Our operations are based on our own methodology for developing and refining the companies in which Traction is an owner. ANNUAL REPORT 2009 Traction in brief raction is a publicly traded investment GOALS company with ownership interests in To achieve average annual growth of shareholders’ listed and unlisted companies. Our opera- equity of at least 25 percent. tions are based on our own methodology To create profitable growth in our wholly owned for developing and refining the compa- and partially owned companies. nies in which Traction is an owner. The To minimise the risk and increase the return on our Tprimary focus of the methodology is customer relation- projects. ships, capital flows and risk management. This metho- dology has evolved over Traction’s more than 35-year STRATEGY history. Traction does not focus on specific industries, To achieve Traction’s goals, the following are required: because our method is based on business acumen, which The ability to choose the right projects, in reality, the is applicable regardless of industry affiliation. Traction’s right partner – corporate managers. role as owner is based on an active and long-term enga- Project Managers who can provide corporate mana- gement, together with an entrepreneur or corporate ma- gers with the support and complementary expertise nagement. In addition hereto Traction conducts invest- they require to carry out the business project. ment operations aimed at achieving a good return on the Project Managers with varying expertise and back- Company’s capital. ground to cover the varying needs of each company. Project Managers with the ability to step in, when BUSINESS CONCEPT necessary, as corporate managers during transitional To apply Traction’s business development method in periods, until a new manager has been appointed. wholly and partially owned companies, thereby genera- Co-operation partners who can act as project mana- ting high returns and value growth. ger, director, chief executive and/or joint owner. Sufficient financial resources to take on interesting BUSINESS PHILOSOPHY projects. We have a long-term approach. Consistent application of our methodology to mini- We are not seeking to build up a corporate group. We mize risk and raise the return on investment. work instead with a number of independent compa- nies – our clients − whose increase in value will be EXIT STRATEGY realised in the longer term. It is important to Traction that our companies display Our sphere of activity lies within the general trans- long-term growth and earning power. Our basic tenet formation of companies. The requisite technical and is that we regard our ownership as “perpetual”, but our industry expertise must be present in the company. shares are, in principle, always for sale at the right price Our primary objective is to sell management; and to a better owner. We define a better owner as an financing is a secondary priority. It is the combina- owner that is able to do more for the company than Trac- tion that is interesting. tion can. SHAREHOLDER INFORMATION 2010 CONTENTS Publiceringsdatum för ekonomisk information 2010 2009 in Brief 2 3 May Interim Report for the period January – March President’s Statement 3 3 May Annual General Meeting 2010 Traction’s Business 5 28 July Interim Report for the period January – June Business Organisation 10 28 Oct. Interim Report for the period January – September Listed Active Holdings 11 Unlisted Active Holdings 16 To subscribe for financial information by e-mail, please visit www.trac- Subsidiaries 19 tion.se, or e-mail the Company at [email protected]. All reports during Ownership Policy 22 the year will be available at the Company’s website. Traction’s official Traction from an Investor Perspective 23 Annual Report will be available for downloading at the website well in A Small Selection of Transactions over the advance of the Annual General Meeting. Past Ten Years 27 The Traction Share 29 Corporate Governance Report 31 Board of Directors 33 Addresses 34 1 Traction annual report 2009 2009 in brief 2009 in Brief Profit after taxes was MSEK 280 (SEK 17 per share) Traction completed its cash offer to the shareholders of Nilörn. By 31 December 2009 ownership stood at 65 percent of capital and 57 percent of votes. Guaranteed new issues in PA Resources, Eniro, Nordic Camping & Sports, SRAB Shipping, Endomines and Switchcore Subscribed for a convertible debenture loan in PA Resources in the amount of MSEK 47 Traction’s wholly owned subsidiary, Ankarsrum Assistant AB took over the rights to the Assistent® and launched a newly designed version on the market Subscribed for newly issued shares in SRAB Shipping. Traction now owns 11.7 percent of the shares outstanding The holding in Gnosjöplast was liquidated Acquired a