Interim report January - June 2009
January 1 – June 30, 2009• Group revenues amounted to SEK 670 M (584). This represents an increase of 14.7% compared with the same period in 2008. The increase is mainly due to acquired operations.
• Operating profit in the Group amounted to SEK 72 M (221). Profit after net financial items amounted to SEK 261 M (88).
• Profit for the period amounted to SEK 282 M (91). Earnings per share amounted to SEK 1.78 (0.64) before and after dilution.
• The ICA Group’s revenues increased by 5.7%. Operating profit amounted to SEK 848 M (919).
April 1– June 30, 2009
• Group revenues amounted to SEK 359 M (301).
• Operating profit in the Group amounted to SEK 104 M (191). Profit after net financial items amounted to SEK 296 M (120).
• Profit for the period amounted to SEK 300 M (118). Earnings per share amounted to SEK 1.88 (0.79). • The ICA Group’s revenues increased by 5.6%. Operating profit amounted to SEK 582 M (660). • Hakon Invests owns 68.5% in Hemtex as of August 18, 2009, following a completed mandatory offer. • Cervera acquired most of DUKA’s Swedish stores as well as NK Glas, Porslin & Kök in June.
Key figures
April - June January - June Full year
SEK M 2009 2008 2009 2008 2008
Group
Revenues 359 301 670 584 1,184
Operating profit 104 191 72 221 612
Profit after financial items 296 120 261 88 163
Profit for the period 300 118 282 91 170
Earnings per common share, SEK 1.88 0.79 1.78 0.64 1.17
Earnings per C share, SEK 1.88 0.79 1.78 0.64 1.17
Equity/assets ratio, % 89.3 94.7 94.9
Return on capital employed, % 3.5 6.8 1.8
Return on equity, % 3.9 7.1 1.9
Parent Company
Profit for the period 530 354 521 281 -57
Hakon Invest, which is listed on OMX Nordic Exchange Stockholm, conducts active and long-term investment operations in retail-oriented companies in the Nordic and Baltic regions. Hakon Invest owns 40% of ICA AB, one of the Nordic region’s leading food retail companies. Hakon Invest also has holdings in Forma Publishing Group, Kjell & Company, Hemma, Cervera, inkClub and Hemtex. Further information about Hakon Invest is available at www.hakoninvest.se
President’s comments
We are continuing our long-term efforts with the plans we have in our holdings and feel stability and confidence in the work now under way. The generally gloomy atmosphere that prevailed last winter was gradually exchanged for more positive tones during the spring. This does not mean, however, that we lack challenges in several of our businesses.
Our largest holding, ICA, has shown strength in many areas so far this year. Particularly ICA Sweden which saw almost record development. At the same time, we see signs that ICA Norway is heading in the right direction, and in the Baltic countries ICA has skillfully fended off the prevailing difficult economic conditions.
The strong sales trend for ICA Sweden continued, partly helped by the successful price campaigns started in April this year. Lower costs for logistics and savings within administration also contributed to the improved earnings for the second quarter.
As far as development for ICA Norway is concerned I can allow myself to strike a slightly more positive note than previously, although still tempered with caution. The some 50 Rimi stores that have so far been reprofiled to the new concept have
experienced a boost in sales. Sales also developed positively in the Maxi stores. ICA Norway’s operating profit was still charged, however, by costs for the action program and intense price competition during the second quarter. Towards year-end we should see improvements in the Norwegian operations and for the full-year 2009 we still expect an improved operating profit for ICA Norway compared with the previous year.
In the Baltic countries the economic situation remains tough and during the second quarter sales in Rimi Baltic’s stores fell 10.2% in local currency. The focus has therefore been on rapid adjustment of costs through extensive staff cutbacks and salary reductions
rate. Despite intense competition for customers, Rimi Baltic captured market shares during the period December 2008 – May 2009 according to the analysis company Nielsen.
Our offer for Hemtex expired in July and we have thus acquired a significant influence in the company. Our assessment is that it is important for Hemtex to have a clear principal owner that is persistent and can implement changes. For Hemtex this involves acquiring a clearer customer offering.
Cervera has seen a real recovery and sales in comparable stores showed a positive development in recent months. The acquisition of the Swedish DUKA stores and NK Glas, Porslin & Kök was completed in June. During the autumn all stores will be reprofiled to Cervera’s new concept.
Hemma has undergone a minor baptism of fire since last year and through reduced costs and better gross margins managed to improve its earnings
significantly. I regard this as a very encouraging development.
