Annual Report 2012
BRA INVEST – BETTER BUSINESS
BrA Invest TABLE OF CONTENTS Introduction 4-5 Company presentations
6-19
Management’s Review
20-22
Income Statement for the Group Balance Sheet for the Group
23 24-25
Cash Flow Statement for the Group
26
Income Statement for the Parent Company
27
Balance Sheet for the Parent Company Cash Flow Statement for the Parent Company
28-29 30
Additional Information
31-32
Notes
33-40
Signatures
40
Auditors’ Report
41
Presentation of the Board of Directors/Auditor
42
Living Story, house and garden products that create enjoyment, creativity and stimulation in the home environment, as well as at public venues, cafés, etc. 2 – ANNUAL REPORT 2012
ANNUAL REPORT 2012 – 3
BRA INVEST – BETTER BUSINESS
BrA Invest
Stability, Profitability and then Growth! The BrA Invest Group has been built up over eight years (apart from BAB, which was acquired in 2001) without any financial starting capital at all. This meant that companies had to be acquired at low prices, which naturally entailed that profitability was low at the time of acquisition, requiring considerable focus on operational aspects after the acquisition. The BrA philosophy has developed into a three-stage rocket: first Stability, then Profitability, and finally Growth! When Draken i Reftele was acquired in September 2005. this company was marked by significant under-investment over several years. After the acquisition we undertook extensive modernisation of the factory’s machinery, and built a 2,000 m² warehouse and production unit, for an investment volume of approximately SEK 40 million, while also working on the company’s different processes and organisation. We can therefore claim that Draken is Stable and fairly Profitable. We are now in the phase of creating organic Growth in an environment where competitors have not made the same improvements, and are thus less competitive. Dogman, acquired at the turn of 2006/2007, had suffered three deficit years in a row, was internally disillusioned, organisationally depleted, and severely affected by the defection of former employees to start up competing companies (then Zemix, now Vitakraft). Under BrA’s management, we have soundly and steadily built up a Stable organisation with creative functions such as product managers, market managers and webmasters, just as we have been keen to establish strong functions and responsibilities within logistics, purchasing and sales. At the same time, four companies have been acquired and six warehouses have been moved, included the major relocation of all activities in Sweden from Lund/Bjärnum to Åstorp, together with an increase in net sales from SEK 220 to 360 million. Dogman now has a total of 88 employees, the company is Stable and fairly Profitable, and we are now focusing offensively on training
4 – ANNUAL REPORT 2012
and competence building, which will lead to rapid organic Growth in the future! The acquisition of Olofssons Hyvleri in the summer of 2008 took place just before the onset of the financial crisis in autumn 2008 and at the end of a sustained phase of strengthened demand over several years, when times were generally very good for the timber processing industry. Since then, BrA has handled a defecting sales family of four key people who all left the company, as well as very constrained market conditions. A new organisation is now in place, several production employees have developed into production planners and salespeople, and we have invested approximately SEK 15 million in machinery and extension of warehouse halls, and also worked on our organisational processes in order to streamline logistics and production. The situation is Stabilising, but unfortunately still with heavy losses, and we are trimming as much as we can to achieve acceptable Profitability. KB Components (formerly Konstruktions-Bakelit) was in a very difficult financial situation in autumn 2008 when the global financial turbulence severely affected the company’s main customer groups: light and heavy vehicle manu facturers, and their Tier 1 suppliers. Delivered volumes fell by 30% virtually instantaneously, and the company was forced to hold a rights issue for SEK 15 million, making BrA the main shareholder of the company. In 2009 the focus was on reducing production capacity to match the
prevailing demand situation (350 employees in Örkelljunga have now been reduced to 160) and focusing the operating capital on managing the cash flow. Despite these efforts, the KB Group lost SEK 23 million in 2009 before the tide turned at the end of the year. Since then we have invested more than SEK 40 million in production equipment (mainly in Örkelljunga), moved a lot of production to Lithuania, acquired Årevall Plast in Värnamo and last, but not least, worked intensively to implement LEAN principles in production and logistics. KB’s situation is now Stable and Profitable, and we intend to be offensive both organically by reaching out to new and existing customers, but also through acquisitions, since the entire injectionmoulding industry in Sweden is in a major consolidation phase that we intend to be an active part of! Living Story (formerly VikingLand), acquired at the beginning of 2011, was in a much worse state than we feared, and worst of all was that this was not obvious, even though there were clear signs at an early stage, before summer 2012. In the second half of 2012 we focused entirely on setting out the most fundamental principles for wholesale operations with purchasing in Asia and sales to stores in the Nordic region, including correct purchasing agreements, warehouse management and clearing up stocks that unfortunately have been relocated several times, and are now split across three different sites, as well as ensuring that we have the right people in the right positions in the organisation, doing the right things.
BRA INVEST – BETTER BUSINESS
From the left: Erling Levin, Berne Särbring, Jessica Nilsson, Åke Waldt, Monika Öberg, Stefan Andersson, Alexander Subotin, Christer Andersson, Christina Nilsson, Lars Holtskog, Johan Zaunders, Peter Wetterlöv
The situation is not Stable yet, but we are still working on this, and will continue to do so throughout 2013. BAB, which operates as a small family business and grew organically from net sales of approximately SEK 20 million in 2001 to almost SEK 100 million in 2010, made two acquisitions in 2011 (Parat and Siffes) that in one move doubled its net sales. The acquisition has required adjustment of the organisation and the management to a more formalised order and structure, which required a lot of work throughout 2012, and we can now claim that at least the construction service side in Åstorp, with net sales of approximately SEK 100 million, is both Stable and Profitable, while the construction side is
gradually adapting its working methods to the POVEL concept. BAB will continue to build Stability with increased Profitability throughout 2013. The BrA Invest Group’s different companies are thus in rather differing phases, and we can state that any offensive measures such as acquisitions that may take place in 2013 will definitely be in the KB or Dogman Groups, which are ripe for acquisitions, and which fulfil the criteria, i.e. Stability and Profitability. We will therefore be prepared to take the risk that an acquisition always entails. The Group’s finances and balance sheet, which we are keen to safeguard, do not give scope for major spectacular investments/acquisitions. Instead, smaller, industrially matched
companies are suitable, in which synergies can be realised within the existing operations. The focus in 2012 was on an operational strengthening of the existing company, safeguarding the balance sheet and increasing the Group’s Profitability overall, and this work will continue in 2013, preferably with positive supplements within Dogman and KB!
CEO Stefan Andersson
ANNUAL REPORT 2012 – 5
BRA INVEST – BETTER BUSINESS
Fastighets AB 3Hus
Consolidation of existing holdings 3Hus is the Group’s property company, with the entire property portfolio located in Åstorp and Bjuv (Praktikertjänst). The business idea is to acquire, manage, improve and develop properties for longterm ownership. With stable and satisfied leaseholders and short decision-making channels, we manage properties in accordance with the respective companies’ needs and requirements. At the end of 2012, the property portfolio consisted of six properties for commercial use, one residential property, and one empty site. In 2012 we worked actively to develop the property Anekdoten 1 into a modern logistics property for the Group tenant
CEO Berne Särbring 6 – ANNUAL REPORT 2012
Living Story. This work was completed in summer 2012. At the same time, the property Nyvång 1:196 was developed and converted into a modern rental property, with three residential units. Again in the second half of 2012, 3Hus undertook project management of Dogman’s major extension of the existing logistics property. Later in 2012, significant resources were devoted to project development of a new residential area in Åstorp, and a development agreement was concluded with Åstorp Municipality in December
2012, with the project’s construction work expected to commence in the first half of 2013. Despite the extensive economic downturn in Europe and Sweden, we take a cautious positive view of 2013, where well-considered property development is the right path to take to ensure the company’s ongoing development.
