THIS IS HIFAB 2008
Our vision
Hifab shall be the first choice of our customers and staff, and serve as a model to the market.
Operations and organisation
Hifab is Sweden’s leading project management company. The business, established in 1947, has nation- wide coverage with approximately 15 offices in Sweden and 10 offices internationally. The number of Hifab employees is on a yearly average 421 and sales totals SEK 436 million, approximately two-thirds of which are generated domestically and one-third internationally.
Hifab Group AB is the parent company of the Group. Operations are carried on in the following six business areas:
BA East operates in the building, construction and real estate sectors focusing on expert competence in installation, energy and environmental issues in the Stockholm region, from Södertälje in the south to Uppsala in the north.
BA South operates in the building, construction and real estate sectors focusing on expert competence in installation, energy and environmental issues, from Malmö in the south to Karlstad in the north.
BA North operates in the building, construction and real estate sectors focusing on expert competence in installation, energy and environmental issue from Gävle and northwards.
BA Environment provides advisory services and and project management in the environmental sector with a focus on environmental issues related to soil, bedrock and water.
BA International, through Hifab International, operates in the area international development and aid projects in approximately 20 countries in Europe, Africa, Central Asia and Asia. The business area includes our foreign subsidiaries Hifab A/S in Norway, Hifab SIA in Latvia and Hifab Middle East Ltd in Saudi Arabia.
BA P to P IT Consulting offers companies and organisations qualified IT services related to the operation, design and administration of IT environments.
2008 IN FIGURES
§ Net sales SEK 436 (369) million
§ Consultancy operations increased to SEK 18.9 (2.6) million
§ Profit after financial items increased to SEK 17.5 (1.2) million
§ Average number of employees/year 421 (319)
§ Earnings per share SEK 0.52 (-0.47)
.
BA East
BA South
BA North
BA Environment
BA International
BA P to P Hifab Group AB
SIGNIFICANT EVENTS IN 2008 CONTENTS
o Hifab’s shareholders accepted the bid of Thalamus Networks AB. The purchase was finalised on 23 September.
o Business area Environment was engaged by LKAB to act as manager of structural geology studies of the Kiruna mine and its immediate surroundings. The purpose is to obtain better knowledge of instable zones in the bedrock.
o P to P was entrusted a new general agreement with ZeroChaos.
o Hifab Group is quoted on OMX First North since November.
o Hifab Oy won several major projects related to rural electrification in Africa. The scope of the projects ranges from construction of systems , advisory services on a ministerial level, to actual construction of distribution of electricity. The sites of the projects are Ethiopia and Ghana and the total project volume exceeds SEK 20 million.
o The planning of the project ”Bypass Stockholm” was won by a consortium in which Hifab is responsible for the project management. The term of the engagement is two years and will result in a working plan and system documentation for an investment of SEK 25 billion.
o Hifab’ s Gothenburg office has been engaged by Banverket (the National Swedish Rail
Administration) for the enlargement of the double track between Gothenburg and Trollhättan. The enlargement work will continue through the year 2012 and is subject to extension.
o An extraordinary general meeting of Thalamus Networks AB on 5 November 2008 decided to adjust the Articles of Association in that the name of the company be changed to Hifab Group AB, that the domicile of the company be changed to Stockholm, and that a new Board of Directors be elected.
This is Hifab 2008 in figures Significant events in 2008
Annual General Meeting, information Report by the Managing Director Five-year review
The Hifab share
Administration report Financial position Key ratio definitions
Consolidated income statement
Consolidated balance sheet
Income statement, parent company
Balance sheet, parent company Equity
Notes
Auditors’ report The Board
The Management Addresses
2 2 3
4
5
6
7
9 13 13
14
15
18
19
22
23
45 46
47 48
ANNUAL GENERAL MEETING OF SHAREHOLDERS
Date and venue Venue
Participation
Notification
Representative
Dividend
Distribution of Annual Report
Financial information 2009
The Annual General Meeting of Shareholders will be held on Thursday 14 May 2009 at 18.00 hrs.
Konferens Spårvagnshallarna, Birger Jarlsgatan 57, Stockholm
Participation at the Annual General Meeting of Shareholders requires that (a) a sharehollder, on the record day 8 May 2009, is registered in the share register maintained by Euroclear Sweden AB (former ly VPC) on behalf of the company, and (b) has notified the company of its participation not later than on 12 May 2009 at 16.00 hrs.
To become qualified to attend the meeting a shareholder, whose shares have been registered in the acquisition register must, not later than on 8 May 2009, temporarily register the shares in its own name with Euroclear Sweden AB,.
Notification of participation at the Annual General Meeting should be made as follows:
o By e-mail: lisa.berg@hifab.se o By fax: 08-546 667 80
o By telephone: 08-546 666 64 or switchboard 08-546 666 00 o By post: Hifab AB, Box 19090, 104 32 Stockholm
A notification by a shareholder shall state the name of the shareholder, the personal/corporate identification number, address, telephone number, number of shares and, where appropriate, representative(s).
