2008
Outline of Lundbergs 2
The year in brief 3
The president’s review 4
Lundbergs as an investment company 7
Net asset value 10
Cash flow 11
The Lundberg share 12
Fastighets AB L E Lundberg 14
Hufvudstaden 18
Holmen 20
Cardo 22
Industrivärden 24
NCC 25
Indutrade 26
Husqvarna 26
Handelsbanken 27
Sandvik 27
29 Report of the Board of Directors 30
Definitions 36
Group
Financial statements 37
Notes 40
Parent Company
Financial statements 63
Notes 66
Proposed distribution of profits 72
Auditor’s report 73
Corporate Governance Report 74
Board of Directors 78
Senior executives 80
Annual General Meeting and Financial Reports 82 Subsidiaries and other major shareholders
Annual report
Corporate governance
28 (52) 45 (88)
Industrivärden NCC
Husqvarna Hufvudstaden
Holmen
Cardo Fastighets AB L E Lundberg 100
41 (41)
10 (21) 11 (15)
1.8 (1.8)
Sandvik 1.2 (1.2)
Indutrade 10 (10)
Handelsbanken
4.3 (13.1)
Principal shareholder Other major shareholdings
Lundbergs
Outline of Lundbergs
Lundbergs is an investment company that manages and develops a number of companies by being an active, long- term owner.
The portfolio includes the wholly owned unlisted real estate company, Fastighets AB L E Lundberg, and the publicly traded subsidiaries and associated companies Cardo, Holmen, Hufvudstaden and NCC. Lundberg also has major
shareholdings in Handelsbanken, Husqvarna, Industrivärden, Indutrade and Sandvik.
Lundbergs’ objective is to generate a return on invested capital over time that substantially exceeds the yield on a risk-free interest-bearing investment.
35.4%
Properties in Fastighets AB L E Lundberg
Cardo 6.5%
Holmen 15.3%
Hufvudstaden 19.9%
Indutrade 1.4%
Handelsbanken 4.7%
Husqvarna 2.4%
Sandvik 2.7%
Industrivärden 8.8%
NCC 2.2%
Other 0.7%
Proportion of Lundbergs’ marked-valued assets, approx. SEK 26 billion, on February 17, 2009
0 100 200 300 400 500 600
Feb 17, 2009 2008 2007 2006 2005 2004 SEK
Net asset value per share after deferred tax, SEK
150 200 250 300 350 400 SEK
Feb Jan 09 Nov Sept July May March Jan 08
The Lundberg share 2
The figures denote the percentage of share capital (voting rights) held on February 17, 2009.
gs 2008
• On December 31, 2008, net asset value after deferred tax amounted to SEK 22.1 billion (SEK 356 per share), com pared with SEK 30.4 billion (SEK 490 per share) at December 31, 2007. The corresponding values on February 17, 2009 were SEK 21.4 billion (SEK 345 per share).
• Consolidated net sales amounted to SEK 22,350 m.
(23,049).
• The operating result amounted to a loss of SEK 1,965 m.
(profit: 7,934). Excluding impairment losses and un-
realized changes in value, operating profit amounted to SEK 3,186 m. (4,255).
• After taxes, a consolidated loss of SEK 2,025 m.
(profit: 5,010) was reported, of which minorities accounted for a profit of SEK 219 m. (2,404).
• A loss (excluding minorities) per share of SEK 36.19 (earnings: 42.02) was reported.
• The Board of Directors proposes a dividend of SEK 6.00 (9.00) per share.
EARNINGS AND KEY DATA
2008 2007
Net asset value after deferred tax, SEK billion 22.1 30.4
Net asset value per share after deferred tax, SEK 356 490
Shareholders’ equity per share attributable to Parent Company’s shareholders, SEK 329 425
Net sales, SEK m. 22,350 23,049
Operating profit/loss, SEK m. -1,965 7,934
excluding impairment losses and unrealized changes in value, SEK m. 3,186 4,255
Profit after tax, SEK m. -2,025 5,010
of which, minority share, SEK m. 219 2,404
Earnings/loss per share, excluding minority share, SEK -36.19 42.02
Dividend per share, SEK 6.00
19.00
Debt/equity ratio 0.36 0.28
Equity/assets ratio, % 53 59
1) The Board of Directors’ proposal.
8
President’s review
Global financial crisis
The financial crisis that started in the US in 2007 evolved into a global crisis during 2008. Financial institutions throughout the world have suffered more or less serious consequences. The governments of countries with our largest economies have presented highly comprehensive stimulus packages to offset the severity of the crisis and save the financial system. Central banks have reduced interest rates aggressively.
The strong economic growth we experienced in large parts of the world over a period of several years was gradu- ally transformed during 2008 into stagnation or decline. The economic slowdown was particularly pronounced during the fourth quarter.
Stock markets worldwide started the year on a negative note, but some stabilization during the spring and summer was followed by a very sharp decline in the autumn. Nasdaq OMX
Stockholm finished the year down 42%, the largest decline in more than 100 years. Most industrial companies reported relatively favorable business development through the end of the third quarter, but order bookings fell sharply in the fourth quarter. The 2009 fiscal year has started weakly, with virtually total uncertainty characterizing many industrial sectors. It is clear that large sections of the Western World have undergone a period characterized by unsustainable credit expansion. The contraction of the credit market that must now take place is a painful process with very serious consequences for banks, companies and private households. It will take time before the proper balance can be restored and we, once again, are able to see our economies reflecting steady growth. In general, I believe the world’s stock markets have discounted this scenario and, therefore, there is reason to believe that the markets have bottomed out or are approaching the low point.
Lundbergs’ performance
The total return to Lundberg’s shareholders during 2008 amounted to minus 15%. While we are definitely not satisfied with a negative total return, we performed relatively well in comparison with other major listed Swedish investment companies. All the other companies reported results that were even worse, with some showing total capital return deficits of 50 to 60%. Our well-balanced portfolio consisting of solid companies and large property holdings was a key factor in our relatively favorable development. Over the past ten years, shareholders in Lundbergs have received an average total return of 16% annually, and have thus fared well in compari- son with those of other investment companies.
For 2008, Lundbergs reported a consolidated financial loss after tax of SEK 2,025 m. (profit: 5,010). The negative result was due to impairment losses on publicly traded shares and participations, and unrealized changes in property values.
Excluding impairment losses and unrealized value changes, Lundbergs would have reported operating profit of SEK 3,186 m.
(4,255).
Net asset value per share after deferred tax declined 27%
during the year to SEK 356 (490). The discount on net asset value declined to about 15% (25).
Lundberg’s Board of Directors will propose that the Annual General Meeting approve a dividend of SEK 6 (9) per share.
The reason for the proposal is that several of our portfolio companies are reducing their dividends this year, and we want to strengthen our cash flow and, in turn, enhance our ability to pursue the investment opportunities that we are convinced will arise in the future. For the shareholders, we believe it is more advantageous to retain a large proportion of our cash flow in the company, as opposed to distributing the funds to shareholders.
