Annual Report 2008

Annual Report 2008

C OVER PICTURE

STCC – Swedish Touring Car Champion ship in Göteborg – a unique urban car race The Eco Drive Arena was inaugurated on 13 June 2008. Sweden’s first ever urban car race could take place and the car racing world flocked to Göteborg. The race was a success with a crowd of almost 38,000 and fantastically high marks from the drivers. The track, which has been con- structed in the Freeport area by the Göta River with a view of the Göteborg Opera House, is 1,650 metres in length and has 12 bends.

Geveko’s subsidiary Cleanosol applied the mark- ings on the track. The 2009 Göteborg City Race will be held on 5-6 June.

Photo: Fredrik Schenholm G EVEKO IN BRIEF

Geveko is Europe’s leading road marking com- pany with a strong brand name on most markets in Europe. Products and services of the highest quality help to create safer conditions on the roads and consequently support Geveko’s mis- sion of being a leading player in improving road safety. Geveko maintains sustained competitive- ness and profitability by means of cost effective production, acquisitions and organic growth, and also by playing an active role in the development and restructuring of the road marking industry.

Graphic layout and production: Natvik Information AB Photos: Fredrik Schenholm, Peter Eriksson,

and Nils-Olof Sjödén.

Repro/printer: Göteborgstryckeriet Translation into English: Ian M Beck AB The Annual Report is printed on eco-friendly paper.

F INANCIAL REPORTS

All the reports are published in Swedish and English. A printed version of the Annual Report is distributed to all shareholders who have specifically expressed their wish to receive it. The reports are also available on AB Geveko’s website from the time of publication.

The reports can also be ordered by post from AB Geveko, Box 2137, SE-403 13 Göteborg, Sweden, telephone: +46 31 172945,

fax: +46 31 7118866, or by email: info@geveko.se.

The reports for 2009 will be published as follows:

• Interim Report-3 month 29 April 2009

• Interim Report-6 month 14 July 2009

• Interim Report-9 month 28 October 2009

• Year End Release 2009 February 2010

• Annual Report 2009 April 2010

C ^ONTENTS

Highlights of the year 2

Chairman’s review 3

CEO’s review 4

Shares and shareholders 6

Business concept, strategic goals

and financial targets 10

Group summary 12

Road safety in Europe 16

Road marking market in Europe 18

Russia 23

Road marking business areas 25

Central and Eastern Europe business area 26

Great Britain business area 30

Western Europe business area 32

New Products business area 34

ChemTech segment/business area 36 Products and product development 38 Employees, Health,

Safety and the Environment 41

Report of the directors 47

Financial reports

Consolidated profit and loss account 51

Consolidated balance sheet 52

Consolidated cash flow analysis 53

Change in consolidated equity 54

Parent company profit and loss account

and change in parent company equity 55

Parent company balance sheet 56

Parent company cash flow analysis 57 Accounting and valuation principles 58 Notes and supplementary information 63 Proposed treatment of

unappropriated earnings 76

Audit report 77

Corporate governance report 80 Board’s report on internal control 87 Members of the Board and auditors 88 Managing director and

other senior management personnel 90 Other

Financial risk management and

sensitivity analysis 91

Five-year review 94

Quarterly review 95

Definitions 96

Glossary 97

Addresses 98

Geveko group

Geveko’s business is divided into two segments: Road Marking and ChemTech. The Road Marking segment focuses on horizontal road markings and is organised in four business areas: Central and Eastern Europe, Great Britain, Western Europe and New Products. The ChemTech business comprises the production and sale of industrial and domestic paints, marking sprays and rust protection agents.

Business areas

Road marking Central and Eastern Europe

The Central and Eastern Europe road marking business area in- cludes the manufacture and sale of road marking materials and contract road marking services. Sales of road marking materials are made up of water-based and solvent-based paints, thermo- plastic materials and 2-component materials. There are production facilities in Sweden, Norway and Finland. Businesses have been established in the Nordic region, Poland, Slovakia, the Czech Re- public, Turkey, Hungary, Romania, Russia and Ukraine.

Road marking Great Britain

The Great Britain business area consists of Roadcare Ltd, which is made up of two wholly owned companies: Rommco (UK) Ltd and Line Markings Ltd. The business focuses on the manufacture and application of thermoplastic road marking materials. Rommco (UK) Ltd sells thermoplastic road marking materials to external companies throughout Great Britain and Ireland.

Road marking Western Europe

The business of the Western Europe business area consists of the manufacture and sale of road marking materials, and of contract road marking services. There are production facilities in Denmark and Germany. Material sales are handled via subsidiaries and sales offices in most countries in Western Europe.

New Products

The business area’s products consist of pre-fabricated thermo- plastic materials, including traffic symbols. Businesses have been established in Denmark, Great Britain, Holland and China. The products are marketed via Geveko’s own sales representatives on most European markets. The business area also includes the development of electronically controlled products for communi- cation between vehicles and the infrastructure.

ChemTech

The ChemTech business area develops, manufactures and markets marking sprays, rust protection systems, industrial and domestic paints as well as road marking paints for the Nordic market.

There are production facilities in Sweden and Finland. Businesses

have been established in Sweden, Finland, Norway and the

Netherlands. Export markets include the Baltic countries, Poland,

Germany, Russia, Switzerland and Austria.

I NFORMATION TILL AKTIEÄGARE

ÅRSSTÄMMA 2009 Tid och plats

Årsstämma i AB Geveko hålls onsdagen den 29 april 2009 kl. 16.30 på Radisson SAS Scandinavia Hotel, Södra Hamngatan 59, Göteborg.

Rätt att deltaga i årsstämman har aktieägare som:

• är införd i den av Euroclear Sweden AB (tidigare VPC AB) förda aktieboken senast den 23 april 2009.

Endast aktieägare som har sina aktier ägarregistrerade har rätt att deltaga i stämman. Aktieägare som har sina aktier förvaltarregistrerade genom banks notariatav- delning eller enskild fondhandlare måste för att äga rätt att deltaga i stämman därför tillfälligt låta registrera aktierna i eget namn i aktieboken hos Euroclear Sweden AB (tidigare VPC AB) senast den 23 april 2009. Aktie- ägaren bör underrätta förvaltaren härom i god tid före denna dag.

• anmält sin avsikt att deltaga i årsstämman.

För att deltaga i årsstämman ska anmälan om del - tagande i stämman ha inkommit till AB Geveko senast den 23 april 2009.

Anmälan

Anmälan kan göras till bolaget enligt ett av följande alternativ:

• per post under adress AB Geveko (publ), Box 2137, 403 13 Göteborg (se anmälningstalong)

• per telefon 031-172945

• per telefax 031-7118866 (se anmälningstalong)

• per e-post: info@geveko.se varvid erfordras bolagets e-postbekräftelse på att anmälan har mottagits.

Observera att fullmakt måste insändas i original. Vid anmälan uppges namn, adress, telefonnummer, person- nummer/organisationsnummer samt eventuellt biträde som ska medfölja vid stämman.

