Ratos's Year-end report 2001

YEAR-END REPORT 2001 HEAR CEO ARNE KARLSSON'S COMMENTS ON THIS REPORT www.ratos.se · Pre-tax profit SEK 1,926m (1,977) · Earnings per share SEK 22.07 (23.50) · Proposed dividend SEK 6.25 per share (5.50) · Total return on Ratos shares +27% · Positive EBITA development in holdings Developments in 2001 Ratos completed the largest acquisition and the largest divestment in its history in 2001. At the same time, Ratos phased out its asset management activities. This means that the private equity strategy launched three years ago is now implemented. During the transitional phase from a pure investment company to a fully invested private equity company, Ratos's shareholders have received good growth in value. The total return from 1 January 1999 to year-end 2001 was 97% which can be compared with the SIX Return Index which rose 29% in the same period. In 2001, the total return on Ratos shares was 27% while the SIX Return Index fell 15%. New and follow-on investments were made for a combined total of SEK 3,793m in 2001. At year-end, Ratos had 25 holdings. 13 new companies were added through the Atle acquisition. The holding in Hilton was received as part payment for the sale of Scandic Hotels, and a further two companies, Lindab and the Norwegian biotechnology company Dynal Biotech, were acquired later in the year. Exits were completed during the year for a total of SEK 2,450m and included Scandic Hotels, Sweden On Line and Telelogic. The global economy was weak in 2001 with a noticeably negative effect towards the end of the year after the terrorist attacks in the US. The situation for Ratos's holdings, however, was mixed. Some sectors and geographic markets experienced a decline in demand, which in some cases was dramatic. Other remained at a high level, with some even showing good growth. Overall, the development for Ratos's holdings was positive. Total pro forma EBITA (full-year earnings before net financial items, tax, items affecting comparability and goodwill amortisation, excluding funds received from Alecta in 2000) for the subsidiaries and associated companies owned by Ratos at year-end, increased by approximately 22%. Taking Ratos's different stakes in the holdings into account, pro forma EBITA rose approximately 6%. Ratos expects a gradual economic recovery in 2002. This, combined with action programmes initiated in several holdings, and which are expected to have an impact in 2002 and 2003, provides prospects for a continued positive trend for operating profit in 2002. Results The Group's pre-tax profit amounted to SEK 1,926m (1,977). This result includes profits from the holdings of SEK 1,817m (1,046), of which write- downs accounted for SEK 248m (0) and profit from asset management SEK 234m (1,008). Central income and expenses amounted to SEK -125 (-77). Profit from holdings rose to SEK 1,817m (1,046). Excluding exit gains, current profit from holdings amounted to SEK 203m (320). Ratos's amortisation of subsidiaries' and associated companies' goodwill and Ratos's share of goodwill amortisation in subsidiaries and associated companies totalled SEK 265m. In addition, Ratos's share of goodwill amortisation in DataVis was SEK 40m. In the 2001 closing accounts a review was performed of the reported value of all Ratos's holdings whereby the recoverable amount has been determined as the estimated value in use of the assets, where a market value was not available. In these valuations a need was identified to adjust the consolidated book values in three holdings - DataVis, Programmera and Q-Labs. The total cost of these write-downs amounts to SEK 248m. Development in the holdings - against the background of the economic climate - was predominantly favourable. EBITA improved compared with the previous year in eight of the holdings, while an unchanged positive EBITA is reported in two holdings. Seven holdings report weaker but still positive earnings while six holdings posted a loss in 2001. The major change in the composition of Ratos's portfolio which has been implemented successively during the year means that comparisons between the years as reported above are not reflected in the Group's net profit for the year. For the purpose of clarity, key full-year figures for all holdings are provided in the table on the final page of this report. Exit result The exit result amounted to SEK 1,852m (726). The sale of Scandic Hotels in the second quarter provided an exit gain of SEK 1,751m. 25% of the purchase price was paid in the form of Hilton shares and the market value of these shares at year-end 2001 exceeded book value by SEK 12m. Sweden On Line was sold in the third quarter. This sale resulted in