The rights of a shareholder may be exercised by proxy. The proxy shall be made in writing, the validity date of which must not exceed twelve months. Please note that the proxy shall be forwarded in the original, or be presented at the meeting. A shareholder shall notify its wish to exercise the right to bring not more than two representatives to the meeting and shall do so in connection with its notification to participate in the meeting.
The Board of Directors and the Managing Director propose that the Annual General Meeting decide that no dividend be paid for the financial year 2008.
The Annual Report is available with the company and on Hifab’s website www.hifab.se on 27 April 2009. The Annual Report is also sent by post to shareholders who have notified the company of such distribution.
Interim reports
January-March 2009 14 May 2009 January-June 2009 28 August 2009 January-September 2009 20 November 2009 Press release
January-December 2009 February 2010
Information channels
Visit Hifab’s web site, www.hifab.se, to view interim reports, annual reports, share prices graphs and press releases. Please contact the company for printed information, either by telephone, 08-546 666 00 or by e-mail, info@hifab.se.
Spårvagnen Block, Stockholm.
Designed by Adolf Emil Melander, architect. Built in 1878.
REPORT BY THE MANAGING DIRECTOR
2008
The reconstruction of major sectors of the Group and the improvement of control and guiding systems in recent years form the basis of the result for the year. Each quarter of the year indicated improvements as compared with last year. All in all, 2008 is Hifab’s best year ever from an earnings point of view. The improvement is exceptional and a result of the hard and persistent work of co-workers and line managers. All business areas show growth and profitability improvement.
One of the major events of the year is no doubt the reverse acquisition of Thalamus Networks AB, which was
implemented during the summer and early autumn. As a result, Hifab’s existing shareholders became major shareholders in the new parent company, which
subsequently changed its company name to Hifab Group AB.
Hifab’s shares became listed on OMX First North on 23 September. In the last 20 years the Group has several times been on its way to becoming listed on the stock exchange, and the IPO was finally achieved in 2008.
The acquisition complements Hifab’s competence in the IT area, contributing to increased knowledge in projects and project management, as well as benefiting from Hifab’s structural capital and experience in project management in particular.
In view of the improved efficiency and the significant volume of orders on hand, prospects are good despite financial crises and the present downturn in economy.
We opened the year in what was considered a very strong and good market, and we close the year with a
diametrically different view. The change has been dramatic and revolutionary, which is obvious to all of us.
2009
However, we shall continue working as usual, perhaps with a greater focus on sales. Recruitment needs remain and we plan for a continued organic growth at a pace similar to that in 2008.
The market signs for 2009 are unambiguous; cutbacks and reductions in investment volumes are reported each and every week. In the construction business we envisage a cutback mainly in new construction of housing and in trading. But at the same time we see an increase in volumes in, among other areas, infrastructure related projects. The efforts launched by the Government will require an increase in project and construction
management resources, and in environmental competence in particular.
Although it is true that each project requires its specialists,
In a year of economic downturn the monitoring of changes in capacity, volume of orders and customer credits must be more rigid. The importance of frequent monitoring cannot be exaggerated. Our general view of the coming year is positive, but we are aware that setbacks may occur in some areas of the organization. Observing signals and taking timely action is of essence.
Several of Hifab’s customers are public authorities, which to a certain extent mitigates the effects of the economic situation, due to among other things the supporting measures taken. Other factors that help maintain our capacity on a sufficiently high level are the relatively high flexibility in our service offerings as well as the internal training of our staff.
Environmental engineering advisory services is one of our stable cornerstones, which in our assessment will enjoy a continued good market also during the economic
downturn. The role of environmental issues in the projects, irrespective of the type of building projects, is now a central issue, the scope of which is expanding rather than decreasing. The link to energy is pretty obvious. Hifab is certified to perform energy assessments and accredited to issue certificates on so called Green Buildings.
People to People (colloquially P to P) acts in a market where assignments are of a short-term nature, which requires a wider customer circle. Simultaneously, we see possibilities to take over IT departments and support in the worsening economic situation. Over the years, Hifab has been able to assist customers with outsourcing services in times of narrowing markets, an activity that we see as a potential in all our business areas.
All in all, I do not quite concur with the gloomy depiction predicted by the world around us. As mentioned, we plan for growth both in volumes and results, which is based on the conditions carried forward to the coming year.
Over the years, flexibility has been our strength, and still is, now in combination with improved effectiveness. The sales efforts continue generating an increase in the inflow of orders, and we are working on maintaining that development. Even a downturn in economy can provide new potentials.
