Annual Report 2012 2012 highlights Significant events during the year Mixed development in the holdings Susanna Campbell appointed as new CEO High level of transaction activity Anticimex sold – IRR 24% Remaining holding in Lindab sold – total IRR 23% Contex sold after the end of the period – IRR -16% Arcus-Gruppen acquired Aalborg with several Nordic brands Stofa sold after the end of the period – IRR 55% Agreement signed on acquisition of Aibel Results Data per share 1) SEKm 2012 2011 2010 2009 2008 SEK 2012 2011 2010 2009 2008 Profit/share of profits -29 546 1,419 1,295 1,554 Earnings after tax 1.90 1.63 7.09 2.66 16.31 Exit gains 978 525 1,320 4,449 Equity 39 43 47.50 48 50 SEK Revaluations and SEK Dividend 3.00 2) 5.50 5.25 4.75 4.50 20 impairment -375 -312 140 8 -92 Dividend yield, % 4.8 2) 6.8 4.2 5.1 6.7 Profit from holdings 574 759 2,879 1,295 5,911 Total return, % -17 -32 40 47 -20 15 Central income and 6 Market price 62.50 80.75 124.50 92.50 67.50 expenses 193 101 -11 80 -240 Market price/equity, % 160 188 262 193 135 Profit before tax 767 860 2,868 1,375 5,671 10 4 1) Applicable historical figures are recalculated taking into account the split in 2011. Equity 12,405 13,658 15,091 15,302 15,825 2) Proposed dividend. 5 2 0 0 2008 2009 2010 2011 2012 1) Earnings after tax/share (left) Dividend/share (right) 1) Proposed dividend. Earnings and dividend Total return SEK SEK % 20 8 80 60 15 6 40 20 10 4 0 5 2 -20 -40 0 0 -60 2008 2009 2010 2011 2012 1) 2008 2009 2010 2011 2012 Earnings after tax/share (left) Ratos B (Total return) SIX Return Index Source: SIX Dividend/share (right) 1) Proposed dividend. % 80 60 % 40 100 80 20 60 0 40 -20 20 -40 0 -60 –20 2008 2009 2010 2011 2012 –40 Ratos B (Total return) SIX Return Index Source: SIX –60 2007 2008 2009 2010 2011 Ratos B-aktie SIX Return Index Kr 20 % 100 15 80 60 10 40 20 5 0 –20 0 2007 2008 2009 2010 20111) –40 1) –60 Utdelning/aktie Resultat efter skatt/aktie Föreslagen utdelning. 2007 2008 2009 2010 2011 Ratos B-aktie SIX Return Index Kr 20 15 10 5 0 2007 2008 2009 2010 20111) Utdelning/aktie Resultat efter skatt/aktie 1) Föreslagen utdelning. Contents Group review CEO’s comments 2 Vision, mission, targets and strategy 4 Ratos as owner 6 Ratos share data 11 The people at Ratos 14 Ratos since 1866 20 Corporate Responsibility 22 Holdings Holdings overview 28 AH Industries 30 Arcus-Gruppen 32 Ratos is a private equity conglomerate. Our Biolin Scientific 34 mission is to provide the highest possible return Bisnode 36 DIAB 38 through the professional, active and responsible Euromaint 40 exercise of our ownership role in a number of Finnkino 42 GS-Hydro 44 selected companies and investment situations. Hafa Bathroom Group 46 HL Display 48 Value creation with Ratos as owner Inwido 50 Jøtul 52 Ratos’s financial target is that each investment should gen- KVD Kvarndammen 54 erate an average annual return (IRR) of at least 20%. Since Mobile Climate Control 56 1999 our IRR has amounted to 25% on the total of 36 exits SB Seating 58 we have completed. Most value creation occurs through industrial development during the holding period. Read more about our vision, mission, targets and strat- Directors’ report egies on pages 4 – 5 Guide to Ratos’s accounts 62 Directors’ report 66 Corporate governance report 68 Long tradition of active ownership Chairman’s letter 68 Ratos has a 147-year tradition of active ownership. The Board of Directors and CEO 78 business has had an industrial focus from the outset through Consolidated income statement 80 its origins in the steel wholesaler Söderberg & Haak which Consolidated statement of comprehensive income 80 Consolidated statement of financial position 81 was founded in 1866. In the subsequent century operations Consolidated statement of changes in equity 82 were developed and operating subsidiaries were added, pri- Consolidated statement of cash flows 83 marily within trading and engineering, as well as a portfolio of Parent company income statement 84 listed shares. Ratos was listed on the stock exchange in 1954, Parent company statement of comprehensive income 84 Parent company balance sheet 85 at the time as a mixed investment company. Today Ratos is Parent company statement of changes in equity 86 a private equity conglomerate which seeks to combine the Parent company cash flow statement 87 best from the private equity and the conglomerate sectors. Index to the notes 88 Ratos is listed on Nasdaq OMX Stockholm, Large Cap. Notes to the financial statements 89 Auditor’s report 132 Read more about our history on pages 20–21 People are the key What makes a difference for Ratos over time is how well Additional information we succeed as active owners. This craftsmanship is car- Five-year overview, Group 134 Definitions 135 ried out by our organisation. Achieving our goals requires Addresses 136 ideas, access to capital and people who have the will, ex- Shareholder information 137 pertise and stamina to implement ambitious plans. The 26 people who currently work in our investment organisation are responsible for the development of our holdings. In addition, active ownership is supported by the rest of our organisation with sound knowledge and experience within finance, accounting and communications. Ratos has a total of 48 employees. The organisation is presented on pages 14–19 Holdings in brief 15 holdings with total Finland 2 holdings sales of SEK 23 billion, Norway 3 holdings Sweden 9 holdings operating profit SEK1.3 billion and Denmark 15,000 employees. 