an exit loss of SEK 29m which means that the IRR on this investment was negative. The remainder of Ratos's holding in Telelogic was sold in the fourth quarter. This investment, which was made in 1998, provided a total IRR of more than 100%. Divestments made in Industri Kapital's funds resulted in exit gains of SEK 46m. Ratos's results Ratos' Profit/ Of which Profit/ s Ratos's holdin share of goodwill share of g profits amortisation profits SEKm % 2001 2001 2000 Arcorus 49 44 -4 Atle Industri 50 -23 -5 Camfil 30 21 -8 -3 Capona 47 58 -2 59 Dahl 44 147 0 110 DataVis 44 -62 -5 -16 DIAB 48 5 -19 Dynal 25 -7 0 Esselte 17 14 0 42 Exceed 100 -32 -6 14 Gadelius 50 6 -4 Haendig 49 3 -3 Haglöfs 100 5 -2 Hilding Anders 27 56 -4 HL Display 29 15 -3 Intervect 50 -15 -2 Kronans 49 -15 -6 Droghandel Lindab 49 44 0 Martinsson 50 -1 -1 Programmera 50 -15 -3 Q-Labs 40 -26 -6 Scandic Hotels 0 18 -2 102 (until March) Superfos 33 -37 -1 12 Sweden On Line 0 0 0 Telelogic 0 Telia Overseas 9 Total 203 -86 320 profit/share of profit Right-downs DataVis -69 Programmera -74 Q-Labs -105 Total right-downs -248 0 Exit result DataVis 4 Industri Kapital 46 88 Scandic Hotels 1 751 32 Sweden On Line -29 Telelogic 84 602 Total exit result 1 852 726 Profit from other 10 holdings Profit from 1 817 1 046 holdings Profit from asset 234 1 008 management Net expenses -125 -77 Consolidated 1 926 1 977 profit before tax Asset management Asset management made a positive contribution to Ratos's earnings in 2001 as well. Dividends received amounted to SEK 16m and net capital gains to SEK 218m. Shares were sold for a total of SEK 3,326m. Ratos's asset management activities are now completely phased out, although some trading in Swedish equities will be conducted in the subsidiary Johnson & Borsell. At year-end 2001 the value of the portfolio was SEK 93m. Central income and expenses In 2001, Ratos's administrative expenses amounted to SEK 106m (88, including SEK 11m bonus from Alecta). Personnel costs amounted to SEK 45m (39) and other expenses, including costs for acquisition and exit processes, to SEK 61m (60). Net financial items amounted to SEK -19m (11). Cash flow Cash flow from operating activities and investing activities was SEK 401m (349) and the Group's liquid assets amounted to SEK 57m (59) at year-end. The parent company's external interest-bearing liabilities amounted to SEK 123m. Consolidated tax expense Ratos's consolidated tax expense currently comprises subsidiaries' and Ratos's share of associated companies' tax. Property tax is not reported as tax in the profit and loss account but is included as an operating cost. Ratos shares Earnings per share for 2001 amounted to SEK 22.07 (23.50) and the total return on Ratos shares was 27%. In the same period, the SIX Return Index fell 15%. Dividend Ratos will continue its assertive dividend policy. The Board of Directors proposes a dividend for 2001 of SEK 6.25 (5.50) per class A and B share. The record date for dividends is expected to be 15 April and payments from VPC are expected to be made on 18 April. Net asset value Ratos's reported net asset value (NAV) at 31 December 2001 amounted to SEK 8,495m corresponding to SEK 108 per share. Calculation of reported NAV is based on the consolidated book value of the unlisted holdings and the market value of the listed holdings. For holdings in Industri Kapital the calculation basis is the market value estimated by Industri Kapital. Unlisted holdings accounted for 81% of total NAV. Reported net asset value 31 % of SEKm December NAV 2001 Atle Industri 573 6 Arcorus 339 4 Camfil 478 5 Capona 495 6 Dahl 695 8 DataVis (incl. 110 1 convertible) DIAB 688 8 Dynal 280 3 Esselte 270 3 Exceed 74 1 Gadelius 138 2 Haendig 169 2 Haglöfs 109 1 Hilding Anders 413 5 Hilton 576 6 HL Display 285 3 Industri Kapital, 488 6 unlisted Intervect 213 2 Kronans Droghandel 404 5 Lindab 1 081 12 Martinsson 156 2 Programmera 20 0 Q-Labs 60 1 Superfos 317 4 Telia Overseas 328 4 Total holdings 8 759 100 Equity trading 93 Parent company's 60 property Liquid assets/ liabilities (net) in central companies -417 Total net asset value 8 495 (NAV) Net asset value/share, 108 SEK 1) 1) Number of shares outstanding at 31 December was 78,958,226 Parent company The parent company's pre-tax profit amounted to SEK 2,240m (1,665). The holdings accounted for SEK 1,983m (758) and assets management for SEK 260m (996) of this result. Costs amounted to SEK 86m (96) and net financial items to SEK 83m (7). Reporting the Atle acquisition At the beginning of May, Ratos and the British company 3i acquired Atle via a 50/50-owned company. The Atle holdings are to be divided between Ratos and 3i in accordance with agreements