Annual Report 2013 Investor in Brief
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Annual Report 2013 Investor in brief Vision As a long-term owner, we actively support the building and development of best-in-class companies. Business concept CONTENTS Investor owns significant interests in high-quality Portfolio overview ......................................................................2 Financial development ................................................................4 companies. Through the Boards of Directors, we actively Letter from the Chairman ...........................................................6 work for continuous improvement of the performance President’s comments ................................................................8 of the companies. Objective and strategy..............................................................10 With our industrial experience, broad network and Active ownership ..................................................................... 11 financial strength, we strive to make and keep our Value creation ..........................................................................12 companies best-in-class. We always look at the Business areas ..........................................................................13 Core Investments .....................................................................15 opportunities and challenges facing each individual Financial Investments ...............................................................22 company. Our employees .........................................................................25 Our cash flow allows us to support strategic initiatives The Investor share ....................................................................26 in our companies, capture investment opportunities and Sustainable business .................................................................28 provide our shareholders with a dividend. Corporate Governance Report .................................................29 Board of Directors ....................................................................38 Management Group .................................................................40 Objective Proposed Disposition of Earnings .............................................41 Our objective is to build the net asset value, operate List of contents of Financials .....................................................42 efficiently and pay out a steadily rising dividend. Over Statements for the Group.........................................................43 time, this should allow us to generate an attractive total Notes for the Group .................................................................49 shareholder return. Our long-term return requirement for Statements for the Parent Company .........................................86 Notes for the Parent Company .................................................91 investments is the risk-free interest rate plus an equity Auditor’s Report .......................................................................99 risk premium, i.e. 8-9 percent annually. Ten-Year Summary .................................................................100 Definitions ..............................................................................101 • Build the net asset value History ....................................................................................102 The net asset value amounted to SEK 215.4 bn. Shareholder information ........................................................104 at year-end 2013 (174.7), an increase, with dividend added back, of 27 percent (15). The SIXRX total The Annual Report for Investor AB (publ.) 556013-8298 consists of return index rose by 28 percent. the Administration Report on pages 4-5, 13-14, 25-41 and the financial statements on pages 42-98. • Operate efficiently The Annual Report is published in Swedish and English. During 2013, management costs were SEK 359 m. (377). This corresponds to 0.17 percent of our net asset value. Going forward, we target a run-rate of SEK 360-380 m., subject to inflationary adjustments. Investor is the leading owner of high quality Nordic-based international companies, founded by the Wallenberg family a hundred years ago. Through board participation, • Pay out a steadily rising dividend our industrial experience, network and financial strength, The Board of Directors has proposed a SEK 8.00 we strive to make our companies best-in-class. Our holdings dividend per share, (7.00). include, among others, SEB, Atlas Copco, ABB, Ericsson and Mölnlycke Health Care. INVESTOR 2013 INVESTOR IN BRIEF 1 Highlights 2013 Return to shareholders We acquired Permobil, which became a new Long-term, our objective is to generate a return to Core Investments subsidiary. The company our