Fastighets AB 3Hus* Key figures 2012 (2011)
Part of the BrA Invest Group since 2008 BrA Invest’s ownership is 100%
Net sales SEK 9.3 million (SEK 8.3 million) EBIT SEK 3.4 million (SEK 2.3 million) Number of employees 1 (2)
*including other property companies
ANNUAL REPORT 2012 – 7
BRA INVEST – BETTER BUSINESS
BAB Byggtjänst AB
Return to order and clarity BAB Byggtjänst AB has roots extending back to the 1920s, when activities were started up by master builder Albin Andersson. In 1955, the activities were acquired by Bertil Andersson and Stig Steen, establishing the company Bertil Andersson Byggnads AB, which was re-named as BAB Byggtjänst AB in the 1980s. BAB Byggtjänst AB has been part of the BrA Invest Group since 2008. Today we operate both contractor and construction service activities, and our operating area is western Scania and southern Halland. In 2011 two companies were acquired: PARAT Bygg in Malmö and Siffes Bygg in Torekov. BAB today has around 120 employees, with net sales of approximately SEK 280 million. The head office is located in Åstorp, with local offices in Malmö, Landskrona and Torekov. BAB has the same expertise as nationwide developers, but our local anchoring and small scale provide a number of advantages. We work according to a well-established, sound approach, and safeguard strong, long-term relations with our customers. The idea is for BAB to be the partner for both large and small projects, and to be involved from first idea until final delivery. In 2012 there was considerable focus on implementing Siffes Bygg and PARAT-Bygg in BAB, and ensuring Stability in our or-
CEO Peter Wetterlöv 8 – ANNUAL REPORT 2012
ganisation and activities. The introduction of POVEL, our new business management system, is an important element of this work, and the objective is to become a POVEL-certified company in 2013. In 2012 we among other things completed two major contracts in Åstorp, converted the property kv. Anekdoten, which was adapted to the commercial needs of Living Story with 3Hus as the Client, and extended Dogman’s offices and stores by a further approximately 600 + 5,000 m². Our construction service department in northwestern Scania focuses its activities on our partnership customers, including Kärnfastigheter, Åstorp Municipality, Landskrona City, Båstad Municipality and Riksbyggen. In Malmö, activities were centred on the renovation of flats for Akelius. In autumn 2012, new framework agreements were concluded with Kärnfastigheter, Rikshem and Akelius. The agreements run until 2014, with the option of extension.
In the autumn a decision was also taken that in 2013, together with our sister company 3Hus, we would develop our own residential project in Åstorp. Again in 2012 the sector was subject to a cyclical downturn, which imposed tough competition, and consequential intense price pressure. This entailed fewer projects, and constrained margins for the projects undertaken. A major challenge in 2013 is to further develop our activities in the Malmö-Lund area, and to continue to work to achieve Stability within our organisation, thereby creating the right conditions for improved profitability and sustained growth in the company. Based on the stable foundation of well-functioning construction service activities, and the agreements and projects described above, we are confident that 2013 will be a good year for us.
BAB Byggtjänst AB (Group) Key figures 2012 (2011)
Part of the BrA Invest Group since 2008 BrA Invest’s ownership is 90%
Net sales SEK 276.0 million (SEK 218.6 million) EBIT SEK 4.4 million (SEK -1.1 million) Number of employees 117 (105)
ANNUAL REPORT 2012 – 9
BRA INVEST – BETTER BUSINESS
AB Dogman
Focus on organic growth After six years of restructuring, four acquisitions, six store relocations and an extension in 2012 to provide a 5,000 m² warehouse and 600 m² of offices, the Dogman Group has settled into the modern new premises in Åstorp, and the company can devote all its energy to its customers, organic growth and brand building. The average annual global growth in the market for pet food and pet accessories is 4-6%, driven by people’s growing need for close contact with ‘man’s best friend’, as well as the rising standard of living, which allows us to spend more money on our pets. They enjoy better food, care, healthcare and, not least, are increasingly treated as our children, with all the needs and preferences that this entails. The consumer, i.e. the per owner, no longer has to feed food scraps to pets, but can give them feed that is suitable for their digestion. These more and more expensive premium feed products can in some cases can reach prices per kilo that exceed the levels for the products we buy for fine dinners and celebrations for humans. In addition, pets are rewarded with treats and snacks that are good for their teeth, as well as various toys and other accessories that meet the welfare society’s various new and modern requirements. In this environment, Dogman is working to build a product range that is subject to constant renewal and that can meet the full range of consumer requirements within
CEO Kenneth Andersson 10 – ANNUAL REPORT 2012
all key pet categories, such as dogs, cats, rodents, birds and fish and, after the acquisition of Jacson of Scandinavia, also horses. Our range includes around 10,000 items that are delivered from two warehouse sites, Åstorp and Oslo, and we have an average stock value of approximately SEK 60 million. Our ambition is delivery on the same day, or the day after receipt of order. We measure supplier capacity at item level, but first of all at order level, with the objective of handling 95+, which means that more than 95% of all orders must be delivered in full on the same day, or the day after the order is received. At the time of writing, in February, we are at a level of around 80%, compared to the approximately 50% historically achieved by the company. The Dogman Group has 88 employees in four countries, including a marketing department in Sweden (serving the entire Nordic region), with a total of eight employees, and a sales team of around 25 employees, which makes us a very strong partner for manufacturers and other players requiring access to specialist retailers and retail customers in the Nordic region. We are working actively to strengthen the organisation, with
a strong focus on training our employees and customers, including the newly-started “Dogman Training Center” at the head office in Åstorp. We believe that this focus on increased expertise and knowledge regarding products, end customers’ needs and requirements, competitors’ abilities, and how we conduct ourselves in our relations with customers, suppliers and other stakeholders, is vital to ensuring the company’s longterm competitiveness and ability to improve its position in relation to other players in this interesting sector. 2013 will entail greater focus on organic growth, the trimming of different processes, and consumer marketing and training, in contrast to six preceding years of different types of structural adjustments. We are optimistic about the future, and can feel that we have a strong wind in our sails!
AB Dogman (Group) Key figures 2012 (2011)
Part of the BrA Invest Group since 2007 BrA Invest’s ownership is 95%
Net sales SEK 359.5 million (SEK 353.6 million) EBIT SEK 11.7 million (SEK 13.3 million) Number of employees 88 (85)
ANNUAL REPORT 2012 – 11
BRA INVEST – BETTER BUSINESS
Draken i Reftele AB
A turnaround and now back on track! Draken i Reftele is a modern plastics producer with two main product areas: industrial packaging and technical film. The company has been owned by BrA Invest since 2005 and up to 2012 has upgraded its machine park and also doubled the factory area with a new extension that was completed in 2011. Draken is distinguished in the market by its vision to be Sweden’s most flexible and effective film conversion company for the production of industrial packaging and technical film in polymer materials. Draken offers customers a wide range of plastic film products for industrial applications, and can provide the market with creative and cost effective solutions. This is achieved by offering such solutions as extrusion, conversion and flexography printing, all under the same roof. Product examples are building film, industrial packaging film, bags, sacks and hoods/ liners according to various specifications and functions. In 2012 the plastics industry saw greater fluctuation in raw materials prices than in 2011. This led to new price increases and a decrease in regranulate within a very short period, which created greater uncertainty in the market. Draken’s ability to predict these fluctuations and work innovatively with raw materials supplies has yielded results. The ambition to approach suppliers when the right opportunities
CEO Alexander Subotin 12 – ANNUAL REPORT 2012
arise has proved successful, and in line with Draken’s long-term strategy. This will be even more important during 2013. The market weakened in Q4 2012 and major increases in raw materials prices compared to 2011 did not provide the optimum basis to achieve greater profitability, yet the result still improved considerably from 2011. The strategy for 2012 has proved to be successful. In 2012, the CEO initiated the VU corporate development project, with inspiration from other companies such as Volvo and ABB. The objective of the project is to achieve high dedication and motivation among Draken’s employees, with a shared focus, contributing to result-improvement measures. In 2012 the focus was on efficiency and scrapped products in production. The goal was to halve the scrapped steel from the extrusion process, and to achieve higher efficiency. In Q4 this goal was visibly measurable, and for the first time in its history, Draken faced a lack of its own material for regranulation. This contributed to a reduction of the materi-
als ratio in 2012, and helped to achieve profitability. In the second part of 2012 a new market strategy was implemented to increase Draken’s market presence. In 2012 Draken also achieved a new food product authorisation, and was re-certified in accordance with ISO 9001 and ISO 14001. Draken will continue the corporate development project and has a clear focus on identifying improvement potential. Draken will communicate more closely with customers and raw materials suppliers. A stronger focus on product development will strengthen our market position. The indications in 2013 are that there is no cyclically-based demand, but this may change in Q1, as the market is cautiously optimistic. The internal focus is on working actively to increase product quality and find the optimum external conditions to build up raw materials stocks when the opportunity arises.