It has always been Lundberg’s philosophy to maintain low indebtedness, which has proved to be a successful principle 4
gs 2008
over time. Our financial strength has enabled us, on many occasions, to accept challenges and act aggressively in situa- tions that were uncertain and risk-filled. As a result, we have been able to capitalize on investment opportunities that, in retrospect, have generated favorable returns. During the next few years, we believe that we will be able to take advantage of similar investment opportunities.
Our financial position at year-end 2008 remained strong.
In relation to the market value of our assets, our debt amount- ed to 12% (see page 10). If our total interest-bearing net debt of SEK 3 billion were attributed totally to our property operations, the loan to value ratio for this would amount to 33%, and our publicly listed shares would be totally free of debt. Our credit rating with Standard & Poor’s, which was confirmed in January 2009, remains strong, A+, with a stable outlook.
Fastighets AB L E Lundberg
Lundbergs’ consolidated accounts include operating profit of SEK 60 m. (1,247) reported by Fastighets AB L E Lundberg. The decline was due to lower unrealized values in the property portfolio, which were estimated at 4.4% in 2008, excluding new investments. The decline was a result of a higher required yield on commercial properties.
On the other hand, earnings attributable to property management operations increased during 2008. The rental market for housing, office and retail premises remained strong during the year. Rental revenues increased, while costs for operations and maintenance remained at the same level as in 2007. The total vacancy rate in February 2009 was about 1.9%, comprising 0.7% for residential properties and 2.6% for commercial premises.
A new investment project was started during 2008 in a commercial property in central Jönköping. Investments will total about SEK 150 m. and the project is expected to be completed in late 2009. Several projects in Linköping and Norrköping are now in the analysis and planning stages and could be started in the next few years.
Portfolio companies
During 2008, we acquired shares for a net total of SEK 201 m., including investments in Sandvik totaling SEK 103 m., Husqvarna SEK 60 m. and Cardo SEK 38 m. In February 2009, we acquired shares in Industrivärden valued at SEK 78 m.
Holmen reported lower earnings in 2008, compared with the preceding year. Demand for newsprint was relatively favorable during the year, while a gradual decline was noted for board. Sharp price increases for timber and recovered paper were charged against earnings. Newsprint prices were under pressure and totally inadequate to offset the increased costs. Although the price of board was raised somewhat, low capacity utilization impacted earnings. During the autumn, Holmen closed the oldest paper machine at the Hallsta paper mill, and all operations were discontinued at the Wargön mill.
Costs for these cutbacks were charged against earnings for the year. Plans for Holmen’s new sawmill, next to the Braviken paper mill outside Norrköping, are proceeding as planned.
Hufvudstaden’s reported earnings declined sharply in 2008 due to unrealized value changes in the property portfolio.
However, earnings from property management operations con- tinued to improve as a result of higher rents and lower vacancies.
The strong rental market slackened gradually during the year.
Hufvudstaden’s financial position remains strong, with a loan to value ratio corresponding to 16% of the value of its properties.
Cardo reported strong earnings in 2008. Particularly favo- rable trends were noted for door operations, and the Pump Division also reported a successful business trend. Service operations continued to account for a growing percentage of Cardo sales, which contributed to the improvement in earnings.
Cardo bought back 10% of all shares in the company during 2008, which was financed entirely by cash flow from business operations.
NCC reported favorable results in 2008. The company’s construction operations were particularly successful in Sweden, while conditions for its housing business slackened, due to the economic crisis. Order bookings declined, particu- larly during the fourth quarter. Organizational adjustments were made to meet the anticipated decline in the construction market during the next few years.
Industrivärden was impacted strongly by the negative stock market trend in 2008. The company’s net asset value declined sharply, and the total return was lower than average
“As always, the fundamental concern for Lundbergs is to
safeguard our financial strength.
Accordingly, we will adopt a cautious approach to under
taking new commitments, although we are naturally
prepared to make investments within certain specific para
meters.”
8
1997 1998 1994
1993 1992
1991 1990
1988 6
for the equities market. Over a long period of time, however, Industrivärden has yielded a favorable return. Continued acquisitions of shares in Volvo were made during the year, and Industrivärden is now Volvo’s second largest shareholder.
Indutrade reported continued strong growth and a positive earnings trend during 2008. The growth was generated both by organically and through acquisitions.
Sandvik performed favorably during the year’s first three quarters. During the fourth quarter, however, the company was affected by the global economic slowdown, which led to lower full-year earnings.
Handelsbanken reported strong earnings in 2008. Net inter- est items and lending rose sharply, and costs were kept under good control. A smaller bank was acquired in Denmark during the year.
Although Husqvarna was impacted negatively by weak private consumption in the US and its earnings declined com- pared with the preceding year, we still believe the long-term outlook for Husqvarna remains favorable. A new CEO was appointed in the autumn. In February 2009, the Board of Direc- tors of Husqvarna announced its decision to implement a rights issue totaling approximately SEK 3 billion, pending approval by an Extraordinary General Meeting. Lundbergs supports the issue and will subscribe for its allotment.
Future outlook
The global financial crisis and serious economic recession have created widespread uncertainty concerning developments in the immediate future. 2009 is expected to be a weak year, and we cannot rule out the possibility that several more could follow.
As always, the fundamental concern for Lundbergs is to safeguard our financial strength. Accordingly, we will adopt a cautious approach to undertaking new commitments, although we are naturally prepared to make investments within certain specific parameters.
Our net debt must never exceed 50% of property values, and share investments shall never be financed by loans. We strive to maintain long-term capital maturities for our loan financing based mainly on fixed interest rates.
Our portfolio companies and our wholly owned property operations maintain high levels of quality with favorable future potential. We intend to continue our long-term efforts to develop and refine our investments in order to provide our shareholders with a healthy return on their investments.
Although the immediate future will be characterized by challenges, in a more long-term perspective, I believe and hope that Lundberg’s shareholders will continue to receive a strong total return, compared with other investment alternatives.
Stockholm, March 6, 2009
Fredrik Lundberg
President’s review
Lundbergs becomes the principal owner of Cardo. Wholly owned property portfolio is concentrated through divestment to Realia.
Structural transaction whereby Lundbergs’ construction operations are merged with Siab.
Principal shareholder in MoDo, currently Holmen.
Additional capital contribution to Östgöta Enskilda Bank.
Tetra Pak’s public offer to acquire Alfa Laval was accepted. Major new issue of shares in Östgöta Enskilda Bank.
Incentive holding is sold.
Major purchases of shares in MoDo, currently Holmen.
The holding in Skaraborgs
banken was divested.
Danske Bank acquires Lundbergs’
holding in Östgöta Enskilda Bank.
Lundbergs becomes a major shareholder in NCC through NCC’s acquisition of Siab. Lundbergs acquires major holding in Cardo.
gs 2008
Lundbergs is an investment company that manages and develops a number of companies based on active, long- term ownership. The asset portfolio includes the wholly owned unlisted real estate company Fastighets AB L E Lundberg and the publicly traded subsidiaries and associ- ated companies Cardo, Holmen, Hufvudstaden and NCC.
