 18.8 | 19.1 |
| Total Non interest-bearing assets | 612.3 | 562.1 | 316.1 | 331.0 | 121.2 | 121.8 | – | – | 1,049.6 | 1,014.9 |
| Non-divided assets | – | – | – | – | – | – | 256.0 | 228.4 | 256.0 | 228.4 |
| Total assets | 612.3 | 562.1 | 316.1 | 331.0 | 121.2 | 121.8 | 256.0 | 228.4 | 1,305.6 | 1,243.3 |
| Operational liabilities | 228.3 | 204.2 | 116.6 | 104.0 | 133.3 | 78.7 | – | – | 478.2 | 386.9 |
| Non-divided liabilities | – | – | – | – | – | – | 194.0 | 277.3 | 194.0 | 277.3 |
| Total consolidated liabilities | 228.3 | 204.2 | 116.6 | 104.0 | 133.3 | 78.7 | 194.0 | 277.3 | 672.2 | 664.2 |
| Shareholders' equity | – | – | – | – | – | – | 633.4 | 579.1 | 633.4 | 579.1 |
| Total shareholders equity and liabilities |
228.3 | 204.2 | 116.6 | 104.0 | 133.3 | 78.7 | 827.4 | 856.4 | 1,305.6 | 1 243.3 |
| Investments | 21.1 | 15.6 | 0.5 | 0.9 | 0.9 | 4.6 | 1.6 | 0.8 | 24.1 | 21.9 |
| Depreciation | 13.8 | 13.7 | 1.5 | 2.5 | 2.0 | 1.6 | 4.4 | 5.9 | 21.7 | 23.7 |
| Sales according to geographic location |
Intangible assets and tangible fixed assets |
Investments | ||||
|---|---|---|---|---|---|---|
| Geographic location | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 |
| Sweden | 1,118.5 | 1,220.0 | 263.8 | 262.9 | 8.6 | 2.9 |
| Germany | 950.9 | 921.3 | 225.2 | 213.6 | 13.7 | 13.2 |
| Other | 439.0 | 429.6 | 7.1 | 9.9 | 1.8 | 5.8 |
| Total | 2,508.4 | 2,570.9 | 496.1 | 486.4 | 24.1 | 21.9 |
The Group only has one external customer that contributes to more than 10 per cent of the Group's sales. Income from this customer amounted to SEK 278.9 million (252.6) in 2013, which is 11.1 per cent (9.8) of sales. This income relates to Automotive R&D.
Of net sales, income from services accounts for 94.5 per cent (93.5). Other sales comprise licenses, sales of computers, assignment computers, training, sales of materials and goods in projects. The parent company's sales attributable to Group companies amounted to SEK 26.3 million (26.3) and purchases amounted to SEK 0.9 million (0.4).
| The Group | Parent company | |||
|---|---|---|---|---|
| SEK m | 2013 | 2012 | 2013 | 2012 |
| Deloitte | ||||
| Auditing assignments | 2.1 | 2.2 | 0.4 | 0.3 |
| Services in addition to auditing assignments | 0.1 | 0.2 | 0.1 | 0.2 |
| Tax consultancy | 0.1 | – | – | – |
| Other services | – | – | – | – |
| Total | 2.3 | 2.4 | 0.5 | 0.5 |
| Other auditors | ||||
| Auditing assignments | 0.2 | 0.1 | – | – |
| Total | 0.2 | 0.1 | – | – |
| Total remuneration to auditors | 2.5 | 2.5 | 0.5 | 0.5 |
| 2013 | 2012 | |||
|---|---|---|---|---|
| The Group | Average number of employees |
of whom women, % |
Average number of employees |
of whom women, % |
| Sweden | 1,298 | 27 | 1,369 | 26 |
| Germany | 1,045 | 21 | 1,009 | 19 |
| Brazil | 155 | 20 | 168 | 24 |
| UK | 127 | 16 | 110 | 15 |
| India | 119 | 6 | 119 | 8 |
| Hungary | 81 | 27 | 66 | 27 |
| China | 47 | 49 | 48 | 63 |
| Spain | 2 | – | 2 | – |
| The Group total | 2,874 | 23 | 2,891 | 23 |
| Parent company | ||||
| Sweden | 11 | 45 | 10 | 40 |
| Parent company total | 11 | 45 | 10 | 40 |
| 2013 | 2012 | |||||
|---|---|---|---|---|---|---|
| SEK m | Total salaries and other remuneration |
Payroll overheads |
Of which pension costs |
Total salaries and other remuneration |
Payroll overheads |
Of which pension costs |
| Salaries, remuneration and payroll overheads | ||||||
| Parent company | 12.8 | 8.8 | 3.2 | 13.2 | 9.9 | 4.0 |
| Subsidiaries | 1,240.2 | 384.7 | 70.8 | 1,215.0 | 386.0 | 74.2 |
| The Group total | 1,253.0 | 393.5 | 74.0 | 1,228.2 | 395.9 | 78.2 |
| 2013 | 2012 | |||||
| SEK m | Total salaries and other remuneration |
Of which bonuses |
Pension costs |
Total salaries and other remuneration |
Of which bonuses |
Pension costs |
| Of which remuneration to senior executives | ||||||
| CEO of the parent company | 2.8 | – | 1.0 | 3.4 | 0.8 | 1.5 |
| CEO of subsidiaries | 3.2 | 0.2 | 0.1 | 4.0 | – | 0.2 |
| The Board | 1.5 | – | – | 1.2 | – | – |
| Other senior executives | 11.0 | 0.3 | 2.7 | 13.1 | 1.8 | 3.5 |
Remuneration to the CEO. According to the terms of the CEO's employment contract, upon notice of dismissal from Semcon, severance pay will be paid for 12 months. If the CEO resigns, notice time is 6 months. A bonus may also be paid in accordance with the rules established by the Board and at a maximum of 6 times the fixed monthly salary. A maximum bonus of SEK 1.8 million was paid in 2011, which was exchanged and paid as a pension provision. The contract also includes a non-competition clause, which limits the CEO from running a competitive business for 24 months from the time of termination of employment. The CEO is entitled to a retirement benefit in the form of a pension scheme. The monthly premium for this pension scheme is 35 per cent of the fixed monthly salary.
The Board. Of the fees to the Board in 2013 the Chairman of the Board received remuneration amounting to SEK 500.000 (400.000). Other external members received SEK 250.000 (200.000). Board fees totalled SEK 1.5 million (1.2).
Other senior executives. Other senior executives, 9 individuals (10), refers to Semcon's senior management besides the company's CEO. Other senior executives are entitled to bonuses based on how well they meet their respective business targets. Bonuses paid will be a maximum six times the fixed monthly salary. The period of notice given to other senior executives is a maximum 12 months. The pension agreements for senior executives are paid in accordance with the ITP plan, except for one executive whose monthly premium is 35 per cent of salary. The amounts included in salaries and remuneration for senior executives refer solely to the periods when the employee was part of the senior management.
Gender of senior executives. Two of Semcon's five Board members are women. In 2012 the Group management team consisted of nine people, of which one woman.
Other. Remuneration to the Board is decided by the AGM after proposals by the nominations committee. Remuneration to the CEO and other senior executives is decided by the Board in its entirety. Benefits concerning company cars amounted to SEK 71.000 (71.000) for the CEO and SEK 497.000 (529.000) for other senior executives.