between the parties. The transfer of the companies to Ratos and 3i had not been fully completed by year-end, since the conditions for some transfers had not yet been met. The financial implications of the agreements are that Ratos acquires shares in 12 companies. Some of these are owned by both Ratos and 3i. In addition, 3i alone acquires 85 holdings. The remaining Atle holdings are placed in Atle Industri which will be owned equally by Ratos and 3i. This year-end report is based on the financial implications of the agreements. This means that, among other things, share of profits for May-December, in all the companies to be held by Ratos, is consolidated in Ratos. In connection with the 2001 closing accounts, some reallocations were made of Ratos's consolidated book values in the Atle portfolio. Accounting principles Starting in 2001, an additional number of new recommendations, issued by the Swedish Financial Accounting Standards Council, have come into force. These recommendations have not had any effect on the Ratos Group's net profit and financial position with the exception of recommendation No. 9, Income taxes. This effect is reported as a changed accounting principle at the beginning of 2000 in accordance with RR 5, Reporting of change in accounting principle. This principle has subsequently been applied. Otherwise the same accounting principles and calculation methods are used in this year-end report as in the most recently published annual report. Tax The parent company is taxed according to the rules for investment companies. This means that, among other things, capital gains are not liable to tax. For this reason, the Swedish Financial Accounting Standards Council's new recommendation will not have any effect on the accounts of the parent company. The fiscal loss carry-forwards in Ratos's subsidiaries amounted to just over SEK 400m at 31 December 2001. The possibility to offset these against future profits is generally uncertain since Ratos's strategy is not to own subsidiaries, only associated companies, and to own holdings for a limited period. In the associated companies owned by Ratos the loss carry-forwards are valued to the extent they exist and that it is judged they can be utilised in the foreseeable future. Any capitalisation will thus affect the shareholders' equity in the associated companies. In this way, the Swedish Financial Accounting Standards Council's new recommendation will have an effect on Ratos's consolidated accounts which is also shown in the table specifying change in shareholders' equity. Holdings Arcorus · Sales +7% and EBITA +7% (in euros) · Strong order bookings for all business areas with several breakthrough orders · Diversified customer and market mix reduces decline in weak international business climate · Action taken early in the year to meet weak demand in North America and Australia Arcorus is a newly formed group, made up of Hägglunds Drives, GS Hydro and Lidan Marine. The Group is a leading international supplier of complete hydraulic drive systems, hydraulic motors, winces and pipe laying systems. The main focus is industrial, marine and offshore applications. Ratos's holding in Arcorus amounts to 49% and the consolidated book value in Ratos was SEK 339m at year-end. Atle Industri · Sales +2% and EBITA -83% · Less favourable earnings for approximately two-thirds of the companies compared with last year, mainly due to a weaker Swedish krona, the slowdown in the economy and costs for action programmes · Action taken in Näsström accounts for SEK -39m of total EBITA of SEK 26m · Stable trend for the two largest holdings, Centralsug and Moving Atle Industri comprises a portfolio of 17 companies operating in trading, the engineering industry, waste management and IT/Technology, of which 14 are wholly owned. Seven of the companies account for 75% of Ratos's book value. These companies are AKA Tempcold (distributes cooling products), Näsström (hydraulic products wholesaler), Moving (materials handling systems), Nordhydraulic (hydraulic valves), Elpress (electrical connectors), Pressmaster Tool (press tools) and Centralsug (waste management systems). Ratos's holding in Atle Industri amounts to 50% and the consolidated book value in Ratos was SEK 573m at year-end. Camfil · Sales +42% and EBITA +77% · Good sales trend, mainly in Europe · Unprofitable Component business wound up · Alan O'Connell new CEO, former CEO Jan Eric Larson to be executive Chairman of the Board · Integration of Farr Camfil is the world leader in clean air technology and manufacture of air filters. The Group has its head office in Trosa, Sweden, and is represented by subsidiaries and local agents in more than 50 countries. Camfil has some 2,800 employees. Ratos's holding in Camfil amounts to 30% and the consolidated book value in Ratos was SEK 478m at year-end. Capona · Rental income +9% and EBITA +6% · Recent disruptions in the business environment had a limited impact on Capona's earnings · Direct yield from property portfolio 9.8% Capona, which owns and actively manages hotel properties, is one of the leading hotel property companies in the Nordic region. Capona was formed in 1997 when PriFast and Diligentia merged their hotel properties into a joint company. The portfolio comprises 42 hotel properties, 32 in Sweden and the rest in other Nordic countries. 