major lot of class A shares in OEM International. Traction now owns 4.7 percent of the capital and 10.3 percent of the votes Started a mutual fund business through acquisition of Thenberg Fonder KEY FINANCIAL INDICATORS 2009 2008 2007 2006 2005 Result for the year, MSEK 280 -171 81 175 310 Earnings per share, SEK 17 -10 5 11 19 Shareholders’ equity, MSEK 1 350 1 147 1 348 1 297 1 137 Equity per share, SEK 85 70 82 78 69 Share price at end of period, SEK 68 54 68 76 60 Market price/equity per share, % 80 76 83 97 87 Return on equity, % 25 -13 6 15 38 Equity ratio, % 92 92 90 90 88 Dividend per share, SEK* 1,85 2,50 1,85 1,10 0,93 Dividend yield, % 2,7 4,6 2,7 1,4 1,6 *) Dividend for 2009 as proposed by the Board of Directors. DISTRIBUTION OF EQUITY ATTRIBUTABLE TO THE PARENT COMPANY’S EQUITY HOLDERS Subsidiaries 7%, including Ankarsrum entities Nilörn Unlisted holdings, 9%, including Bricad Recco Cash and cash equivalents, 25% Banking Automation Aktiva noterade innehav 20% Övriga noterade innehav 29% Dotterföretag 7% Active listed holdings, 20%, including Onoterade innehav 9% Duroc ÖvrigaOther financial finansiella assets, instrument 10% 10% Hifab Likvida medel 25% Softronic PartnerTech OEM International Other listed holdings 29% Traction annual report 2009 2 Presidents’s statement All in all 2009 was a prosperous year for Traction’s shareholders Dear Shareholder, In absolute terms 2009 was one of Traction’s best years to market is improbable at this juncture. A more common belief date with a reported after-tax profit of MSEK 273 attributable is that the Stockholm market will rise by a further 30 percent to the Parent Company’s equity holders. The return on equi- or so during 2011. One argument is that interest rates are so ty, adjusted for repurchased shares, was 25 percent, which low that the alternatives for earning a return are few and far must be regarded as acceptable, given that we had a large between. I am sceptical. Memory is selective for most of us portion of our capital invested in cash and low-return money and limited as to time. If what we have experienced during market instruments. This means that the return on our other a year or so is one of the worst crises since the 1930s, one investments was considerably higher. has to wonder if the economy won’t take considerably more The good result is explained primarily by a number of time to recover than many seem to be expecting today. Per- successful equity investments in large haps it will be the export-dependent and medium-size companies listed companies who will be able to handle on the Stockholm stock exchange, alt- “I see continued the future well, while unemployment hough an increase in the value of our will rise further in the western world, active listed holdings also contributed opportunities in coming where nations will be suffering under to the result. Traction maintained a years of engaging in the mountains of government debt highly liquid position during the year built up during the financial crisis. It in anticipation of new investment underwriting transac- seems quite possible that several of opportunities. We have sensed a great tions, where we can earn our export-dependent companies will deal of concern for negative surprises be able to expand in China and its in equity and money markets as the commission income as environs, at the same time as market financial crisis remains a reality for well as become part demand in the western world remains most companies and nations. weak. In such a scenario it would seem The reality remains frosty for many owners in interesting likely that that stocks are now fairly companies, especially in manufactur- companies at a reasonable valued. But what happens if we get to ing industry. Consumer-dependent see a financial crash in China? That is companies see strong demand for price level.” something we would rather not speak consumption-prone citizens who feel about. they can spend because of currently During 2009 Traction elected to prevailing extremely low interest ra- realise some of our more successful tes. In Sweden in general, and in the investments in order to have financial Stockholm metropolitan area in particular, rising real estate preparedness in connection with a market turnaround and, prices have also contributed to sustained high consumer especially, to be able to participate in transactions where we spending. It will be interesting to see how our right-wing can assume an active ownership role. At the same time we politicians will come to grips with the housing bubble they have a number of large investments in the likes of Swedbank, have contributed to creating. That bubble will have dire con- PA Resources, SCA and others, which means that Traction sequences, especially for the younger generation.