Annual Report 2006
SSAB Svenskt Stål AB
Box 26208, SE-100 40 Stockholm, Sweden
Telephone int. +46 8-45 45 700. Telefax int. +46 8-45 45 725 Visiting address: Birger Jarlsgatan 58, Stockholm
Email: info@ssab.com www.ssab.se
Distinguishing features of the Domex 500 MC high-strength steel include its good bending characteristics, which are exploited by Scania in the manufacture of the frame beams in the P and R series, as here in Scania R-420. Thanks to the strength and the bending characteristics, savings are made as regards weight and several costly elements in the manufacture of the chassis frame beams.
951 69 SSAB_omslag-Engelsk 07-03-05 08.45 Sida 1
SSAB Svenskt Stål AB (publ) Company no. 556016–3429 Joe Brig Art AB, Gothenburg.
Photo: Göran Wink, Dag Sundberg, Bo Björkdahl.
Nominee-registered shares
Shareholders whose shares are registered in the name of a nominee must register their shares in their own names in order to be entitled to parti- cipate at the Annual General Meeting. Temporary owner-registration (voting registration) should be effected in due time prior to March 23, 2007.
Notice
Notice in respect of participation at the Annual General Meeting shall be given by telephone on +46 8 45 45 760.
The name, personal identification number (company registration number), address and telephone number of the shareholder must be provided in the notice.
Notices must be received by SSAB not later than 12 noon on Monday, March 26, 2007, at which time the notice period will expire.
Proxies
Powers of attorney in original and, as regards legal persons, certificates of registration, should be submitted in due time prior to the Annual General Meeting to:
SSAB Svenskt Stål AB, Annual General Meeting, Box 26208,
SE-100 40 Stockholm, Sweden.
Nomination committee Carl-Olof By, Industrivärden, Chairman Thomas Halvorsen, 4th National Pension Fund Sverker Martin-Löf, Chairman of the Board of SSAB Per-Erik Mohlin, SEB Funds
Peter Rudman, Nordea Funds
The nomination committee presents, among other things, proposals to the Annual General Meeting concerning the election of members of the Board of Directors, fees for the Board of Directors, and election of auditors.
Dividends and repurchase of shares
April 4, 2007 is proposed as the record date for the right to receive dividends. It is anticipated that payment of dividends will be effected through VPC on April 11, 2007.
The Board of Directors and the President propose that the Annual General Meeting resolve upon the payment of a dividend for 2006 in the amount of SEK 4.50 per share.
It is proposed that the Board of Directors be authorised to repurchase a maximum of 10% of the Company’s shares.
Financial information
SSAB will present the following information for the 2007 financial year:
Report for the first quarter, April 20, 2007.
Half-year report, July 17, 2007.
Report for the first three quarters, October 23, 2007.
Results for 2007, February 6, 2008.
Annual report, March 2008.
The Annual Report is published in Swedish and English. In the event
of differences between the English translation and the Swedish original,
the Swedish Annual Report shall prevail.
Table of contents
2 Comments by the Chief Executive Officer 4 Operations and production flow
5 Five-year summary 6 Strategy and targets 7 Corporate governance report 11 Group Management and auditors 12 Board of Directors
16 The SSAB share
Report of the Directors 19 Group review
28 SSAB and the environment 32 Sheet Division
35 Plate Division 38 Plannja 40 Tibnor
42 Other companies
Consolidated and
Parent Company Accounts 43 Consolidated profit and loss account 44 Consolidated balance sheet 45 The Group’s changes in equity 46 Consolidated cash flow statement 47 Parent company’s profit and loss account 48 Parent company’s balance sheet 49 Parent company’s changes in equity 50 Parent company’s cash flow statement 51 Table of contents: Notes
51 Accounting and valuation principles 81 Definitions
82 Disposition of profit 83 Auditors’ report 84 Addresses Sales increased by 12%
to SEK 31,054 (27,804) million.
Profit after tax amounted to SEK 4,341 (4,068) million, equal to earnings per share
of SEK 16.02 (14.07).
Operating cash flow was up SEK 741 million on last year and amounted to SEK 3,546 (2,805) million.
Deliveries of extra and ultra high-strength sheet and quenched steel increased by 24%.
It is proposed that the dividend be increased to SEK 4.50 (3.00) per share, equal to SEK 1,166 (818) million.
It is proposed that the Board of Directors be authorised to repurchase not more than 10%
of the company’s shares.
growth and development
In many ways, 2006 was a record year for SSAB with the best results ever and a volume of niche products that reached a new record level. During the year, decisions were taken on several important investments which will further strengthen SSAB in the future. In 2006, the basis was also laid for a new strategic plan of action, called SSAB 2010, which is aimed at better meeting future challenges.
As a mining engineer and someone who has been in the steel industry for many years, I have come to know SSAB as a very fine company with some of the world’s strongest steel brands. It was thus with great gladness and enthusiasm that I assumed the position of President and CEO in the spring of 2006. Today, SSAB is financially stronger than ever, in large part due to a favourable business cycle and a successful focus on specialised niche products. We are in a good position to take advantage of future opportunities and meet future challenges.
Together with the Board of Directors, we in management have developed, secured support for, and initiated a strategic plan of action, SSAB 2010, which will make SSAB one of the most efficient and profitable companies in the industry.
A strong 2006
The very positive trend in 2006, with the best results ever, demonstrates that our strategy involving an increased focus on niche products has been well chosen and should be developed further. During the year, we increased by 24% the share represented by niche products, viz.
quenched steels and extra and ultra high-strength sheet.
These products now account for 39% of our deliveries.
We have continued to invest in order to be able to intensify this development. In the spring, a decision was taken to convert the entire plate production in Oxelösund to quenched steels over the next few years.
Within the Sheet Division, we also took additional steps to expand the product range and volumes within extra and ultra high-strength sheet. This has taken place primarily through an investment in a new coiler at the hot-rolling line in Borlänge.
The subsidiaries, Tibnor and Plannja, reported excellent results in 2006. During the year, Tibnor was able to take advantage of the strong Swedish steel market and deliver very good results for 2006. Plannja’s good results are due to stronger demand on the domestic market from sheet plate workshops and projects as well as an improved market trend in Norway and Poland.
Global situation
Growth is strong on the global steel market, including for our most important customer segments. The steel market grew by approx. 9% in 2006. This is a very high rate of growth; in 2006 it was distributed more evenly throughout the world than in recent years.