Kjell & Company continues to dazzle. Despite a less favorable business climate both sales and profitability are rising, while the company’s expansion continues. InkClub continued to develop very well. In addition to ongoing organic growth the company is also looking at various acquisition opportunities in Europe and I hope this will lead to one or more deals over the next year.
Forma Publishing Group was affected by the sharp decline in the advertising market. A number of measures have been adopted in response to the less favorable market conditions which were initially charged against earnings.
Claes-Göran Sylvén President
Significant events in January –
June 2009
Mandatory offer for Hemtex
On April 28, 2009, Hakon Invest announced a cash offer to Hemtex shareholders, in accordance with the rules on mandatory offers. The acceptance period for the offer of SEK 27 per share expired on July 6, 2009. Hakon Invest subsequently purchased a small number of shares via the stock exchange. On August 18 Hakon Invest’s holding in Hemtex amounted to 28,141,798 shares, corresponding to 68.5% of the shares and votes in the company. Hemtex new issue
Hemtex carried out a SEK 164 M new issue in May 2009. Hakon Invest subscribed for 3,130,406 new shares in Hemtex, corresponding to 24.6% of the shares and votes, for SEK 14 per share. Cervera buys DUKA stores in Sweden
Cervera, which has been a subsidiary in the Hakon Invest Group since January 2009, acquired 27 DUKA stores in Sweden as well as NK Glas, Porslin & Kök. The deal was completed on June 18, 2009. After this acquisition, Cervera has 77 in Sweden including 18 franchise stores. By the end of September 2009, it is expected that all the acquired DUKA stores will be reprofiled to Cervera’s new concept.
Hakon Invest increases stake in Cervera In January 2009 Hakon Invest acquired an additional 33% in the portfolio company Cervera. This increased the holding from 48% to 81% of the capital and votes in Cervera. Hakon Invest paid SEK 33 M in cash for the additional shares. As a result of the increased holding, Cervera has been reported as a subsidiary in the Hakon Invest Group since January 2009.
ICA appeals against Tax Agency decision In January 2009, the Swedish Tax Agency decided not to grant ICA respite for the payment of
Court’s decision in December 2008 not to approve interest deductions of SEK 1,795 M for the period 2001-2003. ICA has appealed against this decision but paid in the amount in February 2009.
ICA sells real estate
In May 2009, ICA sold the Norwegian property Kiellands Hus. The sale provided ICA with a capital gain of NOK 40 M in the second quarter.
Significant events after the
end of the period
In order to finance the acquisition of the DUKA stores and the launch of Cervera’s new store concept in autumn 2009, Cervera will carry out a SEK 120 M new issue in August. The new issue is guaranteed by Hakon Invest.
Group
Revenues and profit
January 1– June 30, 2009
Consolidated revenues amounted to SEK 670 M (584), of which revenues from Forma comprised SEK 410 M (431), Hemma’s revenues SEK 117 M (153) and Cervera’s revenues SEK 143 M (-). Operating profit in the Hakon Invest Group amounted to SEK 72 M (221). The decline was mainly due to a lower share of profits of ICA AB of SEK -120 M as well as restructuring costs in Forma of SEK -26 M. The increased holding in Cervera since the start of January 2009 also contributed to the fall in earnings. Hemma, InkClub and Kjell & Company report higher earnings compared with the previous year.
Net financial items amounted to SEK 189 M (-133), of which change in value of shares in Hemtex amounted to SEK 145 M and results from investment management to SEK 54 M. During the period January – June the Six Portfolio Return Index increased
Profit after net financial items amounted to SEK 261 M (88). Positive income tax of SEK 21 M (3) was reported for the period.
Net financial items amounted to SEK 192 M (-71), of which change in value of shares in Hemtex amounted to SEK 140 M and results from investment management to SEK 57 M. During the period April – June the Six Portfolio Return Index rose 22%. Profit for the period was SEK 282 M (91). Earnings
per share amounted to SEK 1.78 (0.64).
Profit after net financial items amounted to
SEK 296 M (120). Positive income tax of SEK 4 M (-2) was reported for the period.
April 1– June 30, 2009
Consolidated revenues amounted to SEK 359 M (301), of which revenues from Forma comprised SEK 216 M (223), from Hemma SEK 58 M (78) and from Cervera SEK 85 M (-).
Profit for the period was SEK 300 M (118). Earnings per share amounted to SEK 1.88 (0.79).
