2 TRACTION ANNUAL REPORT 2011 TRACTION ANNUAL REPORT 2011 3 CONTENTS 2011 SUMMARY CONTENTS 2011 SUMMARY 4 PRESIDENT’S STATEMENT • The result after taxes attributable to the Parent Company’s shareholders amounted to MSEK –41 (193). • The change in value of securities was MSEK –155 (110). 5 TRACTION IN BRIEF • Operating profit in the operative subsidiaries amounted to MSEK 59 (67). 7 TRACTION’S BUSINESS • The return on equity was –3 (15) percent. • Equity per share amounted to SEK 91 (95). 1 2 BUSINESS ORGANISATION • Net purchases of listed shares for MSEK 257 (129). 13 BOARD OF DIRECTORS • Traction is now the largest owner of BE Group (13 percent) by acquiring shares for MSEK 164. • Ownership in Drillcon increased from 13 to 30 percent. 14 OWNERSHIP POLICY FOR LISTED COMPANIES • Major owner in Catella and G5 Entertainment. • The change in value of securities during 2012 until 15 February amounts to MSEK 183. 15 LISTED ACTIVE HOLDINGS 19 OTHER MAJOR HOLDINGS KEY FINANCIAL INDICATORS 2011 2010 2009 2008 2007 20 UNLISTED ACTIVE HOLDINGS Result for the year, MSEK1 -41 193 273 -171 81 Earnings per share, SEK -3 12 17 -10 5 Shareholders’ equity, MSEK 1 416 1 495 1 350 1 147 1 348 24 SUBSIDIARIES Equity per share, SEK 91 95 85 70 82 Market price at end of period, SEK Onoterade innehav 9%, bl.a. 68 Övriga73 tillgångar 8% 68 54 68 26 TRACTION FROM AN INVESTOR PERSPECTIVE Market price/equity per share,Bricad % 75 77 80 76 83 Recco Finansiella placeringar 40% Return on equity, % Sigicom -3 15 25 -13 6 Equity ratio, % 92 Dotter93 företag 7%, bl.a. 92 92 90 30 TRANSACTIONS OVER THE PAST TEN YEARS Aktiva noterade innehav 36%, bl.a. Ankarsrum Motors Dividend per share, SEK2 BE Group 2,35 Nilörngruppen1,85 1,85 2,50 1,85 Dividend yield, %2 OEM International 3,5 2,5 2,7 4,6 2,7 34 THE TRACTION SHARE Softronic Hifab PartnerTech 1) Attributable to the Parent Company’s equity holders. Drillcon 36 TRACTION’S HISTORY 2) Dividend for 2011 as proposed by the Board of Directors. 3 9 ADDRESSES DISTRIBUTION OF EQUITY ATTRIBUTABLE TO Subsidiaries, including THE PARENT COMPANY’S EQUITY HOLDERS Financial investments 6% Unlisted holdings, including 40% SHAREHOLDER INFORMATION 2012 9% 9 May Interim Report for the period January – March 9 May Annual General Meeting 2011 23 August Interim Report for the period January – June 25 October Interim Report for the period January – September 9% 36% Subscription to financial information via e-mail may be made at traction.se, or by e-mail to [email protected]. Listed active holdings, including All reports during the year will be available at the Company’s website. Traction’s official annual accounts are Other assets available for downloading at the website at traction.se 4 TRACTION ANNUAL REPORT 2011 TRACTION ANNUAL REPORT 2011 5 PRESIDENT’S STATEMENT TRACTION IN BRIEF red to prior levels. In a more extended perspective the c onditions are good for a normalisation of BE Group’s earnings, which should result in a re-evaluation. BE Group lacks a principal owner, which along with the possibility of a re-evaluation, also means that Traction sees exciting possibilities of having an effect on the company’s future development. The investment In BE Development and Group burdened Traction’s result by MSEK 38 during 2011. But by 29 February 2012 a MSEK 51 recovery had been recorded. enhancement of companies The current debt crisis, mainly in some European countries and the United States, affects the mood of investors from time to time. In the short term the Traction is a publicly traded investment company with ownership interests in listed and unlisted companies. Our p sychological mood determines how the stock m arket o perations are based on our own methodology for developing and refining the companies in which Traction is an owner. reacts, at the same time as fundamental f actors play The primary focus of the methodology is customer relationships, capital flows and risk management. This methodology a lesser role. By March 2012 the prevailing fear of has evolved over Traction’s more than 35-year history. Traction does not focus on specific industries, because our a euro meltdown during autumn 2011 has all but method is based on business acumen, which is applicable regardless of industry affiliation. Traction’s role as owner d isappeared, despite the fact that the debt problems are far from resolved. My feeling is that it is very is based on an active and long-term engagement, together with an entrepreneur or corporate management. In addition d ifficult, if not impossible, to know how to react hereto, Traction conducts investment operations aimed at achieving a good return on the company’s capital. u nder such circumstances. At Traction our p rincipal aim is to act with a long-term outlook. We­ tend to i gnore short-term v olatility, but we also try to be BUSINESS CONCEPT STRATEGY