Europe and North America demonstrated very strong
growth but China still accounts for the highest rate of
growth. 2006 was significant in the sense that China
moved from being a net importer to a net exporter of sheet and plate products. Exports of standard products from China to North America and Europe increased significantly and this constitutes a potential threat to the price trend for such products in the future.
In planning for the future, the Board of Directors and management perceive several important trends in the steel industry: a strong growth in demand within our niches, a shift in demand to developing countries, the risk of future over-capacity within standard products with pres- sure on margins as a consequence, global consolidation, and upgrading of product portfolios of leading steel companies to include more specialised products.
A plan of action for the future
SSAB enjoys a strong starting position. Highly specialised products combined with far-reaching customer adaptation and genuine knowledge of the customer’s needs and applications have formed the basis for our success. The plan of action that has been produced is based on this and focuses on three areas: to increase profitability at current plants, to focus even more clearly on growth within our niches, and to strengthen and increase the efficiency of the Group’s organisation and expertise.
The strong increase in sales of niche products and geographic changes in demand mean that we have customers located further away from our traditional markets. Thus, in 2006 SSAB began the construction of a distribution centre in China, which is one of our most important growth markets. Through a local presence in Asia we are able to increase our service level and cut our delivery times to local customers. SSAB is one of the steel producers that has invested a great deal in building up brands for its products. Now that China has become the dominant single market for steel, it is important to create, also there, knowledge and awareness of our brands and thus we are engaging in very active marketing in China.
Ongoing training of our managers and employees represents a further prerequisite for success in achieving the goals we have established. These issues constitute an important part of the plan of action. The company now has a Human Resources Director for the Group, which is a step in this direction. Work is actively taking place in order to best exploit the strength and the synergies that we enjoy as a Group. One element in this is that we have changed from core operations being operated as subsidiaries to being operated as divisions. By simplifying communication paths and developing the Company’s control and follow-up systems, Group Management’s focus on core operations has been strengthened.
Repurchase of shares and higher return target The good results have strengthened SSAB’s balance sheet and, at the end of 2006, the Company is free of debt. The company’s financial targets are to maintain a debt/equity ratio of 30% in the long term. Thus, the Board of Directors has recommended that the dividend be increased to SEK 4.50 per share and that the Board of Directors be authorised to repurchase up to 10% of the Company’s shares. The authorisation provides the Board of Directors with greater flexibility to adapt the amount of repurchased shares to the Company’s capital needs for its strategy.
The plan of action aims at strengthening the condi- tions for continued positive growth in value for our shareholders in a more challenging world. In connection with this, the Board of Directors has also established a higher profitability target for the Group whereby return on capital employed over a business cycle shall exceed 15 percent. The new profitability target entails an increase of some 3 percentage points compared with the previous target.
We have achieved a great deal at SSAB in 2006.
The most important factor in this success has been the commitment and the professionalism shown by SSAB’s employees. Thus, I wish to thank everyone in the Group for a fantastic effort during the year. With the drive that characterises the Company, we can face the future with confidence.
Olof Faxander
The Sheet Division is the largest manufacturer of sheet in the Nordic region and one of the leading companies in Europe within the area of extra and ultra high-strength sheet. The high-strength sheet is used, among other things, for heavy and light vehicles and by crane manufacturers. Ordinary sheet is used primarily within the engineering and construction industries.
Sheet Division
The Plate Division is the world’s leading producer of quenched steels, i.e. abrasion-resistant steels and extremely high-strength construction steels. These are used, among other things, in con- struction machinery, mining equipment, and cranes. Ordinary plate is used within shipbuilding and general engineering as well as within the wind power industry.
Plate Division
Plannja is one of Europe’s leading building sheet companies.
Plannja processes sheet into roofing tiles and rainwater run-off products, etc. Sandwich-type prefabricated building sections are also being manufactured to an increasing extent.
Plannja
Tibnor is the leading Swedish commercial steels company with a range of commercial steels, special steels, pipes, and stainless steels. Non-ferrous metals and building-related products supplement the product range.
Tibnor
SSAB was formed in 1978 through a merger of the steelworks, Domnarvets Järnverk in Borlänge, Oxelösunds Järnverk and Norrbottens Järnverk in Luleå. Since then, the Group has successfully pursued a niche-orientation strategy focusing on high-strength steels. In addition to the Parent Company, the Group comprises two major divisions, the Sheet Division and the Plate Division, as well as the subsidiaries, Plannja and Tibnor. SSAB has subsidiaries or offices in some 40 countries with sales throughout the world.
For the organisation, see page 11.
Five-year summary
2006 2005 2004
1)2003
1)2002
1)Sales (SEK millions) 31,054 27,804 24,631 19,806 19,271
Profit after financial items (SEK millions)
2) 6,052 5,671 4,788 1,343 816
Profit after tax (SEK millions)
2) 4,253 4,021 3,593 899 577
Capital expenditures (SEK millions) 1,407 853 727 1,041 902
Cash flow (SEK millions)
3) 3,794 4,230 1,992 765 1,208
Net debt (SEK millions) – 176 407 1,718 3,032 3,120
Capital employed, at year-end (SEK millions) 17,285 16,658 16,637 13,974 13,941
Total assets (SEK millions) 22,795 21,820 21,618 18,611 18,476
Return on capital employed before taxes (%) 36 34 34 12 8
Return on equity after taxes (%) 29 30 33 9 6
Equity ratio (%) 68 66 60 54 53
Net debt/equity ratio (%) – 1 3 13 30 32
Dividend per share (SEK) – 2006 proposal
4) 4.50 3.00 2.50 2.00 2.00
Earnings per share (SEK)
4) 16.02 14.07 11.87 2.97 1.90
Average number of employees 8,737 8,832 9,412 9,570 9,592
Sales per average employee (SEK millions) 3.6 3.1 2.6 2.1 2.0
Production of crude steel (thousands tonnes) 3,737 3,966 4,142 3,911 3,881
2004 has been adjusted in accordance with IFRS, however not 2002 and 2003. An adjustment for those years would, though, have yielded only a marginal effect.
The capital gain upon the sale of SSAB HardTech affected the result for 2004 by SEK+825 million.
The purchase price received upon the sale of Cogent affected the cash flow for 2006 by SEK +248 million and SSAB HardTech affected the cash flow for 2005 by SEK + 1,425 million.
Data per share has been recalculated to take into account the 3:1 split carried out in 2006.
Definitions are set forth in Note 28.
1
)
2
)
3
)
4
)
The diagram shows the increase in value of one share in SSAB subscribed for at a price of SEK 12 when the SSAB share was listed in 1989. It has been assumed that dividend and redemption rights received have been reinvested in SSAB shares.