95% of Capona's rental agreements are sales-based. Ratos's holding in Capona amounts to 47%. The market value of the Capona holding on 31 December 2001 was SEK 495m. Dahl · Sales +9% and EBITA +45% · Growing markets in Norway, Sweden, Denmark and Finland. Weak market in Poland · Investments and rationalisation programmes in recent years contribute to Dahl's best-ever result · Cash flow remains strong Dahl is the leading wholesaler for heating, plumbing and sanitation products in the Nordic region. The Group has a leading position in Denmark, Sweden, Norway and Poland and a weak position in Finland. The company was listed in 1996 and in 1999 Ratos and co-investor EQT effected a buy-out of Dahl from the stock exchange via a leveraged holding company. Ratos's holding in Dahl amounts to 44% and the consolidated book value was SEK 695m at year-end. DataVis · Sales unchanged and continued negative EBITA · Increased sales focus throughout operations led to several new assignments · Goodwill amortisation a SEK 93m charge against earnings · Ratos writes down the holding by SEK 69m to SEK 110m DataVis is an IT consulting company with high competence in systems development and integration. DataVis offers qualified consulting services in the Business Solutions and Telecom business areas. The company was started in 1990 and had some 215 employees at year-end. Ratos's holding in DataVis amounts to 44% and the consolidated book value was SEK 110m on 31 December. DIAB · Sales +11% and EBITA -30% · Strong sales trend in Europe, weaker demand in the US especially for pleasure boats · Strong growth in wind power sector · Continued investments to expand production capacity DIAB is a niche company within composite materials and sandwich technology. The key applications are hulls and decks for large pleasure boats, wings for wind power stations and components for trains, buses, aircraft and space rockets. Ratos's holding in DIAB amounts to 48% and the consolidated book value was SEK 688m at year-end. Dynal Biotech · Sales +19% and EBITA +13% · Particularly strong development within Tissue Typing · Good prospects for 2002 Dynal Biotech is the world leader in research, development and production of magnetic and non-magnetic small, completely spherical polymer beads. Applications for the products include separation of biological material, such as cells, DNA and proteins. Ratos's holding in Dynal Biotech amounts to 25% and the consolidated book value was SEK 280m at year-end. Esselte · Sales -2% and EBITA -22% · Strong improvement in cash flow · Lower net debt due to reduced stock levels · Winding up of loss-making Curtis led to extra restructuring costs SEK 196m charged against earnings · Positive trend in Europe due to enhanced cost efficiency Esselte is one of the world's leading suppliers of office products. Strong brands within the Group include Dymo, Pendaflex, Leitz and Esselte. Ratos's holding in Esselte amounts to 17% of the capital and 32% of the voting rights. The market value of Ratos's holding in Esselte was SEK 270m at year-end. Exceed · Sales +13% buy EBITA SEK -20m · Continued weak demand for air freight services. Declining growth in the sea freight market · Earnings were charged with costs due to employee resignations in two small units, IT investments and expansion in Finland and Denmark · Continued good profitability in the Swedish air and sea freight business Exceed is one of the leading companies in Nordic air and sea freight. The company has been in the Ratos Group since 1990. The Group employs approximately 275 people and has operations in Sweden, Denmark and Finland. The Conmel Group's logistics division was acquired in 2000. Ratos's holding in Exceed amounts to 100% and the consolidated book value was SEK 74m at year-end. Gadelius · Net sales -3% and EBITA -21% (in yen) · Wooden houses operations sold · Greater focus on unique segments including formation of a medical technology division · Hans Porat takes over as President and CEO on 1 March 2002 Gadelius is a Japanese trading