Operating profit in the Hakon Invest Group amounted to SEK 104 M (191).
Development in the holdings
Key figures January – June 2009
Company ICA Forma Kjell & Co Hemma Cervera InkClub
Revenues 2009 46,596 410 237 117 143 225 2008 44,064 431 186 153 142 197 Operating profit/loss 2009 848 -46 1 -4 -25 26 2008 919 -7 -6 -27 -20 21
Cash flow from operating activities 948 -12 -10 -28 -45 15
Cash flow from investing activities -1,201 -7 -3 5 -59 -1
Assets 40,111 576 151 307 363 217
Equity 12,798 84 46 139 51 182
Interest-bearing net debt 3,117 1) 242 16 82 133 -145
Participating interest, % 40% 2) 100% 50% 3) 89% 81% 50% 3)
Hakon Invest’s investment 200 102 151 120 431
Acquisition year 1999 2006 2006 2006 2007
1) Interest-bearing net debt for ICA is exclusive of ICA Bank.
2) Hakon Invest and Royal Ahold have joint control of ICA AB through an agreement requiring unanimity for all decisions made by general meetings and the Board of Directors.
3) Hakon Invest and the other major owners have joint control of the company through an agreement.
ICA
During the period January – June the ICA Group’s revenues increased by 5.7% to SEK 46,596 M (44,064). At constant exchange rates, revenues increased by 2.8%.
The ICA Group’s operating profit decreased to SEK 848 M (919) during the first half of the year. Operating profit includes capital gains from property sales of SEK 71 M (171) and write-downs of non-current assets of SEK 58 M (0).
ICA Sweden’s operating profit rose to SEK 945 M (655). Earnings improved due to increased sales, lower costs for logistics and administration and an improved result for non-foods. At the same time, costs of goods, partly due to the weaker Swedish krona, had a negative impact during the first half.
ICA Norway’s operating loss worsened to SEK 515 M (-302). The decline in earnings was mainly due to costs for more owned stores and costs connected with the ongoing change program. Costs relate among other things to conversion of Rimi stores to a new concept and non-recurring costs for two Maxi stores which will be closed during the year.
Rimi Baltic’s operating loss was SEK 103 M (+72). Operating result includes write-downs of non-current assets by SEK 58 M (0). The decline in earnings is mainly due to lower sales due to falling consumption in the Baltic countries as well as higher fixed costs due to a larger number of stores than in the same period a year ago.
ICA Bank’s operating profit rose to SEK 75 M (46) during the first half of the year due to improved net interest.
ICA Real Estate’s operating profit amounted to SEK 518 M (589). This result includes capital gains from property sales of SEK 61 M (171). The improved operating profit excluding capital gains is due to increased rental revenue and lower personnel costs. ICA Group Functions reports an operating loss of SEK 72 M (-141). The operating result includes a capital gain of SEK 10 M (0) from the sale of
properties. The comparative figure for 2008 includes a SEK 35 M bonus that was paid to employees. The improved earnings are also due to implemented cost savings.
During the second quarter the ICA Group’s revenues increased by 5.6% to SEK 24,037 M (22,765). At constant exchange rates, revenues increased by 2.8%. The ICA Group’s operating profit decreased to SEK 582 M (660) during the quarter. Operating profit includes capital gains from property sales of SEK 56 M (137) and write-downs of non-current assets of SEK 58 M (0).
ICA Sweden’s operating profit rose to SEK 567 M (358). Earnings improved due to increased sales, lower costs for logistics and administration and an improved result for non-foods. At the same time, costs of goods, partly due to the weaker Swedish krona, had a negative impact during the quarter
ICA Norway’s operating loss amounted to SEK 215 M (-86). The decline in earnings was mainly due to costs for more owned stores and costs connected with the ongoing change program. Costs relate among other things to conversion of Rimi stores to a new concept and non-recurring costs for two Maxi stores which will be closed during the year.
Rimi Baltic’s operating loss amounted to SEK 60 M (+66). Operating result includes write-downs of non-current assets of SEK 58 M (0). The decline in earnings is due to lower sales due to falling consumption in the
Baltic countries as well as higher costs due to a larger number of stores than in the previous year.
ICA Bank’s operating profit increased to SEK 37 M (25), mainly new to improved net interest. ICA Real Estate’s operating profit amounted to SEK 284 M (353). This result includes capital gains from property sales of SEK 56 M (137). The improved operating profit excluding capital gains is due to increased rental revenue and lower personnel costs. ICA Group Functions reports an operating loss of SEK 31 M (-56). The improvement was due to implemented cost savings.