Since 1989, this has resulted in an average increase in value of just over 21% per year.
89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06
Strategy
SSAB shall be one of the most profitable steel companies in the world. The Group’s steel operations have been successfully developed through a deliberate niche ori- entation. This strategic focus will be maintained through a strong focus on several selected product segments in which a strong market position and high profitability can be achieved.
In the plate area, investments are taking place within quenched steels, i.e. abrasion-resistant steels and extremely high-strength construction steels, in which the Group is already a world leader. Investments within the sheet area are taking place within extra and ultra high-strength sheet, in which the Group is one of the leaders in Europe.
Growth in these niche areas has been stronger than for the steel market in general and deliveries of these products have increased substantially during the most recent five-year period, as is evident from the diagram below. Past and present investments within the Group’s steel operations render possible a continued strong growth within these niche areas.
By using quenched steels or extra and ultra high- strength sheet, customers are able to improve their products and thereby their profitability. This creation of added value is a process that often takes place in close co-operation with the customer. The added value that is created benefits both the customer and SSAB and thereby ensures continued good profitability for the Group.
A complete range of sheet products is supplied on neighbouring markets on which significant situational
advantages and favourable conditions for profitability exist. Plannja and Tibnor shall be utilised actively on neighbouring markets so that the steel operations’
already strong position can be maintained.
Financial targets Capital Structure
The Group’s operations are very sensitive to the business cycle. Individual investment projects within the steel operations may, in addition, be extremely large and thus the equity ratio should be relatively high.
The target is that the net debt/equity ratio shall amount to approx. 30% and the equity ratio to approx. 50%
Dividends
Dividends shall be adapted to the average profit level over a business cycle and, in the long-term, constitute approx. 50% of profit after tax. It shall also be possible to use dividends to adjust the capital structure.
Profitability
In order to ensure long-term development and taking into consideration the equity ratio requirement and the dividend policy, the target is that the return on capital employed after tax over a business cycle shall exceed 15 percent.
Profitability and net debt/equity ratio during the
past five years, compared to targets, are shown in the
diagram below.
Introduction
SSAB Svenskt Stål AB was formed in 1978 and has, through a successful and deliberate niche focus, developed into one of the world’s most profitable steel companies.
SSAB’s organisation is characterised by a decentralised work method in which responsibility and powers are delegated to the respective division and subsidiary. The Group’s steel operations consist of the two divisions, Sheet and Plate, while the trading and processing operations consist of the subsidiaries, Tibnor and Plannja.
SSAB applies the Swedish Code on Corporate Governance (the “Corporate Code”), which constitutes a part of the rules and regulations of Stockholmsbörsen (Stockholm Stock Exchange). SSAB has no derogations from the Corporate Code. In accordance with the ap- plication instructions issued by the Swedish Corporate Governance Council, this corporate governance report contains a separate section on the organisation of the internal control regarding the financial reporting. The report does not constitute a part of the formal annual report documents and has not been reviewed by the Company’s auditors.
SSAB’s Corporate Governance Model
Shareholders
SSAB’s shares have been listed on Stockholmsbörsen since 1989. A trading unit consists of 200 shares. SSAB’s share capital consists of Class A and Class B shares, with Class A shares carrying one vote and Class B shares carrying one-tenth of one vote. Both classes of shares carry the same rights to participate in the Company’s assets, profits and dividends.
On December 31, 2006, there were 40,259 share- holders. In terms of votes, Industrivärden was the largest shareholder, followed by LKAB and Nordea Fonder.
Shareholders with 1,000 shares or fewer constituted 58%
of the shareholders while the ten largest institutional owners together owned 34% of the share capital. The percentage of foreign shareholders was 34%. For further information regarding the ownership structure, see page 18 of the Annual Report.
The General Meeting
The General Meeting is the Company’s highest decision- making body; it is there that shareholder influence in the Company is exercised. Shareholders who wish to participate at General Meetings, personally or through a proxy, must be entered in the share register five days prior to the Meeting and must register with the Company in accordance with the notice to attend. Notice to attend General Meetings is given through announcements and on the Company’s website (www.ssab.se).
An Annual General Meeting must be held within six months of the expiry of the financial year. At the Annual General Meeting, the shareholders decide, among other things, on the following: election of the Board of Directors and, where appropriate, the auditors; the manner in which the Nomination Committee is to be appointed;
and discharge from liability for the Board of Directors and President for the past year. Decisions are also taken regarding adoption of the accounts, disposition of profits, fees for the Board of Directors and the auditors, as well as guidelines for compensation to the President and other senior executives.
2006 Annual General Meeting
The Board of Directors presented to the General Meeting a description of its work during the year and concerning corporate governance issues in general. The President informed the General Meeting regarding the Group’s development and financial position as well as the results for the first quarter of 2006. The General Meeting adopted the Annual Report and the consolidated financial statements for 2005 as presented by the Board of Directors and the President, decided upon the disposition of the Company’s profits, and granted the Board members and the President discharge from liability.
In addition, the Chairman of the Nomination Com- mittee described its work during the year and presented reasons for submitted proposals. The General Meeting decided on compensation for the Board of Directors and auditors in accordance with proposals from the Nomination Committee. Carl Bennet, Anders G Carlberg, Sverker Martin-Löf (Chairman), Marianne Nivert, Anders Nyrén and Matti Sundberg were re-elected to serve on the Board of Directors. Olof Faxander (President and CEO) and Lars Westerberg were elected as new members.
Corporate governance report
NOMINATION COMMITTEE
EXTERNAL AUDITORS SHAREHOLDERS’/
GENERAL MEETING
COMPENSATION COMMITTEE
AUDIT COMMITTEE BOARD
OF DIRECTORS
INTERNAL AUDIT PRESIDENT AND
GROUP MANAGEMENT
DIVISIONS AND SUBSIDIARIES
SHEET DIVISION
STEEL OPERATIONS
PLATE DIVISION
PLANNJA TIBNOR
TRADING OPERATIONS PROCESSING
OPERATIONS
Important internal policies and regulations that affect corporate governance Important internal policies
• The Board’s rules of procedure
• Accounting manual
• Finance policy
• Credit policy
• Information policy
Important external regulations
• Swedish Companies Act
• Stockholmsbörsen’s listing agreement
• Swedish Code on Corporate Governance
The General Meeting resolved unanimously on a repay- ment to the shareholders by means of a reduction in the Company’s share capital through the redemption of not more than 4,546,453 shares. The General Meeting also resolved on a bonus issue without the issuance of new shares and on a 3:1 share split. The General Meeting further decided on the criteria for the appointment of the Nomination Committee as well as the principles for com- pensation and other employment terms and conditions for senior executives.