shareholders exceeding the market cost of capital. has a strong product offering and market In addition, we believe benchmarking our performance position, creating a good platform for future to the Swedish general stock market is appropriate growth. considering the overall risk profile on our investments. Over the past one, five, ten and twenty years, our total shareholder return has exceeded the market cost of Mölnlycke Health Care was refinanced capital, and over the past one, ten and twenty years, through an equity injection of EUR 544 m., it has also exceeded the SIXRX total return index. strengthening the balance sheet and enabling growth initiatives and future capital distribution Goal fulfillment to Investor. NAV incl. Return dividend added Investor total SIXRX Years requirement, % back %1) return, %1) return index, %1) 1 8-9 26.9 35.1 28.0 Investor invested SEK 1.0 bn. in equity in 5 8-9 13.2 17.8 20.0 10 8-9 13.9 15.9 12.0 Aleris and refinanced it with an all senior debt 20 8-9 14.6 13.4 11.7 1) Average annual return. structure. Dividend policy We invested SEK 8.3 bn. in Core Investments, Our dividend policy is to distribute a large percentage of which SEK 7.6 bn. in the subsidiaries. of the dividends received from listed Core Investments, as well as to make a distribution from other net assets We received SEK 5.4 bn. in dividends from corresponding to a yield in line with the equity market. our listed Core Investments. The goal is also to pay a steadily rising dividend. SEK/share % The holding in Gambro was divested, with 8 8 8 proceeds of about SEK 10.2 bn. to Investor. 7 7 7 6 6 6 5 5 Investor Growth Capital (IGC) in the U.S. 5 4 4 4 3 3 changed its strategy from ”invest-to-sell” 3 2 2 to ”invest-to-build”. IGC distributed SEK 1.3 bn. 2 1 1 1 0 0 to Investor. 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 1) 04 05 06 07 08 09 10 11 12 13 1) Proposed dividend Ordinary dividend, SEK/share Extraordinary dividend, SEK/share Yield, %, based on share price at year-end Total shareholder return (TSR) amounted to 35 percent. During the past 20 years, average annual TSR has been 13 percent. INVESTORKr/aktie 2013 % INVESTOR IN BRIEF 1 8 8 8 7 7 7 6 6 6 5 5 5 4 4 4 3 3 3 2 2 2 1 1 1 0 0 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 1) 04 05 06 07 08 09 10 11 12 13 1) Föreslagen utdelning Ordinarie utdelning, kr/aktie Extra utdelning, kr/aktie Direktavkastning, %, baserad på årets slutkurs Portfolio overview We are the leading owner of high-quality Nordic- based companies. Our holdings are active within www.seb.se Share of total assets: 16% industrials, financial services, healthcare and tech- A leading Nordic financial services group. Key figures SEB is present in some 20 countries, with Total operating income, SEK m. 41,553 nology, industries in which we have long experi- main focus on the Nordic countries, Value of holding, SEK m. 38,618 ence and deep knowledge. Our investments are Germany and the Baltics. Share of capital/votes, % 20.8/20.9 either core investments or financial investments. Core Investments, 86 percent of our assets, www.atlascopco.com Share of total assets: 15% consists of listed holdings in which we are a signifi- A global leader in compressors, Key figures cant owner and wholly-owned subsidiaries. Our construction and mining equipment, power Net Sales, SEK m. 83,888 tools and assembly systems. The group Value of holding, SEK m. 36,687 investment perspective is long-term. The objective operates in more than 170 countries. Share of capital/votes, % 16.8/22.3 is to generate returns through value appreciation and dividends. www.abb.com Share of total assets: Financial Investments, 14 percent of our assets, 13% includes mainly EQT and Investor Growth Capital as A global leader in power and automation Key figures technologies that enable utility and industry Net Sales, USD m. 41,848 well as our partner-owned investments. We have customers to improve performance while Value of holding, SEK m. 31,738 the same active ownership approach in Core Invest- lowering environmental impact. Share of capital/votes, % 8.1/8.1 ments and Financial Investments; however in the partner-owned investments, we do not control www.molnlycke.com Share of total assets: 9% the exit horizon ourselves. A world-leading manufacturer of single-use Key figures surgical and wound care products and Net Sales, EUR m. 1,153 services for the professional health care Value of holding, SEK m. 20,684 sector. Share of capital/votes, % 98/96 Impact on net asset value, 2013, SEK m. SEB ABB www.astrazeneca.com Share of total assets: 8% AstraZeneca A global, innovation-driven, integrated Key figures Sobi biopharmaceutical company. Net Sales, USD m. 25,711 Ericsson Value of holding, SEK m. 19,753 EQT Share of capital/votes, % 4.1/4.1 Nasdaq OMX Mölnlycke Investor Growth Capital