Förvaltarregistrerade aktier

Aktieägare som har sina aktier förvaltarregistrerade genom banks notariatavdelning eller enskild fondhand- lare måste tillfälligt låta registrera aktierna i eget namn för att kunna deltaga i stämman. Sådan tillfällig ägar - registrering, s k rösträttsregistrering ska vara verkställd senast den 23 april 2009 (samma dag som registrering i Aktieboken). Detta innebär att aktieägare i god tid före denna dag måste meddela sin önskan om rösträttsre- gistrering till förvaltaren.

Ombud

Aktieägares rätt vid årsstämman får utövas genom ombud. Fullmakt kan tecknas på anmälningstalongen.

Företräds juridisk person ska fullmakt vara underteck- nad av firmatecknare och kopia av ett aktuellt registre- ringsbevis som anger firmatecknare ska bifogas.

Biträden

Aktieägare eller ombud för aktieägare får vid årsstämman medföra högst två biträden. Biträde får medföras endast om aktieägaren till AB Geveko i förväg anmäler biträde.

Behörighetshandlingar

Fullmakter och/eller registreringsbevis bör, för att under- lätta inpassering vid stämman, inges i förväg och vara bolaget tillhanda under ovanstående adress senast den 23 april 2009.

Valberedning

Valberedningen har till uppgift att förbereda val av ord- förande och övriga ledamöter i styrelsen, val av revisorer, val av ordförande vid bolagsstämma, arvodesfrågor och därtill hörande frågor. Valberedningen inför årsstämman 2009 utgörs av Sigurd Walldal, före detta Koncernchef, AB Geveko, ordförande, Sören Sjölander, Professor, Chalmers Tekniska Högskola samt David Bergendahl, styrelseledamot AB Geveko.

Utdelning

Utdelning för 2008 utsändes till aktieägare som på av- stämningsdagen är registrerade i aktieboken. Styrelsen och verkställande direktören föreslår att till aktieägarna utdelas 2 kronor per aktie och att den 5 maj 2009 ska vara avstämningsdag för erhållande av utdelning. Be - slutar årsstämman i enlighet med förslaget beräknas utdelningen sändas ut av Euroclear Sweden AB (tidigare VPC AB) den 8 maj 2009.

Ekonomiska rapporter

Samtliga rapporter publiceras på svenska och engelska.

Årsredovisning distribueras i tryckt version till de aktie- ägare som uttryckligen begärt en sådan. Rapporterna finns tillgängliga på Gevekos hemsida vid publicerings- tillfället. Rapporter kan även beställas per post hos AB Geveko, Box 2137, 403 13 Göteborg, telefon 031-172945, fax 031-7118866 och e-post, info@geveko.se.

Ekonomisk rapportering

Delårsrapporter under verksamhetsåret 2009 offentlig- görs enligt följande:

• Delårsrapport 3 månader 29 april 2009

• Delårsrapport 6 månader 14 juli 2009

• Delårsrapport 9 månader 28 oktober 2009

• Bokslutskommuniké 2009 Publiceras i februari 2010

• Årsredovisning 2009 april 2010

Geveko’s business concept is to generate value for

shareholders by offering products of the highest quality,

a high level of service and strong commitment, by being

a leading player in road safety and playing an active role in

the restructuring of the road marking sector, and by estab-

lishing operations on new and existing markets.

First quarter – The season started with a satisfactory order intake

• Turnover increased by 38% and was associated with the consolidation of companies acquired in 2007. Less than some 10% of annual turnover is normally attributable to the first quarter of the year. Owing to the seasonal nature of the business a loss was incurred.

Second quarter – Healthy trend in turnover and improved operating result

• The effects of the acquisitions made in 2007 showed through in the operating result, which improved by 23% in relation to the previous year. Other businesses perform in line with or better than 2007.

Third quarter – Strong improvement in the result and acquisition of road marking business in Norway

• Turnover increased by 42% and the operating result improved by 74% in relation to the third quarter of 2007. The acquisition of Norwegian Mesta’s road marking business was approved by the competition authority in Norway and possession was taken on 1 July.

Fourth quarter – Acquisition of road marking business in Finland

• The road marking business of Destia, a Finnish company, was acquired during the fourth quarter. Destia is market leader in Finland within contract road marking services and had a turnover of some SKr 120 million in 2008.

2008 as a whole – one year as an industrial group

• Net turnover increased by 32% in relation to the previous year and amounted to SKr 1,427.5 million (1,078.8). The operating profit increased to SKr 24.3 million (18.6). The operating margin for 2008 was 1.7% (1.7).

2009

Dividend and proposal for warrant programme

• The Board proposes that the AGM resolve in favour of paying a dividend of SKr 2 (6) per share for 2008. The proposed dividend represents a direct yield of 2.9%, based on the transaction price of Geveko’s shares on 30 December 2008. The Board also proposes that the AGM resolve in favour of a share-related incentive scheme for some 20 senior management personnel and other key employees.

H IGHLIGHTS OF THE YEAR

0 300 600 900 1 200 1 500

2008 2007 2006 2005 2004 SKr million

0 2 4 6 8 10

%

Net turnover EBITA, % Net turnover/

EBITA, % Operating profit/

Operating margin

Operating capital/

Return on operating capital

0 200 400 600 800

2008 2007 2006 2005 2004 SKr million

0 2 4 6 8 10

%

Operating capital/

Return on operating capital 0

15 30 45 60 75

2008 2007 2006 2005 2004 SKr million

0 2 4 6 8

%

Operating profit Operating margin

SKr million 2008 2007 2006

Profit/loss after tax -53.6 -24.6 116.3

Return on equity, % -12.5 -3.8 14.6

Cash flow 3.7 -31.1 38.9

Net turnover 1,427.5 1,078.8 1,035.0

Operating profit ¹⁾ 24.3 18.6 38.6

Operating margin, % 1.7 1.7 3.7

EBITA 46.4 32.3 54.3

EBITA, % 3.3 3.0 5.3

Return on operating capital, % 3.3 6.8 6.9

Per share data

Profit/loss after tax, SKr per share -12.95 -4.85 28.20

Cash flow, SKr per share 0.85 -7.40 9.20

Share price, SKr per share 68.00 125.50 218.00

Number of employees 832 638 611

1) As of 2007 the parent company’s indirect costs are included in the operating result.

Financial ratios

0 300 600 900 1 200 1 500

2008 2007 2006 2005 2004 SKr million

Net turnover

In December 2007 Geveko changed its tax status from that of investment trust to operative industrial group. As far as timing is concerned we man- aged, almost optimally, to divest almost the entire equities portfolio, thereby avoiding losses that can be estimated at around SKr 250 million.

This made 2008 the first year since 1998 that Geveko could focus one hundred per cent on its industrial operations. The reason for changing our tax status was to create resources for consolidating and further develop- ing our position of market leadership within the road marking industry in Europe. This can be accomplished either through our own contracting activities or via the sale of materials to other road marking contractors.

