Ncc A-Del ENG Slutkorr 2 98-04-01 10.33 Sidan 1 Summary
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/ncc A-del ENG slutkorr 2 98-04-01 10.33 Sidan 1 Summary Summary Pro forma consolidated income after net financial KEY FIGURES IN BRIEF items, excluding merger costs, amounted to SEK 1997 1996 Income after net financial items 74 m. (273). Including merger costs, a loss of SEK excluding merger costs, SEK m.1 74 273 375 m. was reported after net financial items. Equity/assets ratio 33% 30% Net income after full tax and excluding merger Earnings/loss per share excluding merger costs, SEK 2.60 2.00 costs amounted to SEK 276 m. (159) which Dividend per share, SEK 1.50 2 1.50 corresponds to SEK 2.60 (2.00) per share. 1) Pro forma, see page 62. Including merger costs, a net loss of SEK 173 m. 2) Board of Directors’ proposal to Annual General Meeting was reported, which corresponds to a loss of SEK 1.60 per share. A dividend of SEK 1.50 (1.50) per share is proposed. BO AX:SON JOHNSON Bo Ax:son Johnson died on May 9, 1997, Total orders received by construction operations at an age of 79. Bo Ax:son Johnson was rose 9 percent to SEK 29.8 billion (27.3). On a active in the Nordstjernan Group for 52 years, the last 18 of which as Chairman of pro forma basis, orders received by NCC’s Nordstjernan. Swedish construction operations declined by During these years, Bo Ax:son Johnson 9 percent during the year to SEK 18.3 billion became intimately associated with Sweden’s industrial history and the (20.0). The impact of a weak Swedish construc- restructuring processes that Swedish industry and commerce tion market was offset by the trend in other underwent. Nordic countries. When Bo Ax:son Johnson took over management of the company, Nordstjernan was a multi-faceted conglomerate Contracted sales of properties in 1997 totaled containing hundreds of companies active in many different SEK 7.3 billion and generated a gain. business areas. During his years in charge, operations were concentrated and Nordstjernan was transformed into a finan- NCC’s financial position was strengthened by a cially strong and market-leading construction and real estate company. NCC was formed as a result of Nordstjernan subsid- strong cash flow of slightly more than SEK 4 iary JCC’s merger with ABV. billion. The debt/equity ratio was reduced by Up to April 1997, Bo Ax:son Johnson served as Chairman 50 percent to a multiple of 0.4. of the Board of Nordstjernan and Deputy Chairman of NCC. Always a visionary, Bo Ax:son Johnson was the driving Conditions in the Swedish real estate market force behind the transformation process that NCC has under- have improved, particularly in NCC’s prioritized gone since the mid-1980s, most recently manifested in the form of the NCC/Siab merger. locations. As a token of the Board of Directors’ appreciation of Bo It is forecast that 1998 earnings will improve Ax:son Johnson’s efforts, the “Bo Ax:son Johnson Award for Prominent Achievements in the Construction Sector” has by an amount largerly corresponding to the been established. The award will be presented annually, com- coordination gains. mencing with NCC’s 1998 Annual General Meeting. 1 /ncc A-del ENG slutkorr 2 98-04-01 10.33 Sidan 2 THE NEW NCC Leading Nordic construction and real estate company Increased resources, increased profitability On February 17, 1997, NCC decided to make a public offer to shareholders in Siab. Four NCC shares were offered for each multiple of seven shares in Siab. When the acceptance period had closed at the beginning of May, slightly more than 99 percent of the shareholders in Siab had accepted the offer. On June 17, the Swedish Competition Authority approved the transaction and the formal merger could be implemented. The Nordic region’s leading construction and real estate company had been formed. The merger of Siab and NCC was a way of countering the effects of Sweden’s weak construction market. It was also a way to meet competition from overseas NCC and Siab become one. At a press conference on February 18, 1997, NCC’s Chairman Bernt Magnusson and Siab’s Chairman Fredrik Lundberg presented the companies, both in the domestic Nordic market and in merger plans. prioritized markets in other parts of the world. Siab and NCC have focused on increased specialization and business development for some time, as illustrated by the division of operations into business areas. With its increased resources, the new NCC will be provided with new oppor- tunities for the development of methods, materials, forms of cooperation and employees. Combined with the bene- fits of scale generated by the merger, this will result in increased customer benefits and improved profitability. It is In the new NCC, the increased level of general expertise deriving from the estimated that the coordination gains will amount to merger will be noticeable at