| The Group SEK m |
2013 | 2012 |
|---|---|---|
| Interest income | 1.2 | 1.8 |
| Other financial income | 0.1 | 0.1 |
| Total | 1.3 | 1.9 |
| Parent company SEK m |
2013 | 2012 |
| Interest income | 10.1 | 13.6 |
| Exchange rate differences | 15.9 | 10.1 |
| Total | 26.0 | 23.7 |
| The Group SEK m |
2013 | 2012 |
|---|---|---|
| Interest expenses | –5.6 | –7.3 |
| Exchange rate differences | –1.5 | –0.8 |
| Other financial expenses | –1.2 | –1.2 |
| Total | –8.3 | –9.3 |
| Parent company SEK m |
2013 | 2012 |
| Interest expenses | –1.8 | –3.2 |
| Other financial expenses | –1.0 | –1.1 |
| Total | –2.8 | –4.3 |
| The Group SEK m |
2013 | 2012 |
|---|---|---|
| Current tax | 26.7 | 20.0 |
| Tax concerning previous tax years | 0.1 | –0.3 |
| Deferred tax expense attributable to temporary differences | 8.7 | 32.9 |
| Deferred tax income attributable to temporary differences | –5.8 | –1.5 |
| Effect of change in tax rate | – | –6.4 |
| Total | 29.7 | 44.7 |
| Parent company SEK m |
2013 | 2012 |
| Current tax | 14.9 | 7.2 |
| Deferred tax expense attributable to temporary differences | – | 13.6 |
| Total | 14.9 | 20.8 |
| Differences between Group's reported tax and tax expense based on current tax rate | ||
| Reported profit/loss before tax | 117.8 | 185.9 |
| Tax according to current tax rate, 22.0 % (26.3) | 25.9 | 48.9 |
| Tax effect of: | ||
| Non-deductible expenses | 1.5 | 1.8 |
| Non-taxable income | –0.3 | –0.1 |
| Adjustments for previous years' tax | 0.1 | –0.3 |
| Effects of other tax rates abroad | 1.2 | –0.1 |
| Effects of amended tax rates | – | –6.4 |
| Other | 1.3 | 0.9 |
| Tax for the year | 29.7 | 44.7 |
| Differences between parent company's reported tax and tax expense based on current tax rate | ||
| Reported profit/loss before tax | 67.0 | 81.5 |
| Tax according to current tax rate, 22.0 % (26.3) | 14.9 | 21.4 |
| Tax effect of: | ||
| Non-deductible expenses | 0.3 | 0.6 |
| Non-taxable income | –0.3 | –1.2 |
| Tax for the year | 14.9 | 20.8 |
| Temporary differences apply in cases where assets or liabilities reported and taxable values are different. | ||
| The Group's temporary differences have resulted in deferred tax assets and deferred tax liabilities for the following items |
||
| Deferred tax assets | ||
| Loss carry-forwards | 40.7 | 46.6 |
| Temporary differences, inventories | 0.0 | 0.0 |
| Temporary differences, accounts receivable | 0.1 | 0.3 |
| Temporary differences, pension obligations | 4.5 | 4.2 |
Other 0.2 0.2 Netting against deferred tax liabilities –1.0 –1.2
| The Group SEK m |
2013 | 2012 |
|---|---|---|
| Deferred tax liabilities | ||
| Untaxed reserves | 2.7 | 3.8 |
| Accrued income reported in the Group | 16.4 | 18.0 |
| Equity hedge loan | 0.9 | 5.4 |
| Goodwill | 5.1 | 5.0 |
| Other | 3.0 | 3.2 |
| Netting against deferred tax assets | –1.0 | –1.2 |
| Total | 27.1 | 34.2 |
The taxable loss carry-forward is SEK 329.1 million (367.4). Of this, SEK 4.7 million (6.8) falls due within 5 years, SEK 0.0 (0.0) after 5 years and for the remaining 324.4 million (360.6) there is no maturity date. For SEK 193.5 million (212.0) of the taxable loss carry-forward no deferred taxes recoverable have been reported because of uncertainty when sufficient taxable surplus is reported in the future. Deferred income taxes recoverable have been reported at SEK 40.7 million (46.6) as it is judged likely, due to positive results in 2013, that the taxable surplus will be available in future, against which this deficit can be offset.
| 2013 | 2012 | |||
|---|---|---|---|---|
| The Group | Before dilution | After dilution | Before dilution | After dilution |
| Earnings attributable to parent company's share holders, SEK m |
88.1 | 88.1 | 141.2 | 141.2 |
| Weighted average number of shares during the year, (000) |
17,970 | 18,113 | 17,956 | 18,113 |
| Earnings per share, SEK | 4.90 | 4.86 | 7.86 | 7.80 |
Earnings per share before dilution are calculated by dividing earnings attributable to parent company shareholders by a weighted average number of outstanding ordinary shares during the period excluding buy-back shares held as own shares by the parent company, see Note 20 on page 69.
When calculating earnings per share after dilution the weighted number of outstanding ordinary shares is adjusted for the dilution effect of all potential ordinary shares.
| The Group SEK m |
2013 | 2012 |
|---|---|---|
| Goodwill | ||
| Opening acquisition value | 616.3 | 622.4 |
| Acquisitions | – | 4.2 |
| Translation difference for the year | 10.5 | –10.3 |
| Closing accumulated acquisition value | 626.8 | 616.3 |
| Opening impairment | –183.0 | –186.4 |
| Translation difference for the year | –3.5 | 3.4 |
| Closing accumulated impairment | –186.5 | –183.0 |
| Closing booked value | 440.3 | 433.3 |
| Specification of goodwill Goodwill is distributed across the Group's business areas as follows: |
||
| Automotive R&D | 272.3 | 265.5 |
| Design & Development | 163.6 | 163.6 |
| Informatic | 4.4 | 4.2 |
| Closing booked value | 440.3 | 433.3 |
Testing for impairment losses for goodwill is carried out annually and when there are indications that impairment losses are required. Recoverable amounts for each business area (cash-generating units) have been set according to management's calculated usable value. These calculations use the estimated future cash flow for 2014. The budgeted cash flow is based on the current year's results, orders and management's expectations for market development in 2014. For 2015-2019 an assumption has been made that revenues will rise by 3 per cent annually and then a long-term growth of 2 per cent. Sensitivity analyses have been carried out and if the assumed growth worsens by one per cent then there will be no need for impairment.
The cash flow has been discounted with a weighted capital cost equivalent to 9 per cent. This is calculated using the Group's targeted capital structure, current risk-free long-term interest rate and a risk premium for shareholders' equity of 5 per cent and a margin for borrowed capital of 1 per cent. If the discount rate after tax increased by 1 per cent to 10 per cent, it means that the beneficial value is still greater than the reported value.
Further assumptions used when calculating value in use for 2013:
| Share of income per currency | ||||
|---|---|---|---|---|
| Exchange rates and share of income |
Exchange | Automotive R&D | Design & Development | Informatic |
| SEK | 1.00 | 26% | 93% | 53% |
| EUR | 8.50 | 61% | 2% | 8% |
| GBP | 10.30 | 7% | – | 27% |
| Other | 6% | 5% | 12% | |
| 100% | 100% | 100% | ||
| Average tax rates | 28% | 23% | 22% |
The estimated value in use for 2013 exceeded the reported values by a good margin. The same long-term growth, and weighted capital cost were used for estimating value in use for 2012. The rates used for 2012 were 28 per cent Automotive R&D, 23 per cent for Design & Development and 23 per cent for Informatic. The exchange rates used in 2012 were EUR 8.70 and GBP 10.50.
| The Group SEK m |
2013 | 2012 |
|---|---|---|
| Other intangible assets | ||
| Opening acquisition value | 88.2 | 87.4 |
| Acquisitions | – | 0.1 |
| Sales/disposals | –3.3 | – |
| Investments | 5.9 | 3.3 |
| Translation difference for the year | 0.6 | –2.6 |
| Closing accumulated acquisition value | 91.4 | 88.2 |
| Opening depreciation | –70.5 | –66.3 |
| Depreciation for the year | –6.6 | –6.4 |
| Sales/disposals | 3.2 | – |
| Translation difference for the year | –0.9 | 2.1 |
| Closing accumulated depreciation | –74.8 | –70.5 |
| Closing booked value | 16.6 | 17.7 |
Other intangible assets in the Group consist of licences and computer software. Depreciation occurs linearly over the period of use.
| The Group SEK m |
2013 | 2012 |
|---|---|---|
| Plant and machinery | ||
| Opening acquisition value | 93.8 | 94.7 |
| Investments | 4.3 | 5.1 |
| Sales/disposals | –2.5 | –3.2 |
| Reclassification | 0.8 | – |
| Translation difference for the year | 2.0 | –2.8 |
| Closing accumulated acquisition value | 98.4 | 93.8 |
| Opening depreciation | –78.8 | –78.6 |
| Sales/disposals | 2.5 | 3.1 |
| Reclassification | – | –0.1 |
| Depreciation for the year | –4.2 | –5.4 |
| Translation difference for the year | –1.8 | 2.2 |
| Closing accumulated depreciation | –82.3 | –78.8 |
| Closing booked value | 16.1 | 15.0 |
| Inventories, computers and equipment | ||
| Opening acquisition value | 158.9 | 164.2 |
| Acquisitions | – | 0.2 |
| Investments | 13.9 | 13.5 |
| Sales disposals | –6.9 | –13.7 |
| Reclassification | –0.8 | 0.1 |
| Translation difference for the year | 5.3 | –5.4 |
| Closing accumulated acquisition value | 170.4 | 158.9 |
| The Group SEK m |
2013 | 2012 |
|---|---|---|
| Opening depreciation/impairment | –138.5 | –144.1 |
| Acquisitions | – | –0.1 |
| Sales/disposals | 6.9 | 13.3 |
| Reclassification | – | –0.1 |
| Impairment for the year | –10.9 | –11.9 |
| Translation difference for the year | –4.8 | 4.4 |
| Closing accumulated depreciation/impairment | –147.3 | –138.5 |
| Closing booked value | 23.1 | 20.4 |
| Parent company SEK m |
2013 | 2012 |
| Inventories, computers and equipment | ||
| Opening acquisition value | 1.7 | 1.7 |
| Closing accumulated acquisition value | 1.7 | 1.7 |
| Opening depreciation | –1.2 | –0.9 |
| Depreciation for the year | –0.3 | –0.3 |
| Closing accumulated depreciation | –1.5 | –1.2 |
| Closing booked value | 0.2 | 0.5 |
| Parent company | Group company | Capital share, % |
Voting rights, % |
Booked value, SEK m |
Co.reg.no | Registered office |
|---|---|---|---|---|---|---|
| Semcon AB | Semcon Förvaltnings AB | 100 | 100 | 58.8 | 556530-6403 | Göteborg |
| Semcon Informatic AB | 100 | 100 | 15.5 | 556606-0363 | Göteborg | |
| Semcon International AB | 100 | 100 | 9.8 | 556534-4651 | Göteborg | |
| Total | 84.1 |
The accumulated acquisition value of shares in Group companies amounts to SEK 307.1 million. A statutory specification of company registration number and registered office of all Group companies in the Group can be obtained from Semcon's head office.