Future growth can be generated organically, but also by playing an active role in the consolidation of a highly fragmented industry, charac- terised by many players on the various national markets.

For several years the business has been conducted through a highly decentralised organisational structure.

As such this has had a number of advantages, but it also resulted in minimal coordination of a consider- able number of acquisitions. The Group has gradually accumulated a critical mass, but this has been put to poor use by the decentralised working practices. If our contracting activities are to achieve satisfactory profitability we need to apply our combined resources to product development, coordinated production, improved and more varied application tech- niques as well as greater efficiency in the use of technically more advanced road marking machines,

In 2008 we endeavoured to conduct our operations through an operatively focused organisation rather than the formerly more legally oriented one.

Prior to 2009 the operative business has been organised into three areas:

Contracting, Material Sales and Production. Most of the administra- tion has been coordinated into a sin- gle unit, in order to gain a more com- prehensive grasp of the business.

I am delighted to note that by the start of 2009 we had established posi- tions of market leadership in all the Nordic countries except Iceland, as well as in Poland, the Czech Republic, Slovakia, Hungary and Romania. It is easy to understand that a high degree of market penetration also creates a sound foundation for greater efficiency and thus, higher profitability.

For several years Geveko has pursued development aimed at integrating electronics into road marking, prod- ucts that are to be launched on the market this year. We are convinced that, in order to be able to further improve road safety, electronics is a still unexploited area with great potential.

Since the Swedish Code of Corporate Governance was introduced, Geveko has chosen not to voluntarily affiliate to the code. It has, however, when judged appropriate, adapted its busi- ness to sections of the code. As of 1 July 2008 the code will apply to all listed companies.

Management and control are always problematic in a company with many small units, and Geveko is no excep- tion. We are taking systematic action to strengthen our controls; this involves the introduction of a group- wide business system as the basic foundation for an effective manage- ment and control system. The aim is that most of our units should have implemented this new business sys- tem during the coming year.

As regards economic conditions 2009 will be a weak year. We know that many companies have been hit far harder than Geveko, whose core busi- ness lies within the infrastructure sec- tor. Nonetheless, we need to improve both profitability and the use of capi- tal, which means that 2009 will be a year of consolidation. We have capa- ble, experienced and dedicated employees, and I am sure that if we can place the right tools in their hands we will have the right condi- tions for increasing our professional- ism and thus our profitability.

Göteborg, Sweden, March 2009

Ove Mattsson Chairman

C HAIRMAN ’ S REVIEW

We have capable, experienced and dedicated employees, and I am sure that if we can place the

right tools in their hands we will have the right conditions for increasing our professionalism

and thus our profitability.

When Geveko’s board decided to change the nature of the business from that of investment trust to an operating industrial group its decision was based on an extensive analysis of the road marking market in Europe.

This analysis then served as the basis for a new business plan for Geveko.

We recognised that the road marking market is highly fragmented, that Geveko, as market leader, had a market share of around 10% and that considerable growth was expected, driven by major infrastructure invest- ments in Eastern Europe.

Strategic goals

The goal in the business plan is to consolidate the position of leadership within the road marking industry in Europe, by, for example, playing an active role in a necessary consolida- tion of the industry. In financial terms the goal is to reach an operating margin of 8% and a turnover around the size of SKr 1,500-2,000 million during 2010.

Strategic expansion

During 2007 and 2008 we gave priority to growth targets, partly in order to reach positions of leadership on fast- growing markets in Eastern Europe, and partly to consolidate our leading position on the important Nordic domestic market. Including the acqui- sitions made during the second half of 2008 we have budgeted for a turnover of some SKr 1,500 million for 2009, which would mean an increase of almost 50% in two years. We now rank as number one or number two on the markets in Poland, the Czech Republic, Slovakia, Hungary, Romania and Ukraine, which have an aggregate population of around 140 million. It is not only infrastructure investments that are driving market growth in these countries. With improved living standards more people can now afford a car and there is a consider- able need to improve road safety. In

Scandinavia, where we are market leader by a wide margin we estimate our market share at around 50%.

Within the Road Marking seg- ment turnover increased by 36%. This growth is almost entirely attributable to markets in Eastern Europe. As far as the result is concerned the Nordic operations, excluding the contracting business in Denmark, developed as planned. The Danish market, which declined by around 20% in 2007 as a result of a reorganisation among our customers, recovered only marginally.

Competition remained intense on the markets in Western Europe, including Great Britain, as a consequence of excess capacity in the industry.

Geveko defended its market position, although profitability was unsatisfac- tory. The businesses in Central and Eastern Europe performed well, except in Poland, where the amalga- mation of recent acquisitions created some problems. These were resolved during the winter. Exports of road marking material to Russia increased strongly in 2008.

Within ChemTech our turnover was mainly unchanged until around the end of June. During the second half of the year sales fell, a tendency which accelerated during the final quarter of the year. As the cost adjust- ments that were decided upon in the autumn did not have an immediate

CEO’ S REVIEW

Several countries in Western Europe have announced substantial investments in the infrastruc-

ture and increased budgets for road maintenance during both 2009 and 2010. We, naturally,

have hopes that given our market position we will be able to take a share of this market growth.

effect this segment incurred an oper- ating loss.

Focus on profitability

In 2009 we will shift our focus onto profitability, i.e. consolidating our positions, improving our result, using capital more efficiently and reducing debts. Internally we have called this process “Operational excellence”. We launched it immediately after the summer of 2008 by carrying out a cost-reduction programme that will improve the operating margin by around two percentage points. In order to direct a sharper focus on our commercial activities, raise our pro- ductivity and improve profitability we are now replacing a geographically based organisation with an operative and functional one. This means that overall responsibility throughout the Group for production, contracting activities and material sales has been brought together into a single unit.

Parallel to the creation of a single IT platform for the Group, a careful analysis is being made of all processes and working practices, right down to job team level. Improvements will be introduced successively and in Sweden, where the process started, a number of rationalisation projects are already underway, which together are expected to reduce the annual cost base by around SKr 10-15 million.

Corresponding projects have begun at the start of 2009 in Norway and Finland. However the full-year impact of these cost reductions is not expected to show through before 2010 at the earliest.

Even though we will be focusing on profitability rather than growth via acquisition we have every reason to hope to achieve organic growth with- in, say, pre-fabricated products, where we have invested substantial re sources in our marketing and sales organisa- tions in Europe in recent years. In 2009 we will begin the process of commercialising several of our elec-

tronic road marking products that we have been developing and testing for several years in Sweden and Denmark.

Target 2010

I am often asked if Geveko really is capable of achieving its target of an operating margin of 8% by 2010.

Measures to improve internal effici - ency, lower depreciation of acquisition goodwill, which will be largely com- pleted by 2010, and the contribution to the result from the acquisitions that were completed in 2008 should make a significant contribution to a marked improvement in the result, with the clear target of achieving 8%.