Draken i Reftele AB Key figures 2012 (2011)
Part of the BrA Invest Group since 2005 BrA Invest’s ownership is 100%
Net sales SEK 101.2 million (SEK 95.0 million) EBIT SEK 5.8 million (SEK 0.1 million) Number of employees 39 (39)
ANNUAL REPORT 2012 – 13
BRA INVEST – BETTER BUSINESS
KB Components AB
Value through innovation KB was founded by Anders Månson in 1947. Right from the start, the bar was set high. The ambition was to lead the plastics industry, rather than following it. Within the KB Group, KB Components is a developer and manufacturer of advanced plastic components, while KB System develops its own flexible power supply articles. KB Components offers turnkey solutions for the development and production of technically advanced plastic components, and masters most techniques and materials. KB Components is one of the largest players in Scandinavia, with modern production facilities in Värnamo and Örkelljunga in Sweden, and Kaunas in Lithuania. The facility in Lithuania offers cost-effective production of labour-intensive products, while the facilities in Örkelljunga and Värnamo undertake the highly-automated production of technically advanced products for vehicles, heating, plumbing and ventilation, security and medical technology. KB System manufactures and sells a system for power tracks, bars and outlet panels, based on the Dynamic Workplace Power (DWP) technique. The unique
CEO Lars Holtskog 14 – ANNUAL REPORT 2012
aspect of the power track system is that the users themselves can design and mount the outlets where they are needed on the tracks. The system is very simple to install, use and reuse. The range also includes a complete programme of power poles and panels under the Com.along brand.
in 2008-2009 made rationalisation measures necessary, and required the introduction of a more flexible production organisation. The company’s successful quality and environmental work led to KB’s achievement of the “Volvo Quality Award of Excellence” from Volvo Passenger Vehicles at the end of 2012.
KB System offers complete systems for laboratories, hospitals, universities and offices that demand high flexibility and security.
The positive development in volumes in 2011 was strengthened in 2012 through acquisitions and organic growth. An improvement in results was achieved through strong focus on cost reductions and productivity improvements. Sales of new products increased, and a substantial project portfolio ensures an optimistic outlook for KB.
Historically, KB has been very successful at adapting to new techniques and major changes in the market. The previous dependence on Saab Automobile at the beginning of the 2000s has been replaced by a broad automotive customer portfolio. The crisis in the automotive industry
KB Components AB (Group) Key figures 2012 (2011)
Part of the BrA Invest Group since 2009 BrA Invest’s ownership is 72% (as from 01-07-2013)
Net sales SEK 418.0 million (SEK 335.4 million) EBIT SEK 25.8 million (SEK 18.3 million) Number of employees 272 (245)
ANNUAL REPORT 2012 – 15
BRA INVEST – BETTER BUSINESS
Olofssons Hyvleri AB
Tough times for the timber processing industry 2012 was the toughest year in the history of the Swedish sawmill and planing mill industry, with falling demand, a high production capacity surplus and challenges in obtaining timber at reasonable prices. These industry-specific problems are exacerbated by the conditions faced by the Swedish timber pro cessing industry, which is heavily dependent on exports to Europe. During the year the Swedish krona strengthened considerably against both the euro and the pound sterling, and the end result was a disastrous combination of eliminations, closures, restructuring, major losses, bankruptcies and new issues. During the year Olofssons Hyvleri was forced to dismiss around half of its staff, and from the beginning of February 2012 we switched from a two-shift day to one single day shift that we found it very difficult to fill during the second half of the year. All customers are affected by the difficult macroeconomic situation. Home construction in Sweden and southern Europe has diminished in particular, which means that the normal demand pattern, with increasing production in the second quarter and the summer, was not fulfilled. Instead, we saw lower volumes and demand almost across the board, which gradually deteriorated further during the year. The strategy at the beginning of the year based on accelerating our way out of the problems by seeking to increase production volumes in order to better utilise major fixed assets has been replaced by a “survival plan” based on investment restraint, low operational costs and stock depletion, in order to ensure survival until the economic
CEO Stefan Andersson 16 – ANNUAL REPORT 2012
conditions begin to improve. Many competitors have sold their planed products far below production cost, probably because they desperately need liquidity for their operations, making it difficult to even cover the variable costs for the processing Olofssons offers to an often weak customer base. In addition to the underlying profitability problems in operations due to the aforementioned circumstances, during the year the company was also affected by non-recurring costs such as customer losses relating to the failure of customers and partners, as well as the costs of the necessary staff reductions, which added to the heavy losses reported by the company for 2012. The stockpiling in winter/spring 2012 was expensive due to the ensuing price drops for sawn and planed timber products, which forced us to write down and sell stocks at declining prices. Before and at the beginning of 2013 there is still no glimpse of the “light at the end of
the tunnel” as the situation is still critical in both the short and medium term. Olofssons is continuing its “survival plan” and working intensively to establish niche customers and applications that demand more in terms of further processing, such as stacking and foiling, and that do not compete to the same extent with the “bulk production” of many of the large competitors, which are highly sensitive to the climate of competition. We focus on a keen, young, locally-anchored organisation who are offered opportunities for further training and competence building. We are convinced that these measures will help to gradually improve the company’s situation. Olofssons’ competitiveness and strength are reinforced by BrA’s sound financial foundation, which enables the company to do “what is right in the industry”, despite our ongoing losses.
Olofssons Hyvleri AB Key figures 2012 (2011)
Part of the BrA Invest Group since 2008 BrA Invest’s ownership is 100%
Net sales SEK 93.4 million (SEK 92.4 million) EBIT SEK -8.8 million (SEK -6.5 million) Number of employees 20 (24)
ANNUAL REPORT 2012 – 17
BRA INVEST – BETTER BUSINESS
Living Story AB
The watchword for 2013 is “Stability” Living Story AB is a furnishing wholesaler located close to route E4 in Åstorp just northeast of Helsingborg. The range of interior fittings, furniture and outdoor garden ornamentations is designed for both decorative and utility purposes, and is strongly linked to the prevailing trends and fashion in the market. The customers are mainly home furnishing stores, garden centres, flower shops and furniture stores. We have our own network of resellers throughout the Nordic region.
2012 was affected by incorrect decisions and the lack of structurally well-functioning operations, which in turn resulted in a very negative financial result. Great expectations/hopes, uncontrolled purchasing, inadequate existing stocks and declining sales all contributed to significant excess capacity. In turn, this led to a lack of seasonality. This disastrous negative spiral has, among other things, required significant liquidity contributions. During the summer drastic measures were taken to break the company’s negative trend. Active minority investors have left the company, and BrA Invest how holds 100% of Living Story. Restructuring measures have been taken, including the
CEO Christer Andersson 18 – ANNUAL REPORT 2012
contribution of resources from the sister company, Dogman, which has valuable wholesale experience. The second half of the year was affected by structural measures to restore order and build a forward-oriented strategy. This costs both time and money, but is a clear signal that BrA Invest sees Living Story as a key element of the Group’s wholesale activities. In July and August we moved into modern, newly-renovated premises adjacent to route E4, which in logistics terms is a very good location. Due to our surplus stocks its is, however, still necessary to also hold stocks at several external locations in Åstorp and its vicinity. In October we implemented a new business
system. On 1 November we took over the failed AI Group AB (Alma Design) in Kumla and began the extensive work of integrating its activities into Living Story. This project will be completed in Q1, 2013. The watchword for 2013 is “Stability”, with the objective of building sound, fundamental stability in the company, a task that requires patience. With a professional organisation and structure, and clear routines and processes at every stage, Living Story must stand out in an immature sector. This is one step towards becoming the Nordic region’s leading wholesaler within house and garden.