Stockholm, March 2009
Jan Skoglund
Net sales; SEK thousand
Operating income from consultancy operations;
SEK thousand
Full-time employees THE HIFAB GROUP – FIVE-YEAR REVIEW
2008 2007 2006 2005 2004
INCOME STATEMENT; SEK thousand
Net sales 435 625 369 010 380 859 469 713 516 076
Operating income from consultancy operations 18 862 2 562 -27 557 1 179 -2 001 Operating income from consultancy operations after items
affecting comparability 18 862 2 562 -27 557 1 179 -6 201
Income after financial items 17 432 1 161 -17 357 -264 -8 591
Taxes -791 -2 149 3 907 -1 203 1 216
Net income for the year, attributable to shareholders in the
parent company 15 775 -1 351 -13 333 -1 354 -7 758
BALANCE SHEET; SEK thousand
Non-current assets 34 249 18 190 21 568 19 006 22 962
Current assets 180 993 120 469 134 911 152 637 159 900
Equity, attributable to shareholders in the parent company 60 199 52 865 54 085 47 247 46 832
Minority interests 1 506 672 282 344 4 350
Long-term liabilities 16 626 17 652 20 762 11 077 19 856
Current liabilities 136 911 67 470 81 350 112 975 111 824
Balance sheet total 215 242 138 659 156 479 171 643 182 862
0 50 100 150 200 250 300 350 400 450
2008 2007 2006 2005 2004
Sver i ge Utl and 0
100 000 200 000 300 000 400 000 500 000 600 000
2008 2007 2006 2005 2004
Sverige Utland
-30 000 -25 000 -20 000 -15 000 -10 000 -5 000 0 5 000 10 000 15 000 20 000 25 000 30 000
THE HIFAB GROUP SHARE
THE SHARE
Thalamus Networks AB’s B-shares were listed on Nordiska Börsen’s (Nordic Stock Exchange) Small Cap list on 4 September 2000.
On 7 October 2008 the share became listed on OMX First North in connection with the bid from Thalamus Networks AB and the acquisition on 23 September 2008. The name of the company was simultaneously changed to Hifab Group AB.
The share capital amounts to SEK 3,034,259.6 distributed over 30,342,596 shares. The face value of the shares is SEK 0.10.
One A-share carries ten votes and one B-share carries 1 vote. A-shares can be converted into B-shares upon notification to the Board. The distribution of A-shares and B-shares appears from the following:
Class of shares No. Of shares % of equity % of votes
Class A 781,333 2.6 20.9
Classe B 29,561,263 97.4 78.7
OWNER STRUCTURE
On 30 December 2008 the five major shareholders held 54.7 per cent (50.8) of the equity and 52.4 per cent (66.4) of the voting power.
Foreign ownership was 1.10 per cent of the number of shares and 0.9 per cent of the voting power.
DIVIDEND
The Board proposes to the Annual General Meeting that no dividend be distributed for the financial year 2008.
SHARE CAPITAL DEVELOPMENT
The share capital of Hifab Group has since 1998 developed as follows
Year Transaction
Share capital
No. Of shares
1998 Directed share issue 704 000 7 040 000
1999 Directed share issue 719 000 7 190 000
1999 Exercise of warrants 779 000 7 790 000
2000 Directed share issue 799 146 7 991 456
2000 Directed share issue 927 146 9 271 456
2007 Directed share issue 1 011 946 10 119 456
2008 Directed share issue 3 034 259 30 342 596
MAJOR SHAREHOLDERS
Shareholders according to Euroclear Sweden AB (previouslyVPC)
2008-12-30
No. of A-shares
No. of B-shares
Share of equity, %
Share of votes, %
Traction Group 100 000 12 066 574 40,10 34,96
Niveau Holding AB 231 334 1 571 066 5,94 10,39
Advantech Invest AB 362 000 138 666 1,65 10,06
Hans Waldaeus Anläggning AB 0 1 400 172 4,61 3,75
Jan Boija Management AB 0 1 242 757 4,10 3,33
Pro Nos AB 0 1 126 767 3,71 3,01
Magnusson, Claes 87 999 5 935 0,31 2,37
Nordqvist & Co AB 0 436 100 1,44 1,17
Tidelius, Jan 0 395 598 1,30 1,06
Other shareholders 11 177 628 36,84 29,90
Total as at 2008-12-30 781 333 29 561 263 100% 100%
OWNER STRUCTURE Shareholders according to Euroclear Sweden AB
2008-12-30
No. Of shareholders
No. Of A-shares
No. Of B-
shares Holding % Votes %
1-500 1 400 0 320 554 1.06 0.86
501 - 1 000 547 0 511 985 1.69 1.37
1 001 - 2 000 289 0 508 770 1.68 1.36
2 001 - 5 000 288 0 1 064 347 3.51 2.85
5 001 - 10 000 114 0 912 612 3.01 2.44
10 001 - 20 000 55 0 822 548 2.71 2.20
20 001 - 50 000 42 0 1 356 867 4.47 3.63
50 001 -100 000 22 87 999 1 393 325 4.88 6.08
100 001 - 500 000 28 0 5 124 253 16.89 13.71
500 001 - 1 000 000 1 362 000 138 666 1.65 10.06
1 000 001 - 6 331 334 17 407 336 58.45 55.44
Total 2 792 781 333 29 561 263 100% 100%
Information about the acquisition of Hifab
On 23 May 2008 Thalamus made a public offering to the shareholders of HifabGruppen (”Hifab”) for an acquisition of all outstanding shares in Hifab. The offering was financed by a combination of cash payment and a new issue of shares. For each Hifab share SEK 19.50 in cash and seven shares of class B in Thalamus was offered.