Lundbergs also has substantial holdings in Handelsbanken, Husqvarna, Industrivärden, Indutrade and Sandvik.
Lundbergs’ objective is to generate a return on invested capital over time that substantially exceeds the yield on a risk-free interest-bearing investment. Lundbergs’ strategy is to generate such a return and value appreciation while main- taining a low risk. Investments focus mainly on companies characterized by solid market positions, strong and stable cash flow and that have their own products and brands. The financial risk is minimized by combining low indebtedness with good access to funds. The time perspective of Lundbergs’
ownership enables the companies and their management to adopt a long-term approach in their efforts to develop market positions and competitive strengths. Long-term ownership is usually accompanied by participation on boards of directors.
Lundbergs is represented on the boards of all of its portfolio companies.
Assets
Lundbergs’ assets are concentrated to a few major holdings.
The real estate holdings, through wholly owned subsidiary Fastighets AB L E Lundberg and shares in Hufvudstaden, represented a value of SEK 14.3 billion at the end of 2008, or 55% of the Group’s total assets. The shareholdings in Cardo, Handelsbanken Holmen, Husqvarna, Industrivärden, Indutrade, NCC and Sandvik accounted for SEK 11.7 billion or 45% of total assets.
Organization
Lundbergs long-term investment work is conducted in a small organization that represents a wealth of collective experience.
The organization that focuses on investment activities and active ownership has about ten employees, including the personnel of the subsidiary L E Lundberg Kapitalförvaltning.
The wholly owned real estate holdings are separated in or- ganizational terms from the Parent Company and are assigned the same status as the Group’s other major investments.
Management expenses in relation to total assets amounted to 0.13% during 2008.
2003 2006 2008
2002
2000 2001 2005
As a supplement to reporting in accordance with IFRS (pages 29-72), Lundberg’s cash flow is reported in this section as if it were an investment company based on the Parent Company and the wholly owned subsidiaries. This procedure means that Fastighets AB L E Lundberg is reported as a fully consolidated company and not as a shareholding.
2007
Continued acquisition of Industrivärden shares.
Participates in structural transaction when Ramirent
Continued acquisitions of Handelsbanken and Sandvik shares.
Acquisition of Industrivärden shares.
Lundbergs launches a share buyback program.
Acquires 20% of Stadium through a private placement.
Divests holdings in Stadium and Ramirent. Acquires shares in Indutrade, Handelsbanken and Sandvik.
Husqvarna shares acquired.
Continued acquisitions of Handelsbanken, Industri
värden and Sandvik shares.
Minor acquisitions of Sandvik, Husqvarna and Cardo shares.
8
L E Lundberg Kapitalförvaltning AB
L E Lundberg Kapitalförvaltning is a subsidiary that engages in securities trading. The objective of operations is to utilize macroeconomic and corporate analyses in order to generate a favorable return on capital employed. In addition to securities trading, the company accounts for the analysis and follow-up of other investments within the Group. The securities trading activities include equities and equity-related instruments.
Although shares listed on Nasdaq OMX Nordic account for most of the investments, investments may also be made in other mature markets. Gross exposure, calculated as the sum total of the market value of long-term and short-term holdings, as well as exposure via derivatives, amounted to SEK 150 m.
at year-end. The organization consists of five employees.
Investment activities
During 2008, investments in shares totaled SEK 201 m., of which Sandvik shares accounted for SEK 103 m., Husqvarna shares for SEK 60 m. and Cardo shares for SEK 38 m. In Febru- ary 2009, Industrivärden shares at a value of SEK 78 m. were acquired.
Return
Lundbergs’ mission is to generate a healthy absolute return for its shareholders through growth in dividends and net asset value. Since 1999, net asset value per share after deferred tax has grown by an average of 10% annually. During 2008, however, net asset value after deferred tax declined 27%.
Total annual return
1over the past 10 years has averaged 16%.
Total annual return over the past five-year period has averaged 8%. The total return in 2008 was minus 15%. Interest-bearing net debt in relation to market-valued assets on December 31, 2008 amounted to 12% (10). The corresponding value during the past 10-year period has varied between 4 and 13%.
Accordingly, the total return has been consistently generated together with low financial risk.
Net asset value
On December 31, 2008, net asset value after deferred tax amounted to SEK 22,073 m. (SEK 356 per share), compared with SEK 30,409 m. (SEK 490 per share) at December 31, 2007; see table page 10. On February 17, 2009, estimated net asset value per share after deferred tax amounted to SEK 21,416 m. (SEK 345 per share).
Cash flow
During the year, dividends totaling SEK 1,251 m. (2,048) were received. Funds contributed through the sale of securities amounted to SEK 129 m. (99) and through real estate opera- tions to SEK 385 m. (542). Accordingly, total funds received amounted to SEK 1,765 m. (2,689). During the year, SEK 281 m. (2,729) was invested in shares and SEK 99 m. (104) in properties. Dividends paid by Lundbergs amounted to SEK 558 m. (527). Interest-bearing assets rose SEK 379 m. and interest-bearing liabilities decreased SEK 148 m. Accordingly, interest-bearing net debt declined by SEK 527 m. to SEK 3,016 m. (3,543) at December 31, 2008. For additional information, see the cash flow report on page 11.
Lundbergs as an investment company
8
1) The total return is defined as the sum total of the change in the share price and reinvested dividends.
gs 2008
2008 2007
2006 2005
2004 2003
2002 2001
2000 1999
SEK billion
0 10 20 30 40 50 60 70 80 90 100
%
Handelsbanken Sandvik Husqvarna Other Indutrade
Industrivärden NCC
Cardo Holmen
Hufvudstaden Properties
0 5 10 15 20 25 30 35 40
Total value, left scale
DISTRIBUTION OF MARKET-VALUED ASSETS AS A PERCENTAGE OF TOTAL ASSET VALUE, SEK BILLION
PROPORTION OF SHARE CAPITAL, VOTING RIGHTS, ACQUSITION VALUE AND FAIR VALUE OF SHAREHOLDERS
Feb. 17, 2009 Dec. 31, 2008 Dec. 31, 2007
%
1Share capital Voting rights Share capital Voting rights Share capital Voting rights
Cardo 41.3 41.3 41.3 41.3 36.0 36.0
Handelsbanken 1.8 1.8 1.8 1.8 1.8 1.8
Holmen 27.9 52.0 27.9 52.0 27.6 51.8
Hufvudstaden 45.2 88.0 45.2 88.0 45.2 88.0
Husqvarna 4.3 13.1 4.3 13.1 4.0 11.4
Industrivärden 10.9 15.0 10.9 15.0 10.9 15.0
Indutrade 10.0 10.0 10.0 10.0 10.0 10.0
NCC 10.0 20.6 10.0 20.6 10.0 20.4
Sandvik 1.2 1.2 1.2 1.2 1.1 1.1
Feb. 17, 2009 Dec. 31, 2008 Dec. 31, 2007
SEK m. Market value
2Acquisition value
3Market value
2Acquisition value
3Market value
2Acquisition value
3Cardo 1,656 1,277 1,277 1,277 2,171 2,021
Handelsbanken 1,213 1,386 1,386 1,386 2,277 2,096
Holmen 3,919 2,917 4,516 2,917 5,751 2,917
Hufvudstaden 5,077 2,828 5,301 2,828 6,015 2,828
Husqvarna 611 629 629 629 1,182 1,175
Industrivärden 2,258 2,405 2,405 2,405 4,757 2,504
Indutrade 366 265 265 265 493 288
NCC 564 541 541 541 1,492 775
Sandvik 694 686 686 686 1,435 1,155
Other shares 145 142 146 144 291 281
TOTAL 16,502 13,075 17,151 13,078 25,863 16,040
8
0 50 100 150 200 250 300 350 400 450 500 550
2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 SEK
NET ASSET VALUE AFTER DEFERRED TAX, PER SHARE
-30 -20 -10 0 10 20 30 40
2008 2007 2006 2005 2004 2003 2002 2001 2000 1999
%
CHANGES IN NET ASSET VALUE PER SHARE
1) The properties’ estimated fair value on December 31, 2008 was SEK 9,048 m. (9,312), of which develop ment properties accounted for SEK 212 m.