| Parent company | Group company | Capital share, % |
Voting rights, % |
Booked value, SEK m |
Co.reg.no | Registered office |
|---|---|---|---|---|---|---|
| Semcon International AB | Kongsberg Devotek AS | 30 | 30 | 18.8 | 883,602,382 | Kongsberg, Norway |
| Total | 18.8 | |||||
| SEK m | 2013 | 2012 | ||||
| Shares in associated companies | ||||||
| Opening booked value | 19.1 | 17.7 | ||||
| Share of earnings | –0.3 | 1.4 | ||||
| Closing booked value | 18.8 | 19.1 |
The share in associated companies' revenue was SEK 43.2 million (43.8), share of assets was SEK 11.7 million (19.1) and share of liabilities was SEK 7.5 million (13.3).
| 2013 | 2012 | |||||
|---|---|---|---|---|---|---|
| The Group SEK m |
Gross | Reserve | Reported value |
Gross | Reserve | Reported value |
| Accounts receivable, not due for payment | 318.9 | – | 318.9 | 307.4 | – | 307.4 |
| Due for payment, 1–30 days | 47.3 | – | 47.3 | 27.6 | – | 27.6 |
| Due for payment, 31–60 days | 3.0 | – | 3.0 | 5.9 | – | 5.9 |
| Due for payment, over 60 days | 7.5 | –5.4 | 2.1 | 10.7 | –5.0 | 5.7 |
| Total | 376.7 | –5.4 | 371.3 | 351.6 | –5.0 | 346.6 |
| The Group SEK m |
2013 | 2012 | ||||
| Provisions for bad debts | ||||||
| Provisions at the start of the year | –5.0 | –15.2 | ||||
| Reservations for expected losses | –1.7 | –3.8 | ||||
| Confirmed losses | – | 11.4 | ||||
| Actual payments of reserved receivables | 1.4 | 2.4 | ||||
| Translation difference | –0.1 | 0.2 | ||||
| Provisions at year-end | –5.4 | –5.0 |
Accrued non-invoiced income is reported in the consolidated accounts by project at the net value of the invoice in line with processing minus invoiced sub-amounts and deductions for possible losses. In 2013 the accrued non-invoiced income stood at SEK 115.5 million (123.0).
Receivables from customers are reported in the balance sheet for the projects for which the total of the assignment expense until the closing day exceeds the partly invoiced amount including deductions for possible losses. Customer liabilities are reported for projects for which partly invoiced amounts exceed the total of the assignment expense.
No value is shown in the Swedish subsidiaries for work in progress, but the amount is accounted for at the time of invoicing, amounting to SEK 75.7 million (73.6).
| The Group SEK m |
2013 | 2012 |
|---|---|---|
| Processed but non-invoiced income | ||
| Income/assignment expenses | 328.2 | 247.1 |
| Partly invoiced amount | –155.5 | –72.7 |
| Total | 172.7 | 174.4 |
| Invoiced but non-processed income | ||
| Income/assignment expenses | 82.2 | 264.4 |
| Partly invoiced amount | –139.4 | –315.8 |
| Total | –57.2 | –51.4 |
| The Group SEK m |
2013 | 2012 |
|---|---|---|
| Accrued income | 9.8 | 3.7 |
| Prepaid expenses | 19.9 | 23.2 |
| Total | 29.7 | 26.9 |
| 500,000 500,000 7 March 1997 Formation of company 4,003,700 4,503,700 14 April 1997 Cash issue 496,300 5 ,000,000 14 April 1997 Non-cash issue 12,338,521 17,338,521 25 April 1997 Cash issue 52,500 17,391,021 31 August 2001 Cash issue 351,245 17,742,266 1 June–31 December 2006 Conversion of promissory note 40,268 17,782,534 1 January–31 May 2007 Conversion of promissory note 18 June 2008 New issue 330,000 18,112,534 |
Date | Type of issue | Number of shares issued |
Share capital after issue, SEK |
|---|---|---|---|---|
The parent company's holding of own shares on 31 December was 142,718 (142,718).
Commitments for retirement pensions and family pensions for salaried employees in Sweden are safeguarded via insurance with Alecta. According to a statement from the Swedish Financial Accounting Standards Council UFR 3, this is a defined benefit plan that encompasses several employees. The Group does not have access to such information that makes it possible to report this plan as a defined benefit plan for the 2013 financial year. Therefore the ITP pension plans secured via insurance with Alecta are reported as defined contribution plans. The plans reported as defined benefit plans below are in Germany. The company's costs and the value of the outstanding obligations have been calculated with the help of actuarial calculation that aims to set the current value of the obligations.
| The Group SEK m |
2013 | 2012 | 2011 | 2010 | 2009 |
|---|---|---|---|---|---|
| Reconciliation of pension obligations | |||||
| Current value of pension obligations | 67.8 | 62.1 | 61.9 | 62.1 | 70.6 |
| Managed assets | –16.4 | –15.4 | –15.9 | –15.9 | – |
| Total | 51.4 | 46.7 | 46.0 | 46.2 | 70.6 |
| Non-reported actuarial profit (+) and loss (–) | – | 0.9 | 3.0 | 2.2 | 2.4 |
| Net provisions in the balance sheet | 51.4 | 47.6 | 49.0 | 48.4 | 73.0 |
| The Group SEK m |
2013 | 2012 | |||
| Specification of changes in the defined benefit obligation | |||||
| At the start of the year | 62.1 | 61.9 | |||
| Costs for employment during the current year | 1.1 | 1.0 | |||
| Interest expenses | 2.4 | 2.6 | |||
| Payment of pensions | –3.1 | –3.1 | |||
| Actuarial profit (+) or loss (-) | 2.8 | 2.1 | |||
| Exchange rate differences | 2.5 | –2.4 | |||
| At year-end | 67.8 | 62.1 |
| The Group SEK m |
2013 | 2012 |
|---|---|---|
| Specification of changes in managed assets | ||
| At the start of the year | 15.4 | 15.9 |
| Plan payments paid | – | –0.3 |
| Return on managed assets | 0.4 | 0.3 |
| Exchange rate differences | 0.6 | –0.5 |
| At year-end | 16.4 | 15.4 |
| Specification of managed assets | ||
| Shares | 0.8 | 0.4 |
| Interest-bearing securities | 11.8 | 11.1 |
| Cash and bank balances | 3.5 | 3.7 |
| Other | 0.3 | 0.2 |
| Total managed assets | 16.4 | 15.4 |
| Specification of changes in pension provisions | ||
| At the start of the year | 47.6 | 49.0 |
| Net cost reported in the income statement | 3.1 | 3.3 |
| Payment of pensions | –3.1 | –3.1 |
| Plan payments paid | – | 0.3 |
| Actuarial profit (+) or loss (-) | 1.9 | – |
| Exchange rate differences | 1.9 | –1.9 |
| At year-end | 51.4 | 47.6 |
| Specification of total cost for pension payments reported in the income | ||
| statement | 51.4 | 47.6 |
| Cost for defined benefit plans | ||
| Costs for employment during the current year | –1.1 | –1.0 |
| Yield on managed assets | 0.4 | 0.3 |
| Interest expenses | –2.4 | –2.6 |
| Costs for defined benefit plans | –3.1 | –3.3 |
| Costs for defined contribution plans | –72.9 | –77.2 |
| Total costs reported in the income statement | –76.0 | –80.5 |
| Of which: | –74.0 | –78.2 |
| Amounts that negatively affected the operating profit/loss (staff costs) | –2.0 | –2.3 |
| Amounts that negatively affected financial income and costs Total costs reported in the income statement |
–76.0 | –80.5 |
| Significant actuarial assumptions, % | ||
| Discount rate | 3.9 | 4.3 |
| Expected salary increase | 3.0 | 3.0 |
| Future pension increase | 1.5 | 1.5 |
Expenses during the year for ITP-2 pension insurance policies signed with Alecta amounted to SEK 30.5 million (34.7). The defined benefit plan premiums for retirement pensions and family pensions are individually calculated and depend on factors including salary, previously accrued pensions and expected remaining period of active service. The collective consolidation level is the market value of Alecta's assets as a percentage of the insurance commitment calculated according to Alecta's actuarial methods and assumptions, which do not comply with IAS 19. The collective consolidation level is usually permitted to vary between 125 and 155 per cent. If Alecta's collective consolidation level falls below 125 per cent or exceeds 155 per cent then measures must be taken to create the conditions for the consolidation level to return to normal. If the consolidation level falls, then one measure might be to raise the agreed price for new subscriptions and to increase existing benefits. If the consolidation level rises, then one measure might be to introduce premium reductions. At year-end 2013 Alecta's surplus in the form of the collective consolidation level was 148 per cent (129).