Formally, Thalamus acquired Hifab in the new issue. In reality, however, Hifab acquired Thalamus, since the new issue entailed that the shareholders of Hifab gained controlling influence. This, in combination with other factors such as the size of Hifab proportionate to that of Thalamus, the change of company name, and the fact that management functions after the acquisition were staffed mainly by Hifab’s personnel, formed the conditions for reporting the event as a reverse acquisition. The previous owners of retained, directly and indirectly, a participating interest of 23.7 per cent after implementation of the new issue. Based on this, Hifab is considered as the acquirer in the reporting, having a controlling influence over the assets and liabilities of the new group.
In the reporting of a reverse acquisition a hypothetical purchase price is established. This means making an appraisal of the number of shares that Hifab would have to issue to achieve a level of ownership equal to that of the formal
acquisition. Further, the value per share is calculated based on the fair value of a Hifab share. Where the fair value of Hifab’s equity instrument is not evident, the total fair value of the total equity instrument issued by Thalamus, prior to the acquisition, shall form the basis of establishing the acquisition value of the purchase. When estimating the acquisition price the latter alternative was applied, since information on the fair value of Hifab shares as at 23 September was not available.
The date of acquisition is defined in IFRS 3 as the day on which the acquirer gains controlling influence, in this case on 23 September.On the date of acquisition Thalamus obtained 99.2 per cent of the shares in Hifab. The acquisition is reported on the basis of 100 per cent acceptance of the offer, i.e. an estimated redemption liability has been reported.
The market value of the Thalamus share on 23 September was SEK 4.60. Prior to the acquisition Thalamus owned 10 119 456 shares. The number of shares was 10 119 456 multiplied by the market value equals an acquisition price of SEK 46 549 thousand. Transaction costs in the amount of SEK 2 726 thousand have been added, which results in an acquisition price of totally SEK 49 275 thousand.
Thalamus, the legal parent company, reports the acquisition value of the shares in Hifab based on their market value as at the date of the acquisition. The share capital and share premium reserve increased.
A reverse acquisition is subject to a revaluation of the assets and liabilities of the formal parent company. The acquisition analysis established in conjunction with the acquisition appears from the following.
Reported equity of the Group and comparative figures
The share capital of the parent company (Thalamus) is reported in the consolidated balance sheet. Other consolidated equity consists of the equity of Hifab Group. This means that as a consequence of the reverse acquisition the
consolidated accounts of Thalamus Group is a continuation of the consolidated accounts of Hifab Group.
Profit/loss generated in Thalamus is eliminated, since it is considered acquired equity. See note 28, Acquisition analysis.
ADMINISTRATION REPORT
The Board of Directors and the Managing Director of Hifab Group AB (publ), (556394-1987),with
registered office in Stockholm, hereby present the annual report and the consolidated financial
statements for the financial year 2008-01-01—2008- 12-31.
BUSINESS IDEA
Hifab offers project management and advisory services on a global level for a sustainable development and optimisation of the resources of our customers.
OWNER STRUCTURE
Hifab Group AB is listed on Nasdaq OMX First North.
At the end of 2008 the number of shareholders in Hifab Group AB was 2 792 (2 428) according to Euroclear Sweden AB’s (formerly VPC) official share register. For more detailed information on the owner structure of Hifab Group AB, please refer to the section ”The Hifab Group share”, pp.7-8.
THE REVERSE ACQUISITION
Information on the reverse acquisition is presented in detail on p. 8. A detailed analysis of the acquisition is presented on p. 43.
Accounting of the results of operations consists of the results of Hifab Group for the entire financial year 2008 and the results of operations of Thalamus Networks for the fourth quarter, whereas the first three quarters of Thalamus are considered as acquired results.
However, the balance sheet presents the consolidated balance sheet of the new Group.
For historical data please view the annual accounts of Thalamus at www.hifab.se, presenting a
consolidated pro forma report 2007 for the Group at Prospectus for the offer to shareholders in Hifab.
ORGANISATION 2008
The parent company Hifab Group AB performs, apart from group management functions, common
services in the areas IT, economy, PR/info, personnel, marketing as well as certain additional support and service functions.
Hifab Group is comprised of the parent company, Hifab Group AB, and two operational sub-groups.
Project management is the overall general competence of the Group. The building and construction sector generates a major part of the Group’s turnover. International development projects all over the world also constitute an important sector of Hifab’s operations since more than 30 years. Hifab is one of the leading companies in Sweden on advisory services in and management of environmental projects.
Through the reverse acquisition Hifab gained
AB provides project management of building, construction and envirnmental projects in Sweden and abroad and has operational subsidiaries: Hifab A/S (Norway), Hifab SIA (Latvia) and Hifab Middle East Co Ltd (Saudi-Arabia). Hifab International AB is operationally responsible for assignments financed by international development banks or aid
organisations and Hifab Oy is its operational subsidiary in Finland.
