Annual Report State-owned Companies 2003 Annual Report State-owned Companies 2003 2 CONTENTS Foreword 4 The year in brief 6 State ownership administration 10 Principles of ownership control 10 State ownership policy 13 Structural development 20 The state corporate sphere 22 Overview 2003 22 Turnover and earnings 24 Investments 25 Employees and international activities 26 Dividend 28 Companies operating under market conditions 29 Overview 2003 30 Akademiska Hus AB 34 Dom Shvetsii, A/O 35 Green Cargo AB 36 Imego AB 37 Kasernen Fastighets AB 38 Lernia AB 39 Luossavaara-Kirunavaara AB, LKAB 40 Posten AB 41 SJ AB 42 Specialfastigheter Sverige AB 43 Sveriges Bostadsfinansieringsaktiebolag, SBAB 44 Photo: Ted Fahn Photo: Stewen Quigley Stattum, Förvaltningsaktiebolaget 45 Sveaskog AB 46 Svensk Exportkredit AB, SEK 47 Swedish Space Corporation 48 Swedish Ships Mortgage Bank 49 Swedcarrier AB 50 Swedesurvey AB 51 SweRoad AB 52 Teracom AB 53 Vasakronan AB 54 Vasallen AB 55 Vattenfall AB 56 Venantius AB 57 Vin & Sprit AB, V&S 58 Review of listed companies 59 Nordea Bank AB 61 OMHEX AB 62 SAS AB 63 TeliaSonera AB 64 Photo: Daniel Jeminen CONTENTS 3 Companies with special societal interests 65 Overview 2003 66 A-Banan projekt AB 69 ALMI Företagspartner AB 70 Apoteket AB 71 Bostadsgaranti, AB 72 Bothia Garanti AB 73 Göta kanalbolag, AB 74 IRECO Holding AB 75 Kungliga Dramatiska Teatern AB 76 Kungliga Operan AB 77 Swedish Civil Aviation Administration 78 Norrland Center AB 79 Samhall AB 80 SIS Miljömärkning AB 81 Swedish Maritime Administration 82 SOS Alarm Sverige AB 83 Statens Väg- och Baninvest AB 84 Svensk Bilprovning, AB 85 Svensk-Danska Broförbindelsen SVEDAB AB 86 Svenska kraftnät, Affärsverket 87 Svenska Miljöstyrningsrådet, AB 88 Svenska Spel, AB 89 Sveriges Provnings- och Forskningsinstitut AB, SP 90 Sveriges Rese- och Turistråd AB 91 Photo: Peter Lydén Swedfund International AB 92 Systembolaget AB 93 Voksenåsen A/S 94 Companies undergoing restructuring 95 SKDföretagen AB 95 Svenska Skogsplantor AB 95 Sydkraft SAKAB 95 Zenit Shipping AB 95 A historical overview 96 Changes in ownership 99 Accounting principles 100 Definitions and abbreviations 101 Review of companies 102 List of government bills 104 Changes of Managing Directors and Chairmen 105 Division of responsibility within the Government Offices for state-owned companies 106 Board members elected by the annual general meeting of shareholders 108 Photo: Lasse Davidsson Employee representatives 114 Addresses 116 From The Hydroelectric Power Board to an internationally competitive group 118 Report dates for state-owned companies 120 Photo: Dan Coleman 4 FOREWORD Foreword It is good and important that the spotlight is now on issues of trust. Transparency and confi- dence go hand in hand. It is a fact that the Gov- ernment has placed demands on state-owned companies for open information for a number of years. This year, the Government adopted new guidelines for the payments and pensions grant- ed by the boards to the managing directors and other senior executives. Guidelines that, for instance, stipulate that the managing director is not to receive a bonus and that the chairman of the board is to justify the managing director’s salary at the annual general meeting. We hope that the changes that have been introduced will also inspire other parts of the business commu- nity to adopt similar measures. The state-owned companies have also completed a year with, as a rule, good results. The return on equity was 11 per cent. The corporate group thus provided a good contribution to govern- ment revenue and the ability to pursue welfare policy. In 2004, it is estimated that the compa- nies will provide a dividend to public finances of over SEK 12 billion. The ambitions for the state-owned companies extend beyond making a contribution to public finances through profits, however. The compa- nies that operate in competitive markets also have a role that goes beyond the demand for a good return. FOREWORD 5 For a number of years, the Government has actively and deliberately recruited new mem- bers for the boards of the state-owned compa- nies. Nomination work is pursued very actively from the assessment of the board to the formal decision at the annual general meeting. The Government has a broad basis for recruitment to shape boards with the ability to develop the activities engaged in. We have succeeded well in our recruitment and we can become even bet- ter. This is noticeable not least by our achieving our target of 40 per cent women among the board members. A number of countries are now adopting the Swedish model of state-owned companies. Our targets are justifiably high. Well-run companies with a stable financial development are a condi- tion for growth. The Government is taking its responsibility for the state-owned companies now and in the future. Stockholm, 19 May 2004 Göran Persson Leif Pagrotsky Prime Minister Minister of Industry, Employment and Communications 6 THE YEAR IN BRIEF Financial overview 2003 STATE-OWNED COMPANIES FINANCIAL FACTS, SEK billion 2003 2002 Change, % Net turnover . 