All Board members and the auditor-in-charge were present at the Annual General Meeting.
Nomination Committee
The Nomination Committee represents the shareholders and, at the 2006 Annual General Meeting, the Chairman of the Board was charged with requesting not less than three and not more than five of the largest shareholders to appoint one member each to form a Nomination Committee together with the Chairman of the Board.
The Chairman of the Nomination Committee should be the representative of the largest shareholder. The Nom- ination Committee for the 2007 Annual General Meeting consists of Carl-Olof By (Industrivärden, Chairman), Thomas Halvorsen (4th National Pension Fund), Sverker Martin-Löf (Chairman of the Board of Directors), Per-Erik Mohlin (SEB Funds) and Peter Rudman (Nordea Funds).
The duties of the Nomination Committee include, among other things, presentation of proposals as regards the nomination of, and fees for, Board members and the Chairman of the Board. The Nomination Committee shall also submit proposals to the Annual General Meeting regarding any compensation for the work of standing committees as well as the selection of, and fees for, external auditors. Proposals which shareholders wish to submit to the Nomination Committee may be sent by e-mail to valberedningen@ssab.com. The Nomination Committee’s proposals are published not later than in connection with the notice to attend the Annual General Meeting.
The Nomination Committee’s work since the 2006 Annual General Meeting
Since being appointed in the autumn of 2006, the Nomination Committee has held three meetings, at which all members were present.
As a consequence of an impending election of auditors, an evaluation has been carried out regarding the current auditor and discussions have been held regarding the election of an auditor for the coming mandate period.
The Nomination Committee has also produced a proposal for the procedure how to appoint the next Nomination Committee.
As a basis for the Nomination Committee’s evaluation of the work of the Board of Directors, the Chairman of
the Board has described its work and composition during the year. The Board is considered well-composed and competent; the members have possessed great combined experience from different industries as well as sound economic and financial skills. In addition, many of the members possess great experience from Board work in other listed companies. The Board of Directors and President have been evaluated through an open dialogue based on a formal self-evaluation.
The Nomination Committee shall also submit proposals regarding fees for the Board of Directors and, in order to form an opinion regarding reasonable fee levels, analyses and comparisons have been conducted with similar companies.
The Nomination Committee proposes to the 2007 Annual General Meeting the re-election of Board members Sverker Martin-Löf (Chairman), Carl Bennet, Anders G.
Carlberg, Olof Faxander, Marianne Nivert, Anders Nyrén, Matti Sundberg and Lars Westerberg. The Nomination Committee’s other proposals will be provided in connec- tion with the notice to attend the Annual General Meeting.
External auditors
According to the Articles of Association, SSAB shall have one or two external auditors. At the 2003 General Meeting, PricewaterhouseCoopers was appointed as auditor for the period up to and including the 2007 Annual General Meeting. The auditor-in-charge since 2005 is the authorised public accountant Claes Dahlén, who is also the auditor-in-charge of the listed company, Karo Bio. In total, PricewaterhouseCoopers is the chosen auditor in 26 of the companies in Stockholmsbörsen’s
“Large cap” segment.
The external audit of the accounts of the Parent Company and the Group as well as management by the Board of Directors and President is conducted in accordance with generally accepted auditing standards in Sweden. The company’s auditor-in-charge participates at all meetings of the Audit Committee. The auditor attends at least one Board meeting per year at which he goes through the audit for the year. He also discusses the audit with the Board members without the President being present.
For information regarding fees to the auditors, see Note 2 in the Annual Report.
The Board of Directors
The overall task of the Board of Directors is to manage
the Company’s affairs on behalf of the shareholders in
the best possible manner. The Board of Directors shall
regularly assess the Group’s financial position and evaluate
the operational management. The Board of Directors
decides, among other things, on questions concerning the
Group’s strategic focus and organisation, and decides on
important investments and undertakings. Each year, the
Board adopts rules of procedure which, together with instructions to the President, govern the allocation of work between the Board and the President. The rules of procedure also regulate the manner in which Board work is allocated between members of the Board, how often the Board is to meet and the manner in which work shall be allocated to various Board committees. Pending each Board meeting, the Board members receive a written agenda and full documentation to serve as a basis for decisions. At each Board meeting, a review is conducted regarding the current state of the business, the Group’s results and financial position, and prospects for the remainder of the year. Other issues addressed include competition and the market situation.
The Board conducts an annual visit to one of the plants within the steel operations.
The Chairman of the Board presides over the Board’s work, represents the Company on ownership issues and is responsible for the evaluation of the work of the Board.
In addition, the Chairman is responsible for regular contacts with Group Management and for ensuring that the Board performs it obligations.
According to the Articles of Association, the Board shall consist of not less than five and not more than ten members elected by the General Meeting. The Board is quorate when more than half of the members are present.
Board members shall possess broad expertise, be versatile, and possess a suitable background for SSAB’s organisation, industry and operations. New Board members undergo an introduction course to rapidly acquire the knowledge which is expected in order to best promote the interests of the Company and the shareholders.
The Board of Directors for 2006 has comprised the following persons:
■ Carl Bennet ■ Anders G Carlberg
■ Olof Faxander ■ Sverker Martin-Löf
(CEO) (Chairman)
■ Marianne Nivert ■ Anders Nyrén
■ Matti Sundberg ■ Lars Westerberg
In addition to the above members elected by the General Meeting, the Board has three members and three alternate members representing the employees. For further in- formation regarding the Board members, see the section entitled “Presentation of the Board” in this report.
The Board’s independence
The table above shows the Board’s independence in relation to the Company and its major shareholders as well as attendance statistics.