Markets – challenges and opportunities

However, developments on our mar- kets are more uncertain than ever before in modern times. As far as our business is concerned, we can see both challenges and opportunities.

Several countries in Western Europe have announced significant invest- ments in the infrastructure and increased the budgets for road main- tenance for both 2009 and 2010 as a way of offsetting the effects of the economic slowdown. So far Germany, Great Britain, Belgium, the Nether - lands, Norway, Sweden and Finland have done this. Given our prominent position we naturally hope to be able to take a share of this market growth.

In Eastern Europe the situation is more fragmented. Hungary and Ukraine received financial aid from the International Monetary Fund already in the autumn of 2008. This support came along with a number of conditions, such as that the recipients should reduce their budget deficits and national debt. In the short term this could mean that spending on road maintenance might also be squeezed. We are ready for this and our businesses are well positioned to adjust quickly to changing market conditions. Exports of road marking

materials to Russia increased dramati- cally during the past year. The volumes are now so large that it is economically feasible to start our own production there. We are following developments closely and are ready to start a factory project at short notice.

In general we must base our actions on short-term considerations but with an eye on the long term.

Many years of effort should not be ruined by excessive short-termism in the serious crisis situation we can see today.

I am convinced that the strategic direction for the Group that the Board has decided on is to the benefit of Geveko’s shareholders. It is now up to me and my colleagues to carry out the plans and deliver improved results that generate growth in value and create conditions in which the company can pay a higher dividend than that we have proposed for the 2008 financial year.

I want to extend my gratitude to shareholders and business partners for the past year, as well as to all our employees, whose great dedication and loyalty have contributed to the Group’s progress.

Göteborg, Sweden, March 2009

Hans Ljungkvist

President and CEO

Listing

Geveko’s Series “B” shares were first listed on Stockholmsbörsen’s “A” list in 1983. In 2000, they were moved to the

“O” list instead. In October 2006 Stock holm Stock Exchange intro- duced the Nordic list and Geveko’s shares were listed on the Small Cap list. The code for Geveko’s Series “B”

shares is GVKO B.

Share structure

Since 1993 the number of shares has been 4,219,533, of which 720,000 are Series “A” shares and 3,499,533 are Series “B” shares. Each Series “A” share carries one vote and each “B” share 1/10th of a vote.

Shareholders

The number of shareholders on 31 December 2008 was 3,252 (3,328), according to Euroclear Sweden AB’s (formerly VPC AB) register of share- holders. Institutional owners have increased during the year from 54%

to 55% of the capital and from 62%

to 63% of the votes. Shareholders registered abroad accounted for 26%

of the capital and 10.2% of the votes, which is broadly unchanged from the previous year.

“A” shareholder consortium A consortium agreement has been reached by owners of Series “A” shares, who together control more than 50%

of the votes.

Share price and turnover The price of Geveko’s shares on 31 December 2008 was SKr 68 (125.50).

During the year the highest listed transaction price was SKr 135 and the lowest was SKr 55. During the year shares were traded for SKr 76.8 million with an average daily turnover of SKr 292,000. The turnover rate was 25%

and transactions were executed on 93% of all trading days.

Total return

The return on Geveko’s Series “B”

shares, including dividend, was nega- tive 41%, which may be compared with the return on the SIX Return Index of negative 39%. During the five-year period 2004-2008, Geveko’s average total return was 9.8% per year. The corresponding figure for the SIX Return Index was 8.0% per year.

Dividend policy

Geveko’s dividend policy has been adapted to the company’s change of direction from investment trust to operating company with effect from 2008. The new dividend policy means that some 50% of the profit after tax will be paid out by way of ordinary dividend.

Dividend

A dividend of SKr 6 per share was paid out in April 2008 for the 2007 financial year. For the 2008 financial year the Board proposes that the AGM resolves in favour of paying a dividend of SKr 2 per share. This dividend cor- responds to a direct yield of 2.9%

based on Geveko’s closing share price on 31 December 2008.

Shareholder information

Geveko’s aim is to regularly provide detailed and timely information for shareholders and the stock market on the company’s progress and financial position. The provision of external information consists of regular reports, viz. year-end releases, annual report, interim report and AGM decisions.

Geveko’s reports and press releases are distributed via Huginonline and are available on Geveko’s website, www.geveko.se, from the time of pub- lication. It is possible, on Geveko’s and Huginonline’s websites, for shareholders and other stakeholders to subscribe to information via email.

Distribution policy

All the reports are published in Swedish and English. Printed versions of the annual report are distributed to those shareholders who have specifically requested such informa- tion. The reports can also be ordered by post from: AB Geveko, Box 2137, SE-403 13 Göteborg, Sweden, phone:

+46 31 172945, fax: +46 31 7118866 and email: info@geveko.se.

Contacts with the capital market Geveko made presentations of its business during the year at meetings of the Swedish Society of Financial Analysts as well as at a number of events organised by local share holders’

associations.

Analyses of Geveko

In 2008 independent equity analysts Redeye and its equity analyst Henrik Alveskog followed Geveko’s perform- ance.

S HARES AND SHAREHOLDERS

As of 2008 Geveko has changed direction and changed its tax status from that of investment trust to that of operating industrial enterprise. Consequently, during 2008 Geveko’s shares were valued more on the basis of the business’s ability to earn a profit than on changes in its net worth. Geveko’s aim is for its shares to be recognised as an attractive investment for private investors and institutional investors.

0 2 4 6 8 10 12

2008 2007 2006 2005 2004 SKr

Dividend per share

No. of No. of Capital, Votes,

“A” shares “B” shares % % Gunnar and Märtha Bergendahl Foundation 349,658 376 8.3 32.7