Living Story AB
Key figures 2012 (2011) Part of the BrA Invest Group since 2011 BrA Invest’s ownership is 100%
Net sales SEK 23.6 million (SEK 22.1 million) EBIT SEK -11.6 million (SEK -4.9 million) Number of employees 16 (13)
ANNUAL REPORT 2012 – 19
BRA INVEST – BETTER BUSINESS
BrA Invest CKS AB Reg. no: 556753-2501
Management’s Review
2012 was affected by many activities and measures within Living Story (formerly VikingLand) and strong focus on improving profitability and cash flow in several portfolio companies. The BrA Group’s balance sheet has been trimmed, solvency has improved, and equity has increased, which overall makes the Group stronger, and prepared for a more offensive strategy, as we enter 2013. KB Components (which changed its name during the year from Konstruktions-Bakelit AB) began the year by establishing a plan for the integration of the newly acquired (31-12-2011) Årevall Plast in Värnamo into the KB Group. This implementation and completion ran well, and by the end of 2012 Årevall is solely a production unit, as the number of employees was reduced by one third as a consequence of the implementation of the decision to move tools to KB’s production unit in Kaunas, Lithuania. The development in KB’s results was satisfactory, especially in the light of the weak macroeconomic factors in the key European market. The order intake in terms of new tools for new and existing customers is approximately SEK 40 million (expected future annual volume), which is an improvement on recent years, and KB currently has a very strong project portfolio. During the year Dogman achieved organic growth for accessories in the range of 10%, while the Purina feed business via Nestlé declined somewhat in volume and net sales terms as a consequence of Nestlé’s decision to supply certain large customers (Granngården) and their
20 – ANNUAL REPORT 2012
centrally warehoused items on a direct basis. New agreements with COOP and Plantagen were rolled out successfully, and we see a strong sales trend in the everyday commodities sector in Sweden and in the retail sector in Norway. Other retail activities were affected by stagnating sales, partly due to the focus on large everyday commodities chains. The integration of Jacson of Scandinavia has been completed, agent agreements have been discontinued, and during the autumn the entire stock acquired in the Anekdoten property (the Living Story building) was moved to the new extension (5,000 m² warehouse plus 600 m² offices) in the Dogman property in Åstorp. The marketing department in Åstorp has gained new premises, with open-plan offices adjacent to the “Dogman Training Center”, which is a large area for training activities for own staff, customers and other stakeholders. The company has been geared up for organic sales growth, which will be the main focus and theme for the 2013 calendar year!
these organisations with the “old BAB”, and took the first steps in the name and trademark adjustment process. Siffes’ construction service activities, focusing on the Bjäre peninsula, together with the old BAB’s construction service, which was mainly historically concentrated in the Helsingborg region, have formed expanding, stable operations, with net sales in the region of SEK 100 million. This market has been strong, due to customers’ increasing interest in renovations and minor conversions, rather than major new projects. The agreement with Parat’s main customer, Akelius, was re-negotiated during the year, and in regional terms this activity has grown from the original Malmö-Trelleborg area to also include parts of northwestern Scania. As certain large projects arising in the 2011 operating year were completed and replaced by, for example, a few internal BrA projects, the profitability of the contractor side was gradually improved during the year. At the beginning of 2013 Parat Bygg AB was merged into BAB.
During the year BAB successfully consolidated the units acquired in 2011, Siffes Bygg and Parat Bygg, merging
Under BAB’s auspices, 3Hus has completed the Anekdoten property and Living Story took over the tenancy from
BRA INVEST – BETTER BUSINESS
BrA Invest CKS AB
BAB B Byggtjänst yggtjä jänst AB 90%
PARAT Bygg B AB
Fastighets F asti tigh hetts A AB B 3H 3 3Hus Hus 100%
KB Components UAB
the beginning of June and then gradually during the rest of the summer. Other properties in the portfolio developed well, and in step with falling market interest rates we can see increased profitability for the company. Different development projects were discussed, leading to an agreement with Åstorp Municipality on the acquisition of land (the Resedan area) and the subsequent new construction of 32 rental apartments (mostly ground floor apartments) that we intend to commence in 2013. External investors have shown an interest in several of (our) properties and we are open to sales agreements, if the financial targets we have set can be achieved. Draken achieved a fine “turnaround” in terms of both profitability and business during the year, when the focus was on streamlining production (ongoing VU programme) and better timing and expertise in terms of raw materials procurement. The company is highly exposed to the granulate procurement market, whereby all or part of an annual result can be achieved or increased, depending on the correct seasonal planning of purchasing and how well volumes are purchased at low prices. In 2012 Draken acted at the right time, in contrast to 2011, when we got things “wrong”. During the year a major competitor, Norfolier, went into compulsory liquidation, which gave us increased opportunities to win (and win back) customers that were previously supplied by this company. Today, Draken is well-capitalised and effective and in 2013 we will continue to work to increase margins, enhance profitability and ensure a good cash flow. At the beginning of 2012 we believed that the sawmill industry had put the worst year in living memory behind it,
Components AB AB KB Components 71.25%
KB System AB
Draken D rak ken i Reft R Reftele ftelle A AB B 100%
Components KB Components Årevall AB
Dogman D ogman AS
Dogman D ogman AB 95%
Dogman D ogman Aps
and we looked forward to better times. But how wrong we were!! 2012 was an even worse year than 2011, and especially the continued strong Swedish krona against the euro made life very difficult for the entire Swedish sawmill and planing mill industry, with extensive losses, bankruptcies, write-downs, new issues and closures in their wake. At the start of the year, Olofssons planned to accelerate its way out of the crisis by gearing up and increasing volumes in order to better shoulder the burden of high fixed costs related to its large pool of machinery and facilities. Later in the spring, we realised that this strategy was not viable, as the volumes available in the market gave such a poor margin that not even direct variable costs were covered, even though we were in the middle of a normal high season, and we were forced to cancel a whole shift. In the autumn we continued to adjust the organisation to lower volumes and at the start of 2013 we have the right level of resources to run operations effectively on a singleshift basis. The market is still very weak, however, and Olofssons will find it difficult to achieve profitability in the current economic conditions. Living Story’s 2012 was extremely turbulent with a new CEO, extensive personnel changes, relocation of activities from the old premises in the centre of Åstorp to a new location close to the motorway (E4) and BrA Invest’s head office, and the acquisition of the remaining assets of Alma Design at the beginning of 2013 and its relocation from Kumla to Åstorp. On the acquisition of the former VikingLand we were not aware of, or did not understand, how depleted and badly managed this company was for a sustained period, including bankruptcy in 2008. The true situation gradually emerged in the autumn, winter and spring
Olofssons Olof Ol fssons H Hyvleri yvle l rii AB 100%
Living Livi Li ing St Story AB 100%
Dogman D ogman Oy
of 2011/2012, and when the former CEO left the position at his own initiative in the summer of 2012, it was clear that the company, which had changed name to Living Story, was in need of a completely new start, a new organisation, new employees and business system - in fact everything necessary to achieve a well-functioning company. We worked in these issues in the second half of the year, while also battling with a poor range that was purchased and delivered either at the wrong time, in the wrong volume (far too many of certain items), or in the wrong quality. All of these factors together led to a very high loss for the year. At the start of 2013 many of the initial changes are under way or completed, and during the year we will work on stabilising the situation, having the right seasonal stock, and building a new range with a higher proportion of low-price “eggcup” items, rather than the previous high-price, bulky furniture items that are only sold in very small volumes in the course of a year. At the close of 2012 the BrA Group is generally well-prepared for the future, with a balance sheet that was trimmed during the year, higher equity, and a rising trend for earnings. This is also the first year, with the exception of KB, that we do not face extensive structural changes such as the relocation of stocks, integration of acquired companies, or name changes. This reinforces the trend of higher profitability and higher yields on both total assets and equity. The subsidiaries Living Story AB and Olofssons Hyvleri AB began 2013 with negative results. As the parent company guarantees the subscribed capital, the task of reversing the development of these companies can be continued.
ANNUAL REPORT 2012 – 21
BRA INVEST – BETTER BUSINESS
Management’s Review continued
Important events in 2012
Proposed distribution of profit
- Vikingland AB changed its name to Living Story AB and BrA Invest increased its ownership interest to 100%.
The following amounts are at the disposal of the Annual General: Retained earnings
37,285,396
- Living Story AB relocated to newly renovated premises (Anekdoten) adjacent to the head office, which is owned by a Group company.
Profit for the year
14,534,338
Total
51,819,734
- An agreement was concluded to increase the BrA Invest interest in KB Components AB (formerly Konstruktions-Bakelit AB) to 72.5% (from 71.25%) as of 01-07-2013.
The Board of Directors proposes the following distribution of profit:
- The extension of 5,000 m² warehouse and 600 m² offices for AB Dogman was completed by mid-October.
Total
The Group’s results and financial position 2012
Net sales
2011
2010
1,260,159 1,111,851
918,699
Profit after financial items
16,593
12,440
82,330
Total assets
611,251
637,692
459,287
Equity including minority interests
123,802
116,600
148,744
20.3%
18.3%
32.4%
1.3%
1.1%
9.0%
Solvency including minority interests Profit margin Interest cover ratio Return on equity
2.7
2.8
21.8
5.1%
5.3%
85.6%
Sek million
100%
1 200
2010
90%
800
80%
2011
70%
2012
60% 50% 40%
400
30% 20% 10%
0
Net sales
Profit after financial items
22 – ANNUAL REPORT 2012
Total assets
Equity including minority interests
0%
51,819,734 51,819,734
Concerning the results and position of the company, further reference is made to the Income Statements and Balance Sheets of both the Group and the Parent Company, with the Additional Information and Notes. All amounts are stated in SEK thousands.