Forma
During the first half Forma’s revenues fell to SEK 410 M (431). The decline is mainly due to lower advertising revenues within Magazine and discontinued operations within Books.
Operating loss amounted to SEK 46 M (-7). Operating result was negatively affected by restructuring costs of SEK 26 M, lower advertising revenues and the launch of the ”Kattis” magazine and television program..
During the second quarter Forma’s revenues amounted to SEK 216 M (223). Operating loss in April – June amounted to SEK 2 M (+11).
Kjell & Company
During the first half Kjell & Company’s revenues amounted to SEK 237 M (186), corresponding to a sales increase of 27%. Sales in comparable stores increased by 9%. Two new stores were opened during the period.
Operating profit amounted to SEK 1 M (-6). The improved earnings are based on increased sales in comparable stores, a strong gross margin and more effective store operation.
During the second quarter Kjell & Company’s revenues amounted to SEK 110 M (90), corresponding to a sales increase of 22%. Operating loss in April - June amounted to SEK 6 M (-6). Two stores were opened in the second quarter, one in Strömstad and one in Luleå. Kjell & Company thus has 40 stores throughout Sweden.
Hemma
During the first half Hemma’s revenues amounted to SEK 117 M (153).
Operating loss amounted to SEK 4 M (-27). The improved earnings were due to a higher gross margin, a sharp reduction in central costs and more efficient store operation.
During the second quarter Hemma’s revenues amounted to SEK 58 M (78) and operating loss was SEK 1 M (-21).
Cervera
During the first half Cervera’s revenues amounted to SEK 143 M (142). Sales in comparable stores decreased by 4%.
Operating loss amounted to SEK 25 M (-20). During the period Cervera acquired NK Glas, Porslin & Kök as well as 27 DUKA stores. Four new Cervera stores were also opened during the period.
During the second quarter Cervera’s revenues amounted to SEK 85 M (72). Sales in comparable stores rose 4%. Operating loss amounted to SEK 9 M (-9). Cervera opened two new stores during the quarter, one in Norrköping and one in Falkenberg. Costs for the new stores were charged against earnings for the period.
inkClub
During the first half inkClub’s revenues amounted to SEK 225 M (197) and operating profit was SEK 26 M (21). Growth of 14% mainly comprised ink
products but increased sales of vacuum cleaner bags and the newly launched battery product range also contributed.
In the second quarter inkClub’s revenues amounted to SEK 103 M (89) and operating profit was SEK 11 M (12).
Hemtex
Hemtex’s net sales for the fiscal year May 2008 – April 2009 amounted to SEK 1,391 M (1,608), a decrease of 13.5% compared with the previous year. Operating loss worsened to SEK 33 M (+141).
Financial position
At June 30, 2009, the Group’s cash and cash equivalents and the current value of short-term investments amounted to SEK 1,048 M compared with SEK 1,495 M at December 31, 2008. At June 30 financial investments were allocated as follows: 28% equities, 24% fixed-income securities, 34% hedge funds and 14% cash and cash equivalents.
The Hakon Invest Group’s non-current financial liabilities amounted to SEK 155 M at June 30 compared with SEK 39 M at December 31, 2008. The equity/assets ratio at the end of the period was 89.3% compared with 94.9% at December 31, 2008.
Cash flow
Cash flow from operating activities amounted to SEK 295 M (428). Dividend received from ICA AB amounted to SEK 347 M (434).
Cash flow from investing activities amounted to SEK 52 M (58). Changes in short-term investments are included with SEK 471 M (383), while acquisition of shares in Cervera, Hemtex and Duka
as well as investments and sales of non-current assets are included with SEK -419 M (-325).
Cash and cash equivalents decreased to SEK 143 M at June 30, 2009, compared with SEK 172 M at December 31, 2008.
Risks and uncertainties
Hakon Invest works with a number of basic principles for managing risks in different parts of its operations. This is regulated and managed via a formal work plan for the President and the Board. All investments are inherently uncertain and ahead of each investment Hakon Invest carries out a careful evaluation designed to identify and if possible reduce the risks that may be associated with the investment. The most comprehensive risk within Hakon Invests is the financial development of the individual portfolio companies, where a worst case scenario is the loss of our entire investment in a company. The holding in ICA AB constitutes a significant part of the company’s assets and is therefore of particular importance for an assessment of Hakon Invest. Via ICA, Hakon Invest also has significant exposure to the Nordic and Baltic food retail sector. A less favorable business climate or political decisions, such as raised taxes, are factors that could have a negative impact on ICA’s sales and earnings.