Hifab Invest AB is the owner of P to P IT-Consulting, offering companies and organisations qualified IT services for the operation, design and administration of their IT environment.
OVERALL TARGETS
The overall financial target of the Group is to achieve a profit margin of 7 per cent on sales over a business cycle. Each of the companies and sections has its individual profit targets in combination with clear targets in marketing, environmental issues, quality and personnel development.
The term ”capital” includes equity as well as
borrowed capital. The aim of the Group is to manage the capital so as to safeguard the Group’s continued existence and freedom of action and to ensure that the owners also in future will obtain return on their investment. Equity and borrowed capital shall be allocated so as to obtain an appropriate balance in risk and return. Where required, the capital structure will be adjusted to changes in economic conditions and other environmental factors. In order to maintain and adapt the capital structure, the Group may distribute funds, increase equity by a new issue of shares or by capital contribution, or by a reduction or an increase in liabilities. The liabilities and equity of the Group are presented in the balance sheet. The report Change in Equity presents the various components of the equity, and a specification of the various components of the reserves appears from the note to the item.
THE MARKET
Hifab maintains a nationwide office network in Sweden and is market leader in project
management. The inflow of orders has increased gradually from the commencement of the year and the prospects for 2009 are very satisfactory.
The construction market has changed drastically during 2008 and the general assessment for the year 2009 is that volumes will decrease significantly, in particular in the housing and trade sectors. The market for advisory service in the environmental and energy sectors is expected to remain on the existing level and is less affected by economic fluctuations.
Internationally, we have noted a downturn in the willingness to invest in commercial projects, whereas
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CONSOLIDATED NET SALES AND EARNINGS
Net sales of the Group increased by SEK 67 million to SEK 436 (369) million, equalling a growth of 18%.
Operating profit increased substantially to SEK 18.9 (2.6) million.
Consolidated earnings after financial items and taxes for the year increased to SEK 17.5 (1.2) million.
Earnings per share was SEK 0.52 (-0.47).
CASH FLOW AND FINANCIAL POSITION
Liquid assets, including credits granted, amounted to SEK 63.0 (31.0) million as at 31 December 2008.
Interest-bearing liabilities amounted to SEK 48.3 (20.0) million, and at year-end interest-bearing net assets in the Group amounted to SEK 14.7 (11.0) million.
Equity/assets ratio amounted to 28 (38) per cent.
Consolidated equity, including minority interests, amounted to SEK 61.7 (53.6) million.
Cash flow from operating activities before change in working capital for the year amounted to SEK 17.8 (2.6 ) million. Cash flow from investing activities has been positive during the period and amounts to SEK 15.5 (-1.1) million net. Cash flow from financing activities was SEK 26.7 million.
PERSONNEL
At year-end the number of full-time employees in the Group over the year was 421, an increase by 102 compared with 2007. Full-time employees comprised 298 (221) men and 123 (98) women.
The number of employees with permanent tenure in Sweden at year-end was 301, as compared with 201 employees at year-end 2007.
Recruitment is an integral part of the activities of the line operations and department managers. There is strong focus on finding and attracting new
employees.
Our internal training programme provides candidates for management positions. Internal recruitment is a priority when appointing managers. Our goal to maintain an even distribution of men and women was achieved in 2008.
HIFAB’S CORE VALUES AND FOCUS AREAS The management has identified the following four focus areas to serve as basis for how we intend to manage and develop the company:
EMPLOYEE FELLOWSHIP signifies openness and candour in discussions and loyalty to decisions made.
Good LEADERSHIP includes inspiring employees’
commitment and ensuring acceptance of changes in
COMMERCIAL ATTITUDE signifies, for example, that we support efforts to gain our customers’ trust in our services and thereby become their first choice.
COOPERATION among individuals, units and business areas is achieved by sharing knowledge and experience with employees and colleagues, and by offering the total service portfolio of the company in our sales and marketing efforts.
During the year we have systematically conveyed our focus areas to all employees in development discussions. We have also set goals for our focus areas in the operational plans of each department of the Group.
The purpose is to set guidelines for attitudes towards each other and our customers and thereby create a clear corporate culture throughout the Hifab
organisation.
KEY RATIOS
Number of permanent employees in Sweden: 301
Management positions:
- internally recruited: 67%
- externally recruited: 33%
Equality
- women in management
positions 10,3%
(as percentage of total number of women)
- men in management positions 9,6%
(as percentage of total number of men) Average age: 42 years
Age distribution
The age distribution of Hifab’s employees is relatively even. The number of employees below the age of 30 has increased considerably since 2007, mainly due to the acquisition of P toP.
CONSULTANCY OPERATIONS
The improved effectiveness of the operations in 2008 enabled us to allocate more resources to recruitment and sales than in previous years. As a result, we have noted a gradual growth in the number of employees as well as in the inflow of orders. The addition of P to P, which was included in the
Thalamus acquisition, adds to our product offering as well as cost effectiveness.