Bergendala Foundation 139,085 222,200 8.5 15.1

Ergel, Jarl 34,720 65,292 2.4 3.8

Dunberger, Klas with family 20,600 32,933 1.2 2.2

Ergel, Magnus 18,000 53,000 1.7 2.2

Dunberger, Marie 20,600 13,000 0.8 2.0

Dunberger, Ulf 20,600 - 0.6 2.0

Ergel, Gunilla with family 18,000 33,335 1.2 2.0

SSB CL Omnibus AC Fund, USA - 209,119 5.0 1.9

Kamprad, Ingvar - 200,000 4.7 1.9

Bergendahl, David 18,500 2,500 0.5 1.7

F Goldman Sachs International Ltd - 177,281 4.2 1.7

Mellon AAM Omnibus Fund, USA - 156,000 3.7 1.5

Bergendahl, Henrik 15,000 - 0.4 1.4

Lewerth, Lars 9,600 32,531 1.0 1.2

Mattsson, Anders 12,180 740 0.3 1.1

Mattsson, Claes-Göran 9, 700 - 0.2 0.9

Svenska Handelsbanken S.A.,

Luxembourg - 81,017 1.9 0.8

Other 33,757 2,220,209 53.4 23.9

720,000 3,499,533 100.0 100.0

Shareholders at 31 December 2008

No. of Capital, Votes,

“B” shares % %

SSB CL Omnibus AC Fund, USA 209,119 5.0 1.9

Kamprad, Ingvar, Switzerland 200,000 4.7 1.9

F Goldman Sachs International Ltd 177,281 4.2 1.7

Mellon AAM Omnibus Fund, USA 156,000 3.7 1.5

Svenska Handelsbanken S.A., Luxembourg 81,017 1.9 0.8

CBNY-DFA International, USA 36,600 0.8 0.3

CBLDN-Dalepole, Cyprus 26,500 0.6 0.3

Altraplan Bermuda, Ltd, Bermuda 25,000 0.6 0.2

ABN Amro Bank, Switzerland 23,300 0.5 0.1

934,817 22.0 8.7

Largest foreign shareholders at 31 December 2008

No. of No. of No. of Capital, Votes,

Size shareholders “A” shares “B” shares % %

1- 500 2,586 312 424,428 10.0 4.0

501- 1,000 336 613 290,675 6.9 2.7

1,001- 5,000 243 21,152 531,682 13.1 7.0

5,001- 10,000 35 27,740 235,641 6.3 4.8

10,001- 15,000 16 30,420 163,671 4.6 4.4

15,001- 20,000 3 0 53,250 1.3 0.5

20,001- 33 639,763 1,800,186 57.8 76.6

3,252 720,000 3,499,533 100.0 100.0

Shareholders by size at 31 December 2008

Source all tables: Euroclear Sweden AB (formerly VPC AB)

Holding, %

Financial companies 6.9

State and municipal companies 0.5 Trade organisations, foundations etc. 19.2 Other Swedish juridical persons 8.1 Foreign physical persons 25.9 Physical persons resident abroad 39.4

Total 100.0

State and municipal companies 0.5%

Foreign physical persons 25.9%

Other Swedish juridical persons 8.1%

Swedish physical persons 39.4%

Financial companies 6.9%

Foundations etc. 19.2%

Holding, %

Sweden 74.1

USA 9.7

Switzerland 5.8

Great Britain 4.7

Luxembourg 2.3

Other 3.4

Total 100.0

Shareholders by category 31 December 2008

USA 9.7%

Sweden 74.1%

Great Britain 4.7%

Switzerland 5.8%

Luxembourg 2.3%

Other 3.4%

Geographical location of shareholders by country 2008

2008 2007 2006 2005 2004

Market capitalisation 287 527 920 882 758

Geveko Series “B” – listed price SKr per share 30 Dec 68 125.50 218 209 175

Highest/lowest price, SKr/share 135/55 323/114 233/175 209/170 181/141

Earnings/loss per share, SKr ¹⁾ -12.95 -4.85 28.20 37.70 16.45

Cash flow per share, SKr 0.85 -7.40 9.20 17 -5.25

Dividend, per share SKr ²⁾ 2 6 11 11 10

Direct yield, % 2.9 4.8 5.0 5.3 5.7

Return on share, % ³⁾ -41 -3 10 25 23

SIX Return Index, % -39 -4 +26 +36 +21

Average turnover per trading day, SKr ‘000 292 1,255 896 639 470

Average value per transaction, SKr ‘000 33 73 73 69 47

Number of trading days with transactions, % 93 99 99 99 99

Number of shares traded, % 24 30 31 19 17

Number of shareholders 3,252 3,328 3,452 3,482 3,358

Number of shares in issue at year-end 4,219,533 4,219,533 4,219,533 4,219,533 4,219,533

1) The Group has no outstanding convertible loans or stock options.

2) Dividend proposal for 2008, SKr 2 per share.

3) Change in share price during the year plus dividend paid in relation to opening share price.

Per share data 2008-2004

Source all tables and diagrams: Euroclear Sweden AB (formerly VPC AB)

Age of No. of Holding,

shareholder shareholders %

5-25 207 0.9

26-50 589 6.1

51-70 1,311 17.4

71-90 823 19.4

91-100 31 0.6

101- 4 0.1

Total 2,965 44.5

Shareholders by age 2008 (physical persons)

Shareholders

Physical persons 2,965

Of whom resident in Sweden 2,937

Juridical persons 287

Of which resident in Sweden 221 Total number of shareholders 3,252

Number of shareholders 2008 Juridical persons and

physical persons

50 100 150 200 250 300 350

2004 2005 2006 2007 2008 2009

50 100 150 200 250 300

Number of shares traded, 1,000

“B” shares (including dividend) SIX Return Index

© NASDAQ OMX

2008 2009

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB 40

60 80 100 120 140

“B” shares OMX Stockholm_PI

© NASDAQ OMX

Dividend incl. bonus Direct yield, % SKr

0 2 4 6 8 10 12

2008 2007 2006 2005 2004 2003 2002 2001 2000

%

0 2 4 6 8 10 12

1999

2004 2005 2006 2007 2008 2009

50 100 150 200 250

“B” shares OMX Stockholm_PI

© NASDAQ OMX

Share redemption, for SKr 75 per share in June 2007.

Dividends paid 1999-2008

Geveko shares, including dividend, in relation to SIX Return Index 2004-2008

Geveko shares in relation to the OMX

Stockholm Price Index 1 Jan 2008 - 28 Feb 2009

Geveko shares in relation to the OMX

Stockholm Price Index 1 Jan 2004 - 28 Feb 2009

• Growth via acquisition

2004 Acquisition of NCC’s road marking business in Poland

2005 Acquisition in the Czech Republic and increased holding in Romania 2006 Acquisition of Preformed Markings,

Great Britain

2007 Acquisitions in Poland and Slovakia and increased holding in Hungary

2008 Acquisition in Norway

• Organic growth 2005 Move into Turkey

2007 New markets in Western Europe for pre-fabricated road marking symbols

0 300 600 900 1,200 1,500

2008 2007 2006 2005 2004 2003 SKr million

Growth via acquisition Organic growth Organic growth/

Growth via acquisition

As of 2008 Geveko is an operating industrial group that focuses on hori- zontal road markings, where Geveko is market leader in Europe. The European industry for road markings is highly fragmented and characterised by the existence of numerous national and local companies which in the main only operate on their respective domestic markets. Geveko considers that considerable potential exists for improving the industry’s profitability by increasing the degree of industriali- sation and consolidation. Geveko shall take a proactive approach in this development.

Geveko’s goal is to consolidate and strengthen its position of market leadership in Europe by means of organic growth and growth via acqui- sition. The goal is to attain a position of market leadership on all priority markets. At the same time, the focused development of new products and product systems will result in a com- petitive edge, higher customer value and improved profitability.

The Group’s overriding objective is to earn a minimum return on equity of 13% per year and to have an equity ratio that does not fall below 35%.

Geveko has adopted a business plan for the Group’s development over the coming three years. The objective is to achieve an operating margin of 8%

by 2010. At the same time, the capital tied up, defined operative working capital, shall be reduced to a maximum 15% of turnover.

• To consolidate and strengthen our position as Europe’s leading company in the road marking industry.