Attendance Statistics 2006 Independence
Name of Elected to Total Board Com- Audit Independence in Independence in
Board Member the Board Annual Meetings pensation Committee relation to the relation to the
Fee, SEK Committee Company and Company’s major
company management shareholders Elected at General Meeting
Sverker Martin-Löf 2003 1,050,000 9 9 6 Yes No, member of the
Chairman of the Board (1943) Chairman since 2003 Board of Industrivärden
Carl Bennet (1951) 2004 350,000 9 – – Yes Yes
Anders G Carlberg (1943) 1986 400,000 9 – 6 No, member for Yes
more than 12 years
Olof Faxander, President 2006 – 6 – – No, President Yes
and CEO (1970)*) of the Company
Marianne Nivert (1940) 2002 400,000 8 – 6 Yes Yes
Anders Nyrén (1954) 2003 400,000 8 9 – Yes No, president and
CEO of Industrivärden
Matti Sundberg (1942) 2004 350,000 9 – – Yes Yes
Lars Westerberg (1948)*) 2006 350,000 5 – – Yes Yes
Employee Representatives
Owe Jansson (1945) 1990 – 9 – – – –
Bert Johansson (1952) 1998 – 9 – – – –
Ola Parten (1953) 2005 – 9 – – – –
Alternates
Sture Bergvall (1948) 2005 – 9 – – – –
Bo Jerräng (1947) 2004 – 8 – – – –
Claes Ström (1945) 2003 – 9 – – – –
*) Appointed in connection with the 2006 Annual General Meeting, after which six Board meetings have been held.
The Board’s work in 2006
During 2006, nine meetings were held at which minutes were taken and the Board has at all times been quorate.
SSAB’s General Counsel, who is not a member of the Board, serves as Secretary to the Board.
During the year, the Board of SSAB has worked intensively on the Company’s strategy and organisation.
Among other things, a new operational structure and control model have been introduced. In this new opera- tional structure, the steel operations comprise two divi- sions under the parent company: the Sheet Division and Plate Division. The Board of Directors has also discussed possible divestments and acquisitions of businesses; among other things, in July 2006 it was decided to sell the 25 per cent stake in the affiliated company, Cogent Power.
During 2006, the Board appointed a new President, Olof Faxander. In connection with the Group’s new operational structure, a partially new Group Manage- ment was appointed. For a further description of Group Management, see the section entitled “Group Management” in this report.
Major capital expenditure decisions taken in 2006 included investments in continued expansion of quenched steels, a distribution centre in China, increased capacity for after-treatment of crude steel in Oxelösund, and a new coiler at the hot-rolling mill in Borlänge.
There are two preparatory committees within the Board:
the Compensation Committee and the Audit Committee.
Compensation Committee
The Compensation Committee presents proposals to the Board regarding the President’s salary and other employment conditions, establishes salaries and employment conditions for Group Management and establishes salary limits and employment conditions for other senior executives. During the year, the Com- pensation Committee held nine meetings at which minutes were taken. The Compensation Committee comprises Sverker Martin-Löf (Chairman) and Anders Nyrén. The President is co-opted to the Committee but does not participate in discussions concerning his own salary and employment conditions.
At the Annual General Meeting, the Board presents proposals regarding principles for compensation and other employment conditions for senior executives, for approval by the shareholders. At the 2006 Annual General Meeting, it was decided that compensation for the President and Group Management shall consist of fixed salary, possible variable compensation, other benefits as well as pensions.
The total compensation package shall be on market terms and competitive and related to the executive’s respons- ibilities and powers. Any variable compensation shall be based on results relative to defined and measurable financial targets and shall be subject to a ceiling relative
to the fixed compensation and shall not constitute a basis for pension rights. No share-related incentive programmes have been issued by the Company. For a further description of the employment conditions of the Board and the Group’s senior executives, see Note 2 in the Annual Report.
Audit Committee
The Audit Committee complies with established rules of procedure which are adopted annually at the constituent meeting of the Board of Directors. The Chairman of the Audit Committee is responsible for ensuring that the entire Board as is regularly informed as to the work of the Committee and, where necessary, shall submit matters to the Board for a decision. The main duties of the Audit Committee are to support the Board in the work of ensuring the quality of the financial reporting.
The Committee regularly meets the Company’s auditors, evaluates the audit work and approves the additional services that the Company may procure from external auditors. There is an established risk management process in the Company which is based on processes and pro- duction flows. In this process, the Audit Committee reviews the risks that have arisen (both commercial risks and risks of errors in the financial reporting) and takes them into account. Based on the result of the internal and external risk assessment, the Committee regularly discusses the focus and scope of the audit with the Company’s internal and external auditors.
Each year, the Audit Committee adopts an internal audit plan which, among other things, is based on the risks that have arisen in the risk management process described above. The Committee also discusses significant accounting issues which affect the Group and assists the Nomination Committee in producing proposals as regards auditors and their fees.
In 2006, the Audit Committee worked on developing and improving the presentation of the external financial reporting. The Audit Committee has, together with the external auditors, reviewed and discussed the risk analysis and audit plan prepared by the auditors as a basis for the statutory audit. Other activities have included assisting the Nomination Committee in pro- posals for the election of auditors at the 2007 Annual General Meeting.
The Audit Committee’s members have been Anders G Carlberg (Chairman), Sverker Martin-Löf and Marianne Nivert. Two of the Committee’s members are independent in relation to the Company’s major shareholders.
In 2006, the Audit Committee held six meetings at which minutes were taken, at which all members were present.
Internal audit
In 2006, the Board appointed an internal audit function.
CHIEF FINANCIAL OFFICER
HEAD OF PUBLIC AFFAIRS CEO
HR DIRECTOR GENERAL
COUNSEL
HEAD OF SHEET DIVISION
HEAD OF PLATE DIVISION
PRESIDENT PLANNJA
PRESIDENT TIBNOR
■ MEMBER OF GROUP MANAGEMENT GROUP MANAGEMENT
Olof Faxander (1970) President and CEO as well as pro tem. Head of Plate Division. Mem- ber of Group Management since 2006. Shareholding 1,200 shares.
M.Sc in Process Metallurgy and B.Sc in economics.
Employed at SSAB since 2006.
Formerly, among other things, Deputy President of Outokumpu.
Göran Carlsson (1954) Head of Sheet Division. Member of Group Management since 2002. Shareholding 5,859 shares and call options corresponding to 7,722 shares..
M.Sc in Process Metallurgy.
Employed at SSAB since 1989.
Formerly, among other things, Technical Director of SSAB.
Martin Lindqvist (1962) Chief Financial Officer. Member of Group Management since 2001. Shareholding 17,109 shares.
M.Sc in Economics. Employed at SSAB since 1998. Formerly, among other things, CFO at SSAB Tunnplåt and Chief Controller at NCC.
Jonas Bergstrand (1965) General Counsel. Member of Group Management since 2006.
LLB. Employed at SSAB since 2006. Formerly, among other things, corporate counsel at ABB, OM Gruppen and Ericsson Radio Systems.
Anna Vikström Persson (1970) HR Director. Member of Group Management since 2006.
LLB. Employed at SSAB since 2006. Formerly Head of HR at Ericsson’s Swedish Division.
