Year-End Report 2002

YEAR-END REPORT 2002 * EARNINGS FOR YEAR SEK 12 (-4) MSEK * FOURTH QUARTER OPERATING EARNINGS SEK 13 (33) MILLION * LARGE NET INFLOW OF NEW CLIENT VOLUMES AND INCREASE IN MARKET SHARE * PROPOSED DIVIDEND SEK 5.00 (5.00) Performance and financial position Hagströmer & Qviberg (H&Q) reports for 2002 operating earnings of SEK -3 (10) million. Earnings have during the year been burdened with restructuring costs of SEK 29 million, of which SEK 16 million for the closure of offices in Luxembourg and New York, and SEK 13 million for staff cuts. Other non-recurring income and expenses amount to a net of SEK 5 million. In the fourth quarter there were positive operating earnings of SEK 13 million. Total operating income was SEK 379 (505) million. Adjusted for income of a non-recurring nature, income decreased by 18 percent. Net income from commissions and fees decreased by 32 percent to SEK 223 (330) million. Income from financial advisory services and underwriting decreased compared to the previous year by 30 percent to SEK 76 (109) million. Net income from financial transactions including dividends amounted to SEK 111 (65) million. Adjusted for corporate finance-related holdings of SEK -6 (-80) million, this corresponds to a decrease of 19 percent compared to the previous year. As a result of the cost-cutting measures implemented during the year, costs have been reduced considerably. Total operating expenses for the year amounted to SEK 382 (495) million, a decrease compared to the previous year of 23 percent. Current expenses on an annual basis excluding bonuses amount to around SEK 250 million. Staff expenses were reduced by 28 percent to SEK 236 (327) million. Other expenses, excluding bad debt and credit losses and items affecting comparability, decreased by 32 percent to SEK 112 (164) million. The year's bad debt losses of SEK 18 million are entirely attributable to the Norwegian business. Average expenses per employee (excluding losses for bad debt and restructuring costs) have fallen despite large-scale staff cuts. Shareholders' equity amounted to SEK 373 (389 per December 31, 2001) million, corresponding to SEK 72 (75 per December 31, 2001) per share, which means a rise of SEK 5.3 per share during the fourth quarter. Earnings per share amounted to SEK 2.4 (-0.8). Capital adequacy for the group amounted to 42 percent (26 percent per December 31, 2001). The number of employees in the group decreased by 28 percent and amounted to 177 on December 31 (246 per December 31, 2001). The average number of employees during the year was 219 (293). H&Q Investment Banking Operating income for H&Q Investment Banking amounted to SEK 187 (177) million, an increase of 6 percent compared to the previous year. Earnings for the business unit were positive. During the autumn activity increased considerably in stock and derivatives trade, both by clients and by H&Q. Meanwhile the level of activity in Corporate Finance has been low. The number of employees on December 31 amounted to 50 (73 per December 31, 2001). H&Q Private Banking Operating income for H&Q Private Banking amounted to SEK 175 (249) million, a decrease of 30 percent compared to the previous year. Earnings were negative for the unit, which is explained by the closure of the office in Luxembourg. Operating earnings for the fourth quarter were positive. H&Q Private Banking continues to build on its strategy of an open architecture with external partnerships. The fourth quarter demonstrated a continued net inflow of new client volumes, partly due to the focus on financial planning and concentration on management of assets for absolute returns. As a result of the net inflow, total assets under management decreased by only 11 percent to SEK 16 (18 per December 31, 2001) billion, despite a decline in Stockholmsbörsen (OMX index) of 42 percent. The number of employees on December 31 was 69 (102 per December 31, 2001). Outlook The financial industry is depressed. Excess supply and continuing high costs for many players mean that profitability will remain low in the sector. Hagströmer & Qviberg has met this with greatly reduced expenses and by focusing on the company's core areas of Private Banking including Financial Planning, and Investment Banking comprising Corporate Finance and automated share trading including institutional client trade. In these areas we are experiencing continued growth. Hagströmer & Qviberg's market share rose during the year from 3.7 percent in January to 5.8 percent in December. Several key recruitments were made and agreements were signed with further external partners. This had a positive effect on the net inflow of customer volumes and our assessment is that the inflow will continue. Hagströmer & Qviberg will demonstrate positive earnings in 2003 provided that activity remains at least at the current level. AGM and dividends The annual general meeting will be held on Thursday, April 3 at 3 pm in Spegelsalen, Grand Hôtel, Stockholm, Sweden. The board of directors proposes to the AGM a dividend of SEK 5.00 (5.00) per share. Stockholm, January 30, 2003 Patrik Enblad, Chief Executive Officer, Telephone +46 8 696 17 00 Scheduled Reports and Meetings Annual report 2002 March 2003 AGM April 3, 2003 Interim report for first quarterApril 22, 2003 Hagströmer & Qviberg is a leading securities brokerage company focusing on investment banking and private banking. Business in the Investment Banking unit includes corporate finance, institutional trade in stocks and derivatives, and trading. The Private Banking unit focuses on trade in stocks and derivatives, asset management with an emphasis on absolute return, and financial planning for private individuals, companies and foundations. The company's head office is located in Stockholm, Sweden, and business is conducted from a further four cities in Sweden, and from Oslo in Norway. Hagströmer & Qviberg has around 175 employees and is listed on the O list of the Stockholm exchange, Stockholmsbörsen (HAGQ). Hagströmer & Qviberg AB (publ) SE-103 71 Stockholm. Visitors: Norrlandsgatan 15 Entrance D. Telephone +46 (0) 8 696 17 00. Telefax +46 (0) 8 696 17 01. http://www.hagqvi.com Registered office: Stockholm. Corporate reg. no.: SE556573-5650 ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2003/01/30/20030130BIT00650/wkr0001.doc The full report http://www.waymaker.net/bitonline/2003/01/30/20030130BIT00650/wkr0002.pdf The full report