Preliminary report on the operations of AB Custos during 2001

PRELIMINARY REPORT ON THE OPERATIONS OF AB CUSTOS DURING 2001 · The Board proposes redemption of every second share for payment of SEK 200 per redeemed share. · A dividend amounting to SEK 14.50 (16.50) per share is proposed. · The total return on Custos' shares during 2001 was 0.8 percent. CEO's comments Two thousand one was another weak stock market year. Although Stockholmsbörsen (formerly the OM Stockholm Stock Exchange) recovered part of its decline late in the year, Custos' comparative index, the SIX Portfolio Return Index, ended at -11.5 percent. Compared to Stockholmsbörsen as a whole Custos performed well with a total return of 0.8 percent. Two large sources of satisfaction were SCA and Perbio, where Custos' holdings were distributed to its shareholders in the spring and autumn, respectively. The shares of both companies rose sharply during the year, while the performance of Pergo, Christian Salvesen and C. Tybring-Gjedde was a disappointment. Looking at Custos' own shares, the discount on net asset value rose somewhat during the year - from 7 percent to 10 percent - which is unsatisfactory even if this level is low in a historical perspective. The fact that Custos is still traded at a discount, despite the fact that the company has distributed assets equivalent to more than SEK 11 billion since 1996, is to some extent a rejection of investment companies as a form of enterprise. However, Custos will continue to transfer assets to its owners. The Board proposes that a total of MSEK 1 554 be transferred to the shareholders during the spring via the dividend and share redemptions. Transfer of funds to the shareholders through redemption, dividend and synthetic repurchase is a good way to maximize the shareholders' value today. As long as the discount continues, new investments will always be weighed against the return that shareholders may instead receive via a distribution of capital or assets or through buy-backs of shares. Because Custos' capital base has diminished, its future strategy will change to some extent. The management expenses of the Company have been lowered. Among other things, the number of employees has been decreased from fourteen to eight, and office space has been substantially reduced. Custos' new investments will mainly be of a financial nature, meaning that in most cases the Company will neither aim at becoming a main shareholder and nor request representation on the board of directors. In addition, Custos will place greater emphasis on the liquidity of the shares it acquires. However, Custos will continue to be closely involved in the companies that are now in its portfolio and work for value maximization. In line with the new strategy, Custos carried out some minor adjustments in its portfolio during the fourth quarter. The Company reduced its exposure to SCA and implemented some small financial investments. These adjustments mean that Custos now has a more balanced investment portfolio. Custos is in a good starting position for 2002. The Company has an investment portfolio with good value potential. Total return Total return on Custos shares - taking into account share price appreciation, dividend paid and redemption of shares - was 0.8 percent. ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2002/01/31/20020131BIT01340/bit0001.doc The full year-end report http://www.waymaker.net/bitonline/2002/01/31/20020131BIT01340/bit0001.pdf The full year-end report