Interim Report January - March 2001

Interim Report January - March 2001 · Profit after full tax amounted to SEK 1,617 m. (352), which corresponds to SEK 25.05 (4.64) per share. · On March 31, 2001, estimated net asset value per share was SEK 221 (Dec 31, 2000: 236) and SEK 200 (Dec 31, 2000: 205) after deferred tax. The corresponding values on May 11, 2001 were SEK 231 and SEK 208, respectively. · Real estate operations reported profit of SEK 95 m. (68) before depreciation, an increase of 40%. · Lundbergs acquires a 20% interest in Stadium. L E Lundbergföretagen AB (publ) Tel: +46 8 4630600 or +46 11 216500 Fax: +46 8 6116609 or +46 11 216565 E-mail: lundbergs@lundbergs.se Website: www.lundbergs.se Company registration number: 556056-8817 Registered Head Office: Stockholm SALES AND PROFIT The Group's net sales amounted to SEK 1,780 m. (506). Profit after financial items amounted to SEK 1,631 m. (372). Profit after full tax was SEK 1,617 m. (352), which corresponds to SEK 25.05 (4.64) per share. Net sales and profit for the first quarter of 2001 include an extraordinary dividend of SEK 1,307 m. from Holmen. REAL ESTATE Operating profit for Lundbergs' Real Estate business area rose to SEK 82 m. (67). As of January 1, 2001, depreciation of the Group's completed properties complies with the Swedish Financial Accounting Standards Council's Recommendation RR12 (see Changed Accounting Principles on page 5). Such depreciation amounted to SEK 7 m. In connection with this change, property fixtures and fittings were subject to excess depreciation in an amount of SEK 4 m. Operating profit before depreciation rose by approximately 40% to SEK 95 m. (68). The increase was attributable to higher rental revenues and reduced costs for maintenance and tenant- oriented property improvements. Favorable rental-revenue and vacancy-rate trends were noted for both housing and commercial premises during the first quarter. Most of the negotiated rent increases for housing in 2001 are recognized in rental revenue as of the first quarter of 2001. Housing accounted for 49% and commercial premises, etc. for 51% of total rental revenues, which increased to SEK 194 m. (182). The overall vacancy rate during the period corresponded to 2.7% of rental revenues (2000 average: 3.9). The vacancy rate for housing was 1.1% (2000 average: 1.8), while the vacancy rate for commercial premises was 4.1% (2000 average: 5.8). The overall vacancy rate in April 2001 was 2.8%, whereby the rate for housing was 1.0% and that for commercial premises was 4.6%. In total, properties were sold for SEK 4 m. (3), generating pretax gains of SEK 0 m. (2). Property costs decreased to SEK 107 m. (111). The decrease was attributable to lower maintenance and tenant-oriented property improvement costs, which totaled SEK 25 m. (41). Since real estate operations are affected by weather conditions, heating costs are generally higher during the first quarter. Such costs rose by SEK 3 m. to SEK 24 m. due to a colder winter. It is estimated that the costs reported for the first quarter of 2001 were at a normal level for the type of operations conducted. SEK 7 m. (31) was invested in wholly and partly owned properties during the period. The Group's completed properties (excluding sold properties), which have a book value of SEK 2,678 m. (2,644), generated an annualized yield (operating net in relation to book value) of 16% (13). The book value of properties held for future development was SEK 144 m. (163). Floor Book Operati space Renta Operat value, ng net SEK m. thousan l ing March as a % d m² reven net 31, of book ues 2001 value (annual ized yield) Completed properties 1,006 193 109 2,678 16.3 Properties held for 11 1 1 144 future development Properties sold 0 0 during Q1 2001 TOTAL 1,017 194 110 2,822 Properties sold 0 0 during Q1 2000 Properties sold 1 0 during full-year 2000 INVEST Lundbergs Invest reported operating profit of SEK 1,581 m. (314). Operating profit includes an extraordinary dividend of SEK 1,307 m. from Holmen. Invest's net sales of SEK 1,585 m. include dividends of SEK 1,503 m. from Holmen and of SEK 79 m. from Hufvudstaden. The remaining portion of net sales derived from sales of securities as part of asset management operations. Following the close of the report period, dividends of SEK 70 m. were received from Cardo and of SEK 63 m. from NCC. The net sales of SEK 322 m. for the first