(208).
2) Publicly traded assets have been entered at the current market price or at the exercise price for written options if the latter price is lower.
3) Other assets, provisions (excluding deferred tax) and liabilities have been entered at the carrying amount at December 31, 2008 and 2007.
4) Deferred tax (26.3%) has been computed on the basis of the provision to the tax deferral reserve and the difference between the market value and taxassessment value. In accordance with current legislation, deferred tax on businessrelated participations was not computed on the basis of the difference between the market value and the taxassessment value. Deferred tax on the difference between estimated market value and taxassessment value of properties in Fastighets AB L E Lundberg was assessed at a standard rate of 10%.
KEY FIGURES
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Net asset value, SEK m. 14,874 13,380 13,665 13,692 18,024 21,520 26,078 33,147 30,409 22,073
Net asset value/share, SEK 196 205 220 221 290 347 421 535 490 356
Changes in net asset value/share, % 38 5 7 0 32 20 21 27 8 27
Lundbergs as an investment company - Net asset value
10
Dec. 31, 2008 Dec. 31, 2007 CALCULATION OF NET ASSET VALUE SEK m. SEK per share SEK m. SEK per share Properties in Fastighets AB L E Lundberg
19,048 146 9,312 150
Cardo
21,277 21 2,171 35
Handelsbanken
21,386 22 2,277 37
Holmen
24,516 73 5,751 93
Hufvudstaden
25,301 86 6,015 97
Husqvarna
2629 10 1,182 19
Industrivärden
22,405 39 4,757 77
Indutrade
2265 4 493 8
NCC
2541 9 1,492 24
Sandvik
2686 11 1,435 23
Other securities
2146 2 291 5
Total marked-valued assets 26,199 423 35,175 567
Other assets, provitions and liabilities
33,233 52 3,759 61 Net asset value before deferred tax 22,966 370 31,416 507
Deferred tax
4894 14 1,006 16
NET ASSET VALUE AFTER DEFERRED TAX 22,073 356 30,409 490
Market value 18,848 304 22,816 368
Price/NAV,% 85 75
gs 2008
CASH FLOW REPORT
SEK m. 2008 2007 2006 2005 2004
Dividends
Cardo 97 97 86 86 86
Handelsbanken 149 88 50
Holmen 281 281 260 236 881
Hufvudstaden 163 1,082 135 373 112
Husqvarna 35 14
Industrivärden 210 182 142 122 100
Indutrade 21 15 11
NCC 228 195 168 157 38
Sandvik
156 77 14
Other 11 17 12 19 11
1,251 2,048 877 994 1,229
Trading in securities
2129 99 124 965 105
Results, property management 338 289 252 330 433
Sales, property management 47 253 147 457 28
Total assets contributed 1,765 2,689 1,401 2,745 1,584
Investments, equity management
Cardo 38
Handelsbanken 527 493 1,075
Holmen 344
Husqvarna 141 1,519
Industrivärden 223 701
Indutrade 288
NCC 14
Sandvik 103 459 443 252
281 2,729 937 1,630 1,045
Investments, real estate operations 99 104 86 168 106
Own dividends 558 527 481 434 403
Repurchase of shares 17
Groupwide costs 27 28 27 27 26
Taxes paid 133 163 97 125 92
Financial items 137 97 81 65 151
Other 13 35 30 79 43
Total assets used 1,249 3,684 1,678 2,528 1,797
Change in net receivable/debt 516 -995 -277 217 -213
Closing net receivable/debt -3,385 -3,901 -2,906 -2,629 -2,846
Of which, interest-bearing -3,016 -3,543 -2,519 -2,210 -2,477
1) Including redemption of shares in 2007.
2) L E Lundberg Kapitalförvaltning AB is reported net.
0 100 200 300 400 500 600
Feb 2009 2008
2007 2006
2005 2004
2003 2002
2001 2000
1999 SEK
Lundbergs Series B SIX General Index SIX Investment and Management Index
12
Series B Lundberg shares are listed on Nasdaq OMX Nordic, Large Cap. An average of 30,935 Series B shares were traded per trading day in 2008. Total share turnover amounted to 7.8 million Series B shares, corresponding to 21% of the total number of Series B shares. The lowest price paid for the share in 2008 was SEK 203 and the highest was SEK 386.
Market capitalization
Lundbergs’ market capitalization at year-end was SEK 18,848 m. (22,816). The share price declined 17% during the year.
Share capital
The share capital of L E Lundbergföretagen AB (publ) amount- ed to SEK 621 m. (621) during the year. On December 31, 2008, the total number of shares was 62,145,483 (62,145,483), each with a par value of SEK 10. The shares are divided into 24,000,000 (24,000,000) Series A shares, carrying ten votes
per share, 38,000,000 (38,000,000) Series B shares, carrying one vote per share, plus 145,483 (145,483) repurchased Series B shares.
Repurchase of own shares
The Board has been authorized to purchase Lundberg shares.
For more detailed information, see page 36.
Ownership structure
Lundbergs has a total of about 13,800 shareholders (14,000), of whom some 10,200 (10,500) are registered in a nominee’s name and about 3,600 (3,500) in the owner’s own name.
Foreign ownership amounts to 5.2% (5.1) of the share capital.
KEY FIGURES
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Dividend per share, SEK 4.75 5.25 5.75 6.00 6.50 7.00 7.75 8.50 9.00 6.001
Growth in dividend per share, % 12 11 10 4 8 8 11 10 6 33
Direct return, % 5,1 4,6 3,6 3,1 2,8 2,5 2,3 1,9 2,4 2,0
Total return, % 27,9 28,6 15,4 27,2 23,1 25,9 20,4 34,9 15,6 15,3
Stock market price, SEK 94.00 115.00 158.00 195.00 232.50 284.50 335.50 444.00 368.00 304.00
1) Board of Director´s proposal.