• To attain positions of leadership on priority markets.

• To participate actively in the restruc- turing of the road marking industry.

• To develop products that give a com- petitive edge and improve profitability.

• The operating margin shall be 8% in 2010.

• The return on equity shall amount to at least 13% per year.

• The equity ratio shall not fall below 35% at year-end.

B USINESS CONCEPT , STRATEGIC GOALS AND FINANCIAL TARGETS

Strategic goals Financial targets

Geveko’s business concept is to generate value for shareholders by offering products of the highest quality, a high level of service and strong commitment, by being a competent partner in road safety, playing an active role in the restructuring of the road marking sector, and by estab- lishing operations on new and existing markets.

0 200 400 600 800 1,000

2008 2007 2006 2005 2004 SKr million

-20 -10 0 10 20 30

%

Equity

Return on equity Equity/

Return on equity

0 500 1,000 1,500 2,000 2,500

2010 2008 2007 2006 2005 2004 2003 2002 SKr million

Target 2010:

Turnover SKr 1,500-2,000 million Operating margin 8%

Turnover

0 2 4 6 8 10

%

Operating margin Target 2010 – Turnover/

Operating margin

Organic growth New products

• Purposeful investments in new products that generate higher cus- tomer value.

• Water-based, environmentally friendly paints.

• Development of pre-fabricated symbols.

• Electronic road markings on the road surface.

New markets

• Move into new markets with high potential for Geveko.

• Fast-growing markets mainly in Central and Eastern Europe.

Growth via acquisition Bolt-on acquisitions

• Bolt-on acquisitions in markets where Geveko is already established and which create synergies and economies of scale.

Structural acquisitions

• Acquisitions on markets where Geveko is either established or not currently active and which con- tribute to the consolidation of the road marking industry in Europe.

Operational excellence Cost effective production

• Take advantage of economies of scale and synergies.

• Improve processes within both pro- duction of materials and contracting.

• Cross-border cooperation between different units in the Group.

• Introduction of benchmarks and best practice.

• Introduction of common standards and an IT platform.

High standard of service

• Decentralised working practices and closeness to the customer.

• Employee development schemes.

Priority areas: Strategic goals and financial targets

Organic growth

• Stepped up marketing activities within the Premark ^® product area.

• Higher market presence in Russia.

• In Ukraine Geveko has become the second largest supplier of materials.

Growth via acquisition

• Acquisition of road marking opera- tions of Mesta AS and Destia Oy, contract road marking companies in Norway and Finland respectively.

Operational excellence

• Introduction of benchmarks.

• Introduction of new IT platform.

• Merger of units in Poland.

• Cost-cutting programme completed autumn 2008.

Follow up of strategic goals

Forecast

The Road Markings business is highly seasonal, with emphasis on the second and third quarters. Much of the volume in the road marking industry is decided on the basis of procurements that take place during the first half of the year.

The full-year effects of acquisitions com- pleted in 2008 are expected to have a favourable impact on turnover. The sea- sonal character of the business area means that most of Geveko’s income is generated during the second half of the year. Therefore, Geveko does not pub- lish any earnings forecast for the full year until the release of the company’s interim report for the second quarter, at the earliest.

2008 2007 2006 2005 2004

Overall targets

Return on equity, % -12.5 -3.8 14.6 23.1 28.0

Equity ratio, % 31.0 37.0 60.2 60.2 63.7

Operational targets

Operating margin, % 1.7 1.7 3.7 5.1 6.5

EBITA, % 3.3 3.0 5.3 6.3 8.3

Operative working

capital as % of turnover 23.1 23.4 21.3 20.8 20.7

Depreciation of goodwill in connection with acquisitions was charged against the operating margin during the 2005-2008 period. Excluding this depreciation, the margin for 2008 would be 1.6 percentage points higher. This is reflected in EBITA, %.

Follow up of financial targets 2008-2004

Nature of business

Geveko’s business is divided into two segments: Road Marking and Chem - Tech.

The Road Marking segment accounted for more than 90% of Geveko’s turnover in 2008. The re - maining share of turnover comes from the ChemTech segment. Geveko’s subsidiaries are 100% owned, except for Plastidrum in Romania, which is 69% owned, and Magyar Plastiroute, the Hungarian company in which Geveko has a 64% interest.

Geveko has operations in most countries in Europe, through sub- sidiaries or sales offices and branches.

Road Marking

Road Marking mainly manufactures road marking materials and road marking products. Geveko is market leader in Europe in the manufacture of horizontal road marking products as well as in contract road marking services.

ChemTech

ChemTech manufactures rust protec- tion products, marking sprays and industrial and domestic paints. The business is concentrated on areas with high demands for customer-specified products. ChemTech possesses con- siderable chemical engineering com- petence, which opens the way for production synergies with other com- panies within the Road Marking seg- ment.

Net turnover and result Net turnover increased by 32% to SKr 1,427 million (1,078). Thirteen percentage points of the growth was organic and 19 percentage points were due to acquisitions. The gross profit amounted to SKr 272.9 million (221.1). The operating profit was SKr 24.3 million (18.6) and the operating margin was 1.7% (1.7).

The operating profit excluding depreciation attributable to acquisi- tions, known as EBITA, amounted to

SKr 46.4 million (32.3), which gives an EBITA margin of 3.3% (3.0).

Road Marking’s business is high- ly seasonal with emphasis on the sec- ond and third quarters. The sales vol- ume increased by 36% to SKr 1,351 million (998) during 2008. The in - crease is mainly due to the acquisitions in Poland, Slovakia and Hungary that were completed during the second half of 2007, as well as in Norway in 2008. Sales of Premark ^® prefabricated road marking symbols rose by 10%, slightly less than in previous years.

In the ChemTech segment Rust protection products and Marking sprays in particular were adversely affected by the recession. Sales of these products declined by around 10% in relation to 2007. Sales of Industrial Paints declined by rather less. Sales of domestic paints, which are mainly marketed on the Finnish market, increased by 4%, much due to successful marketing under the private label concept. Overall, and including sub-contract production of road marking paints, ChemTech’s turnover fell by 6% and amounted to SKr 121.6 million (129.7)

Market and product development Road Marking

The European road-marking market, which is estimated to be worth some SKr 10,000 million per year, is charac- terised by numerous suppliers, most of which are active on only one or a few markets. Geveko is the only com- pany that has achieved a position of leadership on several markets.

Geveko’s share of the European market is estimated at around 10-15%. Growth is weak in Western Europe and is driven more by measures to improve road safety than by the construction of new roads. In 2008, however, several governments have announced in - creased, and more extensive invest- ments in infrastructure as a means of offsetting the effects of the economic downturn and recession. This is a good thing for the road marking

industry. Increased budgets for road maintenance produce an immediate effect, whereas the planning of new roads involves a more long-term per- spective. The application of road markings is also the final stage in the construction of a new road.