298.9 . 337.5 . –11.4 Profit before tax . 26.6 . 8.5 . 214.4 Net profit . 21.9 . 8.6 . 155.4 Shareholders’ equity . 205.3 . 195.2 . 5.2 Total assets . 873.9 . 876.6 . 0.0 Cash flow from operating activities . 25.1 . 75.0 . –66.6 Gross investment . 26.4 . 67.6 . –60.9 Average no. of employees . 144,806 . 162,185 . –10.7 Average no. of employees including associated companies . 205,528 . 199,302 . 3.1 Return on equity, % . .10.9 . 4.6 . 6.3 %-points Equity/assets ratio, % . 19.7 . 18.7 . 1.0 %-points Dividend . 12.3 . 10.01) . 23.1 1) Excluding additional dividend. Important events 2003 SJ AB Shareholders’ equity was restored during 2003 in SJ AB. In December 2002, the board of directors drew up a balance sheet for liquidation purposes and it was noted that more than half of the share capital had been consumed. At an extraordinary shareholders’ meeting in January 2003, it was decided to make use of a period of respite of eight months to investigate the possibilities of restoring the capital. In June 2003, the Government decided to provide a capital contribution of at most SEK 1,855 million which was to be paid to SJ. In August an extraordinary shareholders’ meeting decided that operations were to continue and SEK 1,555 million was paid in December 2003. Vattenfall Profit after tax increased by 21 per cent to SEK 9.1 billion in 2003. The company’s activities generate a strong cash flow and net borrowing is decreasing. Vattenfall’s vision is to develop into one of the lead- ing power companies in Europe. Today, Vattenfall operates mainly in Sweden, Finland, Germany and Poland. Vattenfall is the fifth largest electricity producer (measured in produced TWh) and the largest district heating company in Europe. Read more about Vattenfall on page 118. Photo: Industrifotografen AB THE YEAR IN BRIEF 7 AVERAGE NO. OF EMPLOYEES, thousands RETURN ON EQUITY, % DIVIDEND, SEK bn (including associated companies) 12 15 210 180 10 12 150 8 9 120 6 6 90 4 60 3 2 30 0 0 0 2001 2002 2003 2001 2002 2003 2001 2002 2003 Apoteket 2003 was the first full year with the new generic products reform, which means that more expensive pharmaceutical products are replaced by the cheapest equivalent. This reform has brought large financial benefits for customers and society. In 2003, SEK 1 billion was saved. The consequences for Apoteket are decreased sales revenue and some additional work, as well as a lower operating margin. Special account Svenska Spel at the National Svenska Spel’s turnover increased by 11 per cent in 2003, which meant more money for the public treasury and for activities for children and young people Debt Office organised by popular and sports organisations. Profit after tax was SEK 4,687 The Riksdag decided, in conjunction (4,210) million. In accordance with the new profit sharing system which is based with a review of the capital structure of on Svenska Spel’s total profits, SEK 1,010 million goes to activities for children state-owned companies, to approve a and young people organised by popular and sports organisations. In addition, maximum of SEK 3,000 million in the there is SEK 165 million paid to Sveriges Bingohallar (Bingo), parts of which are form of additional dividends from the paid to local sports associations. The rest of the profit goes to the state. state-owned companies being trans- ferred in 2003 to a special account at the National Debt Office. These funds were intended for initiatives in wholly or partly-owned state-owned companies. The Riksdag considered that there were good reasons to create an arrangement that facilitates capital restructuring in the state-owned company sphere by applying special destination, which means that the Government decides how the profits are to be used. The state should be able to act in the same way as a parent company that provides capital contributions to certain subsidiaries and finances this with funds from other companies. Read more on page 10. 8 THE YEAR IN BRIEF LKAB LKAB’s profit after tax increased greatly in 2003 and totalled SEK 688 (295) million. Demand for LKAB’s products was high in 2003. Turnover increased by SEK 2,280 million, SEK 1,000 million of which derives from companies acquired in the industrial mineral sector. Higher iron ore prices of approximately 10 per cent and increased delivery volume of approximately 2 million tonnes each con- tributed by over SEK 500 million. LKAB has asserted itself well on a consolidat- ed and competitive market.