Note 22 Borrowings
| The Group SEK m |
2013 | 2012 |
|---|---|---|
| Long-term | ||
| Liabilities to credit institutions | – | 129.2 |
| Total long-term | – | 129.2 |
| Short-term | ||
| Liabilities to credit institutions | 94.7 | – |
| Total short-term | 94.7 | – |
| Total borrowings | 94.7 | 129.2 |
| Parent company SEK m |
2013 | 2012 |
| Long-term | ||
| Liabilities to credit institutions | – | 153.6 |
| Total long-term | – | 153.6 |
| Short-term | ||
| Liabilities to credit institutions | 98.9 | – |
| Total short term | 98.9 | – |
| Total borrowings | 98.9 | 153.6 |
The loan was taken out for the acquisition of Group companies and reported as translated to the acquisition date's rate in the parent company, according to the method for net investments.
Of the Group's permitted overdraft facility of SEK 153.3 million (153.3), SEK 5.3 million has been utilized. The credit runs on an annual basis. Of the parent company's permitted overdraft facility of SEK 150.0 million (150.0), SEK 5.3 million (0) has been utilized.
| The Group SEK m |
2013 | 2012 |
|---|---|---|
| Staff-related costs | 166.4 | 169.2 |
| Other items | 64.8 | 55.3 |
| Total accrued expenses and prepaid income | 231.2 | 224.5 |
| Parent company SEK m |
2013 | 2012 |
| Staff-related costs | 3.8 | 7.3 |
| Other items | 8.7 | 2.4 |
| The Group SEK m |
2013 | 2012 |
|---|---|---|
| For rental guarantees | ||
| Frozen bank assets | 2.4 | 2.3 |
| Total pledged assets | 2.4 | 2.3 |
| The Group SEK m |
2013 | 2012 |
|---|---|---|
| Conditional loan, Swedish Energy Agency | 3.8 | 3.7 |
| Total contingent liabilities | 3.8 | 3.7 |
| Parent company SEK m |
2013 | 2012 |
| Guarantees provided | 0.5 | 0.7 |
| Total contingent liabilities | 0.5 | 0.7 |
No acquisitions or divestment of companies have been carried out.
On 1 October 2012, Semcon acquired 100 per cent of the shares in Comet Computer GmbH and Comet Communication GmbH, both based in Munich. The companies are active in the product information sector and are included as part of the Informatic business area.
| The Group SEK m |
2013 | 2012 |
|---|---|---|
| Acquisitions | ||
| Tangible assets | – | 1.0 |
| Other intangible assets | – | – |
| Current assets | – | 2.4 |
| Long-term liabilities | – | –2.2 |
| Current liabilities | – | –2.4 |
| Net assets and liabilities | – | –1.2 |
| Intangible assets, goodwill | – | 4.2 |
| Total purchase price | – | 3.0 |
| Liquid assets in acquired companies | – | –0.5 |
| Effect on the Group's liquid assets | – | 2.5 |
On the acquisition of the Comet companies, the purchase price was greater than the book value of the net assets, resulting in acquisition analyses giving rise to goodwill. The acquisition of the consulting firm meant mainly acquiring human capital in the form of employee competence, which is why the acquired intangible assets of the companies have been allocated to goodwill.
Sales to associated companies amounted to SEK 0.0 million (0.0) with no purchases made. The JCE Group is Semcon AB's largest shareholder with a shareholding of 22.5 per cent (31 December 2013). Sales to companies in the JCE Group amounted to SEK 0.0 million (0.1) with no purchases made.
No transactions have taken place between associated companies or shareholders. For purchases/sales between Group companies, see Note 6 on page 60. Remuneration to senior executives appears in Note 8 on page 61.
The Group rents offices at around forty sites in Sweden, Brazil, the UK, India, China, Spain, Germany and Hungary. All rental contracts have been signed according to usual market rates and with normal duration periods. Besides the rental agreements the Group has a number of leasing contracts mainly for company cars. These contracts run in line with usual market terms and with a remaining contract term of one to three years.
| 2013 | 2012 | ||||||
|---|---|---|---|---|---|---|---|
| The Group SEK m |
Rent for premises |
Other | Total | Rent for premises |
Other | Total | |
| Within 1 year | 57.8 | 10.5 | 68.3 | 53.8 | 11.0 | 64.8 | |
| Between 1 and 5 years | 146.9 | 13.0 | 159.9 | 153.6 | 8.8 | 162.4 | |
| More than 5 years | 115.1 | – | 115.1 | 115.9 | – | 115.9 | |
| Future minimum leasing charges | 319.8 | 23.5 | 343.3 | 323.3 | 19.8 | 343.1 | |
| Minimum leasing charges for the year | 64.6 | 10.9 | 75.5 | 62.6 | 10.8 | 73.4 | |
| Parent company SEK m |
|||||||
| Within 1 year | – | 0.5 | 0.5 | – | 0.7 | 0.7 | |
| Between 1 and 5 years | – | 0.2 | 0.2 | – | 0.4 | 0.4 | |
| More than 5 years | – | – | – | – | – | – | |
| Future minimum leasing charges | – | 0.7 | 0.7 | – | 1.1 | 1.1 | |
| Minimum leasing charges for the year | – | 0.6 | 0.6 | – | 0.5 | 0.5 |
No significant events have taken place since year-end 2013.
The Board and CEO give assurance that the consolidated accounts have been drawn up in accordance with the International Financial Reporting Standards as adopted by the EU and give a true account of the Group's position and results. The Annual Report has been drawn up in accordance with generally accepted accounting policies and gives a true account of the parent company's position and results. The Directors' Report for the Group and parent company give a fair overview of the development of the Group's and parent company's business, position and results and describe significant risks and uncertainty factors that the parent company and the Group companies face.
Göteborg, 14 March 2014
Kjell Nilsson Chairman of the Board Markus Granlund CEO
Marianne Brismar Board member
Gunvor Engström Board member
Håkan Larsson Board member
Christer Eriksson Board member
Kenneth Straschko Board member
Mats Sällberg Board member
Joakim Olsson Board member
Our audit was issued on 14 March 2014. Deloitte AB
Hans Warén Authorized accountant
To the annual general meeting of Semcon AB Corporate identity number 556539-9549
We have audited the annual accounts and consolidated accounts of Semcon AB for the financial year 2013. The annual accounts and consolidated accounts of the company are included in the printed version of this document on pages 41–74.
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 2013 and of its financial performance and its cash flows for the year then ended in accordance with the Annual Accounts Act, and 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 2013 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. The statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts.
We therefore recommend that the annual general 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 Semcon AB for the financial year 2013.
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.
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 we examined 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.
We recommend to the annual general meeting 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.
Göteborg, 14 March 2014 Deloitte AB
Hans Warén Auktoriserad revisor
The value of all assets such as equipment, accounts receivable and bank balances.
Cash flow for the year divided by the weighted average number of outstanding shares over the year adjusted for the dilution effect on potential shares.
The balance sheet total minus non interest-bearing provisions and liabilities.
Net borrowings divided by shareholders' equity including minority interests.
Profit/loss after tax attributable to the parent company's owners divided by the average number of outstanding ordinary shares excluding shares held as own shares by the parent company.
Profit/loss after tax attributable to the parent company's owners divided by the average number of outstanding shares adjusted for the dilution effect of potential shares.
Shareholders' equity as a percentage of the balance sheet total.
Profit before tax plus interest costs divided by interest costs.
Interest-bearing provisions and liabilities with deductions for liquid assets and interest-bearing receivables.
Operating profit as a percentage of net sales.
Price per share at year-end divided by the earnings per share after full dilution.
Price per share at year-end divided by net sales per share.
Profit before tax as a percentage of net sales.
Profit for the year after tax divided by the average shareholders' equity.
Profit before tax plus financial costs divided by the average capital employed.
Shareholders' equity divided by the number of shares at year-end adjusted for the dilution effect on potential shares.
Shareholders' equity divided by the number of shares at year-end excluding shares held as own shares by the parent company.
A set of regulations for how particular software communicate with another software.
Brazil, Russia, India and China.
Semcon's principle for the model front office/back office is that assignments and work should be carried out where we have the best skills and available resources. Back office carry out the main part of the work and the front office is responsible for project coordination and customer interaction.
Technology for supplying electricity over long distances with fewer energy losses compared with conventional AC technology.
Computer dedicated to perform one or more functions, usually integrated in a larger unit together with other components.
Lean production is a method for managing resources. The aim is to identify and eliminate all factors in a production process that don't create value for the end customer.
Collective name for the pharmaceutical, med-tech and bio-tech industries.
Development of equipment, tools and processes in order to produce a product.
A product's lifecycle on the market, i.e. from sale to scrapping.
The cycle from idea to end product.
An office that is physically situated far from the home environment, but network connections and software make it possible to work in a home environment computer system as if on site.
Semcon offices with cutting-edge skills in specific areas.