The markets in the Nordic region and Western Europe for road marking products and contract road marking are subject to intense competition. In 2008, Geveko maintained its position of leadership on the markets in Sweden and Denmark, and strength- ened it in Norway via acquisition. In Sweden, in 2007 Geveko lost its largest customer for materials, Svevia (Swedish National Road Adminis tra - tion), which started its own produc- tion of thermoplastic materials. How - ever the loss of volume was compen- sated for in 2008 by higher exports to Central and Eastern Europe. In Den - mark the local government reform that was implemented in 2007 caused a decline of 20% in the market for contract road marking services. Geveko maintained its share of the shrinking market, at the cost, however, of lower profita bility. Only a small proportion of the lost volume was recovered in 2008. The German market is still under pressure as a result of limited public funds and considerable excess capacity for product systems as well as for road marking contractors. In Great Britain, which is Europe’s largest market for road markings, demand re mained stable at a similar level to the previous year. As a result of rising traffic intensity, particularly on motor- ways, restrictions have been introduced which mean, in principle, that road marking works can only be carried out at night, which places new and tougher demands on the contractors.

The markets in Central and Eastern Europe are estimated to be worth around SKr 2,000 million per year. The growth rate is estimated at 5-10% over the coming 3-5 years. The factor driving growth is an acute need to improve road safety, in combination

G ROUP R EVIEW

Geveko’s strategy is to consolidate and strengthen its position of market leadership in Europe.

Geveko’s growth strategy is based on organic growth and acquisitions of companies, mainly on

those markets where Geveko is currently established and which create valuable synergies. In

line with this strategy Geveko made two acquisitions in 2008.

with large infrastructure investments.

As major motorway projects in Poland have been delayed, partly owing to administrative and environmental fac- tors, growth turned out to be lower than expected. In Slovakia, the Czech Republic, Romania and Hungary the road marking market has developed strongly. In Romania road markings are in growing demand in cities.

Product development activities are focused on environmentally friendly products. New road marking products and systems are intended to help improve road safety and satisfy stringent demands for functionality, environmental security, delivery precision and technical development.

Electronically controlled products, such as optical warning systems, are being developed in the Intelligent Transport Systems (ITS) area. Geveko is also participating in a research project in Sweden in cooperation with Luleå University of Technology and the National Road Administration with the object of creating intelligent roads by integrating communication equipment with road markings. The system was tested in Sweden in 2008.

Further information about products and product development is provided on pages 38-40.

Market and product development ChemTech

In the Nordic region and Western Europe the market for marking sprays is highly dependent on developments in the building and civil engineering industries. Marking sprays are used, for example, in connection with tunnel building and other extensive ground activities. The use of marking sprays is growing on markets in Eastern Europe, such as the forest industry.

Marking sprays did well in 2008 with a growth rate of around 5% up until half way through the year after which it fell dramatically in line with the weakening economic conditions. The after market for corrosion protection in the Nordic region is affected by globalisation and standardisation in the automotive industry. Corrosion protection products did well during the first half of 2008, but deteriorating conditions in the automotive industry had a dramatic effect on demand later on in 2008.

The market for domestic paints is stable and subject to stiff competition.

There is a distinct trend towards water-based paints, which benefits Geveko, whose production of domes- tic paints has long been focused on environmentally friendly water-based

G EVEKO

Head office: Göteborg, Sweden CEO: Hans Ljungkvist

Turnover 2008: SKr 1,427 million (1,078)

Operating profit 2008: SKr 24 million (18)

No. of employees: 832 (633) Road Marking segment

Business areas: Central & Eastern Europe, West Europe, Great Britain, New Products.

Products: Road marking products and contract road-marking services.

Customers: Road Administrations, Civil Aviation Administration, and Municipalities in each country, and building and civil engineering enter- prises.

Competitors: See Road Marking market on page 18.

ChemTech segment

Products: Corrosion protection prod- ucts and marking sprays, industrial and domestic paints.

Customers: Building and civil engi- neering industry, board industry, auto after-market and consumer market.

Competitors: See ChemTech segment on page 36.

0 50,000 100,000 150,000 200,000 250,000

Q4 Q3 Q2 Q1 SKr ’000

Net turnover per month 2008

0 300 600 900 1,200 1,500

2008 2007 2006 2005 2004 SKr million

Net turnover

2004-2008

paints. The demand for industrial paints among housebuilders, and window and moulding manufacturers in Finland has fallen as a result of deteriorating economic conditions.

Environmental demands are con- stantly being tightened on most markets. ChemTech’s environmental policy covers the environment in the production process and in product development, where environmental adaptation is a key factor. In the marking spray product area, product development is based on product use and customer specifications. To enable the development of products with a lower content of volatile organic sub- stances compromises sometimes have to be made with other product char- acteristics. The debate on the quality of vehicle rust-proofing, varying cli- matic conditions and environmental factors is having an influence on the development of corrosion protection

products. Higher demands for an emission-free work and external en - vironment at corrosion protection stations are driving the trend towards products with a lower solvent content.

Acquisitions in 2008

In 2008 Geveko acquired the road marking operations of the state- owned companies Mesta in Norway and Destia in Finland. The acquisition of Mesta was completed on 1 July and Destia was acquired on 30 December.

Both acquisitions are of strategic importance to Geveko, as they strengthen its competitive position on important domestic markets in the Nordic region. Furthermore, the co- ordination of these acquisitions with Geveko’s existing contract road mark- ing companies in Norway and Sweden will make possible more efficient use of resources and lower logistical costs.

The acquisition of Destia in Finland

SKr million except

where otherwise stated 2008 2007 2006 2005 2004

Profit and loss account

Net turnover 1 427.5 1,078.8 1,035.0 991.0 940.3

Operating profit (EBIT) ¹⁾ 24.3 18.6 38.6 51.0 61.0

Operating margin, % 1.7 1.7 3.7 5.1 6.5

EBITA 46.4 32.3 54.3 62.8 78.0

EBITA, % 3.3 3.0 5.3 6.3 8.3

Balance sheet

Operative capital, average 743,0 628,4 561,0 532,7 -

Return on operative capital, % 3.3 6.8 6.9 9.6 -

Cash flow

+ EBIT 24.3 18.6 20.2 35.3 45.3

+ Depreciation according to plan 91.5 70.3 73.8 68.9 59.5

± Adjusted operating capital -4.8 -68.1 -12.2 -23.4 -10.6

= Operative cash flow

before investment activities 111.0 20.8 81.8 80.8 94.2

- Investments in

tangible fixed assets -83.4 -77.8 -41.4 61.7 -59.5

= Operative cash flow 27.6 -57.0 40.4 19.1 34.7

1) As of 2007 the parent company’s indirect costs are included in the operating result.

Five-year review 2008-2004 Acquisitions in 2008

Nature of Turnover 2008, No.

Company Country business SKr million employees

Mesta Norway Contract road marking 80 42

Destia Finland Contract road marking 120 39

Total 200 81

will also mean substantial volumes of thermoplastic material and road marking paints for the factories in Finland and Sweden.