- KB Components Årevall AB was successfully integrated into KB Components AB.
SEK 1,000
To be carried forward
Solvency including minority interests
BRA INVEST – BETTER BUSINESS
Income Statement for the Group SEK 1,000
Note
2012
2011
2
Operating income: Net sales
1,260,159
1,111,851
Change in stocks
−1,395
1,237
Capitalised work
11,885
5,135
Other operating income
3,155
3,192
1,273,804
1,121,415
Raw materials and consumables
-538,428
-464,127
Merchandise
-280,231
-270,917
Operating expenses:
Other external expenses Personnel expenses
4,5
-133,081
-122,311
3
-266,140
-220,030
-30,343
-24,567
Depreciation and amortisation of property plant and equipment and intangible assets Other operating expenses
Operating profit
-338
-707
-1,248,561
-1,102,659
25,243
18,756
837
675
-9,487
-6,991
16,593
12,440
Profit from financial investments: Interest income Interest expenses
Profit after financial items
-5,934
-2,856
Minority interest in the profit for the year
Tax on the profit for the year
-5,704
-3,896
PROFIT FOR THE YEAR
4,955
5,688
7
ANNUAL REPORT 2012 – 23
BRA INVEST – BETTER BUSINESS
Balance Sheet for the Group SEK 1,000 as at 31 December
Note
2012
2011
Non-current assets Intangible assets
8
Trademarks Goodwill
Property, plant and equipment
400
569
42,134
50,735
42,534
51,304
134,054
106,777
9
Land and buildings Plant and machinery
51 536
57,167
Equipment, tools and fixtures & fittings
29,452
27,089
4,151
21,186
219,193
212,219
24
25
Deferred tax assets
2,417
3,085
Other non-current receivables
1,687
1,651
4,128
4,761
265,855
268,284
53,521
43,139
1,935
2,556
92,294
99,358
Work in progress and prepayments for property, plant and equipment
Financial assets Other securities held as non-current assets
Total non-current assets
Current assets Inventories, etc. Raw materials and consumables Work in progress Finished good and merchandise Ongoing work in progress
1,027
0
Prepayments to suppliers
17
1,935
148 794
146,988
162,738
174,351
Current receivables Trade receivables Tax assets Other receivables Income recognised, but not invoiced
11
Prepaid expenses and accrued income
12
626
5,711
2,523
4,653
14,764
10,148
11,175
11,815
191,826
206,678
Cash and bank balances
4,776
15,742
Total non-current assets
345,396
369,408
TOTAL ASSETS
611,251
637,692
24 – ANNUAL REPORT 2012
BRA INVEST – BETTER BUSINESS
Balance Sheet for the Group SEK 1,000 as at 31 December
Note
2012
2011
EQUITY AND LIABIITIES
Equity
13
Share capital
100
100
6,567
6,738
88,247
82,533
4,955
5,688
Total equity
99,869
95,059
Minority interests
23,933
21,541
2,163
4,768
2,163
4,768
83,294
Statutory reserve Unrestricted equity Profit for the year
Provisions Other provisions
15
Total provisions
Non-current liabilities Bank overdraft facility
16
82,554
Building credit facility
16
7,000
9,216
Invoice credit facility
16
26,406
21,469
Other debt to credit institutions
17
Total non-current liabilities
151,465
147,287
267,425
261,266
14,999
15,148
Current liabilities Debt to credit institutions Prepayments from customers Income invoiced, but not recognised
11
Trade payables Other current liabilities
1,329
867
4,936
16,929
124,116
134,878
21,853
39,004
50,628
48,232
Total current liabilities
217,861
255,058
TOTAL EQUITY AND LIABILITIES
611,251
637,692
451,422
411,781
None
None
Accrued expenses and prepaid income
12
MEMORANDUM ITEMS
Pledged assets
Contingent liabilities
18
ANNUAL REPORT 2012 – 25
BRA INVEST – BETTER BUSINESS
Cash Flow Statement for the Group SEK 1,000
2012
2011
Profit after financial items
16,593
12,440
Adjustments for non-cash items
28,268
24,812
Operating activities
Tax for the year Cash flow from operating activities before changes in working capital Decrease/increase in inventories
-5,262
-4,999
39,599
32,253
-1,806
-13,156
Decrease/increase in operating receivables
14,852
-17,700
Decrease/increase in operating liabilities
-37,197
54,112
Cash flow from operating activities
15,448
55,509
-323
-44,971
0
2,575
2,379
0
-31,189
-64,750
Investing activities Acquisition of subsidiaries Disposal of subsidiaries Net investment in intangible assets Net investment in property, plant and equipment Change in non-current receivables Cash flow from investing activities
-36
383
-29,169
-106,763
Financing activities Dividend Net change in loans Minority interest Translation difference in equity Cash flow from financing activities
CASH FLOW FOR THE YEAR
Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year
0
-30,000
6,159
84,733
-3,259
-8,671
-145
-123
2,755
45,939
-10,966
-5,315
15,742
21,057
4,776
15,742
Unutilised overdraft facilities according to Note 16
25,939
15,609
Available cash and cash equivalents at end of year
30,715
31,351
26 – ANNUAL REPORT 2012
BRA INVEST – BETTER BUSINESS
Income Statement for the Parent Company SEK 1,000
Note
2012
2011
4,165
2,000
Operating income: Net sales Operating expenses: Other external expenses
4
-3,091
-1,963
Personnel expenses
3
-4,417
-1,686
-13
-8
1
-3,356
-1,657
6
22,546
10,990
1,689
604
Depreciation of property, plant and equipment Operating profit Profit from financial investments: Profit from investments in Group companies Interest income, the Group Other interest income Interest expenses, the Group Other interest expenses Profit after financial items Tax on the profit for the year PROFIT FOR THE YEAR
7
78
36
-1,243
-285
-821
-33
18,893
9,655
-4,359
-179
14,534
9,476
ANNUAL REPORT 2012 – 27
BRA INVEST – BETTER BUSINESS
Balance Sheet for the Parent Company SEK 1,000 as at 31 December
Note
2012
2011
9
17
29
17
29
76,712
ASSETS Non-current assets Property, plant and equipment Equipment, tools and fixtures & fittings
Financial assets Investments in Group companies
10
68,388
Deferred tax assets
14
2,409
425
70,797
77,137
70,814
77,166
Total non-current assets Current assets Current receivables
58,412
25,184
Current tax assets
Receivables from Group companies
0
10
Other receivables
130
14
99
10
58,641
25,218
58,641
25,218
129,455
102,384
Prepaid expenses and accrued income
Total current assets TOTAL ASSETS
28 – ANNUAL REPORT 2012
12
BRA INVEST – BETTER BUSINESS
Balance Sheet for the Parent Company SEK 1,000 as at 31 December
Note
2012
2011
EQUITY AND LIABILITIES
Equity
13
Restricted equity Share capital - 1,000 shares
100
100
Total restricted equity
100
100
37,285
45,585
Unrestricted equity Retained earnings Profit for the year
14,534
9,476
Total unrestricted equity
51,819
55,061
Total equity
51,919
55,161
33,448
4,837
33,448
4,837
Non-current liabilities Bank overdraft facility
16
Total non-current liabilities
Current liabilities Trade payables Liabilities to Group companies Current tax liabilities Other current liabilities Accrued expenses and prepaid income
12
Total current liabilities
TOTAL EQUITY AND LIABILITIES
360
484
33,180
20,601
46
0
9,143
21,055
1,359
246
44,088
42,386
129,455
102,384
MEMORANDUM ITEMS
Pledged assets
18
68,388
57,587
Contingent liabilities
18
164,054
215,760
ANNUAL REPORT 2012 – 29
BRA INVEST – BETTER BUSINESS
Cash Flow Statement for the Parent Company SEK 1,000
2012
2011
Operating activities Profit after financial items Adjustments for non-cash items Tax for the year
18,893
9,655
8,660
2,886
0
0
27,553
12,541
Cash flow from operating activities before changes in working capital Decrease/increase in operating receivables
−33,423
3,796
1,702
41,861
−4,168
58,198
−24,443
−44,878
Disposal of subsidiaries
0
2,575
Net investment in property, plant and equipment
0
−37
−24,443
−42,340
0
−30,000
Decrease/increase in operating liabilities Cash flow from operating activities
Investing activities Investment in subsidiaries
Cash flow from investing activities
Financing activities Dividend Net change in loans
28,611
4,837
Cash flow from financing activities
28,611
−25,163
CASH FLOW FOR THE YEAR
0
−9,305
Cash and cash equivalents at beginning of year
0
9,305
Cash and cash equivalents at end of year
0
0
Unutilised overdraft facilities according to Note 16
8,552
163
Available cash and cash equivalents at end of year
8,552
163
30 – ANNUAL REPORT 2012
BRA INVEST – BETTER BUSINESS
Additional Information Accounting policies
Recognition of income tax
The accounting policies applied comply with the Swedish Annual Accounts Act and the general recommendations of the Swedish Accounting Standards Board. In the absence of general recommendations from the Accounting Standards Board, guidance has been obtained in the recommendations of the Swedish Financing Accounting Standards Council and, where appropriate, from the declarations of the Swedish Institute of Authorised Public Accountants (FAR SRS). In such case this is stated as a separate provision below.
