The State Ownership Report 2019 Contents The Minister’s introduction 7 Category Goal of the highest possible Scope and key figures 8 return over time and where Key issues for the State as owner 16 the State no longer has a How the State exercises its ownership 22 A sustainable portfolio for 1 rationale for its ownership long-term value creation 34 Ambita AS 42 Baneservice AS 43 Entra ASA 44 Flytoget AS 45 Giek kredittforsikring AS 46 Mesta AS 47 Category Goal of the highest possible return over time and where the State has a special 2 rationale for its ownership Aker Kværner Holding AS 50 Argentum Fondsinvesteringer AS 51 DNB ASA 52 Eksportfinans Norway ASA 53 Electronic chart centre AS 54 Equinor ASA 55 Investinor AS 56 Kommunalbanken AS 57 Kongsberg Gruppen ASA 58 Mantena AS 59 Nammo AS 60 Norsk Hydro ASA 61 Nysnø Klimainvesteringer AS 62 Posten Norge AS 63 Statkraft SF 64 Telenor ASA 65 Vygruppen AS 66 Yara International ASA 67 Category Goal of the most efficient possible attainment of 3 public policy goals Andøya Space Center AS 70 Simula Research Laboratory AS 104 Avinor AS 71 Siva – Selskapet for Industrivekst SF 105 Bane Nor SF 72 Space Norway AS 106 Bjørnøen AS 73 Statnett SF 107 Carte Blanche AS 74 Statskog SF 108 Den Nationale Scene 75 Staur gård AS 109 Andøya Space Center AS 76 Store Norske Spitsbergen Kulkompani AS 110 Den Norske Opera & Ballett AS 76 Talent Norge AS 111 Avinor AS 77 Trøndelag Teater AS 112 Eksportkreditt Norge AS 77 Universitetssenteret på Svalbard AS 113 Enova 78 Vinmonopolet AS 114 Entur AS 79 Fiskeri- og havbruksnæringens forskningsfinansiering AS 80 Gassco AS 81 Companies that are not categorised Gassnova SF 82 Filmparken AS 118 Graminor AS 83 Folketrygdfondet 119 Helse Midt-Norge RHF 84 Rosenkrantzgate 10 AS 119 Helse Nord RHF 85 Rygge 1 AS 119 Helse Sør-Øst RHF 86 Helse Vest 87 Innovasjon Norge 88 Kimen Såvarelaboratoriet AS 89 Kings bay 90 Nationaltheatret AS 91 Nofima AS 92 Norsk Institutt for Odontologiske Materialer AS 93 Appendices Norfund 94 The companies’ reporting on the State’s expectations 122 Norges Sjømatråd 95 The companies' reporting standards and Norsk Helsenett SF 96 sustainability guidelines 128 Norsk rikskringkasting AS 97 Remuneration to the board and auditors for 2019 132 Norsk Tipping 98 Remuneration to the CEO for 2019 134 Norske tog AS 99 Gender balance on the board and in management 136 Norsk senter for forskningsdata AS 100 Owner-appointed and shareholder-elected board members 142 Nye veier AS 101 Petoro AS 102 Contact details 148 Rogaland teater AS 103 Comments and definitions 150 . ... As an owner, we are focused on the companies being transparent on material matters relating to the company’s operations. Good reporting provides insight into the company's ability to create value. This is either in the form of returns or efficient attainment of public policy goals in both the short and long term. The Minister’s introduction The State’s direct ownership is extensive and diverse. Insight into the company's activities is a prerequisite Twelve ministries manage the State’s ownership for good ownership, and reporting can be a impetus interests in 73 companies. This takes place on behalf for the companies better attaining their goals. This of the Norwegian people, and transparency and trust year’s ownership report lists the goals and goal are the cornerstones of the State’s ownership in these attainment for more companies than before. The companies. The State’s Ownership Report is an annual seven listed companies in which the State is a part-­ report of the State’s direct ownership and allows you owner had a return of 3.9 per cent in 2019, compared to read about the strategies, performance, financial with 3.2 per cent in 2018. In comparison, the Oslo development and important events for the respective Stock Exchange Benchmark Index had a return of 16.5 companies in 2019. per cent in 2019 and ­1.8 per cent in 2018. The non­ listed companies which have the objective of making In November 2019, the Government presented a new a return, had a return on equity of 9.1 per cent in White Paper on Ownership. Report to the Storting no. 8 2019, compared with 11.0 per cent in 2018. (2019–2020), The State's direct ownership in companies – Sustainable value creation, was considered by the At the time of writing, the Government has been busy Storting in April 2020. This update of the State's owner­ dealing with the Corona situation. The ministries that ship policy is not a revolution, but rather an evolution manage state ownership are closely monitoring the that facilitates value creation for the companies both situation and have ongoing dialogue with the now and into the future. There are fixed frameworks companies. Several of the