Year-End Report 2001

YEAR-END REPORT 2001 · OPERATING INCOME SEK 505 (935) MILLION · EARNINGS BEFORE TAX AND MINORITIES SEK 10 (250) MILLION Performance and financial position Group Hagströmer & Qviberg (H&Q) reports for 2001 a profit before tax and minorities of SEK 10 (250) million. A low level of market activity during large parts of the year has contributed to substantially lower income. Earnings have additionally been affected by income and expenses of a temporary nature. Cost-reduction programmes were implemented during the second and third quarters, whereby the number of employees has been reduced by around 100 and current expenses, excluding bonuses, have been reduced by almost SEK 130 million on an annual basis in relation to the level at the start of the year. During the second quarter the business in Oslo was restructured. This has thereafter been consolidated as a subsidiary, instead of an associated company as previously, which has affected income and earnings positively from the third quarter inclusive. Earnings before tax and minorities for the fourth quarter amounted to SEK 33 (3) million. Earnings have been positively affected by settlement of a dispute with insurance company Zürich and negatively by a writedown of the holding in H&Q New Technology Fund. In total for the year operating income was SEK 505 (935) million, a decrease of 46 percent. Income from commissions and fees decreased by 41 percent to SEK 384 (651) million. Of the income from commissions and fees, SEK 108 (165) million comprised income from financial advisory services and underwriting. Net income from financial transactions including dividends decreased by 76 percent to SEK 65 (268) million. Corporate finance-related holdings, including the holding in H&Q New Technology Fund, and divestment of the share holding in Starthouse contributed SEK -80 (5) million. Other income amounted to SEK 62 (25) million. Of this the divestment of the premium bonds business contributed SEK 66 million and the writedown of a receivable from SPP/Alecta SEK -6 million. The share in profits of associated companies was SEK 2 (6) million. Operating expenses amounted to SEK 495 (685) million, a decrease of 28 percent. Personnel expenses decreased by 34 percent to SEK 327 (495) million, and other expenses by 13 percent to SEK 167 (191) million. Personnel expenses include non-recurring redundancy costs of SEK 16 million. Other expenses include an allocation for anticipated credit losses of SEK 4 (0) million. The group's liquid funds amounted to SEK 1,474 (-469 as per December 31, 2000) million. Shareholders' equity amounted to SEK 389 (469 as per December 31, 2000) million, corresponding to SEK 78 (93 as per December 31, 2000) per share. Capital adequacy for the group amounted to 26 (24 as per December 31, 2000) percent. DURING THE YEAR THE NUMBER OF EMPLOYEES HAS DECREASED BY 26 PERCENT AND AS PER DECEMBER 31 WAS 247 (336 AS PER DECEMBER 31, 2000). THE AVERAGE NUMBER OF EMPLOYEES DURING THE YEAR WAS 293 (314). H&Q Technology Operating income for the year amounted to SEK 170 million, a decrease of 64 percent in relation to the previous year. Lower market activity, fewer completed capital acquisition and advisory assignments, and writedowns mainly explain the decline in operating income compared with the previous year. Earnings were negative. During the fourth quarter operating income rose by 138 percent in relation to the third quarter, and by 4 percent in relation to the fourth quarter the previous year. The business in Oslo, which conducts financial advisory services with 9 employees, is part of this business unit and is consolidated from the third quarter inclusive. The number of employees as per December 31 was 71 (84 as per December 31, 2000). H&Q Private Banking Operating income for the year amounted to SEK 249 million, a decrease of 42 percent in relation to the previous year. Generally lower market activity and lower market values explain the decline, which has been partly countered by increased sales of guarantee products. Earnings were positive. During