Excellence in Project Management. Project methodology developed by Semcon base don Ericsson's PROPS methodology.
Miriam Stribeck • Electronics engineer "The feel of the steering is the first thing you experience when you sit in a car, in addition to the exterior and interior impressions. This makes it extremely important. The settings are worked out by a team solely working on steering. They give me the different variables to work with, and then I put the changes into effect."
financial reports 77
1980 Semcon was founded in Västerås, Sweden. The name is an abbreviation of Scandinavian Engineering and Marketing consultants.
1983–1996 Expansion with new locations and added skills in Sweden.
1984 Head office moved to Göteborg, Sweden.
1994 International expansion starts. A project office opens in the UK.
1997 Semcon listed on the Swedish stock exchange on 26 May.
2000–2005 International expansion continues. New operations in Hungary and China.
2006 Company gets new main owner, JCE Group, which now owns around 22 per cent of Semcon's shares.
2007 Two major acquisitions, IVM Automotive in Germany and Caran in Sweden. Major outsourcing agreement with Jaguar Land Rover. Activities in Brazil, Spain and India.
2007 Sale of Zpider business area (the company's IT business).
2010 Semcon celebrates its 30th Anniversary as one of the leading companies in the technical consultancy industry.
2011 Several important business agreements, including Chinese Qoros Auto and several German vehicle manufacturers.
2013 New projects with German auto manufacturers carried out according to the FOBO model in Germany and Sweden.
Semcon's shares have been quoted on the NASDAQ OMX Stockholm since 1997, for small companies in the industry sector, under the SECM ticker.
The company's share price saw a positive trend in 2013 with a 26 per cent rise. Overall, the share price rose by SEK 12.50 from SEK 48.00 to SEK 60.50, representing a market capitalization of SEK 1,096 million. During the same period the OMX Stockholm PI index rose by 23 per cent. The highest price paid in 2013 was SEK 80.50 (11 July) and the lowest price paid was SEK 47.60 (8 February).
Since the EU's MiFiD directive was introduced at the end of 2007, shares can now be traded on other market sites than stock exchanges.
Examples of these market sites include Burgundy, Chi-X and Turquoise. The consequences of the directive mean that trading in Semcon shares has gradually increased away from Nasdaq OMX Stockholm, although still in small volumes.
Semcon's shares are quoted on the Nasdaq OMX Stockholm stock exchange and trading on this exchange represented 99 per cent of overall sales of shares in 2013. A total of 11.6 million Semcon shares were traded, valued at SEK 746 million, of which 11.5 million shares via the Nasdaq OMX Stockholm and 0.1 million shares via Burgundy. The turnover rate, calculated as the number of shares traded in relation to the overall number of shares in the company was 64 per cent.
Semcon's share capital on the closing day was SEK 18.1 million, divided between 18,112,534 ordinary shares all with a nominal value of SEK 1 each. Each ordinary share entitles the shareholder to one voting right and an equal right to a share of the company's assets and profits. Changes to the share capital and number of shares over time appear in Note 20 on page 69.
Semcon's holding of its own shares amounted to 142,718 (142,718).
Semcon did not have any share-related incentive schemes in 2013.
On 31 December 2013, Semcon had 3,782 shareholders (3,828). The registered amount of foreign ownership at year-end was 27.3 per cent (17.0) of which 11.1 per cent (4.4) is made up of owners in the UK, 7.4 per cent (4.1) in Finland and 5.9 per cent (3.4) in the US.
On 31 December the JCE Group owned 22.2 per cent (30.5) of Semcon's shares, Swedbank Robur Fonder 8.4 per cent (8.4), Nordea Investments Funds 6.3 per cent (-) and Handelsbanken Fonder 5.7 per cent (3.7). The ten largest shareholders controlled 61.2 per cent (64.3) of the share capital and voting rights, of which the three largest shareholders controlled 36.9 per cent (45.7).
One of Semcon's financial objectives is that dividends to shareholders over the long-term will be equivalent to at least one third of the profit after tax. In accordance with Semcon's dividend policy, consideration is given to the company's financial position and capital requirements for continued expansion. Based on reported results for 2013, the Board proposes that a dividend of SEK 2.50 per share be paid (2.00). Overall, the proposed dividend of 51 per cent of the Group's profit after tax amounts to SEK 45 million.
The record date for the dividend is proposed as Friday 2 May 2014.
Semcon actively informs the market about the company in order to facilitate accurate valuations of the company's shares and in 2013 held lots of meetings with representatives from financial institutions in Göteborg, Stockholm and at a number of locations around Europe. Equity market contacts are mainly carried out through quarterly financial reports, press releases, information at www.semcon.com and company presentations for investors and analysts. The company has also presented its activities at a number of investment meetings organized by the Swedish Association of Share Investors at a number of locations around Sweden. The financial information contacts are the Group's CEO, CFO and IR Manager. Enquiries can be made by contacting: [email protected]
Peter Trigarszky, [email protected] Enskilda Securities
Andreas Joelsson, [email protected]
| 2009 | 2010 | 3.83 | 7.80 | 4.86 | |
|---|---|---|---|---|---|
| –11.52 | –0.29 | 2011 | 2012 | 2013 | |
| Own shares | 1 | 142,718 | 0.8 | 8,634 |
|---|---|---|---|---|
| 100,001– | 25 | 13,316,639 | 73.5 | 805,657 |
| 10,001–100,000 | 74 | 2,107,435 | 11.6 | 127,500 |
| 1,001–10,000 | 571 | 1,595,121 | 8.8 | 96,505 |
| 501–1,000 | 555 | 466,847 | 2.6 | 28,244 |
| 1–500 | 2,556 | 483,774 | 2.7 | 29,268 |
| Size | No. of share holders |
No. of shares |
Votes, % |
Market value, SEK 000 |
Source: Euroclear Sweden AB shareholders' register on 31 December 2013.
| Name | No. of shares |
Share holding, % |
|---|---|---|
| JCE Group | 4,026,271 | 22.2 |
| Swedbank Robur Fonder | 1,521,764 | 8.4 |
| Nordea Investments Funds | 1,141,196 | 6.3 |
| Handelsbanken Fonder Re JPMEL | 1,037,645 | 5.7 |
| Andra AP-Fonden | 961,998 | 5.3 |
| JPM Chase | 705,458 | 3.9 |
| Fjärde AP-Fonden | 516,244 | 2.9 |
| Avanza Pension | 476,535 | 2.6 |
| AMF | 442,400 | 2.4 |
| Europea i Malmö AB | 277,000 | 1.5 |
| Total | 11,106,511 | 61.2 |
| Own shares | 142,718 | 0.9 |
| Other | 6,863,305 | 37.9 |
| Total | 18,112,534 | 100.0 |
Source: Euroclear Sweden AB shareholders' register on 31 December 2013.
Information concerning data per share over a five-year period appears on page 91.
This corporate governance report has been drawn up in accordance with Swedish corporate law and Semcon's Articles of Association. The Articles of Association regulates the alignment of the business, share capital and how and when the notice to attend the AGM takes place. The entire Articles of Association are available on Semcon's website semcon.com. Semcon also complies with other applicable Swedish and foreign laws and regulations.
Semcon applies the Swedish code of Corporate Governance and has no deviations to report. The current code is available at: www.bolagsstyrning.se.
The Annual General Meeting (AGM) is Semcon's highest decision-making body. The notice to attend the Annual General Meeting appears in the Articles of Association. The notice to attend must be published in the Swedish Official Gazette, Dagens Industri and at semcon.com. At AGMs, shareholders get the opportunity to place their voting rights and, in accordance with Swedish corporate law and Semcon's Articles of Association, to take decisions concerning the composition of the Board and other central issues. Shareholders or proxies can vote for the number of shares he/she owns or represents at the meeting. AGM decisions made at the AGM are usually made with a simple majority. A qualified majority is however sometimes required for some decisions.
The 2012 AGM was held on Friday 26 April 2013 at Semcon's head office in Göteborg. Representatives of 54 per cent of
| Representing | Voting rights, %* |
|
|---|---|---|
| Gabriel Berg | JCE Group | 22.2 |
| Evert Carlsson | Swedbank Robur Fonder | 8.4 |
| Martin Jonasson | Andra AP-fonden | 5.3 |
| Kjell Nilsson | Semcon AB | 0.2 |
| Total | 36.1 |
* No. of voting rights 28 February 2014
the share capital were present, of which underlying shares held by the members of the nominations committee represented 46 per cent.
Kjell Nilsson was elected to chair the meeting. The Board, Group management and a representative for Deloitte were present at the AGM.
The AGM also gave the Board, as in previous years, authorization to:
The full minutes and information from the AGM 2013 are available at: semcon.com
The 2013 AGM will be held on Monday 28 April 2014 at Semcon's head office in Göteborg. More information is available on Semcon's website at: www.semcon.se
Semcon has one share class, ordinary shares, with a quotient value of SEK 1 and entitle the owner to one voting right. There were 18,112,534 (18,112,534) ordinary shares at year-end.