Mesta, Norway

The road marking business carried on by the 100% state-owned Mesta AS in Norway, which was acquired on 1 July, had a turnover of around SKr 80 million in 2008. It consists of con- tract road marking throughout the whole of Norway. Mesta’s share of the Norwegian contract road marking market is estimated at around 30%.

The acquired business has been inte- grated with Cleanosol, Geveko’s Norwegian subsidiary.

Destia, Finland

The road marking business carried on by state-owned Finnish company Destia Oy was taken over on 30 December. The business comprises contract road marking, particularly in Northern and Eastern Finland. The market share in Finland is estimated at around 50%. Destia’s road marking activities had a turnover of around SKr 120 million in 2008. The Finnish road marking market involves the use of function contracts, which last for several years. Around 80% of Destia’s business consists of long-term func- tion contracts with the Finnish Road Administration.

Cost structure

Three-quarters of Geveko’s cost base

consists of production costs. Within

Road Marking’s material production

purchased raw materials account for

75% of the costs. The most important

raw materials used in the manufacture

of road marking materials are titani-

um dioxide, binding agents and glass

beads. Effective procurement proce-

dures are therefore vital for achieving

cost efficiency. In the contract road

marking business material costs

account for about a quarter of total

production costs. The remainder con-

sists of labour costs and the cost of

machinery and equipment. A bench-

marking system to measure efficiency

in all areas is being introduced in

2009 with the object of further

improving productivity within the

contract road marking activities as

well as in material production.

Sales/marketing costs 8%

Administrative costs 9%

Development costs 1%

Production costs 76%

Depreciation 6%

Cost structure

Road Marking 93.3%

ChemTech 6.7%

Share of Group turnover

ChemTech 4%

Western Europe 20%

Central & Eastern Europe 62%

Great Britain 7%

New Products 7%

Business area’s share of Group sales IT systems and operational reliability

If the efficiency of the business is to be raised, the IT environment must maintain a high standard in respect of usefulness, accessibility and security.

In order to create standardised proce- dures and working practices within the Group a groupwide financial reporting system was introduced in 2008. The system offers advantages when it comes to control and follow up of the various subsidiary compa- nies and ensures that internal report- ing is of high quality. During 2009 and 2010 the Group’s IT platform will also be upgraded.

Forecast for 2009

Demand for road markings is expected to match last year’s on the Nordic markets and in Western Europe. On some markets demand may increase as a result of higher investments in the infrastructure to counteract the recession. In Central and Eastern Europe the growth rate is higher and substantial investments in the infra- structure are boosting the growth

potential. Geveko’s companies are

well positioned in Central Europe and

are expected to take their full share of

this growth. However in Hungary and

Ukraine demand is expected to de -

cline as a result of weak government

finances. The full-year effect of the

acquisitions completed during the

second half of 2008 will have a posi-

tive impact on turnover and profit. In

2009 working practices and the

organisation will be modified to take

better advantage of economies of

scale and synergies. The effect of these

changes on the result can be expected

to show through during the coming

two or three years. On the downside

are weather conditions and the

intensely competitive market situation

in Western Europe. The seasonality of

the road marking industry means that

most of the profit is generated during

the second half of the year. For this

reason, Geveko does not publish an

earnings forecast before the second

quarter report is released, at the

earliest.

Countries in Europe face considerable challenges if they are to attain their goal of creating a safe cross-border transport system. Although the road infrastructure has improved consider- ably and vehicle safety has increased, some 43,000 people die on the roads in Europe each year. In 2001 the then 15 member states agreed on the target that the number of fatalities on the roads should be no more than 25,000 by 2010. Give the present trend the target will not be achieved until 2018 in the 27 member states.

Most states have adopted plans to bring down the number of road fata - lities which will be achieved by means of the following measures:

• Create effective and long-term road safety systems,

• Develop and maintain a safe traffic environment by raising the standard of the road infrastructure,

• Make the roads safer for children, pedestrians and cyclists,

• Change drivers’ behaviour with regard to speeding, drinking and driving and the use of seatbelts,

• Improve the efficiency of emergency/

rescue services.

Road safety programmes and targets in several countries Sweden

In 1997 the Swedish Parliament de - cided that the policy known as Vision Zero should apply to road safety. The Vision Zero strategy states that it is unacceptable that road traffic claims human lives. The decision has led to changes in road safety policy and in the way road safety is managed. The Vision Zero target was to reduce deaths on the roads to no more than 270 in 2007. The road safety measures taken to reduce the number of fatali- ties included setting up steel wire bar- riers between lanes to prevent head- on collisions and speed cameras to reduce speeds on stretches of road

with known hotspots. There are now some 4,000 kilometres of road with separate carriageways. Even though the target was not achieved, road deaths in Sweden 2008 were at their lowest level since 1945. 420 people died in road accidents, which is a reduction of more than 10% on 2007.

Denmark

The Danish government’s road safety strategy with the vision that “Every accident is one too many” is aimed at state and local authorities and other players involved in road safety in Denmark. The target is to reduce the number of fatalities by 40% during a 12-year period between 1998 and 2012. The road safety strategy em - braces all road-users and is to be achieved regardless of increased traffic intensity. In 2007 409 people died on the roads in Denmark. By 2012 the number of fatalities should be no more than 300.

Norway

In 2000 the Norwegian Parliament adopted a road safety strategy for the period 2002-2011. According to data in the Norwegian traffic safety plan, the number of fatalities has been halved since 1970 and the number of injured on the roads has fallen by two-thirds. Nonetheless, there will be around 300 fatalities annually and 1,400 people will be seriously injured.

Low traffic volume on most roads in Norway make it hard to justify upgrading to motorway standard.

Norway has, therefore, studied Sweden’s roads with separate car- riageways, which are seen as one way for Norway to reduce the number of road accidents.

Finland

The Finnish government has estab- lished road safety targets pursuant to decisions made in 1993, 1997 and 2001. The 2001 road safety plan stipu- lated that the target for the number of

road fatalities would be no more than 250 per year by 2010. The plan has been revised and now extends to 2025, when the number of fatalities should be no more than 100. Im - proved road safety for children, cyclists and pedestrians, separate carriageways and investments in new technology are just some of the meas- ures that will help to achieve the target.

Poland

Poland is one of the countries in Central Europe where the number of road fatalities is very high. The main causes of the high number of fatalities are dangerous driving, a lack of road safety systems for children, pedestri- ans and cyclists, inefficient rescue services and a very poor road standard.

After joining the EU Poland revised its National Road Safety Programme.

The programme includes established targets up until 2013 and focuses on improving the road infrastructure in order to attain the target of halving the number of fatalities by 2013. The number of road fatalities in Poland is in excess of 5,000 per year and the cost of road accidents is estimated at some 7 billion euro.

R OAD SAFETY IN E UROPE

Geveko’s mission is to be a leading player and a competent partner in road safety programmes.

Product development is carried out with a focus on environmentally friendly road marking

products and on the visibility of road markings in the dark and on wet roads for greater road

safety.