Hakon Invest’s financial policy stipulates how financial risks are to be managed and limited. The policy also provides a framework for management of financial assets, which is conducted both internally and externally. More information about Hakon Invest’s risk management is provided on pages 18 – 20 and 70 – 71of the 2008 Annual Report. No significant changes have occurred since the annual report was published.
Parent Company
Revenues and profit
January 1– June 30, 2009
The Parent Company’s revenues amounted to SEK 0 M (0) during the period.
Operating loss was SEK 26 M (-26).
Net financial items amounted to SEK 547 M (307). This included a dividend from ICA AB of SEK 347 M. Reversed impairment of shares in Hemtex during the period had a positive impact of SEK 145 M, while the return on investment management amounted to SEK 54 M.
Profit after net financial items amounted to SEK 521 M (281). Income tax for the six-month period was SEK 0 M (0).
Profit for the period was SEK 521 M (281).
April 1– June 30, 2009
The Parent Company’s revenues amounted to SEK 0 M (0) in the second quarter of 2009.
Operating loss amounted to SEK 14 M (-13). Net financial items amounted to SEK 544 M (367). This includes a dividend from ICA AB of SEK 347 M. Reversed impairment of shares in Hemtex during the period had a positive impact of SEK 140 M, while the return on investment management amounted to SEK 57 M.
Profit after net financial items amounted to SEK 530 M (354). Income tax of SEK 0 M (0) is reported for the period.
Financial position
The Parent Company’s cash and cash equivalents and the current value of short-term investments at June 30, 2009, amounted to SEK 962 M compared with SEK 1,465 M at December 31, 2008.
The Parent Company has no non-current financial liabilities, SEK 0 M (0).
The equity/assets ratio at the end of the period was 98.9% compared with 98.9% at December 31, 2008.
Share information
Share capital in Hakon Invest amounts to SEK 402,293,590 distributed among 160,917,436 shares, each with a quota value of SEK 2.50. Hakon Invest’s earnings per share are calculated based on profit after tax and an average number of shares outstanding during the period January– June of 160,689,404.
At the end of the period the number of C shares amounted to 82,067,892 and the number of outstanding common shares was 78,584,624. Common shares and C shares carry the same voting rights. While common shares have an unlimited dividend entitlement, C shares do not carry entitlement to cash profit distribution, to the extent the Annual General Meeting decides on cash dividends. Such entitlement may include C shares in 2016 at the earliest. C shares carry entitlement to profit distribution through distribution in kind. Hakon Invest’s holding of treasury shares amounts to 264,920 common shares, of which 128,200 shares were repurchased in March 2007, 97,100 in March 2008 and 39,620 in June 2009.
.
Related-party transactions
No significant transactions between Hakon Invest and related parties took place during the period.
Other information
At the 2009 Annual General Meeting Hakon Invest’s Board of Directors was authorized to repurchase shares to cover allocations in the share matching and share-based performance program. During the period June 11– June 24, 2009, 39,620 common shares in Hakon Invest were repurchased over Nasdaq OMX Stockholm at an average price of SEK 76.60 per share. The Board has thus exercised this mandate and repurchases, in accordance with authorization from the 2009 Annual General Meeting, have been completed.
In the share-based incentive program decided by the Annual General Meeting, Group Management and all Hakon Invest employees participate with a total of 10,060 saving shares, of which the President participates with 2,000 saving shares and other senior executives with 1,500 saving shares each. In the event of maximum allocation, a total of 39,620 common shares in Hakon Invest will be able to be acquired by the participants for an exercise price of SEK 10.
Hakon Invest’s holding of treasury shares after completed repurchases amounted to 264,920 common shares.