On 31 December 2013, the JCE Group owned 22.2 per cent (30.5) of Semcon's shares, Swedbank Robur Fonder 8.4 per cent (8.4), Nordea Investments Funds 6.3 per cent (0), Handelsbanken Fonder 5.7 per cent (3.7) and Andra AP-fonden 5.3 per cent. Foreign ownership amounted to 27.3 per cent (17.0) and the number of shareholders amounted to 3,782 (3,828).
The summary below illustrates how responsibility for management and control of Semcon AB is divided between shareholders at eh AGM, the Board and the CEO according to external regulations and internal policies.
According to a decision made by the AGM, based on ownership statistics from Euroclear Sweden AB on 31 August for each respective year, the Chairman of the Board must convene the three largest shareholders in the company, who together shall appoint members of the nominations committee. If any of them decline then the right to nominate transfers to the next shareholder in terms of size, who doesn't already have the right to nominate members to the nominations committee. The member nominated by the largest shareholder will be the nominations committee's chairman.
The job of the nominations committee is to present proposals to the AGM concerning:
nominations committee. The nominations committee's members will be announced no later than six months before the AGM. Information about the nominations committee's members and how proposals to the AGM can be submitted are available in press releases at: semcon. com and in the Q3 report.
The nominations committee's members in 2013/2014 were Gabriel Berg, JCE Group AB (nominations committee's chairman), Evert Carlsson, Swedbank Robur Fonder, Martin Jonasson, Andra AP-fonden and Kjell Nilsson (Chairman of the Board). No remuneration was paid to the members. The nominations committee met four times and also held individual meetings with directly elected members in Autumn 2013. The basis of the nominations committee's work has mainly been the company's strategies and priorities and an evaluation of the Board and its size and structure. The nominations committee's proposal for election of chairman of the meeting, Board members, Chairman of the Board and auditors is given in the notice to attend the AGM and also published on Semcon's website. Questions to the nominations committee can be submitted to: valberedning@ semcon.se
The Board is ultimately responsible for the organization and management of Semcon's business activities. The work of the Board is regulated by the Companies' Act, the Articles of Association and the procedures adopted annually by the Board.
The Annual General Meeting elects Board members and their deputies in Semcon AB. The Board must consist of no fewer than three members and no more than eight members with no more than two deputies. Semcon AB's Board consists of five members elected by the AGM without deputies, of which two are female, and three members with their deputies elected by employees. Of the eight Board members, all are Swedish Citizens. The Board's structure meets the requirements for being independent set by the Swedish Code for Corporate Governance and in association with the NASDAQ OMX Stockholm. See table on page 83.
The Board held nine ordinary meetings in 2013. The Board has adopted a number of steering documents and policies. The Board oversees the CEO's work by continuously monitoring the business throughout the year, and is responsible that the organization, management and guidelines for administering the company's affairs are suitably put together and that there is suitable internal control. The Board is furthermore responsible for developing and following-up the company's strategies through plans and objectives, decisions regarding the acquisition and divestment of businesses and major investments. The Board also determines six- monthly and annual accounts. The work of the Board follows an agenda with fixed points for Board members. The Chairman leads and delegates Board work and ensures that urgent matters in addition to the fixed points on the agenda are dealt with. Attendance at the Board meeting is given in the table on page 83. Other salaried employees in the company take part in Board meetings as co-opted members, speakers and secretary.
No 5: Statutory meeting.
No 6: Interim financial statement, January–June, financial report.
All meetings took place at the company's head office in Göteborg.
The Board decided on a written agenda at the statutory Board meeting, close to the AGM. At the statutory Board meeting, the Board set its agenda, instructions for the CEO, subsidiary instructions, financial reporting instructions, certification procedures and financial policy.
Semcon has decided the entire Board will carry out the audit committee's tasks. The entire Board aims at keeping in close contact with the company's auditors so that it can satisfactorily follow significant issues concerning the company's accounts, reporting routines, management of company assets and internal control. These kinds of issues are therefore dealt with by the Board as a whole. To make sure that the Board's need for information is reached, the company's auditors report to the Board at least twice a year. Hans Warén, the responsible authorized public accountant at Deloitte, has reported their views over the past year about the Group's internal control and routines for reporting, financial accounting routines, reviewing the interim report for January–September and final balance sheet examination.
Semcon has decided that the entire Board will carry out the remuneration committee's tasks. Members of company management will not participate in this work.
Remuneration to the Board is decided by the AGM following proposals from the nominations committee. The AGM decided that remuneration to the Board in 2013/2014 should be SEK 500,000 for the Chairman and SEK 250,000 for other Board members not employed by the company.
The AGM decides on remuneration principles and other employment guidelines concerning the CEO and senior executives that report to him. Remuneration to the CEO is decided by the Board.
The CEO's remuneration and benefits are reported in note 8, page 61. Senior executives' remuneration is proposed by the CEO and decided by the Board. All senior executives in the Group management team are entitled to a fixed salary and a flexible salary of no more than six months' salary based on how well they meet their respective targets. The fixed salary is adjusted to conditions on the market and set every calendar year. Remuneration guidelines include the individuals, who during the time the guidelines applied, were part of the senior management team. The Board has the right to deviate from the guidelines if there is just cause to do so in special circumstances. Senior executives' remuneration and bonuses are reported in Note 8 on page 61.
Deloitte AB was re-elected as the company's auditor by the AGM in 2013 until the AGM in 2014. The company's main auditor is Hans Warén (born 1964). His other audit assignments include Akademiska Hus AB, Ekman & Co AB, Göteborgs Stadshus AB, Göteborg Energi AB, Parker Hannifin AB and SJ AB.
The auditors' interaction with the Board is described above. In addition to auditing, Deloitte AB also provides advice on accounting issues to Semcon. All services provided in addition to the statutory auditing service are checked specially to ensure there is no conflict of interest or disqualification issue. No senior executive at Semcon has held any position at Deloitte AB. Semcon's remuneration to auditors and purchase of services in addition to auditing, appear in Note 7 on page 60.
At year-end 2013 Group management consisted of the CEO and managers of the business areas and Group staff. See page 88.
Group management holds regular meetings led by the CEO. The meetings follow an agenda and are minuted. In addition to these meetings, a number of meetings are held where all, or parts of, the Group management are present along with to the employees from the Group. Group management works towards close contact with every business area in order to support and provide help and the tools to make the business more effective, marketing, business development and internal exchange of knowledge. From 1 January 2014 Group management consists of the CEO, CFO, general counsel and the business area managers.
Semcon's business activities were organized into three business areas in 2013. Semcon's organization is characterized by far-reaching decentralization, where every unit is highly independent with lots of authorization. Group management's control of the business areas takes place, in addition to continual contacts, mainly through monthly internal debriefings by business area managers and controllers and by internal meetings with members of the Group management. A new market-oriented organization with four business areas was introduced on 1 January 2014.
The Group has certification and decision-making that clearly regulates authorization at every level in the company, from individual employees to Semcon's management. The areas regulated include contract levels, handling quotes/tenders, investment, rental and leasing contracts, insurances, expenses and guarantees. The organization for an assignment/project varies according to the assignment/project's size, location and complexity. Semcon and its Swedish subsidiaries are certified and apply quality and environmental management systems according to ISO 9001:2008 and ISO 14001:2004, which are constantly reviewed by external auditors.
The following information is available at semcon.com
| ¢ Semcon's Board | Elected | Present | Dependent | Audit committee |
Remunerations committee |
|
|---|---|---|---|---|---|---|
| Kjell Nilsson | Chairman | 2007 | 9/9 | Yes * | Yes | Yes |
| Gunvor Engström | Member | 2007 | 9/9 | No | Yes | Yes |
| Håkan Larsson | Member | 2008 | 9/9 | No | Yes | Yes |
| Marianne Brismar | Member | 2008 | 9/9 | No | Yes | Yes |
| Joakim Olsson | Member | 2011 | 8/9 | No | Yes | Yes |
| Roland Kristiansson** | Employee representative | 2004 | 3/3 | Yes | Yes | |
| Christer Eriksson | Employee representative | 2007 | 9/9 | Yes | Yes | |
| Ronny Lundberg | Employee representative | 2011 | 9/9 | Yes | Yes | |
| Kenneth Straschko** | Employee representative | 2013 | 6/6 | Yes | Yes |
*Kjell Nilsson is dependent to the company as he was the company's CEO.
** Roland Kristiansson retired in conjunction with the AGM 2013 and was replaced by Kenneth Straschko.
A presentation of Board members is available on page 86 of this Annual Report.
The Swedish Companies Act regulates the Board and CEO's responsibility concerning internal control. The Board's responsibility is also regulated by the Swedish Code of Corporate Governance, which also includes demands for annual external information flow concerning how the financial reporting is organized.