the fourth quarter operating income increased by 31 percent in relation to the third quarter, but decreased by 35 percent in relation to the fourth quarter of the previous year. Total managed capital decreased to SEK 18 (24 as per December 31, 2000) billion as a result of lower market values. The net flows of new clients and volumes were positive. For the year the net inflow of capital was SEK 2.7 billion, of which SEK 0.4 billion during the fourth quarter. The number of employees as per December 31 was 102 (150 as per December 31, 2000). Miscellaneous As per January 1, 2002, Patrik Enblad took over as the new chief executive officer from Anders Böös. Annual general meeting and dividends The annual general meeting will be held on Tuesday, April 9 at 3 pm at Vinterträdgården, Grand Hotel, Stockholm, Sweden. The board of directors plans to propose to the annual general meeting a dividend of SEK 5.00 (17.00) for each common and preferred share. Stockholm, February 12, 2002 Patrik Enblad, Chief Executive Officer, Telephone +46 8 696 17 00 SCHEDULED REPORTS Annual report 2001 March 2002 INTERIM REPORT, FIRST QUARTER 2002APRIL 2002 GROUP TRENDS PER QUARTER 4Q 01 3Q 01 2Q 01 1Q 01 4Q 00 (SEKM) Commissions and fees, net 94 63 85 88 121 Net interest income 14 8 14 12 19 Financial transactions 37 4 -16 40 24 including dividends, net Other operating income - - 60 - 13 Share of profits in 3 - -2 1 1 associated companies Operating income 148 75 141 141 178 Operating expenses -115 -100 -140 -140 -175 Profit before tax and 33 -25 1 1 3 minorities KEY RATIOS JAN - JAN-DEC JAN-DEC DEC 01 00 99* Operating income, SEKm 505 935 1,065 Operating expenses, SEKm -495 -685 -712 Profit before tax and 10 250 353 minorities, SEKm Earnings per share before neg 36 49 dilution, SEK Earnings per share after neg 35 47 dilution, SEK Return on equity per share, 78 92 57 SEK Operating margin, % 2% 27% 33% Return on equity, % neg 46% 83% Capital adequacy, % 26% 24% - * Comparison figures for 1999 are corresponding figures pro forma. CONSOLIDATED INCOME STATEMENT OCT 1, OCT 1, JAN 1, JAN 1, (SEKM) 2001 2000 2001 2000 DEC 31, DEC 31, DEC 31, DEC 31, 2001 2000 2001 2000 Income from commissions and fees 106 134 384 651 Note 1 Expenses from commissions and fees -12 -13 -54 -59 Net interest income 14 19 48 50 Dividends received 2 1 26 24 Net result of financial 35 23 39 244 transactions Other operating income - 13 60 19 Share of profits in associated 3 1 2 6 companies Total operating income 148 178 505 935 General administrative expenses -99 -155 -438 -623 Depreciation and write-down of -7 -8 -22 -23 tangible and intangible fixed assets Other operating expenses -8 -12 -31 -39 Net credit losses -1 - -4 - Total operating expenses -115 -175 -495 -685 Operating profit 33 3 10 250 Tax -4 3 -7 -69 Minority share -2 - -7 - Profit for the period 27 6 -4 181 Earnings per share before dilution, 5 1 neg 36 SEK Earnings per share after dilution, 5 1 neg 35 SEK Average number of shares before 5,145,6 5,017,3 5,144,6 5,017,37 dilution 61 74 56 4 Average number of shares after 5,458,6 5,226,1 5,280,5 5,226,12 dilution 24 24 57 4 Number of shares outstanding before 5,173,7 5,017,3 5,173,7 5,017,37 dilution 24 74 24 4 Number of shares outstanding after 5,458,6 5,226,1 5,458,6 5,226,12 dilution 24 24 24 4 CONSOLIDATED BALANCE SHEET (SEKM) DEC 31, DEC 31, 2001 2000 Lending to credit institutions 1,474 106 Lending to the public 782 1,658 Shares and participations 1,948 2,084 Other assets Note 2 545 690 Total assets 4,749 4,538 Liabilities to credit institutions - 575 Deposits and borrowing from the 1,529 1,714 public Other liabilities Note 2 2,820 1,780 Minority share 11 - Shareholder's equity Note 3 389 469 Total equity provisions and 4,749 4,538 liabilities CASH FLOW STATEMENT (SEKM) JAN 1, JAN 1, 2001 2000 DEC 31, DEC 31, 2001 2000 Cash flow from continuing -69 241 operations Cash flow from operative assets and 2,072 -1,282 liabilities Cash flow from continuing 2,003 -1,041 operations Cash flow from investing activities 74 -37 Cash flow from financing activities -134 54 Cash