Key figures for Hakon Invest
April – June January - June Full year
SEK M 2009 2008 2009 2008 2008
Gross margin, % 38.8 32.8 35.7 34.4 35.7
Operating margin, % 28.9 63.4 10.6 37.8 51.7
Net margin, % 83.5 39.1 42.1 15.6 14.4
Return on equity, % 3.9 7.1 1.9
Return on capital employed, % 3.5 6.8 1.8
Equity/assets ratio, % 89.3 94.7 94.9
Share
Earnings per common share, SEK 1.88 0.79 1.78 0.64 1.17
Earnings per C share, SEK 1.88 0.79 1.78 0.64 1.17
Share price at the end of the period, SEK 72.00 103.00 89.25
Dividend per share, SEK 5.00
Dividend, SEK M 393
Dividend ratio, % n/a
Equity per share, SEK 60.47 58.54 59.21
Cash flow per share, SEK -0.18 0.04 -0.69
Number of common shares 78,584,624 78,624,244, 78,624,244,
Number of C shares 82,067,892 82,067,892, 82,067,892,
Number of shares at the end of the period 160,652,516 160,692,136, 160,692,136,
Average number of shares 1) 160,689,404 160,738,248, 160,713,190,
1)Before and after dilution
Definitions
Capital employed Balance sheet total less non-interest bearing liabilities and provisions.
Cash flow per share Cash flow for the period divided by the total number of shares outstanding.
Dividend payout ratio Dividend as a percentage of the Parent Company’s profit for the period.
Earnings per common share Profit for the period, excluding minority interests, divided by the average total number of shares outstanding.
Earnings per C share Same definition as in the case of earnings per common share, since common shares and C shares provide entitlement to equal participation in earnings and shareholders’ equity. The C share does not, however, give entitlement to a cash dividend, as opposed to the common share.
Equity/assets ratio Equity including minority interests as a percentage of the balance sheet total.
Equity per share Equity excluding minority interests divided by the total number of shares outstanding. Gross margin Gross profit as a percentage of revenues. Net margin Profit for the period as a percentage of revenues.
Operating margin Operating profit as a percentage of revenues.
Return on capital employed Profit after financial items plus financial expenses, calculated on a rolling 12-month period as a percentage of average capital employed during the same period.
Return on equity Profit for the period, excluding minority interests, calculated on the basis of a rolling 12-month period as a percentage of average equity excluding minority interests during the same period.
Financial statements
Condensed consolidated statement of comprehensive income
April - June January - June Full-year
SEK M Note 2009 2008 2009 2008 2008
Revenues 2 359 301 670 584 1 184
Cost of goods sold -219 -202 -430 -383 -761
Gross profit 140 99 240 201 423
Other operating income 13 4 23 8 17
Selling expenses -122 -67 -238 -159 -326
Administrative expenses -56 -59 -125 -110 -206
Other operating expense 0 0 0 0 0
Share of profit of companies accounted for
using the equity method 3 129 214 172 281 704
Operating profit 2 104 191 72 221 612
Net financial items 192 -71 189 -133 -449
Profit after net financial items 2 296 120 261 88 163
Tax 4 -2 21 3 7
Profit for the period 2 300 118 282 91 170
Other comprehensive income
Change in revaluation reserve, net after tax -69 57 194 -7 13
Change in fair value reserve, net after tax 155 0 157 0 20
Step acquisition, net after tax -19 0 -19 0 0
Change in hedge reserve, net after tax -15 0 -23 0 0
Other comprehensive income for the period 52 57 309 -7 33
Total comprehensive income 352 175 591 84 203
Profit for the period attributable to
Equity holders of the parent 302 127 287 102 187
Minority -2 -9 -5 -11 -17
Total comprehensive income attributable to
Equity holders of the parent 354 184 596 95 220
Minority -2 -9 -5 -11 -17
Earnings per share, before and after dilution (SEK)
Common share 1.88 0.79 1.78 0.64 1.17
Condensed consolidated statement of financial position
Jun 30, Dec 31, SEK M Note 2009 2008 2008 ASSETS Non-current assets Goodwill 841 288 304Other intangible assets 790 118 129
Interest in companies accounted for using the equity method 3 7,218 6,845 7,306
Other non-current assets 232 512 329
Total non-current assets 9,081 7,763 8,068
Current assets
Short-term investments 905 1,449 1,323
Cash and cash equivalents 143 287 172
Other current assets 968 427 458
Total current assets 2,016 2,163 1,953
TOTAL ASSETS 2 11,097 9,926 10,021
EQUITY AND LIABILITIES
Equity 9,915 9,396 9,515