Semcon has defined internal control as a process designed to provide reasonable assurance that Semcon's objectives are achieved in terms of an appropriate, effective business, reliable reporting and how to follow applicable rules and regulations. The internal control is influenced by the Board, CEO, Group management and other employees and is based on a control environment that creates the basis for the oth-
er four components in the process - risk assessment, control activities, information, communication and follow-ups. The process bases itself on the framework for internal control issued by the Committee of the Sponsoring Organizations of the Treadway Commission (COSO). The control environment includes the values and ethics that the Board, CEO and Group management communicate and use and that are documented in Semcon's Code of Conduct and the Group's organizational structure, management, deci-
sion-making, authorization, responsibility and expertise of the employees. Semcon's vision, business concept, objectives and strategies are the basis of day-to-day work. Semcon is characterized by a decentralized organization driven from target-steered management with clear objectives.
Internal control concerning financial reporting aims to give reasonable assurance concerning reliability of the external financial reporting in the form of quarterly reports, financial statements and annual reports, and that the external financial reports are drawn up in accordance with laws, applicable accounting standards and other demands made on listed companies. The following description has been drawn up in accordance with the Swedish Code of Corporate Governance and the current application instructions and make up the Board's report for internal control concerning the financial reporting.
The Board has overall responsibility for the internal control of financial reporting. The Board has set out written standing orders that clarify the Board's responsibilities and that regulate the work of the Board. The Board will ensure that set principles for financial reporting and internal control are observed and that applicable relationships with the company's auditors are maintained. The Board has drawn up instructions for the CEO and for financial reporting. Responsibility for ensuring effective control environments is delegated to the CEO. The Group's Internal Control is a support function for the internal control of financial reporting in the Group's companies and business areas. Internal control instruments for financial reporting are made up of the Group's finance policy, information policy, investment
| Follow-ups | |
|---|---|
| Information and communication |
|
| Control activities | |
| Risk assessment | |
| Control environment | |
Framework for internal control
rules, authorization rules and the Group's accounting and reporting rules. Semcon's ethical values are documented in the Group's Code of Conduct and staff policies complement other rules and instructions for employees. A lot of hard work has been carried out in recent years on the Group's management systems and for clearer routines and regulations for submitting tenders/ bids, conditions of contract and drawing up agreements. To make sure these routines are adhered to a number of
training initiatives were completed over the year.
Semcon's risk assessment covering financial reporting, i.e. identification and evaluation of the most significant risks in the Group's companies, business areas and processes regarding financial reporting, consist of a foundation for how they are managed. They are managed by the risks being accepted, reduced or eliminated. Annual evaluation activities are carried out by the internal control function and worked out according to a risk-based model. A number of criteria are considered to assess the degree of risk of inaccuracies occurring in financial reporting. Complex accounting policies might, for example, mean that the financial reporting risks being inaccurate for the items covered by such policies. Valuing certain assets or liabilities using various assessment criteria might also constitute a risk. The same applies to complex and/or changes to business conditions.
The significant risks identified for financial reporting are managed through various control activities and processes in the Group's companies and business areas and aim to safeguard that the basic demands on external financial reporting are met. The control activities build on the Group's minimum requirements for internal control for financial reporting and consist of comprehensive, detailed controls that can be preventative and exploratory in nature. The respective business areas are responsible for the Group's control instruments being implemented and observed and that any possible deviation is reported.
Information and communication about internal control instruments for financial reporting is published on Semcon's intranet, which is accessible to every employee. External communication consists, for example, of external financial reporting such as quarterly reports and the annual report. There is a communication handbook to support the information procedures in the Group. This clearly states who is allowed to communicate what type of information and that the information must be correct, coordinated, consistent, fast and able to be monitored, both internally and externally.
Follow-ups for ensuring effective internal control for financial reporting are carried out by the Board, CEO, Group management, the Internal Control function and by the Group's companies and business areas. Follow-ups are carried out informally and formally and comprise follow-ups of monthly financial reports against budgets and objectives such as quarterly reports, which in certain cases are complemented with independent examinations by external auditors. Semcon has introduced a Group-wide reporting system for working on the internal control of financial reporting, which includes self-evaluation of all the Group's companies and business areas that provides a picture of how the Group's subsidiaries live up to the minimum requirements of internal control for financial reporting for significant risks identified and also provides information concerning the status of subsidiaries' work. Every company and business area is responsible for drawing up action plans for divergence that is then followed-up by the respective internal Board in each business area. In view of the results of the tests, the company has so far found no reason to introduce a special internal audit function.
Göteborg, 14 March 2014 The Board
To the Annual General Meeting of Semcon AB, corporate identity number 556539-9549.
It is the Board of Directors who is responsible for the corporate governance report for 2013, included in the printed version of this document on pages 80-85 and that it has been prepared in accordance with the Annual Accounts Act.
We have read the corporate governance report and based on that reading and our knowledge of the company and the group we believe that we have a sufficient basis for our opinions. This means that our statutory examination of the corporate governance report is different and substantially less in scope than an
audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden.
In our opinion, the corporate governance report has been prepared and its statutory content is consistent with the annual accounts and the consolidated accounts.
Göteborg, 14 March 2014 Deloitte AB
Hans Warén Authorized Public Accountant
Employee representative since 2011, employed since 2009 Born 1960 Qualifications: Vocational school, officer's degree Nationality: Swedish Shareholding in Semcon: 411 Replaced by Mats Sällberg on 11 March 2014.
Board member since 2011 Born 1965
Qualifications: Master of Business Administration (MBA) from INSEAD Fontainebleau France and graduate engineer from The Royal Institute of Technology in Stockholm
Professional background: Former CEO of Haldex AB (publ.) and various positions at ABB Ltd. (Germany, Switzerland and Brazil), CEO of SAG Group (Germany) Nationality: Swedish
Other board assignments: – Shareholding in Semcon: 4,000
Independent in relation to the company, company management and major shareholders.
Marianne Brismar
Board member since 2008 Born 1961 Qualification: Pharmacist Graduate and BA in Economics Professional background: Former CEO and owner of Atlet AB Nationality: Swedish Other board assignments: Chairman of Newbody AB, board member of Engelhardt AB, Wollenius Invest AB, Beijer Alma AB, Concentric AB, Axel Johnson International AB and Creades AB. Shareholding in Semcon: 5,000
Independent in relation to the company, company management and major shareholders.
chairman Board member since 2007
Born 1948 Qualifications: Economics and Business Studies Graduate from the School of Business, Economics and Law, University of Göteborg.
Professional background: Among others, former CEO of Boliden, Trelleborg and Semcon as well as sitting on various boards.
Nationality: Swedish
Other board assignments: Chairman of Lindab. Board member of Choice Hotels AS, Home Properties AB and Home Invest AS Shareholding in Semcon: 31,088
Not independent in relation to the company as he was President and CEO of the company between 2008 and 2012, but is independent in relation to major shareholders.
Board member since 2007 Born 1950 Qualifications: Master of Business Administration (MBA), Stockholm School of Economics Professional background: Among others,
former CEO of Företagarna and Bank2, and county governor of Blekinge.
Nationality: Swedish Other board assignments: Vionlabs AB,
Länsförsäkringar Fondförvaltning AB, Apoteksgruppen, Metria AB and Tredje AP-fonden
Shareholding in Semcon (own and family): 30,000
Independent in relation to the company, company management and major shareholders.
Employee representative since 2012, Employed since 2006. Born 1964 Qualifications: Graduate electronics engineer, Faculty of Engineering, Lund University Nationality: Swedish Shareholding in Semcon: 1,250
Board member since 2008 Born 1947
Qualifications: Master of Business Administration (MBA), School of Business, Economics and Law, University of Göteborg
Professional background: Among others, former CEO of Rederi AB Transatlantic and before that CEO of Schenker AG Nationality: Swedish
Other board assignments: Chairman of Valea AB, Inpension Asset Management, Wallenius Wilhemsen Logistics AS and Tyréns AB. Board member of Bure Equity AB, Handelsbanken Region Väst, Rederi AB Transatlantic, Eukor Car Carriers Inc. and Stolt-Nielsen Ltd.
Shareholding in Semcon: 10,000
Independent in relation to the company, company management and major shareholders.
