Interim Report JANUARY - SEPTEMBER 2000

Interim Report JANUARY - SEPTEMBER 2000 High tempo towards focusing on the TIME sector The Group's strongest results ever of SEK 2,941M (244) The parent company's exit gains amounted to SEK 724M in the third quarter The net asset value excluding Capio amounted to SEK 79 per share, a 51 per cent increase since January 2000 Successful listing of Capio generated significant increased value for Bure's shareholders The parent company's strong financial position enables freedom of action - equity ratio 89 per cent Establishment in Stockholm for more intensive concentration on Bure's business model. Group Review Results Consolidated profit after financial items amounted to SEK 538M (-42) for the third quarter and to SEK 2,941M (244) for the first three quarters, which is Bure's highest ever nine-month profit. The profit includes income relating to SPP funds of SEK 201M. Capio, which was distributed to the shareholders during October, is only included in the results for the first six months of the year. Parent company Results and financial position In the third quarter, the parent company's profit after tax amounted to SEK 632M (-1). The quarter includes exit gains totalling SEK 724M (-10). For the first three quarters, profit after financial items amounted to SEK 2,309M (291). This includes total exit gains of SEK 2,657M (37) in the investment operation and SEK 74M (155) in the parent company's stock portfolio. Expenses, which for the first three quarters amounted to SEK 121M (60), were strongly influenced by the intensive business operations and by expenses for the synthetic options with SEK 33M (-6). Personnel costs amounted to SEK 29M (33). Expenditure for the stockmarket listing of Capio has been estimated at approximately SEK 57M and has been reported against shareholders' equity. At the end of the quarter, total assets were SEK 5,485M compared with SEK 6,361M at the start of the year. This is mainly due to the distribution of Capio to Bure's owners. Shareholders' equity rose by SEK 466M to SEK 4,869M compared with the start of the year despite the fact that the distribution of Capio and the dividend reduced shareholders' equity by SEK 1,844M. The equity ratio was 89 per cent at the end of the quarter compared with 69 per cent on 1 January. The net loan liability has been turned into receivables of SEK 1,565M compared with a liability of SEK 356M on 1 January. The largest proportion of the net receivables consists of the stock portfolio which had a market value of SEK 952M at the quarter-end. Divestments and exit gains The concentration of Bure into a private equity company with an emphasis on unlisted holdings within the TIME sector, i.e. Telecom, IT, Media & information and E-knowledge, is now in its final phase. During August, the remaining holding in Gunnebo was divested. The exit gain amounted to SEK 332M in the parent company which is equivalent to an annual return of 29 per cent. At the beginning of September, the holding in Nobel Biocare was divested. The exit gain amounted to SEK 364M which is equivalent to an annual return of 60 per cent since Bure became an active stakeholder in the company at the 1997/1998 turn of the year. During the third quarter, Nordic Capital divested its holding in Essex which on Bure's part generated an exit gain of SEK 31M on an original investment of SEK 16M, equivalent to an annual return of 56 per cent. For the first three quarters, the divestments generated total exit gains of SEK 2,657M. Added to this is the distribution of Capio to the shareholders. Investments In the first three quarters, the parent company made investments and supplementary investments in 25 companies totalling SEK 796M and decided to participate in funds with SEK 400M. During the third quarter, Bure increased its ownership in MobileOpinion from 30 to 49 per cent. The investment in MobileOpinion, which totals SEK 13M, is a step in Bure's investment in information services with an international potential. Strong position for continued growth The strong results for the first three quarters means that Bure has significantly strengthened its financial position. Bure is an attractive collaboration partner for innovative growth companies and a large number of investment alternatives are currently being intensively evaluated. The inflow of new projects is large and on the increase. With the objective of increasing the business intensity still further, Bure will establish an investment team in Stockholm. The operation is planned to be up and running at the turn of the year. The holdings are now being concentrated on the TIME sector in which Bure has continuously built up large values in its investments. The positive price development in the listed subsidiary, Observer, and the sale of Guide/Framfab are examples where very large surplus values have been made visible. Another example is Bure's investment of SEK 3M in Altitun, via InnovationsKapital, which after less then two years resulted in an exit gain of SEK 202M. A further approximately SEK 20M will be added as an exit gain during the fourth quarter when the deal has been completed. Extraordinary General Meeting An Extraordinary General Meeting in August changed the name of Investment AB Bure to Bure Equity AB to mark the new orientation as a private equity company with a focus on unlisted holdings within the TIME sector. Planned sales The stockmarket introduction of Citat, which had been announced to take place during the autumn, has been postponed due to the current stockmarket situation. Net asset value - before and after Capio At the quarter-end, the net asset value per share amounted to SEK 79 compared with SEK 97 on 30 June. The change of SEK 18 is wholly attributable to Capio which at mid-year was included in the net asset value with an estimated market value of SEK 2,000M, or SEK 18 per share. At end-September, the market value of Bure Equity was SEK 9,164M, compared with SEK 6,328M in 1999. On top of this the shareholders have received a dividend of SEK 327M. The total yield to the shareholders was thus 50 per cent during the first three quarters of the year. In the third quarter, the market value rose by SEK 1,963M, or by 27 per cent. The investment company index has changed by 16 per cent for the first three months this year and by -1 per cent for the third quarter. Capio was listed on 16 October, when the market value became approximately SEK 2,900M, or SEK 24.50 per Bure share. This meant an additional value of SEK 6.50 on top of Bure's reported net asset value. When Capio was listed, Bure and Capio were valued in total at SEK 84 per Bure share. The year high for the Bure share was SEK 94 at the beginning of October. Tax matters With reference to the 1993 financial year (Tax 94) Bure is involved in a tax dispute regarding whether or not the Company's investment company status was complied with. Bure has won both in the County Administrative Court and the Administrative Court of Appeal. The National Tax Board has appealed against the judgement of the Administrative Court of Appeal to the Supreme Administrative Court. In the 1999 Annual Report, in which this dispute was reported under Contingent liabilities, Bure's costs were estimated at SEK 187M, including interest, should the litigation be lost. In September 2000, the National Tax Board announced that the Board intends to examine the short-term securities trading in the Swedish investment companies to ensure that it is in agreement with the terms for the investment companies' tax status. The examination of Bure started during autumn 2000. Roger Holtback President and CEO Gothenburg, 30 October 2000 Bure Equity AB Important events after the end of the period Successful stockmarket listing of Capio On 16 October, trading started of the shares in Capio AB (publ). The closing price on the listing date was SEK 49. Thus Bure's shareholders received SEK 24.50 for every share in Bure. The price paid for Capio on the first listing day meant a total market value of SEK 2,900M. This value can be compared with SEK 2,000M at which Capio was included in Bure's net asset value at 30 June. Thereafter, Capio's price development has strengthened still further, and the value amounted to approximately SEK 4,000M. This means that Capio's value has increased with approximately SEK 2,500M compared to invested capital. Investment in Newmad Technologies AB In October, Bure became a shareholder in the high technology research and incubator company, Newmad Technologies AB. The initial holding amounts to 19 per cent with an opportunity to increase the holding to 23 per cent via an option. Newmad Technologies develops applications for the next generation's mobile IT terminals with a network connection Bluetooth, Wireless-LAN and 3G. Through Newmad, an incubator company with a focus on wireless is added to Bure's network within TIME. Exit gains after the end of the period During October, Bure has sold shares in ADC Telecommunications and in Formex. The sale has generated exit gains of SEK 20M and SEK 5M, respectively. Both investments formed part of InnovationsKapital's portfolio. ------------------------------------------------------------ This information was brought to you by BIT The following files are available for download: The full report The full report