HIFAB AB offers qualified project management services in the building, construction, environmental, energy and real estate sectors with an aim to optimise the profitability of our customers’
operations.
Hifab AB is represented in Sweden by 15 offices, and also in Norway, Latvia and Saudi Arabia.
The turnover of the operations was SEK 279 (262) millian, and earnings after allocation of common costs of the Group and financial items amounted to SEK 17.7 (8.4) million.
The number of full-time employees over the year was 223 (188).
HIFAB INTERNATIONAL AB offers qualified project management services in international development projects financed mainly by international development banks and aid
organisations. The company also offers services to companies in the area of Corporate Social
Responsibility (CSR).
Hifab Oy, Finland, is a wholly-owned subsidiary.
The sales of the organisation amounted to SEK 110 (88) million and the net profit after allocation of common costs of the Group and after financial items amounted to SEK 4.7 (-5.9) million. The major part of the sales for the year was invoiced abroad.
The number of employees in Sweden was 63 (60).
P TO P AB offers companies and organisations qualified IT services in the operation, design and administration of the IT environment. The core competence is within the Microsoft, Citrix and VMware environment.
The sale of the operations was SEK 70 (50) million and the recorded profit after allocation of common costs of the Group and after financial items was SEK 0.8 (1.8) million. Sales and profit for the period January-September is included in the acquisition and is not recorded in consolidated earnings.
Average number of employees over the year was 61 (71).
ENVIRONMENTHifab AB is environmentally certified according to ISO 14001. The certification entails active environmental efforts to improve travel
THE WORK OF THE BOARD OF DIRECTORS IN 2008
The Board of Directors of Hifab Group AB was formed in November 2008 and was composed of seven members. Anders Ekborg was elected
Chariman of the Board. Other members of the Board are Per-Ola Andersson, Bengt Stillström, Sophia Mattsson Linnala, Anders Eriksson and Hans Waldaeus. During the year Erik Hirsch, Unionen, acted as employee representative .
Thirteen meetings of the Board were held in 2008, including the board meeting following election, all of which were documented by minutes. The work of the Board has been performed in accordance with the established annual plan. The auditor of the company attends the Board meeting at which the year-end financial accounts are dealt with.
DIVIDEND
The proposed dividend for the financial year 2008 is SEK 0 per share.
RISKS
Risks and risk management
All business operations are exposed to a certain amount of risk. Hifab’s operations are exposed to a number of different risk factors, some of which are within the control of the company, whereas others are beyond our control. The following list of risk factors does not claim to be complete, nor are the risks ranked according to level of importance. The risks are classified as market risks, insurable risks, financial risks and currency risks.
Market risks
The operations of the Group are affected by the general economic development, which has great impact on the willingness and possibilities of private entities to make investments. A significant part of the sales is made to the public sector, which means that political decisions may have an impact on the business opportunities of the Group.
Operational risks
The operational risks of the Group are mainly related to customer and supplier relations and may, for example, concern the payment capacity of a customer or the reliability and quality of a supplier.
Reviews are currently made to assess the business risks involved in those relations.
Insurable risks
Hifab Group maintains customary insurance against property damage and liability risks.
Financial risks
The parent company coordinates liquidity planning and complies with the financial policy determined by the Board.
Financial risk factors
The operations the Group are exposed to various
Interest risk
Fluctuation in the value of financial instruments due to changes in market interests constitutes an interest risk. On the balance sheet date the interest-bearing net assets of the Group was SEK 14 063 thousand.
Credit risk
The risk that a party to a financial instrument
transaction is incapable of fulfilling its commitment. A majority of Hifab Group’s most important customers, whose assignments are as yet uncompleted, are large and sound entities. New customers are subject to credit information. The assessment is that no major concentration of credit risks exists,
geographically or related to a particular customer segment.
Liquidity risk
Prudent management of liquidity risks includes available, sufficient liquid funds, alternatively granted credits, to enable closing of market positions. At the present time the liquidity risk is assessed as
reasonably low.
Fair value
The reported value equals the fair value of all of the Group’s respective financial assets and liabilities.
The consolidated financial assets are all classified as accounts receivable and loans receivable, and financial liabilities are classified as financial liabilities valued at accrued cost.
The goal for the capital structure of the Group is to safeguard the capability of the Group to continue its operations in order to generate return on investment to the shareholders, benefit to other stakeholders, and to maintain an optimal capital structure to keep the cost of capital low. Distribution of dividend to the shareholders, redemption of shares, a new issue of shares or sale of assets are examples of measures that can be taken by the Group to adjust the capital structure.
Currency risk
Contracts with international customers are mainly prepared in EUR or USD currencies. According to the policy applied, costs shall be in the same
currency as income, to the extent feasible. Expected currency surplus is hedged on a current basis.
FUTURE DEVELOPMENT OF THE COMPANY
For the year 2009 we envisage a significantly decline in the economic situation, entailing an overall decline in demand, in Sweden as well as internationally.