Non-current liabilities 313 221 191
Current liabilities 869 309 315
TOTAL EQUITY AND LIABILITIES 11,097 9,926 10,021
Condensed consolidated cash flow statement
January - June Full-year
SEK M 2009 2008 2008
Cash flow from operating activities 295 428 468
Cash flow from investing activities 52 58 -62
Cash flow from financing activities -376 -480 -517
Cash flow for the period -29 6 -111
Cash and cash equivalents at January 1 172 281 281
Exchange differences in cash and cash equivalents 0 0 2
Condensed consolidated statement of changes in equity
Changes in condensed consolidated equity June 30, 2009
SEK M Attributable to equity holders of the parent Attributable to minority Total
Opening equity January 1, 2009 9,515 0 9,515
Total comprehensive income 596 -5 591
Purchase of treasury shares -3 - -3
Acquisitions - 205 205
Dividend -393 - -393
Closing equity 9,715 200 9,915
Changes in condensed consolidated equity June 30, 2008
SEK M Attributable to equity holders of the parent Attributable to minority Total
Opening equity January 1, 2008 9,796 - 9,796
Total comprehensive income 95 -11 84
Purchase of treasury shares -13 - -13
Payment for call options 1 - 1
Dividend -472 - -472
Closing equity 9,407 -11 9,396
Condensed Parent Company income statement
April - June January - June Full-year
SEK M 2009 2008 2009 2008 2008 Revenues 0 0 0 0 0 Administrative expenses -14 -13 -26 -26 -52 Operating loss -14 -13 -26 -26 -52
Result from financial investments 544 367 547 307 1
Profit after financial items 530 354 521 281 -51
Tax 0 0 0 0 -6
Condensed Parent Company balance sheet
Jun 30, Dec 31,
SEK M 2009 2008 2008
ASSETS
Non-current assets
Interests in group companies 833 206 206
Interests in joint ventures 2,960 2,960 2,960
Other non-current assets 1,130 1,365 1,213
Total non-current assets 4,923 4,531 4,379
Current assets
Short-term investments 905 1,449 1,323
Cash and cash equivalents 57 246 142
Other current assets 178 26 94
Total current assets 1,140 1,721 1,559
TOTAL ASSETS 6,063 6,252 5,938
EQUITY AND LIABILITIES
Equity 5,997 6,191 5,872
Non-current liabilities 43 43 43
Current liabilities 23 18 23
Note 1
Accounting principles
This interim report is prepared according to the rules for interim reporting in the Swedish Annual Accounts Act and IAS 34 Interim Financial Reporting. The accounting principles and calculation methods applied are the same as those used in the most recent annual accounts and consolidated financial statements.
New accounting principles 2009
Revised IAS 1 Presentation of Financial Statements is applied with effect from January 1, 2009. These amendments have affected consolidated accounts retroactively from December 31, 2007. The amendments mean, among other things, that income and expenses previously recognized directly in equity are now recognized in the statement of
comprehensive income as well as a new structure for consolidated changes in equity. New and revised
IFRS as well as interpretations issued by IFRIC have not had any effect on the financial position or earnings of the Group or the Parent Company. .
In order to prepare financial reports in accordance with IFRS, management is required to make assessments and estimates and to make assumptions that affect the application of the accounting principles and the carrying amounts in the income statement and balance sheet. Estimates and assumptions are based on historical experience and are regularly reviewed. The results of these estimates and assumptions are then used to determine the recognized values of assets and liabilities. Fair value may deviate from these estimates.
Note 2 Segment reporting
January - June Publishing operations White goods operations Home furnishings operations* Other, incl. Eliminations Total SEK M 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 External revenues 410 431 117 153 143 - - - 670 584 Operating profit/loss -46 -7 -4 -27 -25 - 147 255 72 221
Profit/loss after financial items -52 -12 -6 -29 -27 - 346 129 261 88
Profit/loss for the period -38 -9 -6 -29 -19 - 345 129 282 91
Assets 576 574 307 319 1,195 - 9,019 9,033 11,097 9,926
Liabilities 492 444 168 205 650 - -128 -119 1 182 530
Investments 7 11 0 0 59 - 358 314 424 325
Depreciation 7 6 2 2 5 - - - 14 8
* Home furnishings operations were added in the first quarter of 2009 and refer to the operations in Cervera, as well as Hemtex relating to assets and liabilities.
