ANNUAL REPORT 2020 CARNEGIE HOLDING AB INTRODUCTION Contents Introduction Carnegie in 5 minutes 1 146 The year in brief 2 The pandemic is acceler- Loribea cum repudam CEO’s message 4 ating existing megatrends reicia iusam as rempe Market and business environment 6 like digitalisation, auto- optinctatem exerernate mation and climate and Strategic framework 8 volum velit eni occum sustainability efforts. Business model 10 eatem ipsamus magnimi, Business objectives 12 oditasim voluptati non- seque comnis nobitatur, Our business quate nia voluptatu. Market position 14 Investment Banking 16 Securities 18 Private Banking 20 Sustainable advisory 24 Responsible advisory 28 Responsible employer 30 Responsible business 34 Corporate governance 2628 Corporate governance report 38 CarnegieLoribea cum acted repudam as Board of Directors 41 adviserreicia iusam in capital as rempe raises Group management 42 foroptinctatem Cleantech exerernate companies involum 2020 velit corresponding eni occum eatem ipsamus magnimi, Annual report to USD 1 billion (SEKoditasim 9 billion). voluptati non- Board of Directors’ report 43 seque comnis nobitatur, Five-year review 51 quate nia voluptatu. Consolidated financial statements 52 Parent company financial statements 55 Notes 59 Certification 83 Auditor’s report 84 Sustainability Sustainability disclosures 87 GRI index 96 Other 3519 Loribea cum repudam Definitions 98 Carnegie participated inreicia 86 ECMiusam transactions as rempe Addresses 99 duringoptinctatem the year, exerernate more Contact 99 thanvolum any velit other eni occumbank ineatem Europe. ipsamus magnimi, oditasim voluptati non- seque comnis nobitatur, quate nia voluptatu. This is Carnegie’s annual report for the 2020 financial year. The formal annual report comprises pages 44-89.43–83. TheThe annualannual reportreport alsoalso comprisescomprises Carnegie’s sustainability report for 2020 as re - quiredrequired under under the the Swedish Swedish Annual Annual Accounts Accounts Act, Act, ch 6ch s 610, s 10, (1995:1554). (1995:1554). INTRODUCTION CARNEGIE IN 5 MINUTES Carnegie is the foremost financial adviser in the Nordics. We bring investors together with entrepreneurs and compa- nies to enable clients, owners and society to grow sustainably. Simply put, Carnegie is where knowledge and capital meet. OUR MISSION OUR CLIENTS We enable companies, We work with companies, capital and communities their owners, institutions and to grow sustainably. high net-worth individuals. OUR BUSINESS Investment Banking Securities Private Banking Carnegie Investment Banking offers profes- Carnegie Securities offers institutional Carnegie Private Banking provides compre- sional advisory in mergers and acquisitions clients several services within research, bro- hensive financial advisory to high net worth (M&A) and equity capital market (ECM) kerage and sales trading and equity capital individuals, small businesses, institutions transactions. The Debt Capital Markets market transactions (ECM). In addition, and foundations. The staff includes experts (DCM) unit also provides advisory related the Fixed Income unit offers bond research in areas including asset allocation, asset to capital acquisition via corporate bonds and sales. Carnegie’s top-ranked research, management, law, tax management, and fixed income instruments. With unique brokerage and equity sales enjoy a globally pensions and trading in securities and understanding of sectors and capital leading position in Nordic equities. fixed-income bonds. markets in the Nordic region, Carnegie is a Operations in Denmark, Finland, Norway, Operations in Denmark and Sweden. leading Nordic adviser in corporate finance. Sweden, the UK and the US. Operations in Denmark, Finland, Norway and Sweden. CARNEGIE HOLDING AB • ANNUAL REPORT 2020 1 INTRODUCTION KEY DATA The year in brief Carnegie’s leading position in the Nordic market combined with high market activity generated income growth of 26 percent. We are reporting good financial performance for the entire business, with the strongest development in the ECM market. Carnegie also solidified its position as a market leader in all main business areas, according to independent client surveys and rankings. Operating income 2020 Profit before tax 2020 Total operating income SEK 3,284m (2,613), +26% SEK 836m (501 excluding capital gain of SEK 171m), +67% 3, 284 836 Responsible advisory Responsible advisory Responsible employer Percentage of listed companies for Percentage of discretionary Percentage of employees who which the ESG perspective is included management covered by expressed high engagement with in equity research. ESG screening. their jobs. 100% 100% 95% (+2%) Common equity Tier 1 capital ratio % Carnegie #1 30 Carnegie Investment Bank received several