In consideration of the continued good inflow of orders, there is a need to strengthen the resources of the Swedish units. Recruitment opportunities are improving and by applying a structured management we can expect to achieve the required staff increase.
Profitability in the various units of the organisation is a priority, and we are also noting a growth in volume in most of the units.
In order to mitigate the risks in a deteriorating market our operations will be carried on in various kinds of consortiums and joint ventures. Measures such as engaging sub-consultants and employment on a particular project basis will also enhance flexibility.
Supplementing our traditional project management services with environmental managers and expertise has proven very successful. The significance of environmental issues will not diminish in the years to come – on the contrary.
FINANCIAL POSITION
Below is a summary of the consolidated performance and financial position for the years 2004-2008 (TSEK = SEK thousand)
2008 2007 2006 2005 2004
Net sales 435 625 369 010 380 859 469 713 516 076
Operating income from consultancy operations, TSEK 18 862 2 562 -27 557 1 179 -2 001
Earnings after financial items, TSEK 17 432 1 161 -17 357 -264 -8 591
Profit for the year attributable to the shareholders of the parent company, TSEK
15 775 -1 351 -13 333 -1 354 -7 758
Balance sheet total, TSEK 215 242 138 659 156 479 171 643 182 862
Equity, attributable to the shareholders of the parent company, TSEK 60 199 52 865 54 085 47 247 46 832
Quick ratio, (%) 132 179 165 138 143
Equity/assets ratio, (%) 28 38 35 28 26
Return on capital employed, (%) 18 4 0 1 0
Return on equity after tax, (%) 26 0 0 0 0
Debt/equity ratio, (GGR) 2,5 1,6 1,9 2,6 2,8
Number of full-time employees/year 421 319 318 394 422
DATA PER SHARE BEFORE AND AFTER DILUTION 1)
2008 2007 2006 2005 2004 2003 2002 2001
Average number of shares 20 269 456 10 013 456 9 271 456
9 271 456
9 271 456
9 271 456
9 271 456
9 271 456
Number of shares at year-end 30 419 456 10 119 456 9 271 456
9 271 456
9 271 456
9 271 456
9 271 456
9 271 456 Earnings per share, attributable to owners
of the parent company, SEK
0,79 0,27 -1,52 0,45 1,23 -1,39 1,26 -1,91
Net cash flow per share, SEK 1,98 1,72 -0,60 0,32 -0,70 -0,76 1,31 -0,21
Equity per share, SEK 2,03 12,08 11,52 15,04 24,59 25,36 26,73 25,45
Dividend per share, SEK - 6,00 - 2,00 10,00 2,00 - -
Share price at year-end, SEK 3,12 7,30 10,30 24,60 22,50 20,00 18,00 18,00
The financial years 2004-2008 are reported or translated in accordance with IFRS. Earlier years have not been translated.
1) The results from operations in phase-out stages are disclosed for the years 2006 and 2007. Earlier years are not disclosed.
The year 2008 is not comparable, since the Group was restructured in a reverse acquisition.
Key ratio definitions are stated below.
PROPOSED ALLOCATION OF PROFIT
The following earnings are at the disposal of the Annual General Meeting, SEK:
Retained profit 139 998 981
Dividend 2008 -60 716 736
New issue 90 577 260
Group contributions paid or received after tax effects
1 282 372
Profit for the year 1 218 090
172 359 967
The Board and the Managing Director propose to the Annual General Meeting that no dividend be distributed for the financial year.
.
Dividend to shareholders (equivalent to SEK 0 SEK/share) 0
To be carried forward 172 359 967
KEY RATIO DEFINITIONS – FINANCIAL POSITION
Net turnover – Invoiced fees, disbursements and sub- consultants
Quick ratio – Current assets excluding client funds, as percentage of current liabilities excluding client funds Equity/assets ratio – Equity as percentage of the balance sheet total excluding client funds
Return on capital employed – Profit after financial items plus financial expenses, as percentage of the balance sheet total, excluding client funds and non interest-bearing liabilities
Return on equity after tax – Profit after tax as percentage of equityl
Debt/equity ratio – Current liabilities excluding client funds plus long-term liabilities, as percentage of equity.