Recognised income tax includes current tax, adjustments concerning current tax in previous years, and changes in deferred tax. All current tax payable/ receivable is valued at nominal amounts and in accordance with the tax rules and tax rates adopted or that have been announced and are very likely to be determined.
The accounting policies applied are unchanged from previous years.
For items that are recognised in the Income Statement, the related tax effects are also recognised in the Income Statement. Tax is recognised directly to equity if the tax is attributable to items that are recognised directly to equity.
General
Deferred tax is calculated according to the balance sheet liability method on all significant temporary differences between recognised and taxable values of assets and liabilities. The temporary differences arise mainly via untaxed reserves.
The Group’s financial statements include subsidiaries in which the Parent Company directly or indirectly holds more than 50% of the votes or otherwise has a controlling influence.
Deferred tax assets concerning loss carry-forwards or future tax deductions are recognised only to the extent that it is probable that the deductions can be settled against future taxable profit.
Companies that are acquired or divested during the current year are recognised in the Group’s financial statements for the part of the year that the company was held by the Group.
No deferred tax is recognised on temporary differences in properties, as these are expected to be divested in a way that does not release taxation.
Group financial statements
The Group’s financial statements are presented on the basis of the acquisition method. This entails that the assets and liabilities of acquired subsidiaries are recognised at market value according to a completed acquisition analysis. If the acquisition value of shares in subsidiaries exceeds the estimated market value of the company’s net assets according to the acquisition analysis, the difference is recognised as goodwill. Amortisation of goodwill is based on the calculated economic useful life. Translation of foreign subsidiaries The current exchange rate method is applied to the translation of the total assets of foreign subsidiaries. This entails that the assets and liabilities of foreign subsidiaries are recognised at the exchange rates on the balance sheet date. Items included in equity are recognised at the exchange rates prevailing on the respective acquisition dates. All items of the Income Statement are translated at the average exchange rates for the year. Translation differences are carried directly to Group equity. Minority interests The minority share of the Group’s net profit is recognised in the Income Statement for the Group. The minority share of subsidiaries’ equity is recognised as a separate item of the Balance Sheet for the Group.
Income recognition
Due to the relation between recognition and taxation, the deferred tax liability on untaxed reserves is recognised in the parent company as part of the untaxed reserves.
Inventories Inventories are assessed at the lower of cost and realisable value. Deductions are made for obsolescence.
Receivables Receivables are stated at the amount that is estimated to be paid, based on an individual assessment.
Receivables and liabilities in foreign currencies Receivables and liabilities denominated in foreign currencies are stated at the exchange rates on the balance sheet. If hedging transactions are used, such as forward foreign exchange contracts, the forward exchange rate is used.
Provisions and liabilities Liabilities are stated at acquisition cost, subject to the customary reservations for accrued costs. Provisions are made for known or probable risks based on individual assessment.
General Income is recognised to the extent that the economic benefits are likely to accrue to the company, and the income can be calculated on a reliable basis. Recognition of construction contracts and similar commissions The company reports performed contracts – at fixed price and current account – in accordance with the general principle of the Swedish Accounting Standards Board in BFNAR 2003:3. The principle is called successive profit settlement and entails that income and expenses are recognised in the Income Statement as a ratio of the degree of completion of the contract. The degree of completion is determined on the basis of the actual project costs as a ratio of the calculated project costs of the entire contract. Recognised income comprises the degree of completion as a ratio of the total income calculated for the entire contract. A precondition for successive profit settlement is that the outcome can be calculated on a reliable basis. For commissions for which the outcome cannot be calculated reliably, income equivalent to the actual costs is recognised. Expected losses are carried as costs as soon as they are known. Construction contracts are recognised in the Balance Sheet project by project either as Recognised, but not invoiced income under current assets, or as Invoiced, but not recognised income under current liabilities. Projects with higher recognised income than invoiced are recognised as assets, while projects invoiced for more than recognised income are recognised as liabilities.
ANNUAL REPORT 2012 – 31
BRA INVEST – BETTER BUSINESS
Intangible assets and property, plant and equipment
Definition of key figures
Intangible assets and property, plant and equipment are recognised at cost less accumulated depreciation or amortisation and any impairment. Cost includes the acquisition price and the costs that are directly attributable to the asset for its installation and preparation for use in accordance with the purpose of its acquisition.
Profit margin
The gain or loss on the divestment or disposal of an asset is the difference between the sales price and the recognised value of the asset, after deduction of direct sales costs. The incurred gain or loss is recognised as operating profit.
Profit after financial items as a percentage of net sales. Interest coverage ratio Profit after financial items increased by interest expenses via interest expenses.
Depreciation and amortisation are based on original cost reduced by the calculated residual value equivalent to zero. Depreciation takes place on a straightline basis over the assessed useful life of the asset:
Return on equity
Capitalised development expenses
3 years
Solvency - net
Trademarks
5 years
Adjusted equity as a ratio of total assets
Goodwill
5-20 years
Buildings
33-100 years
Site improvements
20 years
Plant and machinery
5-10 years
Equipment, tools and fixtures & fittings
4-10 years
The term of amortisation of Group goodwill concerning acquired companies is 5-20 years as these acquisitions are assessed to represent long-term strategic value.
Financial income and expenses Financial income and expenses consist of interest income on bank deposits, receivables and interest-bearing securities, interest expenses, distributed income, and realised profits and losses on financial investments. Interest income and interest expenses include accrued amounts.
Financial risk management Interest rate risk Existing interest-bearing debt carries variable interest rates. Currency risk The activities are in principle exposed to certain transaction risks. The company does not normally use forward contracts or similar financial instruments. Credit risk The activities concern a large number of customers subject to varying credit terms. The company suffers very few customer losses, among other things due to credit controls and credit limits. The credit risk is assessed to be limited. Liquidity risk In recent years the company has reported large positive cash flows from the company’s activities. Completed investments have been financed with loans and own funds. Continuing sound profitability means that the liquidity risk is deemed to be low.
32 – ANNUAL REPORT 2012
Net profit as a percentage of equity.
Solvency including minority interests Group equity + minority interests as a percentage of total assets.
BRA INVEST – BETTER BUSINESS
Noter Note 1 Purchase and sale between Group companies The Parent Company’s sales are all internal within the Group. The Parent Company’s purchases from companies in the Group are SEK 558 thousand (SEK 278 thousand)
Note 2 Net sales per business area The Group
2012
2011
Manufacture of plastic components
418,002
335,399
Trading of pet articles
359,540
353,626
Building activities
260,454
209,694
Production of plastic products
100,929
94,461
Planing
93,413
92,369
Trading of decoration products
23,564
22,095
Property management Total
4,257
4,207
1,260,159
1,111,851
Note 3 Personnel 2012 Average number of employees
2011
Number
of whom women
Number
5
20%
2
0%
Subsidiaries
560
33%
515
33%
The Group, total
565
33%
517
33%
Board of Directors
2
0%
4
0%
CEO and other company management, Parent Company
3
33%
2
0%
CEO and other company management, subsidiaries
11
18%
9
11%
Board of Directors and CEO
Other employees
Board of Directors and CEO
Other employees
Parent Company
of whom women
Gender distribution of the company management
Salaries and other remuneration Parent Company
1,503
1,155
461
548
Subsidiaries
6,807
179,417
7,674
151,694
The Group, total
8,310
180,572
8,135
152,242
Invoiced directors’ fees are
610
460
Board of Directors and CEO
Other employees
Board of Directors and CEO
203
185
89
71
Subsidiaries
1,327
12,308
1,283
9,293
The Group, total
1,530
12,493
1,372
9,364
Pension costs Parent Company
Other social security expenses Parent Company
All
Other employees
All
959
382
Subsidiaries
55,620
47,728
The Group, total
56,579
48,110
There are no outstanding pension obligations to the management of the Parent Company or the Group.