■
■
■ ■
■ ■
The internal auditor reports directly to the Audit Com- mittee but is subordinate to the Chief Financial Officer.
In 2006, the internal audit work focused primarily on surveying the internal control. The internal auditor has also worked on an in-depth risk analysis in order to improve SSAB’s risk management model. For a further description of the work of the internal audit in 2006, see the section entitled “Description of the organisation of the internal control with respect to financial reporting”.
Group Management
Group Management is responsible for the formulation and implementation of the Group’s overall strategies
and addresses issues such as acquisitions and divestments.
These issues as well as major investments (>SEK 10 mil- lion) are prepared by Group Management for decision by the Board of the Parent Company.
The President is responsible for the day-to-day management of the Company in accordance with the Board of Directors’ instructions and guidelines. Following the reorganisation, Group Management consists, in addition to the President, of the Heads of the Sheet Division and Plate Division, the Chief Financial Officer, the General Counsel, and the HR Director.
Group Management holds monthly meetings in order to discuss the results and financial position of the Group as well as divisions/subsidiaries. Other issues addressed at Group Management meetings include strategic issues and follow-up on budget and forecasts.
The Head of each division and subsidiary is responsible for the respective profit and loss account and balance sheet. Overall operational control of the divisions takes place through monthly performance reviews and, in Plannja and Tibnor, through the respective Boards of Directors. The President of the Parent Company is the Chairman of the Boards of the directly-owned subsidiaries and these Boards also include other members from Group Management as well as employee representatives. The Boards of the subsidiaries monitor the ongoing operations and determine respective strategies and budgets.
Recruitment of a Head of the Plate Division is underway.
AUDITORS
PricewaterhouseCoopers AB Elected at the 2003 Annual General Meeting for a term up to and including the 2007 Annual General Meeting.
Auditor in charge: Claes Dahlén, authorised public accountant.
Shareholdings include shareholdings of closely-related persons. Call options
have been acquired on the market for a part of disbursed variable salary.
Carl Bennet (1951) Elected to the Board 2004.
Shareholding 16,200 shares.
M.Sc. in Economics, Tech. dr.hc. Chairman of the Board of Elanders, Getinge and Lifco. Deputy Chairman of the Board of Boliden.
Formerly, among other things, President and CEO of Getinge.
Anders G Carlberg (1943) Elected to the Board 1986.
Shareholding 4,800 shares.
M.Sc. in Economics.
CEO of Axel Johnson International. Member of the Board of, among others, Axel Johnson, Beijer Alma, Sapa and SäkI. Formerly, among other things, President and CEO of Nobel Industrier and J.S. Saba as well as Deputy President of SSAB.
Marianne Nivert (1940) Elected to the Board 2002.
Shareholding 6,000 shares.
B.A. Chairman of the Board of Posten. Member of the Board of Beijer Alma, 4th National Pension Fund, Systembolaget and Wallenstam. Formerly, among other things, President and CEO of Telia.
Anders Nyrén (1954) Elected to the Board 2003.
Shareholding 2,250 shares.
M.Sc. in Economics, MBA.
President and CEO of Industri- värden. Deputy Chairman of the Board of Handelsbanken.
Member of the Board of Ericsson, Ernström-gruppen, Industrivärden, Sandvik, SCA and Skanska. Formerly, among other things, Deputy President of Skanska.
Matti Sundberg (1942) Elected to the Board 2004.
Shareholding 6,000 shares.
M.Sc. in Business and Economics; ekon.dr.hc., Mining Counsellor. Regional Director of Scania Nordeuropa.
Chairman of the Board of Scania Sverige and Oy Scan- Auto. Member of the Board of Boliden. Formerly, among other things, President of Valmet and Ovako Steel.
Lars Westerberg (1948) Elected to the Board 2006.
Shareholding 5,000 shares.
M.Sc in Engineering and MBA. President and CEO of Autoliv. Chairman of the Board of Husqvarna.
Member of the Board of Autoliv, Haldex and Plastal.
Sverker Martin-Löf (1943) Chairman. Elected to the Board, Chairman since 2003.
Shareholding 17,250 shares.
Doctor of Technology, dr.hc. Chairman of the Board of SCA and Skanska. Deputy Chairman of the Board of Industrivärden. Member of the Board of Ericsson and Handelsbanken. Formerly, among other things, President and CEO of SCA.
Olof Faxander (1970) Elected to the Board 2006.
Shareholding 1,200 shares.
M.Sc in Process Metallurgy and B.Sc. in Economics.
Chairman of the Council of the Swedish Steel Producers’
Association.
Formerly, among other things, Deputy President of Outokumpu.
BOARD OF DIRECTORS / APPOINTED BY THE EMPLOYEES
Owe Jansson (1945) Employee representative since 1990. Steel Worker, Plate Division.
Bert Johansson (1952) Employee representative since 1998. Electrician, Sheet Division.
Ola Parten (1953) Employee representative since 2005. Engineer, Sheet Division.
Sture Bergvall (1956) Employee representative since 2005. Electrician, Sheet Division.
Bo Järräng (1947) Employee representative since 2004. Personnel, Plate Division.
Claes Ström (1945) Employee representative since 2003. Accounts, Sheet Division.
Alternate members BOARD OF DIRECTORS / APPOINTED BY THE ANNUAL GENERAL MEETING
Björn Wahlström
has been Honorary Chairman of the Company since 1991.
Secretary of the Board of Directors:
Jonas Bergstrand, General Counsel.
The shareholdings include shares
held by closely-related persons.
Internal control and risk management
The overall objective of the internal control is to ensure, to a reasonable degree, that the Company’s operational strategies and goals are followed up and that the owners’
investments are protected. In addition, the internal control shall ensure that the external financial reporting is, with reasonable certainty, reliable and prepared in accordance with generally accepted accounting principles, that applicable laws and regulations are complied with, and that the requirements imposed on listed companies are complied with.
In order to improve the internal control, during 2006 work was commenced in improving the risk management model, which will be implemented in 2007. The objective of this work is to create a uniform process within the Group and to integrate it as a natural part of the control and decision processes in the operations.
For a description of the organisation of the internal control with respect to financial reporting, see below.
Description of the organisation of the internal control with respect to financial reporting – report for the 2006 financial year
According to the Swedish Companies Act and the Swedish Code on Corporate Governance, the Board of Directors of SSAB is responsible for the internal control. This section has been prepared in accordance with section 3.7.2 of the Swedish Code on Corporate Governance, and supplementary instructions issued by the Swedish Corporate Governance Council.