Lundbergs as an investment company - The Lundberg share
gs 2008
0 1 2 3 4 5 6 7 8 9
2008
12007 2006 2005 2004 2003 2002 2001 2000 1999
SEK/share %
0 1 2 3 4 5 6 7 8 9
Dividend/share Direkt return, right scale 1) Board of Directors’ proposal.
DIVIDEND AND DIRECT RETURN DISTRIBUTION OF SHAREHOLDERS
No. of
shareholders As % of all shareholders
No. of shares held
As % of share
capital
Average no.
of shares/
shareholders
1 500 11,454 83.2 1,393,224 2.2 122
501 2,000 1,651 12.0 1,746,385 2.8 1,058 2,001 5,000 320 2.3 1,102,888 1.8 3,447 5,001 20,000 216 1.6 2,254,122 3.6 10,436 20,001 50,000 51 0.4 1,605,038 2.6 31,471
50,001 66 0.5 54,043,826 87.0 818,846
TOTAL 13,758 100.0 62,145,483 100.0 4,517
TREND OF SHARE CAPITAL, SEK M.
Share capital Total paid in/
paidout amount Added/
canceled Total
1981 Bonus issue, 3:1 75 100
1982 Bonus issue, 1:1 100 200
1983 New issue 300 30 230
1984 Bonus issue 1:1 230 460
1989 New issue 412 46 506
1990 Bonus issue 1:2 253 759
2000 Cancellation of repurchased shares 909 76 683 2002 Cancellation of repurchased shares 884 62 621 LARGEST SHAREHOLDERS
Feb 2009
Holdings as % of Feb 2008 Holdings as % of share capital votes share capital votes Fredrik Lundberg
incl. companies 52.7 89.5 52.5 89.4
Louise Lindh 7.5 1.7 7.5 1.7
Katarina Lundberg 7.5 1.7 7.5 1.7
Robur Funds 3.8 0.8 1.2 0.3
Second AP Fund 2.0 0.4 1.2 0.3
FPG 1.8 0.4 2.1 0.5
Fourth AP Fund 0.9 0.2 0.9 0.2
SEB Funds 0.8 0.2 0.9 0.2
Handelsbanken Funds 0.8 0.2 0.9 0.2
Knowledge Foundation 0.6 0.1 1.1 0.3
Others 21.6 4.8 24.0 5.2
Subtotal 99.8 100.0 99.8 100.0
Repurchased Lundberg shares
10.2 0.2
TOTAL 100.0 100.0 100.0 100.0
Swedish shareholders 94.8 98.8 94.9 98.9
Foreign shareholders 5.2 1.2 5.1 1.1
TOTAL 100.0 100.0 100.0 100.0
1) The Company’s own holding of repurchased Lundberg shares amounts to 145 483 (145 483).
-20 -10 0 10 20 30 40
2008 2007 2006 2005 2004 2003 2002 2001 2000 1999
%
TOTAL RETURN
Direct return – Dividend per share as a percentage of share price on Total return – Sum total of change in share price and
reinvested dividends.
8
Fastighets AB L E Lundberg
Housing 48%
Office 26%
Retail 15%
Other 11%
Distribution of annual rental revenues by type of premises Proportion of Lundbergs’
total asset, Feb 17, 2009
Properties 35.4%
14
Housing 55%
Retail 9%
Office 18%
Other 18%
Distribution of floor space by category
Chairman: Fredrik Lundberg CEO: Peter Whass www.lundbergs.se
gs 2008
Fastighets AB L E Lundberg is one of the major private real estate owners in Sweden. The real estate portfolio consists largely of centrally located residential, office and retail premises.
With strategic positions in several of Sweden’s expansive municipalities, the company is well positioned for continued strong growth.
The real estate holdings include 149 wholly or jointly owned investment properties in 15 municipalities through- out central and southern Sweden, with particular focus on major metropolitan areas and university cities. The portfolio also includes about 70 development objects. Most of the structures in the real estate portfolio were built during the construction-intensive years of the 1960s and 1970s, and consist largely of structures built on a proprietary basis.
The division between residential and commercial properties is relatively even at 48% and 52%, respectively, of rental value.
Business concept and strategy Fastighets AB L E Lundbergs’ business concept is to manage and develop residential and commercial properties in municipalities where favorable growth is expected.
The company focuses on:
– low sensitivity to economic fluctua- tions through an even distribution between residential and commercial properties.
– comprehensive local market know- ledge through a decentralized organization.
– providing effective management with high levels of tenant service.
– striving for optimal operating and development gains based on the potential of each individual property.
Market trend
Most of the municipalities in which the company is active have shown popula- tion growth in recent years, which is fa- vorable for the market for the leasing of commercial premises. The rental market for commercial premises was favorable during 2008, which was evident in the improvement in rentals and increased rents. Demand for offices and retail premises declined somewhat during the final quarter of 2008. Demand for housing in major metropolitan regions and cities with colleges and universities also remained favorable.
Since the real estate portfolio is concentrated in central locations, it is estimated that Fastighets AB L E Lundberg will have favorable opportuni- ties to maintain a high leasing rate.
Organization
As of January 1, 2009, the company’s management is divided into four regions: Gothenburg, Stockholm, Western and Eastern. The management group includes the President, Vice Presidents, regional managers, financial director, project development manager and rental administration manager.
The organization provides excellent prerequisites for continued focus on current management operations, and the possibility to further improve and develop new and existing properties in attractive locations.
Property-management and property- development operations are led by the four regional managers. Everyday management and rental activities are handled locally by the respective offices. Project-development operations are conducted centrally from the head office in Norrköping, which also has resources for administration, operation, accounting, purchasing, information, IT, and environmental and quality matters.
Eastern 35%
Western Gothenburg 16%
15%
Stockholm 34%
Distribution of annual rental revenues by region
Eastern 37%
Western 18%
Gothenburg 15%
Stockholm 30%
Distribution of floor space by region
Fair value by region
Eastern 33%
Western 16%
Stockholm 35%
Gothenburg 16%
8
Regions
The Gothenburg Region comprises Gothenburg and Jönköping. Healthy demand for housing and commercial premises is resulting in a favorable rental situation in the region.
In Gothenburg, a major office remodeling project on behalf of the police authorities has been in progress at the Stampen property since 2006.
Completion of the project is scheduled for 2009 and total expenditure amounts to approximately SEK 125 m. At the Ansvaret block in Jönköping, construction is under way of a new retail and office property. Completion of the project is scheduled for late 2009 and expenditure will total about SEK 150 m.
The Stockholm region consists of Enköping, Eskilstuna, Nyköping, Solna, Stockholm, Södertälje and Uppsala.
The municipalities’ close proximity to Stockholm is contributing to healthy rental conditions. The company’s real estate holdings in Solna, Stockholm and Uppsala consist mainly of commercial premises, while housing accounts for 84% of managed properties in Eskils- tuna, Nyköping and Södertälje.
Demand for housing in the region is good. The rental situation for commer- cial premises remains favorable.
The Western region consists of Arvika, Karlstad and Örebro. Supported by strong demand for housing and for office and retail space, the rental situa- tion is favorable throughout the entire region. In Karlstad, major re fur bishment of the Potatisen residential property is under way. Completion of the project is scheduled for spring 2009 and expendi- ture is estimated at SEK 20 m.