Employee representative since 2007, Employed since 2000 Born 1969 Qualifications: Master of Engineering (M.E.) in Mechanical Engineering, Materials and Mechanical Technology, Luleå University of Technology Nationality: Swedish Shareholding in Semcon: 2,492
Markus Granlund
ceo Acting president of Engineering Services International Born 1975
Qualifications: Bachelor of Law, Lund University LL.M. International commercial law, Bond University, Australia. Courses in business economics, accounting and marketing, (in the LL.B. programme) Bond University, Australia Employed since 2008 Shareholding in Semcon: 10,000
Björn Strömberg cfo Born 1960 Qualifications: Master of Business Administration (MBA), School of Business, Economics and Law, University of Göteborg Employed since 2007 Shareholding in Semcon: 12,840
Carin Wiberg general counsel Born 1978 Qualifications: Bachelor of Law, University of Göteborg Employed since 2012 Shareholding in Semcon: –
Anders Atterling communications manager Born 1960 Qualifications: Bachelor of Science (B.Sc.), Economics, Örebro University Employed since 1991 Shareholding in Semcon: 17,420
Lena Emriksson quality and sustainability manager Born 1976 Qualifications: Industrial economics graduate from Luleå University of Technology Employed since 2006 Shareholding in Semcon: –
Klas Elmby it manager Born 1969 Qualifications: Technical College Engineer, courses taken at HTU and Chalmers University of Technology Employed since 1990 Shareholding in Semcon: 20,000
Henry Kohlstruck business area president, engineering services germany Born 1968
Qualifications: Technical draughtsman, certified business administration graduate, Fulda University of Applied Sciences, Germany Employed since 2010 Shareholding in Semcon: –
Olof Christensson business area president, engineering services nordic Born 1966 Qualifications: Master of Business Administration (MBA), Karlstad University Employed since 2013 Shareholding in Semcon: 1,000
Johan Ekener business area president, product information Born 1964 Qualifications: Master of Science (MSc.), Chalmers University of Technology. Master of Business Administration (MBA), School of Business, Economics and Law, University of Göteborg Employed since 2004 Shareholding in Semcon: 4,000
Urban Kihlén purchasing manager Born 1959 Qualifications: Master of Business Administration (MBA), School of Business, Economics and Law, University of Göteborg Employed since 1998 Shareholding in Semcon (own and family): 7,200
Anders Löwgren group controller Born 1965 Qualifications: Master of Business Administration (MBA), School of Business, Economics and Law, University of Göteborg Employed since 1998 Shareholding in Semcon: 2,258
| SEK m | 2013 | 2012 | 2011 | 2010 | 2009 |
|---|---|---|---|---|---|
| Income statement | |||||
| Net sales | 2,508.4 | 2,570.9 | 2,451.9 | 2,090.9 | 2,281.1 |
| Operating expenses* | –2,383.6 | –2,377.6 | –2,340.7 | –2,087.9 | –2,522.3 |
| Operating profit/loss | 124.8 | 193.3 | 111.2 | 3.0 | -241.2 |
| Financial income | 1.6 | 1.9 | 3.8 | 2.0 | 8.2 |
| Financial expenses | –8.6 | –9.3 | –14.6 | –11.1 | –23.7 |
| Profit/loss before tax | 117.8 | 185.9 | 100.4 | -6.1 | -256.7 |
| Taxes | –29.7 | –44.7 | –31.0 | 0.8 | 48.1 |
| Net profit/loss for the year | 88.1 | 141.2 | 69.4 | -5.3 | -208.6 |
| * Of which: | |||||
| Goodwill impairment and participations in associated companies |
– | – | – | – | –78.2 |
| Miscellaneous items | – | – | –30.7 | –14.9 | –92.6 |
| Balance sheet | |||||
| Goodwill | 440.3 | 433.3 | 436.0 | 437.2 | 475.2 |
| Other intangible assets | 16.6 | 17.7 | 21.1 | 24.7 | 28.5 |
| Tangible fixed assets | 39.2 | 35.4 | 36.2 | 43.0 | 60.6 |
| Deferred tax receivables | 44.5 | 50.1 | 64.7 | 69.9 | 89.0 |
| Other financial assets | 18.8 | 19.1 | 19.0 | 18.2 | 17.2 |
| Accounts receivable | 371.3 | 346.6 | 372.6 | 323.8 | 324.2 |
| Processed but non-invoiced income | 172.7 | 174.4 | 121.7 | 133.9 | 108.2 |
| Other current assets | 48.9 | 51.1 | 41.3 | 37.4 | 93.7 |
| Cash and bank balances | 153.3 | 115.6 | 39.7 | 42.5 | 67.7 |
| Total assets | 1,305.6 | 1,243.3 | 1,152.3 | 1,130.6 | 1,264.3 |
| Shareholders' equity | 633.4 | 579.1 | 442.0 | 372.6 | 385.4 |
| Long-term liabilities | 78.5 | 211.0 | 290.8 | 318.5 | 383.6 |
| Current liabilities | 593.7 | 453.2 | 419.5 | 439.5 | 495.3 |
| Total shareholders' equity and liabilities | 1,305.6 | 1,243.3 | 1,152.3 | 1,130.6 | 1,264.3 |
| Cash flow statement | |||||
| Cash flow from current activities | 135.0 | 186.2 | 87.6 | –55.1 | 104.1 |
| Cash flow from investment activities | –23.9 | –23.9 | –17.2 | –11.0 | –19.3 |
| Cash flow from financing activities | –78.5 | –83.2 | –73.3 | 47.2 | –133.3 |
| Cash flow for the year | 32.6 | 79.1 | –2.9 | –18.9 | –48.5 |
| Key figures | |||||
| Sales increase, % | –2.4 | 4.9 | 17.3 | –8.3 | –30.8 |
| Organic growth, % | –1.0 | 6.1 | 20.3 | –4.5 | –33.1 |
| Operating margin before one-off items, % | 5.0 | 7.5 | 5.8 | 0.9 | –3.1 |
| Operating margin, % | 5.0 | 7.5 | 4.5 | 0.1 | –10.6 |
| Profit margin, % | 4.7 | 7.2 | 4.1 | –0.3 | –11.3 |
| Interest cover ratio, (multiple) | 22.0 | 26.8 | 8.7 | 0.4 | –10.0 |
| Return on shareholders' equity, % | 14.6 | 27.7 | 17.3 | –1.4 | –42.1 |
| Return on capital employed, % | 16.1 | 26.2 | 15.5 | 0.6 | –25.7 |
| SEK m | 2013 | 2012 | 2011 | 2010 | 2009 |
|---|---|---|---|---|---|
| Equity/assets ratio, % | 48.5 | 46.6 | 38.4 | 33.0 | 30.5 |
| Debt/equity ratio, (multiple) | – | 0.1 | 0.5 | 0.8 | 0.8 |
| Average number of employees | 2,873 | 2,891 | 2,727 | 2,474 | 2,791 |
| Investments in fixed assets, SEK m | 24.1 | 21.9 | 17.4 | 14.5 | 18.5 |
| Data per share | |||||
| Earnings per share before dilution, SEK | 4.90 | 7.86 | 3.89 | –0.29 | –11.52 |
| Earnings per share after dilution, SEK | 4.86 | 7.80 | 3.83 | –0.29 | –11.52 |
| Shareholders' equity per share before dilution, SEK | 35.25 | 32.23 | 24.71 | 20.57 | 21.28 |
| Shareholders' equity per share after dilution, SEK | 34.97 | 31.97 | 24.40 | 20.57 | 21.28 |
| Share price/equity per share, (multiple) | 1.73 | 1.49 | 0.98 | 1.43 | 1.34 |
| Cash flow from current activities per share, SEK | 7.45 | 10.28 | 4.84 | –3.04 | 5.75 |
| Dividend per share, SEK | 2.50** | 2.00 | – | – | – |
| P/E ratio | 12.44 | 6.16 | 6.27 | neg | neg |
| P/S ratio | 0.44 | 0.34 | 0.18 | 0.25 | 0.23 |
| Share price at year-end, SEK | 60.50 | 48.00 | 24.00 | 29.40 | 28.50 |
| Market value at year-end, SEK m | 1,096 | 869 | 435 | 533 | 516 |
| No. of market shares at period's end, (000) | 18,113 | 18,113 | 18,113 | 18,113 | 18,113 |
| Average no. of shares, (000) | 18,113 | 18,113 | 18,113 | 18,113 | 18,113 |
| No. of own shares at year-end, (000) | 143 | 143 | 227 | 289 | 299 |
| Average no. of own shares, (000) | 143 | 157 | 273 | 291 | 312 |
| No. of shareholders | 3,782 | 3,828 | 4,547 | 4,015 | 4,430 |
**Board's proposal
| Q1 report Jan–March | 28 April |
|---|---|
| Annual General Meeting | 28 April |
| Q2 report Jan–June | 15 July |
| Q3 report Jan–Sept | 21 October |
| Financial statement | 5 February 2015 |
Markus Granlund, President and CEO Email: [email protected]
Björn Strömberg, CFO Email: [email protected]
Anders Atterling, Communications Manager Email: [email protected]
Information about Semcon's business, financial reporting, share information, corporate governance, activities and press releases etc. can be found on Semcon's website at: www.semcon.com where you can also subscribe and order financial information via email.
Previous years' Annual Reports and quarterly reports are available at semcon.com or can be ordered by telephone on: +46 (0)31 721 00 00 or by email: [email protected].
For environmental and cost reasons Semcon has chosen to only send the Annual Report to shareholders who have specifically requested it. Before the Annual Report is published each year, new shareholders are sent an order form giving them the opportunity of subscribing for the coming printed version of the Annual Report.
Produced by: Spoon • Photos: Istvan Labady, Niklas Bernstone, Christer Ehrling, Sebastian Berger, Stefen Chow, Tripbuddy, Chris Close, Anna Sigvardsson, Volvo Trucks, ABB, Zehnder, Jernbaneverket, Mikael Göthage, Kristofer Samuelsson, Secunet, Anders Deros, Rickard Kilström och Lars Ardarve. Print: Trydells Tryckeri, Laholm 2014 • Translation: Cannon Språkkonsult AB
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