house with its roots in Sweden from 1890 and operations in Japan since 1907. Today, Gadelius is a distributor of high-tech products with a focus on niche products with a high knowledge content within areas such as IT, medical technology, construction, machines for the packaging and food industry, and exports of mechanical and electronic components to European industry. Ratos's holding in Gadelius amounts to 50% and the consolidated book value in Ratos was SEK 138m at year-end. Haendig · Sales +27% and EBITA +2% · Two acquisitions during the year gave Haendig a presence throughout the Nordic region · Pressure on margins due to weak Swedish krona and a weak Danish market · Continued capital and cost rationalisation to integrate completed acquisitions · Continued focus on own brands. Incorporation of Bath business area Haendig is a comprehensive distributor to end users in the DIY market and industry. Sales are conducted via retailers in the building and hardware sectors, hypermarkets, heating, ventilation & sanitation suppliers, as well as agricultural suppliers in Sweden, Norway, Denmark and Poland. The company has experienced strong growth in the past year through acquisitions. The head office is in Halmstad, Sweden, and the company has subsidiaries in Norway, Sweden, Denmark, Finland and Poland. Ratos's holdings in Haendig amounts to 49% and the consolidated book value in Ratos was SEK 169m at year-end. Haglöfs · Sales +20% and EBITA -7% · Sales outside the Nordic area rose from SEK 6m to SEK 25m · Major planned costs for build-up of new markets had negative impact on earnings · Administration, product development and marketing organisation strengthened Haglöfs develops, produces and markets equipment and clothing for an active outdoor life. Haglöfs' Outstanding Outdoor Equipment brand includes rucksacks, sleeping bags, tents, shoes and clothes. The Group is market leader in Sweden and also holds strong positions in the other Nordic countries. Sales are conducted via retailers such as sports shops and outdoor specialists. Ratos's holding in Haglöfs amounts to 100% and the consolidated book value in Ratos was SEK 109m at year-end. Hilding Anders · Very strong increase in sales and earnings · Hilding Anders takes leading position among Europe's bed manufacturers · Integration of acquisitions during the year goes according to plan · Launch of a new bed collection contributed to a powerful sales increase Hilding Anders is today Europe's largest bed manufacturer. Several European bed manufacturers were acquired during the year and Hilding Anders now has factories throughout Europe. Ratos's holding in Hilding Anders amounts to 27% and the consolidated book value in Ratos was SEK 413m at year-end. Hilton · Hilton acquires Scandic in the first half of 2001 · Both hotel operations and betting and gaming business report higher profits · Share price was higher at year-end than at the Scandic acquisition despite disruptions in the autumn · Hilton's results for 2001 will be published on 28 February 2002 Hilton Group plc is listed on the London Stock Exchange. Operations are divided into two operating areas: Ladbroke Betting and Gaming and Hilton International. Hilton International has 379 hotels in nearly 70 countries. Ratos's holding in Hilton amounts to approximately 1%. The market value of Ratos's holding in Hilton was SEK 576m at year-end. HL Display · Sales +23% and EBITA +67% · HL Display share price +75% in 2001 · Extensive restructuring of production structure · Annual growth target 20% with a 10-15% profit margin over a business cycle HL Display is one of Europe's leading suppliers of products and systems for goods display, store communications and store fittings for the retail trade and its suppliers. The company, which is among the 500 fastest growing companies in Europe, has operations throughout Europe as well as in Asia and the US. Ratos's holding in HL Display amounts to 29%. The market value of Ratos's holding in HL Display was SEK 285m at year-end. Industri Kapital · Divestments during the year provided Ratos with exit gains of SEK 46m · Major investments in 2001 in Fives-Lille, Perstorp as well as eight Telia companies Industri Kapital is an unlisted private equity company with assets under management of more than EUR 3 billion. Since its formation in 1989, Industri Kapital has completed some 40 investments in different sectors in Europe. Most of these investments were made in the engineering, trading and service industries. Investors in Industri Kapital's funds comprise major Nordic, European and American institutions and insurance companies. Ratos has invested in four funds: 1989, 1994, 1997 and 2000.. Industri