Framework for internal control
SSAB complies with the internationally established framework, Internal Control – Integrated Framework, which is issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
In accordance with COSO, SSAB’s internal control process is based on the organisation’s control environment and includes primarily the following components: risk assess- ment, control activities, information and communication as well as follow-up.
SSAB’s internal control process is structured in order to ensure, to a reasonable degree, the quality and accuracy of the financial reporting. In addition, the process shall ensure that the reporting is prepared in accordance with applicable laws and regulations as well as requirements imposed on listed companies in Sweden. Prerequisites for this being achieved are that a sound control environment is in place, that reliable risk assessments are carried out, that established control activities exist and that infor- mation and communication as well as follow-up function is in a satisfactory manner.
Control environment
The control environment is characterised by the organ- isation structure, management’s work method and philosophy as well as other roles and responsibilities within the organisation. The Audit Committee assists the Board with respect to important accounting issues which the Group applies and follows up the internal control with respect to financial reporting. In order to maintain an efficient control environment and sound internal control, the Board of Directors has delegated the practical responsibility to the CEO who, in turn, has delegated responsibility to other members of Group Management and Heads of Divisions/subsidiaries.
A number of projects are being conducted to ensure that the Group’s internal control meets the requirements imposed by various interested parties. Based on a current status analysis, the projects have proposed improvements with respect to work methods, routines and documenta- tion in order to ensure a sound internal control. As a part thereof, updating and, in certain cases, formulation of written routine descriptions has taken place in order to better define responsibilities and powers. To ensure the quality of the financial reporting, work is taking place on further developing common Group policies and manuals;
among other things, an accounting manual has been produced. The project work will continue during 2007.
The most important, overall common Group control documents and policies are an accounting manual, finance policy, information policy and ethics policy. In addition to these common Group policies, there are local control documents and policies, e.g. credit policy and policy for dissemination of economic information.
All divisions and subsidiaries have adopted guidelines with respect to ethical issues. Decisions regarding each subsidiary’s ethical guidelines have been preceded by extensive reviews conducted by various project groups within the Group. The work of clarifying the Group’s Code of Conduct will continue during 2007. This rep- resents a stage in further strengthening the communication of the Group’s values and philosophy. For additional information regarding SSAB’s Code of Conduct, see page 25 of the Annual Report.
CONTROL ACTIVITIES INFORMATION AND COMMUNICATION
RISK ASSESSMENT
FOLLOW-UP CONTROL ENVIRONMENT
INTERNAL CONTROL PROCESS
Risk assessment
SSAB is an organisation which is exposed to various risks, both internally and externally. In order to ensure a sound internal control to a reasonable degree, the risks which may affect the financial reporting are identified, gauged and measures are taken. SSAB’s operations are characterised by processes involving well-established routines and systems. The risk assessment thus takes place largely within these processes and only general risk assessments take place on a Group level. Responsible persons in the Group identify, monitor and follow-up opportunities and risks. This creates conditions for well-founded and correct commercial decisions on all levels. Financial risks such as currency, financing and liquidity risks as well as interest rate and credit risks are handled primarily by the Parent Company’s finance and accounting function in accordance with the Group’s finance policy (see Note 26 of the Annual Report). The Group’s system for identifying, reporting and taking measures as regards risks is integrated in the ongoing reporting to Group Management and the Board and also constitutes the basis for the assessment of risks of error in the financial reporting.
During 2006, an in-depth risk analysis was carried out and a new, improved risk management model will be implemented in 2007. See also page 26 of the Annual Report for an overview of the Group’s commercial risk exposure.
Control activities
The primary purpose of control activities is to prevent and, at an early stage, discover errors in the financial reporting so that these can be addressed and rectified.
Control activities, both manual and automated, take place on both overall and more detailed levels within the Group.
Routines and activities have been designed in order to handle and rectify significant risks associated with the financial reporting as identified in the risk analysis.
Depending on the nature and affiliation of the control activity, corrective measures, implementation, docu- mentation and quality assurance take place on a Group, subsidiary or process level. Similarly as with regard to other processes, the relevant Head is responsible for the completeness and accuracy of the control activities.
In 2006, new business systems and accounting systems were implemented in some of the divisions/subsidiaries.
This has further strengthened the internal control, among other things through more controls and processes being automated and authorisations in IT systems being limited according to powers and areas of responsibility. The work of implementing new accounting and business systems will continue in 2007.
Control activities are carried out on all levels in the
Group. For example, there are established Controlling
functions which analyse and follow-up deviations and
Internal information and communication Each division and subsidiary has a Chief Financial Officer who is responsible for maintaining high quality and precision of delivery with respect to the financial reporting.
The local intranet constitutes an important com- munication channel in the Group on which information is published regularly. The divisions/subsidiaries also hold regular accounting meetings. At these meetings, relevant personnel are updated regarding news and changes within the accounting area and within the internal control with respect, among other things, to the financial reporting. In addition, the Parent Company holds annual accounting days at which new accounting principles and other relevant issues are discussed. At these meetings, the divisions/subsidiaries are also instructed in the application of common Group accounting principles and procedures for preparing the financial reporting.
Follow-up
The Board of Directors’ follow-up of the internal control with respect to financial reporting takes place primarily through the Audit Committee, among other things through follow-up of the work and reports of the internal and external auditors.
During the year, the internal audit has carried out overall reviews of the internal control with respect to the projects carried out in the Group regarding work methods, routines and documentation. In 2006, the internal auditor, with the assistance of a project team from the Group, has also conducted process reviews in which the work is documented and reported to the Audit Committee. These internal audits will continue in 2007.
The external auditors review each year selected parts of the internal control within the scope of the statutory audit. The external auditors report the results of their review to the Audit Committee and Group Management.
Important observations are also reported directly to the Board of Directors. In 2006, the external auditors reviewed the internal control in selected key processes and reported thereon to the Audit Committee and Group Management.
report further in the Company. Follow-up by Group Management takes place, among other things, through regular meetings with Heads of Divisions and subsidiaries with regard to the operations, their financial position and results as well as financial and operational key ratios.
The Board of Directors analyses, among other things, monthly business reports in which Group Management describes the period that has passed and comments on the Group’s financial position and results. In these ways, important fluctuations and deviations are followed up, a factor which minimises the risks of errors in the financial reporting.
The work on the closing accounts and the annual report involves processes in which there exist additional risks of error in the financial reporting. This work is less repetitive in nature and contains several elements in the nature of an assessment. Important control activities include ensuring the existence of a well-functioning reporting structure in which the divisions/subsidiaries report in accordance with standardised reporting models, as well as important profit and loss account and balance sheet items being specified and commented on.