The Eastern region comprises Katrine- holm, Linköping and Norrköping, with about 70% of the region’s portfolio concentrated in Norrköping.
The rental situation for housing, retail premises and offices is favorable throughout the region.
In Norrköping, a major remodeling project has commenced in the Torget property, where premises are being adapted for banking operations.
In Linköping, the development of retail space is being planned at the Braxen property block.
Development properties The development properties are situated mainly in central Sweden and comprise 2,520 hectares of farmland, forests and centrally located sites distributed among about 70 objects.
The property-development operations develop properties into sites suitable for
commercial development and create new projects for resale. This is achieved through active involvement in planning and property formation matters, and through cooperation with the parties who need developable land.
Detailed development plans are being prepared for approximately 1,000 single-family homes and apartments in such locations as Haninge, Marie fred, Enköping, Norrköping and Ny köping. In 2008, detailed develop ment plans for approximately 160 single-family houses and apartments gained legal force.
During 2008, sales of development properties generated revenues of SEK 47 m.
(52), generating a gain of SEK 31 m. (45).
Quality and the environment The operations of Fastighets AB L E Lundberg have been quality certified in accordance with ISO 9001:2000 since 1998. The company’s quality policy, in which security and safety are key considerations, also includes the principal environmental issues.
The company is working proac- tively on efforts to increase the energy effici ency of its properties. The aim is to reduce total energy consumption while improving the indoor residential climate for tenants. In 2008, the focus on in crea sing the energy efficiency of properties resulted in heat and electricity
Fastighets AB L E Lundberg
37%
1960-1969
13%
1980-1989
34%
1970-1979
12% 4%
1990- -1959
1 room
14%38% 32%
13%
2 rooms 4 rooms
3 rooms More than 5 rooms, 3%
Age structure of investment properties, by rental revenues
Residential apartments by type
Housing 48%
22%
6%
14%
10%
< 1 Mkr
1 - 3 Mkr
3-5 Mkr
> 5 Mkr Value of rental contracts,
Dec 31, 2008
Housing 48%
7%
9%
14%
7%
6%
9%
2009 2010
2013 2011
2012
2014- Maturity of rental contracts distibuted by rental revenues 16
gs 2008
con sumption during the year, adjusted to conditions during a normal year, decreasing by 3.7%, corresponding to total savings of 4.7 GWh compared with 2007. Water consumption was reduced by 2.5% in 2008, corresponding to 22,000 cubic meters. Since Septem- ber 1, 2008, Fastighets AB L E Lundberg purchases electricity marked with the
“Good Environmental Choice” label, as approved by the Swedish Society for Nature Conservation (SSNC).
In total, this means that carbon dioxide emissions were reduced by 10%
in 2008, corresponding to approximately 1,000 tons compared with the preced- ing year.
Sales and earnings
Net sales, including revenues from divestments of development properties, amounted to SEK 930 m. (912). The increase was attributable primarily to higher rental revenues. Operating expenses for electricity, heat, water and waste disposal were held at the same level as during previous years.
Maintenance costs declined to SEK 251 m. (258). The change was attributable mainly to an SEK 12 m. decrease in costs for tenant adaptations and an SEK 5 m. increase in costs for planned maintenance measures. Operating profit amounted to SEK 313 m. (353).
In February 2009, the vacancy rate in the real estate portfolio was nearly
1.4%, with the vacancy rate for residen- tial premises amounting to 0.7% and that for other premises to about 2.1%.
Fair value of the real estate port folio’s managed property holdings on
December 31, 2008 was SEK 8,836 m.
(9,104); the corresponding value of de velop ment properties was SEK 212 m.
(208). Properties in prime locations and well-maintained buildings, combined with low vacancy rates and continued investments in the existing real estate portfolio are key factors contributing to the fact that the the value of the portfolio of investment properties did not decline by more than 4%.
Key figures 2008 Operating results
1Stockholm Region Western
Region Gothenburg Region Eastern
Region Total
Number of properties 32 32 22 58 150
Carrying amount, SEK m. 625 441 511 1,059 2,637
Fair value, SEK m. 3,145 1,400 1,383 2,908 8,836
Number of apartments 2,495 1,641 605 2,170 6,911
Residential, sqm 187,581 116,155 43,506 156,565 503,807
Residential, rent per sqm, SEK 848 857 849 847 850
Residential, rental value, SEK 000s 159,028 99,461 36,944 132,492 427,925 Residential, rentbased vacancy rate, % 0.6 0.4 0.3 0.7 0.6
Office and retail, sqm 52,201 29,735 73,027 94,621 249,584
Other premises, sqm 38,126 22,013 16,002 90,779 166,920
Office/retail, rent per sqm, SEK 2,209 1,091 1,246 1,379 1,479
Other premises, rent per sqm, SEK 678 494 431 581 578
Office/retail, rental value, SEK 000s 115,326 32,430 90,967 130,458 369,182 Other premises, rental value, SEK 000s 25,847 10,873 6,904 52,777 96,399
According to AAA According to IFRS
SEK m. 2008 2007 2008 2007
Net revenues
2930 912 930 912
Operating expenses 245 243 177 186
Maintenance 251 258 148 174
Personnel costs 97 92
Property tax 33 40 33 40
Divested development properties 16 7 16 7
Depreciation 43 44 4 5
Sales and administrative costs 29 28
Gain on sale of investment properties 64
Impairment losses/reversal of impairment losses 0 2
Value change in investment properties 397 838
Operating profit 313 353 60 1,247
1) As a supplement to reporting in accordance with the Annual Accounts Act (AAA) on pages 1417, operating profit in the table above is 8
Hufvudstaden
Stockholm Eastern City Stockholm 47%
Western City 41%
Gothenburg 12%
The Hufvudstaden share Distribution of annual rental
revenues by type of premises Annual rental revenues
by business area Proportion of Lundbergs’ total
assets on February 17, 2009
30 40 50 60 70
SIX Properties Index Hufvudstaden A
SEK
Feb Jan 09 Nov Sept July May March Jan 08
Offices 48%Retail and Restaurants 45%
Other 7%
Hufvudstaden 19.9%
18
Chairman: Fredrik Lundberg CEO: Ivo Stopner www.hufvudstaden.se
gs 2008
Hufvudstaden, which was founded in 1915, is one of Sweden’s leading real estate companies. The company’s business concept is to use its own properties in central Stockholm and Gothenburg to offer high-quality of- fice and retail premises to successful companies in attractive marketplaces.
Hufvudstaden’s current real estate port- folio is concentrated in the central parts of Stockholm and Gothenburg. The company owns commercial office and retail properties within the city centers’
business districts, including Hamngatan, Norrmalmstorg, Biblioteksgatan and Kungsgatan in Stockholm and Vall- graden and Östra Nordstan in Gothen- burg. This makes Hufvudstaden one of the most specialized and geographically concentrated real estate companies in Sweden. Total rentable space amounts to slightly more than 350,000 square meters with an annual rental value of SEK 1.3 billion. The fair value of the real estate portfolio at year-end 2008 was SEK 19.1 billion.