Kapital's estimate of the market value of Ratos's holding in Industri Kapital amounted to SEK 488m at year-end. Intervect · Sales +5% and EBITA SEK 4m · Extensive action program initiated · New CEO and management appointed · Continued integration of HEK and Alimak companies in countries including the US, France and Germany Intervect is a recently formed group comprising the Swedish industrial lift manufacturer Alimak and the Dutch work platform manufacturer Hek International, which merged with Alimak in 2000. The Group is the world leader in hoists and platforms for the construction and mining industries as well as for other industrial applications. The Group has a worldwide network of subsidiaries and distributors. Ratos's holding in Intervect amounts to 50% and the consolidated book value in Ratos was SEK 213m at year-end. Kronans Droghandel · Sales +19% but EBITA SEK -4m · The Swedish pharmaceutical distribution remained profitable and operations in Finland developed strongly · Weak consolidated earnings due to major losses in Norway following deregulation of the pharmacy market and start-up costs for new business areas in Sweden · Action program and contracted volume increases already expected to have earnings impact in 2002 Kronans Droghandel is one of the largest and oldest distributors in the healthcare and pharmaceutical market in the Nordic region. A pure play logistics company, Kronans Droghandel handles products including pharmaceuticals, vaccines and medical devices. Suppliers are mostly multinational pharmaceutical companies and customers are pharmacies and the healthcare sector. Ratos's holding in Kronans Droghandel amounts to 49% and the consolidated book value in Ratos was SEK 404m at year-end. Lindab · Sales +17% but EBITA -12% · Continued good demand in the Ventilation business area. Trend towards weaker demand in the Profile business area · Strong growth in Eastern Europe · Integration of acquired companies Folkebolagen, Tekno Term and Spiral-Helix proceeding well Lindab is an international group which develops. manufactures and markets thin-sheet metal products for the environmental and ventilation sectors, as well as a complete profile programme for the construction industry. Together with companies including Skandia Liv and the Sixth Swedish National Pension Fund, Ratos implemented a buy-out of Lindab from the stock exchange via a leveraged buy-out company, Lindab Intressenter. Ratos's holding in Lindab amounts to 49% and the consolidated book value in Ratos was SEK 1,081m at year-end. Martinsson · Sales -37% and EBITA SEK -4m · Continued low demand in the market for IT products · Continued focus on servers and server-related services · Good effect from cost savings and a stable financial situation · In February 2002 Martinsson makes an offer totalling SEK 102m for competitor IMS Martinsson is represented throughout Sweden and is a dedicated IT infrastructure company. Using its own consultants, together with products from world-leading suppliers, the company can provide customised IT platforms. Customers are mainly medium-sized and large companies and organisations. Ratos's holding in Martinsson amounts to 50% and the consolidated book value in Ratos was SEK 156m at year-end. Programmera · Sales -18% and EBITA SEK -30m · The continued weak market worsened earning capacity and some redundancies were made · Merger with IT consulting company Giga Group successful while acquisition of e-solutions led to a SEK 13m charge against earnings · Restructuring carried out during the year is expected to have a positive effect in 2002 · Ratos writes down this holding by SEK 74m to SEK 20m Programmera/Giga is an IT consulting company which provides services within IT infrastructure, administration and systems development with a focus on the banking, financial services and insurance sectors. Ratos's holding in Programmera amounts to 50% and the consolidated book value in Ratos was SEK 20m at year-end. Q-Labs · Revenues +12 % and EBITA SEK -44m · Substantial deterioration of the market situation in Scandinavia · Continued sales success in the German automotive industry · Improved profitability in the German and American operations · Ratos writes down this holding by SEK 105m to SEK 60m Q-Labs is a world-leading consultant for services relating to improvement and quality assurance of software development. Ratos's holding in Q-Labs amounts to 40% and the consolidated book value in Ratos was SEK 60m at year-end. Superfos · Sales -10% and EBITA -67% · Less favourable earnings capacity for Packaging due to a discontinued customer project in the US and the costs of closing a production unit in the UK · Continued focus on