every location and in each project. approximately SEK 400 m. annually. Successful merger work Merger work has been characterized by speed and the dedica- tion and commitment of employees in both companies. These factors, combined with the two companies complementary characters in terms of expertise and geographic coverage, are the main reasons why the merger work has been so success- ful. Essentially, the merger of the companies has now been completed. Head offices, regional offices and local offices have been combined. Nearly 600 employees became superfluous to needs and have left the Group. There have been very few losses of key employees. The Industry business area has suc- ceeded in reducing the number of customer centers by 40 percent. It was agreed that the merged company would be called NCC. During the summer of 1997, all Siab signs were removed and replaced by NCC signs. 2 /ncc A-del ENG slutkorr 2 98-04-01 10.33 Sidan 3 The new NCC The new NCC today NCC has annual sales of slightly more than SEK 30 bil- lion, with more than 20,000 employees. The Group is organized in six business areas: Civil Engineering, Hous- ing, Building, Industry, Real Estate and Invest. NCC shares are listed on the Stockholm Stock Exchange. In the Group’s domestic markets—Sweden, Denmark, Finland and Norway—NCC builds roads and civil engi- neering facilities, residences, industrial premises, hospi- NCC builds roads and civil engineering facilities, residences, industrial premises, tals, offices and other buildings. NCC also produces hospitals, offices and other buildings. building materials. In selected markets outside the Nor- NCC develops real estate for external sale or internal dic region, NCC engages in large-scale, technologically property management. The Group has an extensive real advanced civil engineering projects. estate portfolio, consisting of 824,000 m2 of floor space in Sweden and 116,000 m2 in other markets. In Sweden, the objective is to concentrate the real estate portfolio to about ten expansive regions, in which coordination of the Group’s construction operations can generate consider- able synergistic benefits in terms of property and project development. NCC tomorrow The new NCC’s vision is that the Group will become the leading construction and real estate company with respect to volume, profitability, quality, the environment, efficiency and development power. NCC shall represent innovative- ness in terms of the products delivered, its way of solving problems and the way it uses new materials and methods. NCC’s way of nurturing the environment and traditions will enable it to accept responsibility for satisfying customer requirements, while meeting the demands of society at large. The increased level of general expertise deriving from the merger will be noticeable at every location and in each project conducted by the new NCC. We combine the ded- NCC develops real estate for external sale or internal property management. ication of the local firm with the continuity and strength of a major company. Two successful companies with fine traditions NCC Siab 1875 Nya Asfalt is formed 1944 Siab is formed 1890 Nordstjernan is formed 1952 Acquisition of FG Larssons Byggnads AB 1916 AB Armerad Betong is formed 1965 Acquisition of Byggnads AB Bäckströms & Co 1917 AB Vägförbättringar is formed 1970 Acquisition of Hermanssons Byggnads AB 1930 Svenska Väg is formed 1977 Acquisition of Bygg-Sjögren 1977 Armerad Betong and Vägförbättringar are merged to form ABV 1979 Acquisition of AB A Huse & Co 1982 Nya Asfalt and Svenska Väg are merged to form JCC 1979 Acquisition of Bygg Oleba 1988 ABV and JCC are merged to form NCC, 1980 Acquisition of Byggnads AB Kvissberg & Bäckström Nordic Construction Company 1990 Acquisition of Diös AB 1991 Nordstjernan and NCC are merged 1991 Acquisition of Industribau Fürstenwalde GmbH, 1991 NCC is listed on the Stockholm Stock Exchange in eastern Germany 1995 Acquisition of Puolimatka in Finland and 1992 Acquisition of NPL Eeg-Henriksen in Norway 1994 Acquisition of Lundbergs Construction Operations 1996 Acquisition of Rasmussen & Schiøtz in Denmark 1995 Acquisition of Kraftbyggarna 1997 Merger of NCC and Siab 1997 Merger of Siab and NCC 3 /ncc A-del ENG slutkorr 2 98-04-01 10.33 Sidan 4 STATEMENT BY THE PRESIDENT Structural transactions create strong plat The merger of Siab and NCC is the largest transaction ever in 1997. We entered into contracts representing total property the Swedish construction industry. During 1997, two inde- sales of nearly SEK 7 billion, which improved the balance pendently successful construction and real estate companies between construction and real estate operations. NK Cityfas- were combined to form the foundation for an even stronger tigheter, which owns properties with a book value of slightly company, in terms of both human and production resources.