Interim report Jan-March

INTERIM REPORT January - March 2001 www.ratos.se · Profit before tax SEK 24m (788) · Operating profit SEK 66m (44) · Total return on Ratos shares 5% · Offer for Atle completed · Scandic holding sold after end of period, exit gain SEK 1.7 billion · Asset management portfolio almost completely divested after end of period Acquisition of Atle On 19 February this year, Ratos and 3i made an offer for all the shares in Atle. The offer was implemented via the 50/50-owned Swedish company Woodrose Invest AB. Since more than 97% of Atle's shareholders had accepted the offer at the end of the acceptance period, the offer will be completed. This deal is an important step in Ratos's strategy to become a leading Swedish private equity company. The deal means that Ratos will acquire 13 new investments from Atle's portfolio, corresponding to SEK 3.2 billion. In terms of value this constitutes 40% of Atle's portfolio at 19 February 2001. The new holdings in Ratos's portfolio are: Arcorus, DIAB, Gadelius KK, Haendig, Haglöfs, Hilding Anders, HL Display (publ), Intervect, Kronans Droghandel, Martinsson Gruppen, Programmera and Sweden On Line. In addition, some 20 small holdings will be transferred to a joint portfolio of which Ratos will own 50%. The new holdings from Atle will be consolidated in the Ratos Group as of 1 May 2001. Results The Group's profit before tax amounted to SEK 24m (788). This result includes profit and share of profits from the active holdings of SEK 66m, an increase of 50% compared with the same period in the previous year. No exit gains were made during the period. Improved profits were reported from Camfil, Capona, Dahl, DataVis, Exceed and Scandic Hotels. Q-Labs was affected by a weaker market and showed a loss. The holdings in Telelogic and Telia Overseas are not reported as associated companies. Both companies showed good growth. Telia Overseas posted an operating profit due to capital gains while Telelogic reported an operating loss. Share of profits of associated companies include goodwill amortisation for each holding. Total consolidated goodwill amortisation in the Group and associated companies amounted to SEK 47m (23) in the first quarter. Asset management reported a loss of SEK 23m (162 profit) for the first quarter. This negative result was mainly due to the general uncertainty on the stock market. RATOS'S RESULTS Profit/ Of which Profit Ratos' / Ratos share of goodwill share profits amortisa of tion profit s SEK m ownership, %1) 2001 Q1 2001 Q1 2000 Q1 Holdings Camfil 30 7 -2 - Capona 47 13 0 13 Dahl 44 20 - 2 DataVis 44 -1 -1 -2 Esselte 17 15 - 19 Exceed 100 3 -2 0 Q-Labs 40 -3 -2 - Scandic Hotels2) 24 18 -2 14 Superfos 33 -6 0 -2 Telelogic 7 - - - Telia Overseas 9 - - - Industri Kapital - - - Total profit/share of 66 44 profits Total exit result - 595 Profit from holdings 66 639 Profit/loss from asset -23 162 management Net expenses -19 -13 Consolidated profit before 24 788 tax 1) Without taking buy-backs into account 2) The entire Scandic holding was sold after the end of the period Asset management The divestment of asset management's holdings started in the first quarter and was in principle completed by 30 April. Shares were sold for a net amount of SEK 1,449m in the first quarter and additional shares were sold net for SEK 1,273m at 30 April 2001. The reported loss SEK 23m for the first quarter is explained by the general stock market decline in which the General Index fell 15%. Including divestments made in April, the capital gain amounted to SEK 90m. At 30 April, asset management's remaining holdings included Svedala, which is subject to a recommended cash offer, Haldex, Pandox and a few small holdings with a total market value of SEK 469m. In addition, there are assets with a market value of SEK 118m in the subsidiary Johnson & Borsell which will continue to conduct trading in securities. Central income and expenses Total organisation's costs amounted to SEK 19m (14) of which personnel costs amounted to SEK 5m (7). Other expenses, including costs in connection with acquisition processes, amounted to SEK 14m (7). Net financial items amounted to SEK 0m (1). Cash flow from operating activities and investing activities for the period was SEK 1,355m (496) and liquid assets amounted to SEK 1,630m (691) at the end of the period. Consolidated tax expense Ratos's consolidated tax expense currently comprises its share of associated companies' taxes. Property tax is not reported as tax in the profit and loss account but is included as an operating cost. Net asset value Net asset value per share amounted to SEK 113 at 31 March. Ratos shares During the period Ratos shares rose 5% compared with the SIX Return Index which fell 17%. On 4 May 2001 the total return on Ratos shares amounted to 18% compared with -7% for the benchmark. Annual General Meeting The Annual General Meeting held on 5 April decided to issue a dividend as recommended by the Board of SEK 5.50 (4.50) per class A and B share. Olof Stenhammar (chairman), Peggy Bruzelius, Harry Faulkner, Göran Grosskopf, Arne Karlsson, Jan Söderberg and Per Olof Söderberg were re- elected as members of the Board. Göran Lindahl was elected as a new Board member, increasing the number of Board members to nine. The Annual General Meeting decided to issue a maximum of 500,000 call options on repurchased shares. The call options will be offered to a maximum of 15 key people at Ratos and the price per option was set at SEK 4.05. Option purchases will be subsidised by the buyer receiving a cash bonus payment corresponding to a maximum of 60% of the option premium after deduction for 55% standard tax, whereby the bonus will be divided into equal parts over five years and provided the person concerned remains an employee of the Ratos Group. The Board has also adopted a bonus program for key people for 2001. Bonus will be paid if certain operating targets are met and in a maximum amount of a couple of per cent of net profit. Events after the end of the period On 23 April 2001, Ratos sold its entire holding in Scandic Hotels to Hilton Group plc. Hilton Group paid SEK 144 per Scandic share which corresponds to approximately SEK 2.3 billion for Ratos's holding in Scandic. Of this amount, 75% was paid in cash and 25% in newly issued Hilton shares. The price of Hilton shares on the takeover date was 220.50 pence. At the same time, Hilton Group made an offer to all shareholders in Scandic Hotels on the same terms as those received by Ratos. ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2001/05/09/20010509BIT00750/bit0001.doc The full report http://www.bit.se/bitonline/2001/05/09/20010509BIT00750/bit0001.pdf The full report