production of thermoformed plastic packaging · Declaration of intent signed for acquisition of Danish competitor Jotipac Superfos is a Danish group with international operations and 2,300 employees in 16 countries. The Group is organised in two operating areas: Packaging and Aerosols. Superfos Packaging develops, produces and sells thermoformed packaging to the food, chemical-technical and pharmaceutical industries. Superfos Aerosols is a significant European player in contract filling of aerosols. Ratos's holding in Superfos amounts to 33% and the consolidated book value in Ratos was SEK 317m at year-end. Telia Overseas · Strong growth in number of subscribers · Divestments in Brazil and Slovenia. The Slovenia sale provided a capital gain of SEK 450m · Strong growth particularly in India, Hong Kong and Uganda · All holdings show good financial development especially the African holdings in Namibia and Uganda. Telia Overseas was formed in 1996 to acquire, develop and sell telecom licences, mainly for mobile telephony and communications networks in developing countries. The company goes in as a stakeholder together with local partners. Telia Overseas has associated companies all over the world. Ratos's holding in Telia Overseas amounts to 9% and the consolidated book value in Ratos was SEK 328m at year-end. Annual General Meeting Ratos's Annual General Meeting will be held on 10 April at 5.30 p.m. in Berwaldhallen, Dag Hammarskjölds Väg 3, Stockholm. Shareholders who wish to participate in the Meeting must be entered in the share register kept by VPC no later than 28 March 2002, and notify their intention to attend no later than 5 April. Notification of attendance may be made by writing to Ratos, Box 1661, SE-111 96 Stockholm, or telephoning +46 8 700 17 00. Complete company documentation and basis for decision will be available at the company's offices at Drottninggatan 2 in Stockholm and on the company's website www.rataos.se from 27 March 2002. Share buy-backs Ratos has a share buy-back programme. From when repurchases started in 2000 until the end of 2001 a total of 2,362,200 shares had been acquired corresponding to 2.9% of the total number of shares, No Ratos shares have been repurchased in 2002. The 2001 Annual General Meeting's decision to reduce the share capital by SEK 8,222,500 through cancellation without repayment of 657,800 B shares repurchased by the company, was implemented in September. The reduced share capital was transferred to unrestricted equity. The number of shares then amounted to 80,662,626, of which Ratos through repurchase owns 1,704,400 or 2.2%. The Board has decided to propose that the Annual General Meeting gives the Board a renewed mandate to repurchase shares in the company during the period until the next Annual General Meeting. Repurchases will be effected on the Stockholm Stock Exchange (Stockholmsbörsen) and be subject to the restriction that the company's holding of own shares may not at any time exceed 7% of all the shares in the company. The purpose of the repurchase is to give the Board greater freedom of action in its efforts to create value for Ratos's shareholders. Incentive programme for senior executives The Board has today decided to propose that the Annual General Meeting decides on the issue of a maximum of 550,000 call options on repurchased Ratos class B shares. It is proposed that the call options be offered to a maximum of 20 key people who work at the company. The options are offered with a maximum of between 11,250 and 105,000 options per person. The exercise price will be set at 125% of the average share price in the period from 11 April until 17 April 2002 inclusive, although a minimum of SEK 20 and a maximum of SEK 200. The options will remain valid until and including 30 March 2007. The price of the options will be determined as their assessed market value taking the share price during the measurement period into account. Purchasers of options will received a bonus, distributed over five years, corresponding to 60% of the option premium, provided the person concerned is still working at Ratos. Stockholm, 21 February 2002 Ratos AB (publ) Board of Directors For additional information: Arne Karlsson, CEO, +46 8 700 17 00 Clara Bolinder-Lundberg, Communications and IR, +46 8 700 17 63 Financial calendar Annual Report 2001 March 2002 Interim Report, January-March 13 May 2002 Interim Report, January-June 26 August 2002 Interim Report, January-Sept 13 November 2002 ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2002/02/21/20020221BIT00780/bit0002.doc The full year-end report http://www.waymaker.net/bitonline/2002/02/21/20020221BIT00780/bit0002.pdf The full year-end report