The operation is divided into three business areas. Stockholm Eastern City comprises 16 properties with total rent- able space of 146,000 square meters.
Stockholm Western City comprises nine properties with total rentable space of 150,000 square meters. This business area includes the NK properties in Stockholm and Gothenburg and the
NK brand. It also includes the subsidiary Parkaden, which has parking operations in two of Hufvudstaden’s properties.
The Gothenburg business area consists of four properties with total rentable space of 59,000 square meters. The largest property includes the Femman department store, which is part of the Nordstans shopping mall.
Hufvudstaden has proprietary resources for everyday operations and maintenance and works actively to develop the high quality and efficiency of its real estate portfolio with the aim of creating favorable value growth.
Changes and improvements are im- plemented on a regular basis. Through development measures, the premises are given high technology standards and more space-efficient layouts, which contribute to improved operating net and higher returns.
Hufvudstaden’s financial goal is to achieve favorable, sustained dividend growth, and that the dividend should represent more than half of the net profit from operating activities. Over the long term, the equity/assets ratio should amount to at least 40%.
A comprehensive remodeling of the Rännilen 18 property in Stockholm was started during the year. The rebuilding project is expected to be completed in autumn 2009 and will create open and space-efficient office premises.
The market value of the property portfolio at year-end 2008 was assessed at SEK 19.1 billion (20.5).
The equity ratio amounted to 56%
and the net loan to value ratio was 16%.
• Styrelsen har föreslagit en höjning av den ordinarie utdelningen till 1:30 kronor per aktie och därutöver en extra utdelning om 2:70 kronor per aktie. Total utdelning föreslås därmed bli 4:00 kronor per aktie.
Key financial data
2008 2007 Net sales, SEK m. 1,348 1,276 Operating profit/loss, SEK m. 881 3,449 Profit/loss after net financial items, SEK m. 1,025 3,322 Earnings/share, SEK 2.18 11.64 Dividend/share, SEK 1.90
11.75 Share price, Dec. 31, SEK, Series A share 55.25 62.00
1) Board of Directors’ proposal.
Largest shareholders, Dec. 31, 2008
% of share capital voting rights
Lundbergs 45.2 88.0
SEB Trygg Liv 11.4 2.3
State Street Bank & Trust funds 3.5 0.7
Mellon Funds 3.3 0.7
Second AP Fund 2.6 0.5
Swedbank Robur Funds 2.4 0.5
Lundbergs’ shareholding, February 17, 2009
Series A shares 85,141,229
Series C shares 8,177,680
According to the Satisfied Customer Index property barometer, Hufvud- staden has the most satisfied office tenants.
Highlights of the year
8
Sweden 26%
1United Kingdom 10%
Germany 13%
Spain 10%
France 4%
Netherlands 4%
Italy 5%
Rest of Europe 18%
Rest of the World 10%
The Holmen share External net sales
by business area
External net sales by geographical market Proportion of Lundbergs’ total
assets, February 17, 2009
120 140 160 180 200 220 240
SIX Forest Products Index Holmen B
SEK
Feb Jan 09 Nov Sept July May March Jan 08
HolmenPaper 53%
Holmen Skog 16%
Iggesund Paperboard 25%
Holmen Timber 3%
Holmen Energi 3%
Holmen 15.3%
Holmen
20
Chairman: Fredrik Lundberg CEO: Magnus Hall www.holmen.com
1) Of which, forest and power 16%.gs 2008
Holmen is a forest industry group whose business concept is to develop and conducts operations in three product-oriented business areas com- prising newsprint, board and wood products, and two business areas based on raw materials – forestry and energy. Europe is the company’s primary market, accounting for about 90% of sales. The number of employees is approximately 4,800.
Holmen Paper produces wood-con- taining newsprint based on virgin-fiber and recycled fiber raw materials at two mills in Sweden and one in Spain. The products are used mainly to produce newspapers, magazines, catalogs, advertising materials and books. The business area’s principal markets are Sweden, the UK, Germany and Spain.
Iggesund Paperboard manufactures and sells solid board and folding boxboard based solely on virgin-fiber raw materials at one mill in Sweden and another in the UK. The products are used as packaging materials for cosmet- ics, pharmaceuticals, tobacco, confec- tionery and food, and for graphic-design applications. The business area’s largest markets are Germany and the UK.
Holmen Timber manufactures red- wood timber products at one sawmill in Sweden for industrial manufacturers of consumer products. Its main markets are Scandinavia, the UK, North Africa and the Middle East.
The Group’s annual production
capacity amounts to 1.9 million metric tons of newsprint, 590,000 metric tons of board and 340,000 cubic meters of wood products.
Holmen Skog is responsible for the Group’s forests, which comprise slightly more than one million hectares. Annual felling in wholly owned forests totals approximately 2.5 million cubic meters.
Holmen’s self-sufficiency rate in terms of timber is about 55%.
Holmen Energi is responsible for the Group’s hydroelectric power assets and development of Group operations in the energy sector. Production at the wholly and partly owned hydroelectric power plants in Sweden during a normal year amounts to approximately 1,100 GWh of electricity. The self-sufficiency rate in terms of electricity is slightly more than 30%.
Holmen Skog and Holmen Energi are also responsible for the Group’s timber and electricity supplies, respectively, which are important raw materials for the industrial operations.
Holmen’s goal is to have a strong financial position, with a debt/equity multiple of 0.3–0.8. Annual ordinary dividend payments shall correspond to 5–7% of shareholders’ equity. Extraor- dinary dividends and share repurchases may be effected when permitted by the company’s capital structure and the financing requirements of its business operations. Holmen aims to show favorable profitability, with a return that consistently and sustainably exceeds the cost of capital in the market.
Holmen Paper reduced its produc- tion capacity and implemented organizational adjustments as part of efforts to align operations to changes in market conditions for newsprint.
Substantial personnel cutbacks were made at the Hallsta Paper Mill, and the mill’s oldest paper machine and recycled paper line were shut down.
In Madrid, some production adjust- ments were made from newsprint to coated printing paper. Production at Wargöns Mill was discontinued in December following a prolonged period of insufficient profitability.
Key financial data
2008 2007 Net sales, SEK m. 19,334 19,159 Profit after net financial items SEK m. 1,051 2,843 Operating profit, SEK m.
1740 2,582 Earnings/share, SEK 7.60 17.80 Dividend/share, SEK 9.00
212.00 Share price, Dec. 31, Holmen B, SEK 193.50 240.00
1) Including items affecting comparability in 2008 amounting to an expense of SEK 361 m. Items affecting comparability in 2007 amounted to income of SEK 557 m.
2) Board of Directors’ proposal.
Largest shareholders, Dec. 31, 2008
% of share capital voting rights
Lundbergs 27.9 52.0
Silchester International Investors 10.5 3.1
Kempe Foundations 7.0 16.9
Handelsbanken with
pension foundation 3.1 9.1 Swedbank Robur Funds 2.3 0.7
Alecta 1.4 0.4
Lundbergs’ shareholding, February 17, 2009
Series A shares 14,010,196
Series B shares 9,398,720
During the summer, Iggesund Paperboard launched Invercote, the new generation of solid board.