Information and communication
SSAB’s information paths are concise, a factor which allows for a rapid and flexible processing of informa- tion. The Group has a common information policy governing the flow of information, both externally and internally.
External information and communication The aim of the Group’s financial reporting to shareholders and the financial market is to provide the best possible conditions for a comprehensive assessment of the Company. Information is provided in accordance with the rules set forth in the listing agreement with Stockholmsbörsen. Following a review by the Audit Committee and the Board of Directors, all external financial reports are published on the website (www.ssab.se) after having first been submitted to Stockholmsbörsen.
The Chairman of the Board is responsible for owner-related issues. Financial information regarding the Group is provided only by the CEO, the CFO, the Head of Public Affairs or the Head of Investor Relations. The Head of Public Affairs handles primarily contacts with the mass media, while the Head of Investor Relations handles contacts with the financial market.
In addition to the above communications, annual capital market days are arranged and presentations given to parties in the capital market in connection with pub- lication of interim and full-year reports.
SSAB applies a so-called closed period policy
whereby no financial information is presented three
weeks prior to publication of financial reports.
Redemption
During the second quarter, the shareholders were invited to submit every twentieth share for redemption for SEK 485 (almost SEK 162 after the share split). In total, almost 4.5 million shares were surrendered for redemption and SEK 2,205 million was paid out to the shareholders on June 19. This corresponded to just over SEK 24 per outstanding share prior to redemption.
Share capital
Following the redemption, bonus issue and 3:1 share split, the share capital amounts to SEK 2,280 million divided into 259,147,821 shares, of which 192,612,666 are Class A shares and 66,535,155 are Class B shares.
The quotient value per share equals SEK 8.80. All shares are unrestricted. Each Class A share entitles the holder to one vote and each Class B share entitles the holder to one tenth of one vote.
Dividends and repurchase of shares
Dividends shall be adjusted to the average profit level over a business cycle and, in the long-term, constitute approx. 50% of profit after tax. It shall also be possible to use dividends to adjust the capital structure.
For the 2006 financial year, a dividend of SEK 4.50 per share is proposed, i.e. 27% of earnings. Since the share was listed on the stock exchange in 1989, the dividend has thus averaged 33% of earnings. Including redemptions and repurchases, 66% of earnings have been distributed to the shareholders.
The Board will request authorisation from the 2007 General Meeting entitling the Board to repurchase the Company’s own shares. Pursuant to such authorisation, the Board shall be entitled, should it deem appropriate, to decide upon the repurchase of a maximum of 10%
of the Company’s shares during the period until the next Annual General Meeting. Any repurchase will take place on the stock market or through an offer to all shareholders. It is proposed that the Board’s authorisation will also include the possibility to transfer repurchased shares, however only in connection with payment for an acquisition.
60 65 70 75 80 85 90
Share price development since listing.
SSAB on the stock exchange
The shares have been listed on Stockholmsbörsen since 1989. The share has been listed on the Exchange’s A-List and, since 1994, among the most actively traded shares.
Commencing 2006, the share has been listed on OMX The Nordic Exchange, on the Large cap list. A trading unit consists of 200 shares. OMX The Nordic Exchange issues call and put options on the shares.
During the year, shares were traded at a value of just over SEK 62,300 million. Trading in SSAB shares took place on all exchange days and, on average, amounted to approx. SEK 250 million per day. Traded shares corresponded to 182% of outstanding shares and constituted 1.1% of the total turnover on the OMX Stockholm Stock Exchange. Trading per month during the past five years is shown in the adjacent diagram.
During the year, the lowest trading price for the Class A share was SEK 93.20 and the highest price was SEK 166.67. At the end of the year, SSAB’s market capitalization was SEK 41,579 (25,805) million. The Class-A share price increased by almost 70% in 2006, compared with an increase of just over 24% for Affärs- världen’s General Index.
Ownership structure
At the end of the year, Industrivärden was the largest
shareholder measured in terms of share capital and voting
capital, followed by LKAB. AMF Pension and Swedbank
Robur are among the financial institutions that have
reduced their holdings in SSAB during the year, while
Industrivärden and the 4th National Pension Fund have
increased their holdings. Swedish shareholders have, in
total, reduced their stake in SSAB from 73% of share
capital on December 31, 2005 to 66% of share capital
on December 31, 2006.
Since 1989, the number of shares and the share capital have changed as set forth below:
Change in number Number Change in share Share capital
Year of shares of shares capital (SEK millions) (SEK millions)
1989 Conversion + 1,500,000 26,500,000 + 150 2,650
1994 Conversion + 5,500,000 32,000,000 + 550 3,200
1995 Split 4:1 + 96,000,000 128,000,000 0 3,200
1998 Redemption – 15,891,199 112,108,801 – 397 2,803
2001 Reduction in share capital – 11,210,880 100,897,921 – 281 2,522
2005 Redemption – 9,968,861 90,929,060 – 249 2,273
2006 Redemption – 4,546,453 86,382,607 – 114 2,159
2006 Bonus issue 0 0 + 121 2,280
2006 Split 3:1 + 172,765,214 259,147,821 0 2,280
Data per share
2006 2005 2004 2003 2002
Trading price Dec. 31, class A, SEK 162.50 96.33 53.33 42.83 34.33
Earnings, SEK 16.02 14.07 11.87 2.97 1.90
Cash flow, SEK 14.29 14.81 6.58 2.53 3.99
Equity, SEK 59.18 52.01 42.96 33.14 32.36
Dividend
1), SEK 4.50 3.00 2.50 2.00 2.00
Average no. of shares, million 265.5 285.6 302.7 302.7 302.7
No. of shares at year-end, million 259.1 272.8 302.7 302.7 302.7
Market capitalization, MSEK 41,579 25,805 15,659 12,520 9,997
Valuation
Yield, % 2.8 3.1 4.7 4.7 5.8
P/E ratio 10.1 6.8 4.5 14.4 18.1
Price/equity, % 275 185 124 129 106
EV/EBIT
2), 6.4 4.5 3.6 10.4 13.1
EV/EBITDA
2), 5.6 3.9 2.9 6.2 6.2
Pursuant to the Board of Directors’ proposal for the 2006 financial year.
EV/EBIT and EV/EBITDA: Enterprise value (EV) relative to Earnings Before Interest and Taxes (EBIT) or Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA). Enterprise value is the total of the Company’s market capitalization, net debt and minority interests. The gauge expresses the market value of the business as a debt-free company relative to the earnings levels before financing items.
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