ANNUAL REPORT 2012 – 33
BRA INVEST – BETTER BUSINESS
Note 4 Audit fees 2012
2011
Audit services
Other services
Audit services
Other services
Mazars SET Revisionsbyrå AB
703
610
1,071
306
Other auditors
127
49
362
77
The Group, total
830
659
1,433
383
Audit services are the auditors’ statutory audit. Audit fees concerning audit by Mazars SET Revisionsbyrå AB are charged to the Parent Company BrA Invest CKS AB in their entirety as from and including 2012.
Note 5 Leasing fees Group
Leasing fees total
Parent Company
2012
2011
2012
2011
9,837
9,729
0
0
Note 6 Profit from financial investments Parent Company Profit from investments in Group companies
2012
2011
Anticipated dividend
12,775
11,875
Group contributions
18,418
1,993
Profit on divestment
0
1,335
Impairment Total
-8,647
-4,213
22,546
10,990
Note 7 Tax on the profit for the year Group
Tax effect, Group contributions Current tax, tax for the year Current tax, tax in previous years Deferred tax Total
34 – ANNUAL REPORT 2012
Parent Company
2012
2011
2012
2011
0
0
-6,343
-167
-5,262
-5,139
0
0
0
140
0
0
-672
2,143
1,984
-12
-5,934
-2,856
-4,359
-179
BRA INVEST – BETTER BUSINESS
Note 8 Intangible assets Group 2012
2011
486
486
Capitalised costs Opening balance Closing acquisition cost
486
486
Opening amortisation
-486
-454
Amortisation for the year Closing amortisation Book value
0
-32
-486
-486
0
0
Trademarks Opening balance
5,231
5,231
Closing acquisition cost
5,231
5,231
Opening amortisation
-4,662
-4,485
Amortisation for the year
-169
-177
-4,831
-4,662
400
569
65,557
40,901
Purchase
-2,210
24,670
Sale/scrapping
-1,153
0
161
-14
Closing acquisition cost
62,355
65,557
Opening amortisation
-14,822
-10,716
-6,492
-4,119
1,153
0
Closing amortisation Book value
Goodwill Opening balance
Translation difference
Amortisation for the year Sale/scrapping Translation difference
-60
13
Closing amortisation
-20,221
-14,822
Book value
42,134
50,735
ANNUAL REPORT 2012 – 35
BRA INVEST – BETTER BUSINESS
Note 9 Property, plant and equipment Group 2012
2011
120,468
93,195
Land and buildings Opening balance Acquisition of subsidiaries Purchase Reclassifications Sale
0
35
22,012
27,273
7,730
0
0
-35
150,210
120,468
-13,691
-12,022
Acquisition of subsidiaries
0
-34
Sale
0
34
-2,465
-1,669
-16,156
-13,691
134,054
106,777
Opening balance
4,096
4,126
Sales/disposal
-3,986
0
-110
-30
Closing balance Opening amortisation
Amortisation for the year Closing amortisation Book value
Costs incurred in property not owned
Translation difference Closing balance
0
4,096
Opening balance
-4,096
-3,087
Sales/disposal
3,986
0
0
-1,041
Amortisation for the year Translation difference
110
32
Closing amortisation
0
-4,096
Book value
0
0
223,688
152,944
Plant and machinery Opening balance
0
64,165
Purchase
Acquisition of subsidiaries
5,564
14,986
Sales/disposal
-6,364
-8,407
Reclassifications
93
0
Closing balance
222,981
223,688
Opening amortisation
-166,521
-109,664
0
-56,612
Acquisition of subsidiaries Sales/disposal Amortisation for the year Closing amortisation Book value
36 – ANNUAL REPORT 2012
5,987
8,407
-10,911
-8,652
-171,445
-166,521
51,536
57,167
BRA INVEST – BETTER BUSINESS
Note 9 continued Property, plant and equipmentr Group
Parent Company
2012
2011
2012
2011
152,444
133,234
37
0
0
10,856
0
0
13,308
10,230
0
37
-4,087
-1,805
0
0
Translation difference
-295
-71
0
0
Reclassification
866
0
0
0 37
Equipment, tools and fixtures & fittings Opening balance Acquisition of subsidiaries Purchase Sale/disposal
Closing balance
162,236
152,444
37
Opening balance
-125,319
-108,813
-8
0
0
-9,021
0
0
3,319
1,346
0
0 -8
Acquisition of subsidiaries Sale/disposal Depreciation for the year
-10,311
-8,874
-12
Translation difference
181
43
0
0
Reclassification
-654
0
0
0
-132,784
-125,319
-20
-8
Opening impairment
-36
-36
0
0
Sale/disposal
36
0
0
0
Closing depreciation
Closing impairment Book value
0
-36
0
0
29,452
27,089
17
29
Note 10 Investments in Group companies Parent Company
Opening balance Purchase
2012
2011
80,925
37,920
323
22,032
Shareholder contributions
0
12,213
New issue
0
10,000
Disposal
0
-1,240
81,248
80,925
Closing balance Opening impairment
-4,213
0
Impairment for the year
-8,647
-4,213
Closing impairment
-12,860
-4,213
Book value
68,388
76,712
Information concerning subsidiaries Company Name and Domicile
Reg. no.
Capital/Votes
Number of shares
Book value
1,143
Direct ownership BAB Byggtjänst AB, Åstorp
556608-9669
90%
1,350
Fastighets AB 3Hus, Åstorp
556739-8010
100%
1,000
100
Draken i Reftele AB, Gislaved
556476-2093
100%
4,000
9,833 24,750
Dogman AB, Åstorp
556493-9519
95%
28,500
Olofssons Hyvleri AB, Vrigstad
556386-4668
100%
10,000
1,350
KB Components AB, Örkelljunga
556081-6653
71%
399,000
15,885
Living Story AB, Åstorp
556304-6803
100%
11,000
7,077
Fastighets AB Västra vägen, Åstorp
556825-8650
100%
500
2,050
Fastighets AB Vårdsippan, Åstorp
556825-8635
100%
500
4,050
Gajadfastigheten i Åstorp AB, Åstorp
556826-1944
100%
500
50
Mässhallen i Åstorp AB, Åstorp
556838-8622
100%
500
50
Fastighets AB Bjuvstorp 6:42, Åstorp
556825-9070
100%
500
2,050
Total
68,388
ANNUAL REPORT 2012 – 37
BRA INVEST – BETTER BUSINESS
Note 10 continued Investments in Group companies Information concerning subsidiaries Company Name and Domicile
Reg. no.