quarter of 2000 included dividends of SEK 215 m. from Hufvudstaden and NCC, of which an extraordinary dividend from NCC accounted for SEK 98 m. The subsidiary L E Lundberg Kapitalförvaltning, whose results are reported in Lundbergs Invest, reported operating profit of SEK 0 m. (13) and profit after financial items of SEK 1 m. (12). On March 31, 2001, exposure to shares and interest-bearing paper amounted to approximately SEK 56 m. (Dec 31, 2000: 28). M.AJOR SHAREHOLDINGS IN PUBLICLY TRADED COMPANIES During 2001, additional Holmen and Hufvudstaden shares were purchased for SEK 44 m. and SEK 64 m., respectively. Lundbergs' voting rights and share capital in NCC were affected by NCC's repurchases of its own shares and by the restamping of shares. The tables below show the voting rights, percentage shareholding, book value and market value of the Group's shares in publicly traded companies. May 11, 2001 March 31, December 2001 31, 2000 Voting Share- Votin Share- Votin Share- % rights holdin g holdin g holdin g right g right g s s Cardo 33.5 33.5 33.5 33.5 33.5 33.5 Holmen 52.0 27.2 52.0 27.2 51.4 27.0 Hufvudstade 87.4 44.1 87.4 44.1 87.2 43.1 n NCC 16.6 13.3 16.6 13.3 16.5 13.2 May 11, 2001 March 31, December 2001 31, 2000 Book Market Book Market Book Market SEK m. value value value value value value Cardo 1,890 1,730 1,890 1,680 1,890 1,539 Holmen 2,547 4,342 2,547 3,922 2,503 6,263 Hufvudstade 2,825 2,656 2,825 2,657 2,761 2,827 n NCC 1,076 1,031 1,076 1,017 1,076 974 TOTAL 8,338 9,759 8,338 9,276 8,230 11,603 PORTFOLIO INVESTMENTS In addition to the major shareholdings in publicly traded companies, the Group owned publicly traded shares with a book value on March 31, 2001 of SEK 258 m. (Dec 31, 2000: 250) and a market value of SEK 229 m. (Dec 31, 2000: 224). On May 11, 2001, the book and market values were SEK 286 m. and SEK 263 m., respectively. FINANCIAL ITEMS Financial items amounted to an expense of SEK 30 m. (expense: 8), of which net interest expense accounted for SEK 30 m. (expense: 8). FINANCIAL POSITION Liquid assets (excluding credit facilities) rose to SEK 101 m. (Dec 31, 2000: 8). Interest-bearing liabilities decreased to SEK 1,543 m. (2,539). The average period of fixed interest was approximately 2.5 months and the average interest rate was 4.3%. The Group's interest-bearing net debt decreased to approximately SEK 1,300 m. (Dec 31, 2000: 2,500). The net decrease was due mainly to the extraordinary dividend from Holmen, as well as to repurchases of Company shares and investments in the Group's major shareholdings in listed companies. Following the close of the report period, dividends of SEK 333 m. were paid to Lundberg shareholders and dividends of SEK 133 m. were received from associated companies. The debt/equity ratio was 0.14 (Dec 31, 2000: 0.30). The Group's reported shareholders' equity on March 31, 2001 was SEK 9,273 m. (Dec 31, 2000: 8,291). The equity/assets ratio rose to 79% (Dec 31, 2000: 72). NET ASSET VALUE On March 31, 2001, estimated net asset value per share was SEK 221 (Dec 31, 2000: 236). After a deduction for deferred tax, net asset value per share was SEK 200 (Dec 31, 2000: 205). Reported shareholders' equity accounted for SEK 146 (Dec 31, 2000: 127) of net asset value per share. A deduction has been made for approved but as yet unpaid dividends to Lundberg shareholders in an amount of SEK 5.25 per share, or a total of SEK 333 m. On May 11, 2001 estimated net asset value per share was SEK 231 and SEK 208 after deferred tax. March 31, December 2001 31, 2000 SEK m. SEK/s SEK SEK/sh hare m. are Real Estate 6,687 105 6,692 102 Invest Cardo 1,680 26 1,539 24 Holmen 3,922 62 6,263 96 Hufvudstaden 2,657 42 2,827 43 NCC 1,017 16 974 15 Other publicly traded 229 4 224 3 shares Other assets/liabilities, -2,208 -34 - -47 net 3,107 NET ASSET VALUE BEFORE 13,984 221 15,41 236 DEFERRED TAX 2 NET ASSET VALUE AFTER 12,648 200 13,39 205 DEFERRED TAX 5 Market value 9,002 142 9,287 142 Price/NAV, % 71 69 Net asset value is calculated as follows: Publicly traded shares are included at current market price. The Group's completed properties are included at estimated market value on December 31, 2000, in accordance with independent and internal valuations. The only corrections made during the first quarter have been for investments and sales. Other assets and liabilities are included at book value on December 31, 2000 and March 