companies in which the for how the State exercises ownership. Within these State is an owner have activities that contribute to frameworks, we have further developed and clarified maintaining production and services that are of critical the policy to help the companies better attain their importance to society. At the same time, several of goals. the companies in the portfolio have experienced significant falls in value and have given notice of and, The State’s goals as owner are the highest possible in some instances carried out, extensive layoffs. The return over time or most efficient possible attainment companies within the oil and gas industry and of public policy goals. This requires the companies to transport sector have been particularly hard hit. The be sustainable. Companies that understand and boards in each of the companies must assess the manage development trends in society, including both situation and the need for various measures. risks and opportunities, will have a competitive advan­ tage that contributes to long­term value creation. I would like to thank all of the boards and all of the employees in the companies in which the State has NRK, Simula, Statkraft, Posten Norge, Kommunalbanken ownership interests. Your year-round efforts are an and Ambita have provided brief overviews of how they important contribution to the Norwegian economy are working to develop their business strategies in and national welfare. Many of you are now in a line with important development trends in society. challenging period. Both myself and the Government I find these examples to be interesting, innovative and will do our part to ensure that the business sector and inspiring and hope more people can derive enjoyment Norwegian society get through this crisis as best as from them. possible. As an owner, we are focused on the companies being I hope you find this report informative and useful! transparent on material matters relating to the com­ pany’s operations. Good reporting provides insight into the company's ability to create value. This is either in the form of returns or efficient attainment of public policy goals in both the short and long term. Iselin Nybø Minister of Trade and Industry 7 Scope and key figures The following is an overview of the 73 companies in which the State has full or part ownership and key figures for these companies in 2019. The companies have been divided into three categories based on the State's goals as owner and whether the State has a rationale for its ownership. For the companies in Categories 1 and 2, the State’s goal as owner is the highest possible return over time. These are companies that primarily operate in competition with other companies. For companies in Category 3, the State’s goal as owner is the most efficient possible attainment of public policy goals. These are companies that do not primarily operate in competition with other companies. Goal of the highest possible Goal of the most return over time efficient possible attainment of public policy goals Category 1 Category 2 Category 3 The State no The State has a longer has a special rationale rationale for for its ownership its ownership. Photo: Ole Jørgen Bratland 9 Overview of the State's direct ownership Key figures 2019* Value of the State’s ownership interests in Value development in the portfolio in the companies with state ownership past five years NOK billion NOK billion Other companies: 121 1 200 Kommunalbanken: 16 1 000 143 151 157 Statnett: 18 800 122 43 34 17 115 715 Norfund: 23 600 644 Norsk Hydro: 23 400 Yara International: 36 974 200 mrd kroner Helse Sør-Øst: 39 1 Equinor: 393 2015 2016 2017 2018 2019 DNB: 88 Category 1 and 2 Category 3 Statkraft: 94 Telenor: 123 The value of the State's ownership interest is calculated The graph shows the development in the value of the State's ownership based on the market value of the listed companies and the interests, divided among companies where the state’s goal is the highest possible book value of the non­listed and public policy companies. return over time (Categories 1 and 2) and the companies where the State’s goal is the most efficient possible attainment of public policy goals (Category 3). The amounts are calculated based on the market value of the listed companies and the book value of the non-listed and public policy companies. 73 3.9% 41.5 billion 1,378 billion Number of companies Return from listed companies Dividend to the State Operating revenues (73) (3,2%) (45.7 billion) (1,422 billion) 287,727 9.1% 20% 183 billion Number of employees Return on equity from Equity ratio** Purchases by/subsidies from (280,550) non-listed companies (21%) the public sector: (11.0%) (172 billion) * See definitions on page 150.