Capital/Votes
Number of shares
986 467 025
95%
100
29 41 44 91
95%
125,000
2366900-6
95%
100
KB System AB, Örkelljunga
556306-9581
71%
1,000
KB Components UAB, Kaunas, Litauen
300 066 964
71%
10
Direct ownership Dogman AS, Hagan, Norge Dogman Aps, Bröndby, Danmark Dogman OY, Åbo, Finland
KB Components Årevall AB, Värnamo
556498-0885
71%
5,000
Parat-Bygg AB, Malmö
556323-5406
90%
3,000
Note 11 Non-concluded construction work Group 2012
2011
Recognised income for construction work in progress
77,855
100,957
Invoiced for construction work in progress
-63,091
-90,809
Total
14,764
10,148
-36,232
-59,784
Income recognised, but not invoiced
Income invoiced, but not recognised Recognised income for construction work in progress
41,168
76,713
Total
Invoiced for construction work in progress
4,936
16,929
Net construction work in progress
9,828
-6,781
Note 12 Accrued items Group
Parent Company
2012
2011
2012
2011
Prepaid expenses
9,274
9,364
99
10
Accrued income
1,901
2,451
0
0
11,175
11,815
99
10
Accrued personnel expenses
40,071
39,727
659
146
Accrued bonus to customers
3,123
1,840
0
0
Other accrued expenses
6,352
5,627
700
100
Prepaid expenses and accrued income
Total
Accrued expenses and prepaid income
Prepaid income Total
38 – ANNUAL REPORT 2012
1,082
1,038
0
0
50,628
48,232
1,359
246
BRA INVEST – BETTER BUSINESS
Note 13 Equity The Group
Share capital
Restricted equity
Unrestricted equity
100
6,738
88,221
-5
-140
Opening balance Translation difference Adjustments between restricted and unrestricted equity
-166
Profit for the year
166 4,955
Closing balance
100
Parent Company
Share capital
Unrestricted equity
100
55,061
Opening balance
6,567
Group contributions
93,202
-24,119
Tax effect of Group contributions
6,343
Profit for the year
14,534
Closing balance
100
51,819
Note 14 Deferred tax assets (+) / tax liabilities (-) The temporary differences have resulted in deferred tax assets and liabilities concerning the following:
Group
Parent Company
2012
2011
2012
-3,927
-5,836
0
0
-481
-381
0
0
Other assets
381
1,787
0
0
Provisions
528
617
0
0
5,916
6,898
2,409
425
327
392
184
220
2,417
3,085
2,409
425
Untaxed reserves Non-current assets
Loss of which blocked for taxation 2015 Total
2011
Note 15 Other provisions Group
Pensions
2012
2011
2,163
2,118
Other
0
2,650
Total
2,163
4,768
Note 16 Credit limits Group
Parent Company
2012
2011
2012
2011
108,493
98,903
42,000
5,000
25,939
15,609
8,552
163
7,000
27,000
0
0
30,000
23,460
0
0
Overdraft facility Limit granted Unutilised credit facility Building credit facility Limit granted Invoice credit facility Limit granted
ANNUAL REPORT 2012 – 39
BRA INVEST – BETTER BUSINESS
Note 17 Non-current liabilities Group
Loans falling due within 2-5 years Loans falling due after 5 years
2012
2011
39,086
46,520
112,379
100,767
Note 18 Memorandum items Group
Parent Company
2012
2011
2012
2011
Business mortgages
138,400
114,000
0
0
Property mortgages
137,250
137,250
0
0
Shares in subsidiaries
129,113
109,597
68,388
57,587
35,086
38,925
0
0
1,554
1,554
0
0
Pledged assets
Mortgaged trade receivables Capital insurance Other pledged assets Total pledges
10,019
10,455
0
0
451,422
411,781
68,388
57,587
Contingent liabilities Surety for subsidiary
164,054
215,760
Total contingent liabilities
164,054
215,760
Åstorp 04-04-2013
Stefan Andersson
Lennart Andersson
CEO
Chairman
My audit report was submitted on 04-04-2013
Bo Matson Authorised Public Accountant
40 – ANNUAL REPORT 2012
Audit Report To the Annual General Meeting of BrA Invest CKS AB, Reg. no. 556753-2501 Report on the Annual Report and the Consolidated Annual Report I have audited the Annual Report and Consolidated Annual Report of BrA Invest CKS AB for the year 2012. The company’s Annual Report and Consolidated Annual Report are presented on pages 20-40 of the printed edition of this document. The responsibility of the Board of Directors and the CEO for the Annual Report and Consolidated Annual Report The Board of Directors and the CEO are responsible for the presentation of an Annual Report that presents a true and fair view in accordance with the Swedish Annual Accounts Act, as well as a Consolidated Annual Report that presents a true and fair view in accordance with the Swedish Annual Accounts Act, and for the internal controls deemed necessary by the Board of Directors and the CEO in order to present an Annual Report and Consolidated Annual Report that are free of material misstatement, whether due to inaccuracies or errors. Responsibility of the auditor It is my responsibility to state an opinion concerning the Annual Report and the Consolidated Annual Report on the basis of my audit. I conducted my audit in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. These standards require that I comply with ethical business requirements and plan and perform the audit to obtain reasonable assurance that the Annual Report and the Consolidated Annual Report are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and other disclosures in the Annual Report and the Consolidated Annual Report. The auditor selects which measures to perform, among other things by assessing the risks of material misstatement in the Annual Report and the Consolidated Annual Report, whether due to inaccuracies or errors. In this risk assessment, the auditor considers the elements of the internal control that are relevant to how the company presents the Annual Report and the Consolidated Annual Report, in order to present a true and fair view, for the purpose of performing the assessments that are appropriate in the circumstances, but not to state an opinion on the effectiveness of the company’s internal control. An audit also includes an assessment of the appropriateness of the accounting policies applied and their application by the Board of Directors and the CEO on preparing the Annual Report, as well as evaluating the overall presentation of the Annual Report and the Consolidated Annual Report.
I therefore recommend the Income Statements and Balance Sheets of the Parent Company and the Group for adoption by the Annual General Meeting. Report on other statutory requirements and other provisions In addition to my audit of the Annual Report and the Consolidated Annual Report, I have also audited the proposal for allocation of the company’s profit or loss, as well as the management of BrA Invest CKS AB for the year 2012 by the Board of Directors and CEO. The responsibility of the Board of Directors and the CEO The Board of Directors is responsible for the proposal for allocation of the company’s profit or loss, and the Board of Directors and CEO are responsible for the management of the company in accordance with the Swedish Companies Act. Responsibility of the auditor On the basis of my audit, it is my responsibility to state an opinion with reasonable certainty concerning the proposal for allocation of the company’s profit or loss and on the management of the company. I conducted my audit in accordance with generally accepted auditing standards in Sweden. As the basis for my opinion on the Board of Directors’ proposal for allocation of the company’s profit or loss I have examined whether the proposal is in accordance with the Swedish Companies Act. As the basis for my opinion concerning discharge of responsibility, in addition to my audit of the Annual Report and the Consolidated Annual Report I have examined significant decisions, measures and circumstances of the company in order to assess whether any member of the Board of Directors or the CEO has any indemnification liability to the company. I have also examined whether any member of the Board of Directors or the CEO has otherwise infringed the Swedish Companies Act, Annual Accounts Act, or the company’s Articles of Association. I consider the audit evidence I have obtained to be sufficient and appropriate as the basis for my opinion. Opinion I recommend that the Annual General Meeting adopts the distribution of the profit in accordance with the proposal in the Management’s Review and grants the members of the Board of Directors and the CEO discharge of their responsibility for the financial year.
I consider the audit evidence I have obtained to be sufficient and appropriate as the basis for my opinion. Opinion I believe that the Annual Report and the Consolidated Annual Report are presented in accordance with the Annual Accounts Act and in all material respects present a true and fair view of the financial position of the Parent Company and the Group as of 31 December 2012, and of their financial results and cash flows for the year in accordance with the Annual Accounts Act. The Management’s Review is in harmony with the other elements of the Annual Report and the Consolidated Annual Report.
Helsingborg 04-04-2013
Bo Matson Authorised Public Accountant
ANNUAL REPORT 2012 – 41
BRA INVEST – BETTER BUSINESS
Board of Directors and auditors
Stefan Andersson, born 1964
Revisor
Member of the Board of Directors and CEO since 2008
Bo Matson, born 1952
Education and professional experience: MSc (Eng), Mechanical Engineering, Master of Business Administration, CEO and President of BrA Invest since 2008, CEO of Gunnebo Troax AB and member of Gunnebo’s Executive Management Board, 2002-2008, Division Manager, Atlas Copco Secoroc, 2000-2002, Division Manager, Trelleborg Protective Products, 1996-2000, other management positions in ABB Stal, 1988-1996, in such locations as Finspång, North Brunswick, NJ, USA and Nurnberg, Germany.
Authorised Public Accountant, Mazars SET Revisionsbyrå AB.
Current Board positions: Chairman of the Boards of all subsidiaries of BrA Invest.
Other audit responsibilities: Among others Marco Group, Stenbocken, Ulf Malmgren Gruppen, Godbiten.
Alternate auditor
Rose-Marie Östberg, born 1963 Authorised Public Accountant, Mazars SET Revisionsbyrå AB.
Lennart Andersson, born 1937 Chairman
42 – ANNUAL REPORT 2012
Other audit responsibilities: Among others Öresundskraft, Helsingborgshem, HSB Nordvästra Skåne, Mäster Grön.
ANNUAL REPORT 2012 – 43
T H O R N R E K L A M BY R Å 2 0 1 3
BrA Invest – Box 163 – SE-265 22 Åstorp – Tel. +46 (0)42-509 60 – Fax +46 (0)42-599 20 – Reg. no.: 556753-2501 – www.brainvest.se