1 holding Our holdings AH Industries Arcus-Gruppen Biolin Scientific Bisnode Danish supplier of metal compo- One of the Nordic region’s leading Offers advanced analytical instru- One of Europe’s leading suppliers nents to the wind energy, cement suppliers of wine and spirits. The ments for research, development of digital business information and mineral industries. group’s best-known brands include and diagnostics. within credit, market and business Aalborg and Lysholm Linie Aquavit. information. Sales SEK 1,062m Sales SEK 2,278m Sales SEK 235m Sales SEK 3,935m Operating profit/loss SEK -45m Operating profit SEK 5m Operating profit SEK 23m Operating profit SEK 511m Ratos’s holding 69% Ratos’s holding 83% Ratos’s holding 100% Ratos’s holding 70% Investment year 2007 Investment year 2005 Investment year 2010 Investment year 2005 www.ah-industries.dk www.arcusgruppen.no www.biolinscientific.com www.bisnode.com Hafa Bathroom Group HL Display Inwido Jøtul With the Hafa and Westerbergs International supplier of products Develops, manufactures and sells One of Europe’s largest manufac- brands a leading Nordic company and solutions for in-store commu- windows and exterior doors in turers of stoves and fireplaces. The within bathroom interiors. nication and store merchandising. the Nordic region and selected company dates back to 1853 and countries in northern Europe. the products are sold worldwide. Sales SEK 268m Sales SEK 1,657m Sales SEK 4,607m Sales SEK 913m Operating profit SEK 7m Operating profit SEK 104m Operating profit SEK 288m Operating profit/loss SEK -52m Ratos’s holding 100% Ratos’s holding 99% Ratos’s holding 97% Ratos’s holding 61% Investment year 2001 Investment year 2001/2010 Investment year 2004 Investment year 2006 www.hafabg.com www.hl-display.com www.inwido.com www.jotul.com Sector-neutral investments in the Nordic region Sector breakdown by consolidated book value Ratos invests in medium-sized to large companies in the Nordic region. Companies can be in all sectors – although Other 15% Industry 40% never in the arms industry or pornography, or in companies with an obvious negative environmental impact. The biggest sector in terms of consolidated book value Life Science 3% is industry followed by consumer goods and services. An overview of Ratos’s holdings is presented below Services 14% Consumer goods 28% and a detailed description of each holding is provided on pages 30–59 DIAB Euromaint Finnkino GS-Hydro Global company that manufac- Independent maintenance com- The largest movie theatre chain Global supplier of non-welded tures, develops and sells core ma- pany for the rail transport sector in Finland and the Baltic countries piping solutions primarily to terials for composite structures in Sweden, Germany, Belgium, the with 24 movie theatres and 158 marine and offshore industries. including blades for wind turbines. Netherlands and Latvia. screens with approx. 27,000 seats. Sales SEK 1,003m Sales SEK 2,489m Sales SEK 862m Sales SEK 1,352m Operating profit/loss SEK -217m Operating profit SEK 51m Operating profit SEK 128m Operating profit SEK 123m Ratos’s holding 96% Ratos’s holding 100% Ratos’s holding 98% Ratos’s holding 100% Investment year 2001 Investment year 2007 Investment year 2011 Investment year 2001 www.diabgroup.com www.euromaint.com www.finnkino.fi www.gshydro.com KVD Kvarndammen Mobile Climate Control SB Seating Sweden’s largest second-hand Offers complete, customised Develops and produces ergonomic car broker via the marketplace climate comfort systems mainly office chairs with a Scandinavian kvd.se, which has approximately for buses, off road and defence design for corporate and public 200,000 unique visitors per week. vehicles. environments. Sales SEK 287m Sales SEK 1,250m Sales SEK 1,176m Operating profit SEK 41m Operating profit SEK 108m Operating profit SEK 237m Ratos’s holding 100% Ratos’s holding 100% Ratos’s holding 85% Investment year 2010 Investment year 2007 Investment year 2007 www.kvd.se www.mcc-hvac.com www.sbseating.com The strategy stands firm When I sum up my (short) first year as CEO of Ratos, I do so with great confidence in the company and our ability to create value in the years ahead.