top 24 2 rankings and awards in 2020: 20 1 Kantar Sifo Prospera 10 #1 Domestic Equity Sweden, Finland & Nordic 5 #1 Corporate Finance ECM Nordic & Sweden 0 #1 Corporate Finance M&A Adviser Sweden 201 201 2018 2019 2020 #1 Private Banking Sweden & Nordic #1 Back-Office Equity Nordic, Sweden & Finland Operating income S 4000 Mergermarket 3284 3000 #1 Sweden M&A Adviser 2000 EuroMoney 1000 #1 Private Banking Sweden 0 201 201 2018 2019 2020 2 CARNEGIE HOLDING AB • ANNUAL REPORT 2020 INTRODUCTION High employee engagement is critical to Carnegie’s success. Gender distribution, women/men Among 600 employees in six countries, 27 percent are women and 73 percent are men. Companies covered Assets under management ECM transactions The number of listed companies covered by Carnegie’s total assets under management Number of ECM transactions executed in Carnegie and their combined share of total and growth in 2020, SEKbn. the European market. market capitalisation in the Nordic countries. 360 (93%) 166 bn (+30%) 86 (47) Income Geographical distribution Employees by business area of income per unit Investment Banking & Securities 80% Sweden 60% Securities 26% Private Banking 20% Norway 14% Support & Group 24% Denmark 8% Investment Banking 23% Other 18% Private Banking 16% IT 16% CARNEGIE HOLDING AB • ANNUAL REPORT 2020 3 INTRODUCTION CEO’S MESSAGE Higher demand for our services 2020 was a turbulent year, and a dramatic one. We quickly reorganised our working methods at Carnegie to continue providing outstanding service to our clients. Client loyalty, higher market shares and our financial performance indicate that we accomplished that goal even under the unique circumstances. 2020 was a year that will have impact on people and Digital adoption gave us new opportunities companies for a long time to come. We might not see For much of 2020, contact with our clients was almost the beginning of the end of the pandemic that has exclusively digital and we will take away important digital swept across the world until 2021. The pandemic also lessons when the pandemic is over. The digital platforms had profound impact on Carnegie, mainly affecting how have provided opportunities including channels to reach we interact with our clients and each other. The eco- new clients and new markets, along with the possibility to nomic sector in which we operate proved to be relatively enhance interaction between our offices in the Nordics, resilient, even in a pandemic. The swift and powerful New York and London. actions taken by governments and central banks around It was important to us during the past year to not let the world are an important reason that the consequences important long-term initiatives fall by the wayside during the on the real economy and, by extension, the financial pandemic. We are therefore continuing to modernise our market, were less serious than initially feared. Viewed digital infrastructure. This is a comprehensive, future-ori- across the entire year, activity in our business was very ented initiative that will be key to the development of our good, although it varied over time and from one seg- business in the years ahead. ment to the next. Top scores in market and client surveys Higher demand for our services As in previous years, we are top-ranked among essentially Activity was high in the equity market during the year all target groups in most client and market surveys, in all and demand for Carnegie’s services rose. Institutions areas of operation. This illustrates the high trust we enjoy and individuals were very active in the financial markets, from our clients, which was especially important in a year while numerous companies were seeking capital. In like 2020 when so much took place digitally and remotely. total, we participated in 86 ECM transactions during the year, more than any other bank in Europe. Of these, Strong company culture 16 were IPOs, double the number in 2019. There was We also received praise in the employee survey. The initial negative impact on the M&A market when the employee engagement score went up since last year to 95 pandemic hit, but the market recovered towards the end percent. In challenging years like this one, it is particularly of the year. important to be rated highly as an employer. It states that There was strong inflow of clients and assets under our company culture is strong and our infrastructure is management to Private Banking. When the pandemic resilient when tested. Committed employees are essential made face-to-face meetings impossible, we quickly to Carnegie’s success. We are especially proud that the switched to digital communication with our clients, percentage of women who believe Carnegie provides which proved successful. There was a huge thirst for equal opportunities