Note 3 Interests in companies accounted for using the equity
method
Book value Share of profit June, 30 January - June
SEK M 2009 2008 2009 2008
ICA AB 6,662 6,227 169 289
Bra Förlag AB 7 6 0 0
Trade Press AS 11 10 1 0
Kjell & Co Elektronik AB 108 102 0 -2
Cervera AB - 82 - -7
inkClub Development AB 430 418 2 1
7,218 6,845 172 281
Note 4 Acquisitions
In January 2009 Hakon Invest an additional 33% in the portfolio company Cervera. This increased the holding from 48% to 81% of the capital and votes in Cervera. Hakon Invest made a cash payment of SEK 33 M for the additional shares. As a result of the increased ownership stake, Cervera is reported as a subsidiary of the Hakon Invest Group with effect from January 2009. The surplus value is allocated to brands and goodwill.
Acquisition of shares in Hemtex during 2009 means that Hakon Invest’s holding has increased to 68% of the shares and votes in Hemtex.
With effect from June 30, 2009, Hemtex is reported as a subsidiary in the Hakon Invest Group. Since previously the shareholding in Hemtex was
recognized at fair value, book value adjustments for Hemtex shares were reversed in the Hakon Invest Group’s comprehensive income for January – June 2009. In total, the reversed amount is SEK 164 M. Total cost for all shares in Hemtex held by Hakon Invest amounts to SEK 923 M. Goodwill is assessed as attributable to processes, geographic coverage and customer relations. The Purchase Price Allocation is still provisional.
As a consequence of Hemtex being reported as a subsidiary in the Hakon Invest Group, consolidated equity/assets ratio decreased to 89.3% at June 30, 2009. At December 31, 2008, the consolidated equity/assets ratio was 94.9%.
2009-06-30 Cervera AB Hemtex SEK M Carrying amount in acquired company* Value according to purchase price allocation Carrying amount in acquired company* Value according to purchase price allocation (provisional) Brands 77 500 Goodwill 284 0
Other intangible assets 8 5 50 50
Tangible assets 21 21 121 121
Financial assets 5 5 7 7
Inventories 131 131 291 291
Current receivables 36 36 39 39
Prepaid expenses and accrued revenues 22 22 9 9
Cash and cash equivalents 10 10 31 31
Deferred tax liabilities -20 -25 -157
Non-current liabilities -38 -38 -90 -90
Current liabilities -127 -127 -233 -233
Acquired identifiable net assets 68 122 484 568
Less minority -24 -181
Change in interests in associates during the
holding period 10
Step acquisition, effect on equity 19
Goodwill 12 517
Purchase price for shares in subsidiary 118 914
Acquisition costs 2 9
Total acquisition cost 120 923
Total acquisition cost for acquisitions during 2009 33 504
Cash and cash equivalents in acquired subsidiary -10 -31
Change in cash and cash equivalents at acquisitions for 2009 23 473
* Reported in the company applying Hakon Invest's principles.
In addition to the acquisitions in the table above, Cervera in June 2009 completed its acquisition of the assets and liabilities in DUKA as well as NK Glas, Porslin & Kök (Northern Classic AB). The
acquisition included 27 store locations, store fixtures and fittings, existing external inventories and the DUKA store brand in the Swedish market.
The Board of Directors and the President hereby affirm that this interim report provides a true and fair view of the Parent Company’s and the Group’s operations, financial position and earnings as well as describing material risks and uncertainties faced by the Parent Company and the companies in the Group.
Stockholm, August 18, 2009 Lars Otterbeck
Chairman of the Board
Cecilia Daun Wennborg Jan Olofsson
Thomas Strindeborn Claes-Göran Sylvén
President and CEO
Anders Fredriksson
Deputy Chairman of the Board
Jan-Olle Folkesson Magnus Moberg
The information in this interim report is such that Hakon Invest must disclose pursuant to the Swedish Securities Exchange and Clearing Operations Act and/or the Swedish Act on Trading in Financial Instruments. The information was submitted for publication at 08.00 CET on Wednesday, August 19, 2009.
For further information, please contact
President and CEO Claes-Göran Sylvén +46 8 55 33 99 64 CFO Göran Blomberg +46 8 55 33 99 99 Head of IR Pernilla Grennfelt +46 8 55 33 99 55
Press and analyst meeting
At 10.30 CET on Wednesday, August 19, 2009, Hakon Invest will hold a webcasted press and analyst meeting in Salén Konferens at
Norrlandsgatan 15 in Stockholm. Notify attendance at [email protected].
Financial calendar
Interim report for January – September will be presented on Wednesday, November 4, 2009. Year-end report for January – December 2009 will be presented on Wednesday, February 17, 2010.
ICA AB
ICA’s complete interim report can be accessed at www.ica.se