Number of full-time employees/year – Average number of employees during the year translated to full-time employees
Equity per share – Equity in relation to number of shares at the end of the period
Net cash flow per share – Cash flow from operating activities (before investments) and before payment of tax, in relation to average number of shares
Earnings per share – Profit for the year in relation to average number of shares
INCOME STATEMENT The Group
SEK thousand Note 2008 2007
OPERATING INCOME
Net sales 1,24 435 625 369 010
Other operating income 5 305 4 381
TOTAL 440 930 373 391
OPERATING EXPENSES
Other external costs 2, 27 -200 538 -174 666
Salaries and personnel costs 3 -218 706 -192 965
Depreciation 11, 12 -2 824 -3 147
Other operating expenses - -51
TOTAL -422 068 -370 829
OPERATING INCOME FROM CONSULTANCY OPERATIONS 18 862 2 562
RESULT FROM FINANCIAL INVESTMENTS
Result from participations in group companies 4 - 71
Result from participations in associated companies -1 143 43
Result from securities held as non-current assets 520 16
Interest income and similar income items 5 1 741 387
Interest expenses and similar income items 6 -2 548 -1 918
TOTAL FINANCIAL INCOME AND EXPENSES -1 430 -1 401
RESULT AFTER FINANCIAL ITEMS 17 432 1 161
Tax for the year 7 -791 -2 149
NET INCOME FOR THE YEAR 16 641 -988
Income for the year attributed to shareholders of the parent
company
18 15 775 -1 351
Minority shareholders 866 363
16 641 -988
Earnings per share based on results attributable to shareholders of the parent company over the year (SEK per share)
0,52 -0,47
Earnings per share based on results attributable to minority shareholders of the parent company over the year (SEK per share)
0,03 0,12
KEY RATIOS PER SHARE
Number of shares at year-end 30 419 456 -
Equity, SEK 2,03 -
Dividend, SEK - -
Portion of dividend, SEK - -
BALANCE SHEET The Group
SEK thousand Note 2008-12-31 2007-12-31
ASSETS
TANGIBLE NON-CURRENT ASSETS
Equipment 10, 11 5 109 3 554
Capitalised refurbishment expenses 12 207 965
Total tangible non-current assets 5 316 4 519
FINANCIAL NON-CURRENT ASSETS
Participations in associated companies 14 4 1 040
Other long-term security holdings 8, 15 920 941
Deferred tax asset 28 009 11 690
Total financial assets 28 933 13 671
TOTAL NON-CURRENT ASSETS 34 249 18 190
CURRENT ASSETS
Work in progress, not invoiced 16 10 658 5 661
Advance payments to suppliers 1 125 1 004
Total work in progress 11 783 6 665
CURRENT RECEIVABLES
Trade receivables 8, 9 104 787 88 300
Tax receivables 5 318 3 790
Other receivables 8 6 803 1 499
Prepaid expenses and accrued income 17 9 320 9 184
Total current receivables 126 228 102 773
Cash and bank balances 8 42 982 11 031
TOTAL CURRENT ASSETS 180 993 120 469
TOTAL ASSETS 215 242 138 659
BALANCE SHEET, cont. The Group
SEK thousand Note 2008-12-31 2007-12-31
EQUITY AND LIABILITIES
EQUITY
Share capital 19 3 034 29 000
Other capital contribution 1 109 4 722
Translation reserve 2 868 1 308
Retained profits including profit for the year 53 188 17 835
Total equity attributable to shareholders of the parent company
60 199 52 865
Minority share of equity 1 506 672
Total equity 61 705 53 537
LONG-TERM LIABILITIES
Liabilities to credit institutions 8, 20 15 825 17 600
Deferred tax liability 801 52
Total long-term liabilities 16 626 17 652
CURRENT LIABILITIES
Liabilities to credit institutions 8, 21, 24 32 400 2 400
Advance payments from customers 8,21 10 554 106
Trade liabilities 8, 21 38 935 25 162
Other current liabilities 8, 21 14 604 8 557
Accrued expenses and deferred income 22 40 418 31 245
Total current liabilities 136 911 67 470
TOTAL EQUITY AND LIABILITIES 215 242 138 659
PLEDGED ASSETS AND CONTINGENT LIABILITIES 23 51 310 49 521
CASH FLOW STATEMENT The Group
SEK thousand Note 2008 2007
Operating activities:
Income before financial items 18 862 2 562
Non-cash items 26 114 2 511
Interest received/interest paid and result from
financial transactions -1 430 -1 401
Income tax paid 233 -1 974
Dividend from associated companies - 861
Total cash flow from operating activities before change in working capital
17 779 2 559
Cash flow from change in working capital:
Change in work in progress -4 670 17 510
Change in operating receivables 3 414 -13 013
Change in operating liabilities -27 661 -15 462
Total change in working capital -28 917 -10 965
CASH FLOW FROM OPERATING ACTIVITIES -11 138 -8 406
Investing activities:
Sale of group companies - -
Acquisition of subsidiaries 26 16 666 -
Acquisition of tangible non-current assets -2 156 -1 419
Acquisition of intangible non-current assets - -
Acquisition of financial non-current assets 966 19
Sale of non-current assets - 331
CASH FLOW FROM INVESTING ACTIVITIES 15 476 -1 069
Financing activities:
Net change in overdraft facility - -2 951
Reduction of equity, cash quota of legal acquisition
-56 550 -
Cash quota of legal acquisition, not yet paid 426 -
Cash quota of legal acquisition, paid 56 124 -
Amortisation of loan -3 301 -
Current acquisition loan 30 000 -
CASH FLOW FROM FINANCING ACTIVITIES 26 699 -2 951
CASH FLOW FOR THE YEAR 31 037 -12 426
Cash and cash equivalents at beginning of year 11 031 23 260 Exchange rate differences in cash and cash
equivalents
914 197
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
42 982 11 031