Dear Shareholders, oppor tunistic, buying on major downturns and selling To apply Traction’s business development method To achieve Traction’s goals, the following is required: after big surges. in wholly and partially owned companies, thereby The earnings performance of Traction’s project Another inference is that the political a tmosphere g enerating high returns and capital appreciation. • The ability to choose the right projects, in reality, the c ompanies was good during 2011. It is particularly will fluctuate and will continue to constitute a m ajor right partner – corporate managers. gratifying to note that the positive development of uncertainty factor, which contributes to r apid and BUSINESS PHILOSOPHY Traction’s operating subsidiaries continued, especially force ful market reactions. The mood of the stock • We have a long-term approach. • Project Managers who can provide corporate in the case of Ankarsrum Motors and N ilörngruppen. m arket also affects people’s overall view of the m anagers with the support and complementary The performance of several of our unlisted partially e conomic situation and their willingness to consume, • We are not seeking to build up a corporate group. e xpertise they require to carry out the business project. owned companies was good during 2011, in particular which has the effect that a weak stock market quickly We work instead with a number of independent Sigicom, which generated a record result for the past contributes to weaker market demand. The actions of companies – our clients − whose increase in value • Project Managers with varying expertise and back- year. In terms of their business, the d evelopment of our the public in stock market increases also appear to be will be realised in the longer term. ground to cover the varying needs of each company. listed portfolio companies was also quite satisfactory. the inverse, even if a stock market upswing not auto- But this development is not directly reflected in matically results in more room for consumption. • Our sphere of activity lies within the general trans- • Project Managers with the ability to step in as corporate Traction’s reported result, which to a much greater My take on the situation is that we will continue formation of companies. The requisite technical and managers during transitional periods, until a new degree replicates the short-term performance in the to experience recurring crises in coming years. These industry expertise must be present in the company. m anager has been appointed. stock market of our listed holdings. As we all know, will create opportunities for Traction, at the same as the market goes up and it goes down. Last year the we will be affected by changed valuation levels when • Our primary objective is to sell management; financing • Co-operation partners who can act as project manager, trend was markedly down and so far this year it the crises culminate. The option of selling all assets is a secondary priority. It is the combination that is director, chief executive officer and/or joint owner. has been sharply up. The valuation of the unlisted is not particularly appealing. And in what should i nteresting. c ompanies is done on an ongoing basis by the Board we i nvest instead to give us long-term appreciation? • Sufficient financial resources to take on interesting of Directors, which means substantially less v olatility T here are those who think gold, Swiss Francs or long- GOALS projects. than for the corresponding listed holdings. But the term g overnment bonds are good alternatives – I have • To achieve average annual growth of shareholders’ changes in value of our subsidiary shares are not my doubts. equity of at least 15 percent. • Consistent application of our methodology to minimise included in the reported result. Only their reported As before, we will therefore continue to develop our risk and raise the return on investment. earnings for the period are included. Measured in companies proactively, at the same time looking for • To create profitable growth in our wholly owned and this manner Traction reported a loss for the year of 3 new business opportunities. The most important thing partially owned companies. EXIT STRATEGY percent of equity. Compared with the performance of is that we as owners always work towards making It is important to Traction that our companies display the Stockholm stock market, which dropped by 13.5 our companies well-managed and making sure that • To minimise the risk and increase the return on our long-term growth and earning power. Our basic tenet percent, this may be regarded as a rather good result. there are always appropriate action plans to handle projects. is that we regard our ownership as “perpetual”, but A new, major engagement is the BE Group, where s ituations when demand suddenly becomes weaker.