Interim Report 1 January - 31 March 2001

Interim Report 1 January - 31 March 2001 · Operating income increased by 37 percent to MSEK 37.4 (27.3). · Profit before restructuring expenses and depreciation of goodwill amounted to MSEK 6.8 (4.1. · The operating margin before restructuring expenses and depreciation of goodwill amounted to 18 percent. · Since the beginning of the year, the number of customers increased by 21 percent to 78,600. · Net flows in HQ.SE Fonder amounted to MSEK -40 (+380). Operations Operations within the HQ.SE Group have continued to develop at a fast pace at the beginning of 2001. Notwithstanding the very weak market climate in which the Stockholm Stock Exchange fell by 18 percent during the first quarter, HQ.SE reported a strong overall increase in income and significant improvements in results. The most important reasons for the strong increase in earnings are the income contributions and costs savings which resulted from the acquisition of Aktiespar Fondkommission, and also the positive contribution to income due to the acquisition of PFK's stock of custodian account customers, which was consolidated in the accounts commencing 12 February. HQ.SE's cost efficiency and economies of scale within all business areas in the Group have also been important contributory factors to the operations reporting a profit during the period. On 4 April, the Annual General Meeting of the shareholders adopted the Board of Directors' proposed resolution to spin-off the operations within the HQ.SE Fonder business area. Restructuring work has been taking place within the Group to prepare for the spin-off and separate listing of HQ.SE Fonder. Results and financial position The Group For the first quarter, the profit before restructuring expenses and depreciation of goodwill amounted to MSEK 6.8 (4.1). Accordingly, the operating margin before restructuring expenses and depreciation of goodwill amounted to 18 percent. Marketing expenses amounted to MSEK 0.8 (5.5). Restructuring expenses regarding the distribution of HQ.SE Fonder amounted to MSEK 3.5, and accordingly, the operating profit after restructuring expenses amounted to MSEK 3.3 (-3.9). During the first quarter, depreciation of goodwill amounted to MSEK 11.0 (0). During the first three months, commission income amounted to MSEK 42.3 (30.1), and the operating income amounted to MSEK 37.4 (27.3), corresponding to increases of 41 percent and 37 percent respectively for comparable units. As of 31 March 2001, shareholders' equity amounted to MSEK 349.8 (355.3) or MSEK 16.67 (16.93) per share. The Group's liquid funds amounted to MSEK 214.1 (210.9). The parent company For the period, HQ.SE Holding reports a loss before provisions and taxes of MSEK -2.2 (-7.0). During the period, net turnover amounted to MSEK 0.8 (-1.0). The company's liquid funds amounted to MSEK 104 (104 as per 31 December 2000). HQ.SE Aktiespar HQ.SE Aktiespar's operating income amounted to MSEK 20.2 (6.1), corresponding to an increase of 231 percent. The operating result before depreciation of goodwill amounted to MSEK -1.5 (-6.2). Commission income increased by 677 percent to MSEK 17.1 (2.2). The significant increase is mainly attributable to the larger customer base. Commission income was negatively affected, however, by the lower customer activity. On average, custodian account customers conducted 1.3 (2.8) transactions per customer and month during the first quarter. The average commission per contract note for custodian account customers amounted to SEK 76. However, the share of other commission income, among others, custodian account fees, increased significantly as a result of the integration of Aktiespar Fondkommission. Accordingly, during the first quarter, average total revenues per custodian account customer increased to SEK 400. HQ.SE Aktiespar has also attracted new institutional investors through an attractive product offer, which made a positive contribution to income. Operating profit was strengthened as a result of the costs savings carried out by HQ.SE Aktiespar due to the acquisition of Aktiespar Fondkommission. As a consequence, HQ.SE Aktiespar is right at the top in the branch as regards costs efficiency, which is regarded as being an important condition for long-term competitiveness and profitability. The extended opening hours of the Stockholm Stock Exchange until 8 p.m., which started in February, has also had a positive effect upon HQ.SE Aktiespar's results. An improved net interest income made a positive contribution to the earnings. This was due, among other things, to increased lending and introduction of an interest ladder. Extraordinary income in the amount of MSEK 1.8 million is also included in the profits for the first quarter. . As of the end of March, there were 52,900 active customers, compared to 39,000 at the beginning of the year. Accordingly, during the first quarter, the number of active customers increased by 13,900, with the consolidation of the stock of custodian account customers from PFK accounting for 12,500. The extremely weak market climate has resulted in a weakening interest in securities trading during the period which, combined with the reduction in marketing efforts, meant that the influx of active customers (excluding those from PFK) only amounted to 1,400 (4,900). At the end of the quarter, the total custodian account value at HQ.SE Aktiespar amounted to MSEK 5.8 billion. During the first quarter, HQ.SE Aktiespar's market share on the Stockholm Stock Exchange amounted to 3.7 (0.3) percent of the number of transactions, and 0.5 (0.0) percent of the turnover. During the first quarter, measured by the number of transactions, HQ.SE Aktiespar was the second largest independent Internet broker, and seventh largest on the Stockholm Stock Exchange