Year-end report 2001

YEAR-END REPORT 2001 * Total investments at 31 December amounted to MSEK 503 in 31 companies. * Closing liquid funds amounted to MSEK 227. * Equity per share of SEK 5.33, equity ratio of 98 per cent. * A write-down of MSEK 160 in the portfolio results in a loss of MSEK 197. * A continued sharp focus on mobile communication and a growing proportion of the capital invested in that sector - 62 per cent at year end. * The portfolio is maturing. Four of the portfolio companies have now reached breakeven or are in profit. A further 12 companies are well placed to reach breakeven in 2002. The need for follow-up investments in the portfolio has declined markedly. * Ledstiernan's portfolio is judged to be worth considerably more than its book value. * Lower administrative overheads - the office in London has been closed, and discussions are underway in Helsinki with other venture capital companies. * Strengthening of industrial network through MIC of Japan, with NTT DoCoMo (and others) as shareholders, and membership of WIVA, an international association of investors in mobile communication. Ledstiernan is building Europe's leading seed and venture capital company focusing specifically on mobile communication. The shares are listed on Stockholm Stock Exchange's "O" list. SIGNIFICANT EVENTS DURING THE PERIOD STRONGER INDUSTRIAL NETWORK During the year, Ledstiernan further developed its industrial network in the mobile communication industry through its membership of WIVA (the Wireless Internet Venture Association), whose other members include Innovacom (France Telecom), Ericsson Innova, Fintech (Telecom Italia), 3i , Sonera Venture Partners and MIC (part-owned by NTT DoCoMo). Ledstiernan has also signed an agreement to cooperate with MIC (Mobile Internet Capital) during the year which led to that Ledstiernan's portfolio companies were invited to make a presentation during the autumn to thirty or so prominent hi-tech companies in Japan. MIC has also invested in Ledstiernan's portfolio companies. EXTERNAL FINANCING External financing was arranged for six companies in the portfolio during the autumn from new, professional partners at levels that well justify their book values. ipUnplugged raised MSEK 48 from the Swedish Industrial Development Fund, Mobile Internet Capital (MIC) of Japan and others. FM Fondmarknaden raised MSEK 20 from Scope Venture Capital and others. Skandia was involved in the injection of MSEK 20 into Mint. the Phone Pages raised some MSEK 10 from Siemens Mobile Acceleration GmbH and others, along with further guarantees from Skanditek. The Swedish Industrial Development Fund has invested MSEK 6 in RoamInfo and New Ground Capital has invested MSEK 20 in Incomit. Ledstiernan also participated in all the above investments. ORGANISATION Ledstiernan downsized its organisation during the year, reducing its administrative costs to an annual level of some MSEK 25. The London office has been closed. As it is important to systematically monitor the market in Finland, discussions on possible co-operation are currently taking place with companies on the Finnish venture capital market. At 31 December 2001, the number of employees was 11 (16 in 2000), all of whom were employed at the Stockholm office. REVIEW OF LEDSTIERNAN'S DAY-TO-DAY OPERATING AND DECISION-MAKING PROCEDURES Ledstiernan's investment committee has been gradually modified. The committee now consists of all the investment managers, the CFO and the president, who is also the chairman. The threshold level for Board decisions has been lowered from MSEK 50 per portfolio company to MSEK 30. The standardised role of Ledstiernan's Founding Partners that was laid down when the company was floated has been abolished and their role is now determined on an individual basis. The obligations of the Founding Partners with regard to personal outside investments and outside professional commitments, which are described in the flotation prospectus, will therefore formally cease to apply in February 2003. In addition to this the incentive programme for the Founding Partners, which involves both a right and an obligation to acquire call options on 5 per cent of Ledstiernan's holdings in its portfolio companies, was replaced on 1 August 2001. One Founding Partner has left the partnership. PORTFOLIO DEVELOPMENTS Ledstiernan's portfolio companies fall into four relatively distinct categories: 1. Companies at the development phase or whose market results are measured in terms of test orders (4 companies). 2. Companies that have booked commercial orders but not budgeting to reach breakeven during the current financial year 2002 (11 companies). 3. Companies that have received commercial orders and expect to reach breakeven during the current year 2002 (12 companies). 4. Companies that already reached breakeven (at an annual rate) in 2001 and will continue at that level or better (4 companies). Ledstiernan's portfolio companies, which matured noticeably during the year, can report several encouraging events during the period. Ambiotech has signed agreements and delivered its mobile internet solution for quality assured operation and management in the property industry to several clients, including Vasakronan/Norrporten, Boden Bo, Fortifikationsverket and Swedish Post. Columbitech has recently launched its Columbitech Wireless VPN product with Pocket PC 2002 support, which was successfully demonstrated with SAP at the Comdex Nordic fair. The demonstration was a further development of the successful project carried out by Columbitech, SAP and Compaq at Wayne's Coffee in Stockholm to demonstrate the ease with an ERP (Enterprise Resource Planning) system can be accessed from any location. Columbitech also launched, in partnership with Compaq, the Columbitech Wireless VPN with Windows XP support. EuroFlower.net has continued with its planned establishment of a marketplace for the florist sector, with its unique system for direct transactions. Shops in Sweden, Denmark and England can now use the EuroFlower.net system, and additional countries are in the process of affiliation. EuroFlower.net has been in profit since September 2001, and growth continues with healthy profitability. FM Fondmarknaden had its international breakthrough with the delivery and operation of its IT platform to FundCoach, a company owned by the Dutch SNS Bank. MINT launched its mobile phone-based system for roadside parking fees and person-to-person payments in the autumn, complementing previous functions such as mobile payments in stores and restaurants. MMG launched the Style TV channel in Sweden, Denmark, Finland and Norway in 2001, and also established NonStop Services during the year. Two more new TV channels are planned for launching in 2002 and further strong growth is expected in all other business areas. The largest of these areas, Non Stop Entertainment, reports a clear profit for 2001. MGON launched eSports, a unique concept giving computer games players around the world the chance to compete with each other online. The company now has two million unique visitors a month and 50 million hits (source: Double-Click), which means a growth in traffic of more than 100 per cent over the past 6 months. Nordic Circle successfully restructured its business during the year, which led, however, to considerable losses in 2001. Nordic Circle now consists of three subsidiaries, Fyrplus, Nordic Spring Management and Advisec. The remaining businesses noted good profitability in 2001, and the strong performance has continued into 2002. North Node received new orders from JM Byggnads AB and Mimer in January 2002, and the first order from Norway for Oslo's Rikshospitalet (university hospital), an order that was signed with Intelli. North Node's customer list already included property companies Karlstads Bostadsbolag, Örebro Bostäder and Frontyard. North Node foresees considerable demand for its products for the smart home. See also "Events during the 4th quarter" (p.4) for additional comments on portfolio developments. ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2002/02/13/20020213BIT00230/bit0001.doc The full year-end report http://www.waymaker.net/bitonline/2002/02/13/20020213BIT00230/bit0001.pdf The full year-end report