flow for the year 1,943 -1,024 Liquid funds at the beginning of -469 555 the year Liquid funds at the end of the year 1,474 -469 Accounting principles The year-end report was prepared in accordance with the Swedish Annual Accounts Act (1995:1559) governing credit institutions and securities companies (ÅRKL) and the regulations of the Swedish Financial Supervisory Authority (FFFS 2001:19). The group has applied reporting principles that are unchanged in relation to the reported comparative years. Definitions Earnings per share after tax Net profit after tax in relation to the average number of shares during the period. Consideration has been taken to buy-back of the company's own shares, 12,500. In the calculation of the average number of shares after dilution, outstanding warrants with exercise prices of SEK 71 and SEK 133 have been included. Shareholders' equity per share Shareholders' equity in relation to the number of shares on the closing day. Consideration has been taken to buy-back of 12,500 of the company's own shares at an average price of SEK 118 and issue payments from warrants with exercise price SEK 71 and SEK 133. Operating margin Operating profit in relation to operating income. Return on equity Profit after tax in relation to average shareholders' equity. In the calculation consideration has been taken to buy-back of the company's own shares, 12,500, and issue payments from warrants with exercise price SEK 71 and SEK 133. Liquid funds include cash and central bank balances, lending to credit institutions and liabilities to credit institutions. Capital adequacy Capital base in relation to risk-weighted amount for market and credit risks. Notes (all amounts in SEKm) Note 1 - Income from commissions and fees Income from commissions and fees includes brokerage fees of 311 (548). The fourth quarter included brokerage fees of 80 (110). Note 2 - Other assets/Other liabilities Other assets includes stock-related derivative instruments with positive value in the amount of 194 (actual value). Other liabilities includes stock-related derivative instruments with negative value in the amount of 161 (actual value). Note 3 - Shareholders' equity Shareholders' equity includes preferential share capital in the amount of 57. The number of outstanding preferred shares amounts, after conversion, to 1,428,331. Terms and conditions for this are described in the prospectus to shareholders of Hagströmer & Qviberg AB (publ) as of September 21, 1999. Group 2001 2000 Amount at beginning of financial year 469 281 Dividends paid -88 New issue of warrants 12 5 Buyback of own shares/warrants -2 Translation differences etc. 2 2 Profit/loss for the year -4 181 Balance at end of financial year 389 469 Auditor's report for Hagströmer & Qviberg AB (Publ.) We have reviewed this year-end report in accordance with the recommendations issued by FAR, the Swedish Institute of Authorised Public Accountants. Nothing has come to our attention that indicates that the interim report does not fulfil the requirements of the Swedish Stock Exchange Act and the Swedish Annual Accounts Act. Stockholm, February 12, 2002 KPMG, Caj Nackstad, Authorised Public Accountant Hagströmer & Qviberg (H&Q) is a leading investment bank with a focus on Technology. H&Q finances Technology companies and supports those who create, build and finance growth entrepreneurs and also companies and foundations. The business involves mainly research, advisory services, equities and derivatives trading, asset management and financial planning, and is conducted within the business units H&Q Technology and H&Q Private Banking. H&Q attracts clients from many countries worldwide. The company's head office is in Stockholm. Business is also conducted in five further Swedish cities and from Oslo, New York, San Francisco and Luxembourg. H&Q has 247 employees. The company is listed on the Stockholm Stock Exchange (HAGQ.ST). ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2002/02/12/20020212BIT00500/bit0001.doc http://www.waymaker.net/bitonline/2002/02/12/20020212BIT00500/bit0002.pdf