Planning of the new sawmill at Bravikens Paper Mill in Norrköping continued during the year. Deploy- ment of the new plant is scheduled for year-end 2010.
A new, energy-efficient pulp supply plant was placed in operation during the year at Bravikens Paper Mill.
Highlights of the year
8
Cardo
Door &
Logistics Solutions 49%
Wastewater Technology Solutions 31%
8%
Pulp & Paper
12%Solutions Residential Garage Doors
Europe 82%
North Amerika 6%
Asia 6% Other 6%
The Cardo share Net sales by division Net sales by geographic area
Proportion of Lundbergs’ total assets, February 17, 2009
Cardo 6.5%
70 90 110 130 150 170 190 210
SIX Industrial Conglomerates Index Cardo
SEK
Feb Jan 09 Nov Sept July May March Jan 08
Chairman: Fredrik Lundberg CEO: Peter Aru www.cardo.com 22
gs 2008
Cardo is a multinational industrial engineering group with leading brands. The company offers solutions based on quality products, high levels of service and extensive application knowledge to industrial customers.
It has strong positions in the markets for docking solutions, water and wastewater treatment technologies, systems for the pulp and paper industry and garage doors. Cardo has subsidiaries in more than 30 countries, mainly in Western Europe.
The number of employees is 6,000, of whom approximately 80% work outside Sweden.
Business operations are divided into four divisions. The Door & Logistics Solutions Division offers industrial doors and docking solutions. Under the Crawford name, turnkey solutions, service and specialist knowledge is offered to customers worldwide. Crawford’s customers in the transport, logistics and retail segments include DHL, Schenker, Carrefour, Ahold and Lidl. The Hafa and Combursa brands are also used for docking systems. Under the Megadoor brand, Cardo markets a number of the world’s largest doors for hangars used in the aviation industry. The division has one of Europe’s largest service organiza- tions, with more than 600,000 customer service visits annually.
The Wastewater Technology Solu- tions Division is one of Europe’s leading
suppliers of turnkey solutions for waste- water and water treatment applications.
ABS, the division’s primary brand, has the market’s widest product range, with submersible and dry-installed sewage pumps, agitators, aerators, compressors, control and remote monitoring systems and drainage pumps. The Pumpex brand is used for drainage pumps in the construction sector.
The Pulp & Paper Solutions Division includes Lorentzen & Wettre, one of the world’s leading suppliers of advanced equipment for quality control and proc- ess optimization for the paper industry, and Scanpump, which supplies pumps, agitators and aerators for the paper and pulp industry.
The Residential Garage Doors Division develops, manufactures and sells garage doors and related products, combined with service and support.
Sales offices are situated in most coun- tries in Western Europe and in China.
The product range includes most types of garage doors, which are marketed under the Crawford, Normstahl and Henderson brands.
The Group’s financial goals are to maintain an operating margin of at least 10% and generate average organic growth of at least 5% annually over the course of a complete economic cycle, with a minimum return on capital employed of 20%.
Cardo Pulp & Paper Solutions acquired Kajaani Process Measure- ment Ltd, a Finnish measurement company, during the year. The acquisition strengthened the division’s position in measurement instruments for pulp.
A decision was reached during the year to retain the Residential Garage Doors Division. In Decem- ber, garage door operations in the UK were sold to focus on the premium segment in Europe.
Key financial data
2008 2007 Net sales, SEK m. 9,810 9,116 Operating profit, SEK m. 941 426
1Profit after net financial items, SEK m. 825 355 Earnings/share, SEK 18.10 5.67 Dividend/share, SEK 9.00
29.00 Share price, Dec. 31, SEK 114.50 201.00
1) Including items affecting comparability amounting to SEK 210 m and restructur
ing costs totaling SEK 107 m.
2) Board of Directors’ proposal.
Largest shareholders, Dec. 31, 2008
% of share capital and voting rights
Lundbergs 41.3
If Skadeförsäkring 11.1
HQ Funds 3.7
Lannebo Funds 3.7
Odin Funds 2.0
Orkla ASA 1.9
Lundbergs’ holding, February 17, 2009
Number of shares 11,150,000
Highlights of the year
Cardo achieved all of its financial goals in 2008. Operating profit improved in the remaining opera- tions of all divisions, while the order intake increased or remained unchanged in three of the Group’s four divisions
8
Industrivärden is one of the Nordic region’s leading investment compa- nies, with holdings in a concentrated number of Swedish listed companies with favorable development poten- tial. The business concept is to create shareholder value based on profes- sional investment operations and active ownership. Active ownership is based on Industrivärden’s model for value creation and exercised through representation on boards of directors.
Industrivärden’s stock portfolio is highly diversified, with major shareholdings in some of Sweden’s leading companies.
The largest shareholdings are Sandvik, Handelsbanken, Ericsson, SCA and SSAB.
Industrivärden is also a major owner of shares in Volvo, Skanska, Indu trade, Munters and Höganäs.
Industrivärden’s objective is to generate high growth in net asset value, yielding a total return that exceeds the average for Nasdaq OMX Stockholm, computed over a long-term period.
The investments are made primarily in large and midsize, publicly listed Nordic companies. Industrivärden’s dividend policy is to distribute a direct return to shareholders that exceeds the average for Swedish listed shares. Over the past 10 years, the total return on Series A shares has averaged 5% annually, outperforming the SIX return index by two percentage points.
Key Financial data
2008 2007 Loss after tax, SEK m. 29,114 1,942 Net asset value, SEK billion 23.9 54.8 Net asset value per share, SEK 62 142 Net debt/equity ratio, % 31.1 16.6 Dividend/share, SEK 4.50
15.00 Share price, Dec. 31, SEK,
Series A shares 57.25 113.25
1) Board of DIrector’s proposal.
Largest shareholders, Dec. 31, 2008
% of share capital voting
rights
Lundbergs 10.9 15.0
AMF Pension 7.4 1.0
Handelsbanken’s Pension Foundation 7.2 9.9 Handelsbanken’s Pension Fund 7.1 9.8 Jan Wallanders & Tom Hedelius
Pension Foundation 6.2 8.5 SCA Pension Foundation 4.4 6.1
Lundbergs’ shareholding, February 17, 2009 Number of Series A shares 42,000,000 On February 18, 2009, an additional 1.4 million Series A shares in Industrivärden were acquired.
Handelsbanken 23%
Ericsson 13%
Sandvik 19%
SCA 14%
SSAB 10%
Volvo 9%
Other 5%
Skanska 7%
The Industrivärden share Composition of stock portfolio,
market value, on December 31, 2008 Proportion of Lundbergs’ total assets,
February 17, 2009
40 60 80 100 120
SIX Investment and holding company Index Industrivärden A
SEK
Feb Jan 09 Nov Sept July May March Jan 08 Industrivärden 8.8%
Chairman: Tom Hedelius CEO: Anders Nyrén www.industrivarden.se
24 Industrivärden
gs 2008