in total. Response times on HQ.SE Aktiespar's homepage improved significantly during the period. Due to, among other things, certain problems concerning the Exchange's extended opening times and operational tests, the degree of accessibility was, however, 98.7 percent, which is less than the long-term objective of 99.5 percent. During the first quarter, HQ.SE Aktiespar introduced trading in foreign shares via Jiway. In addition, interest increased markedly in the company's monitoring and information services via SMS and e-mail. During the second quarter, HQ.SE Aktiespar will, among other things, be launching a new version of the homepage. HQ.SE Fonder Operating income declined by 19 percent to MSEK 17.2 (21.2) and operating profit before restructuring expenses declined by 19 percent to MSEK 8.3 (10.3). Restructuring expenses amounted to MSEK 3.5 and relate entirely to the spin-off and listing of HQ.SE Fonder. The reduction in income is largely due to the weak stock exchange climate during the period. Managed assets are less during 2001 compared to the same period of 2000 and the result-based management fee in HQ.SE Absolut Strategi failed to take off. Since a large part of the operation's costs are fixed costs, changes in income have direct, significant effects upon earnings. HQ.SE Fonder manages a total of twelve mutual funds, of which eight are equity funds, three fixed-income funds, and one a mixed fund. As of 31 March 2001, managed assets amounted to MSEK 7,400 (8,300 as per 31 December 2000), broken down into MSEK 7,053 in equity funds, MSEK 270 in fixed-income funds, and MSEK 77 in the mixed fund. During the first quarter of the year, savings in mutual funds in Sweden has continued to increase. However, compared to the first quarter of 2000net savings, i.e. investments less withdrawals declined by 50 percent to MSEK 11.7 million. The change is even more pronounced for equity funds, which is by far the most important segment for HQ.SE Fonder. Net savings in equity funds declined to MSEK-1.1 billion, compared to MSEK 16.0 billion in the positive net flow during the corresponding period of 2000. For HQ.SE Fonder, net savings amounted to MSEK -40 million, compared to MSEK 380 million for 2000. A large withdrawal in January of a large deposit which was made in December 2000 in one of the fixed-income funds played a major part in the negative net flow for the period. Equity funds made a weak, positive contribution to the net flow. The relatively weak interest in equity funds during the year is probably due to the weak stock market. During the first weeks of April when stock markets experienced an upturn, HQ.SE Fonder can once again report a good, positive net flow. The weak stock markets have resulted in negative performance by a number of equity funds. However, HQ.SE Rysslandsfond and HQ.SE Tillväxtmarknadsfond performed best, with increases of 32.1 and 5.8 percent respectively since the beginning of the year. Fixed-income funds can also report a positive return. With the exception of HQ.SE Rysslandsfond, which far exceeded its comparison index, the funds have performed approximately in line with their respective comparison indices. In addition to the day-to-day operational work, preparations are being made so that the organisation will comfortably meet the requirements imposed upon an independent, listed company. Accordingly, HQ.SE Fonder has created, for example, its own finance, advice and marketing functions. These functions were shared in the past with HQ.SE Aktiespar. Work is continuing to improve communications with mutual fund owners. Among other things, this has resulted in fund managers writing each quarter to mutual fund holders concerning market and fund performance. Prospects for the second quarter Growth in income and earnings is largely dependent upon market trends. It is believed that the weak start to April, combined with the relatively low number of trading days during the second quarter, will result in both income and earnings for the second quarter being lower than for the first quarter. Other Spin-off of HQ.SE Fonder On 4 April, the Annual General Meeting of the shareholders resolved to adopt the Board of Directors' proposed resolution to spin-off the operations within the HQ.SE Fonder business area. The spin-off means that shareholders will receive one share in HQ.SE Fonder for each share held in HQ.SE Holding. The last day for trading in shares in HQ.SE Holding which includes an entitlement to shares in HQ.SE Fonder is 7 May. HQ.SE Fonder will be listed on the New Market, and the first listing day is planned to be 14 May. The listing prospectus will be made available and sent to all shareholders at the beginning of May. The business area report explains the effects of the spin-off on income and expenses. As a result of the spin-off, Group equity will be reduced by approximately MSEK 12, and total assets will be reduced by approximately MSEK 25. Change of name In light of the acquisition of Aktiespar Fondkommission, and the spin- off of HQ.SE Fonder, the Annual General Meeting of the shareholders adopted the proposed resolution that HQ.SE Holding AB change its name to HQ.SE Aktiespar AB. It is estimated that the change of name will be completed during May. Future reports Interim report January - June 2001 10 August 2001 Interim report January - September 2001 25 October 2001 Press release of unaudited February 2002 earnings figures Stockholm, 24 April 2001. Nicklas Storåkers, Chief Executive Officer Telephone +46 8-562 250 00 This report has not been the subject of a separate audit by the company's auditors. ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2001/05/03/20010503BIT01030/bit0001.doc The full report http://www.bit.se/bitonline/2001/05/03/20010503BIT01030/bit0001.pdf The full report