31, 2001. REPURCHASE OF OWN SHARES The Annual General Meeting on March 28, 2001 renewed the Board's authorization to repurchase shares in Lundbergs during the period up to the next Annual General Meeting. The Board has decided to exercise the authorization received from the Annual General Meeting. The purchases are subject to the limitation that the Company's holding may not exceed 10% of the total number of shares in the Company, corresponding to 6,829,000 shares, at any time. As at March 31, 2001, 4,900,300 of these shares had been repurchased for SEK 693 m., or an average of SEK 141.19 per share. The repurchased shares correspond to 7.2% of the share capital and 1.7% of the voting rights. Shares in an amount of SEK 302 m. were repurchased during the first quarter of 2001. As at May 11, 2001, 4,925,300 shares had been repurchased for SEK 697 m., or an average of SEK 141.17 per share. The repurchased shares correspond to 7.2% of the share capital and 1.7% of the voting rights. The average number of shares outstanding during the first quarter of 2001 was 64,557,716. The number of shares outstanding on March 31, 2001 was 63,392,083 and the number of shares outstanding on May 11, 2001 was 63,367,083. PARENT COMPANY L E Lundbergföretagen AB (publ) reported net sales of SEK 1,503 m. (154). Reported profit after financial items amounted to SEK 1,490 m. (163). SIGNIFICANT EVENTS FOLLOWING THE CLOSE OF THE REPORT PERIOD Lundbergs has reached an agreement with the owners of Stadium, whereby Lundbergs, through a private placement of Stadiums shares in an amount of SEK 250 m., will acquire 20% interest in Stadium. The intention is to list Stadium on the stock exchange within a period of 5 - 7 years. Stadium, a retail chain active in the sports products and sports fashion segments, has increased its sales by an average of 20% per year during the past five years. Stadium currently has 60 outlets in Sweden, of which 10 were opened during 2000 and 2001. Stadium opened its first outlet outside Sweden, namely in Copenhagen, in October 2000, and plans to open a number of additional new outlets in the Copenhagen region. Stadium's first outlet in the city of Helsinki was opened in April 2001and will be followed by the establishment of two more stores in the region in September and October. Stadium currently has annual sales of approximately SEK 2.6 billion, with 2,000 employees. Through its involvement in Stadium, Lundbergs will be able to participate actively in an exciting sector with major growth opportunities. Lundbergs has considerable confidence in Stadium's business concept and brand, as well as in the company's management. The capital that will be contributed by Lundbergs will provide Stadium with the financial resources required for continuing successful expansion of the company. CHANGED ACCOUNTING PRINCIPLES This interim report has been prepared in accordance with the Swedish Financial Accounting Standards Council's Recommendation RR20 (Interim Reporting). As of the 2001 fiscal year, the accounts have been adapted to the Swedish Financial Accounting Standards Council's Recommendation RR9 (Income Taxes). When calculating the deferred tax on timing differences, a tax rate of 28% has been applied. As a result, the deferred tax liability under the provisions item increased by SEK 235 m. at December 31, 2000. Of this increase, SEK 221 m. was reported directly against unrestricted shareholders' equity and SEK 14 m. was reported against profit for 2000. Profit for the first quarter of 2001 has been charged with deferred tax of SEK 2 m. As of January 1, 2001, completed properties have been reclassified from current to fixed assets in accordance with the Swedish Financial Accounting Standards Council's Recommendation RR12 (Tangible Fixed Assets). Accordingly, as of the same date, depreciation is applied at a rate of 1 - 2% of the acquisition value of the properties. In all other respects, the Group applies the same accounting and calculation principles as in the 2000 Annual Report. Stockholm, May 14, 2001 [REMOVED GRAPHICS] FREDRIK LUNDBERG President This interim report has not been subject to specific examination by the auditors of L E Lundbergföretagen AB (publ). ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2001/05/14/20010514BIT00410/bit0003.doc The full report http://www.bit.se/bitonline/2001/05/14/20010514BIT00410/bit0003.pdf The full report