Interim report for the period January 1 June 30, 2012

Transcription

1 Interim report for the period January 1 June 30, 2012 Second quarter April 1 June 30, 2012 Period January 1 June 30, 2012 Consolidated net sales amounted to SEK 662 M (589). Consolidated net sales amounted to SEK 1,288 M Operating profit in the Group amounted to SEK 169 M (1,107). (91), of which capital gains accounted for SEK 94 M (0). Operating profit in the Group amounted to SEK 253 M Profit before tax amounted to SEK 159 M (89). (85), of which capital gains accounted for SEK 94 M (0). Profit for the period amounted to SEK 159 M (75). Profit before tax amounted to SEK 261 M (71). Earnings per share attributable to continuing operations Profit for the period amounted to SEK 253 M (57). amounted to SEK 1.09 (0.69) before and after dilution. Earnings per share attributable to continuing operations The ICA Group s net sales increased by 1.6% compared amounted to SEK 1.73 (0.79) before and after dilution. with the previous year. Operating profit amounted to The ICA Group s net sales increased by 3.9% compared SEK 622 M (738), including nonrecurring items in ICA with the previous year. Operating profit amounted to Norway of net SEK -194 M. SEK 1,303 M (1,228), including nonrecurring items in ICA Hakon Invest s subsidiary Forma Publishing Group sold Norway of net SEK -194 M. the Forma Contract business area and the Finnish magazine operations, which generated a total capital gain of SEK 94 M Rolling Apr - Jun Apr - Jun Jan - Jun Jan - Jun Full year 12 months Group Net sales ,288 1,107 2,498 2,679 Operating profit Profit for the period Earnings per common share continuing operations, SEK Earnings per C share continuing operations, SEK Growth, % Operating margin, % Hakon Invest, which is listed on NASDAQ OMX Stockholm, conducts active and long-term investment operations in retailoriented companies in the Nordic and Baltic regions. Hakon Invest owns 40% of ICA AB, one of northern Europe s leading food retail companies. Hakon Invest also has holdings in Forma Publishing Group, Kjell & Company, Cervera, inkclub and Hemtex. Further information about Hakon Invest is available at HAKON INVEST AB Street address Telephone Website Svetsarvägen Postal address Fax Registered number Box 1508, SE Solna

2 CEO s comments We are pleased to see that the relatively favorable retail development we saw at the start of 2012 continued in the late spring and early summer. Consumers appear to have shaken off concerns about the European debt crisis, for the time being at least, and instead realized that lower interest rates and reduced electricity costs mean more money for both consumption and savings. The confidence indicator shows that the mood among Swedish households gradually improved during the spring and in July was just above the historical average. In other words we have a considerably better market today than we predicted when we entered 2012 even though the factors causing concern we saw then still apply. In my opinion we should continue to pay attention to high household debt since a situation with higher interest rates can have major effects on consumption. The ICA Group s operating profit excluding nonrecurring items increased by 10% during the second quarter. In Sweden, ICA continued to outperform the food retail market in general due to strong development even in the smaller profiles, ICA Nära and ICA Supermarket. Cura Pharmacy also performed well during the quarter. Strong store sales combined with a higher proportion of private labels helped boost earnings for ICA Sweden. Efforts to reduce logistics costs in Sweden are underway. ICA Norway s operating result excluding nonrecurring items improved during the quarter but is far from satisfactory. The major restructuring taking place in Norway designed to create a profitable and stable ICA Norway continues with full force. One key measure has been our leaving the Maxi concept and centering operations around Rimi and ICA Supermarked. Another measure is that we are now implementing administrative efficiency improvements. It will take time, however, before we see the full effects of these measures in the sense that we can expect to report a profit. Rimi Baltic reports earnings for the second quarter on a par with the previous year which is a good result in view of the intense price competition prevailing in the Baltic markets. Among our other holdings Kjell & Company, Cervera, inkclub and Hemtex had a good second quarter this year with both increased sales and earnings compared with the previous year. The strategic review of our ownership in Forma Publishing Group was completed in June. This review resulted in the sale of the Forma Contract business area as well as Forma Magazines Finnish magazine publications. Remaining in Forma after the sale are Forma Books and Forma Magazines. The market for magazines and books remains challenging with shrinking sales figures for the sector as a whole and changed consumption patterns which are something to which we must adjust. In order to meet these conditions we have taken action in Forma Books as well as in Forma Magazines. Claes-Göran Sylvén President & CEO Page 2

3 Significant events during the period January June 2012 June 2012 Forma will continue to operate with Hakon Invest as owner, Forma Contract sold to Stampen In autumn, Hakon Invest started a process to review its ownership in the wholly owned subsidiary Forma Publishing Group. As part of this process Forma Contract and Forma Magazines Finnish operations were sold during the spring. Remaining in Forma after the sale are Forma Magazines and Forma Books, which will continue to operate with Hakon Invest as owner. The sale of these operations generated a capital gain of SEK 94 M which is included in Hakon Invest s operating result for the second quarter of April 2012 ICA divests ICA Maxi in Norway ICA reached an agreement with Lagopus Eiendomsutvikling AS in April 2012 relating to the transfer of a number of lease agreements and eight properties linked to ICA Maxi in Norway. Lagopus has taken over a total of 17 lease agreements and eight properties. The divestment generated a capital gain on the property portfolio of SEK 232 M, which is included in ICA Real Estate s operating profit for the second quarter, and costs of SEK 367 M, which are included in ICA Norway s operating result in the second quarter, including goodwill impairment, costs for sales of inventories and overhead costs for refurbishment of premises. Taken overall, including capital gains and nonrecurring costs, the sale of ICA Maxi resulted in a charge against the ICA Group s operating profit of SEK -135 M in the second quarter of April 2012 Hannu Ryöppönen elected as the new Chairman of the Board at Hakon Invest s AGM At Hakon Invest s Annual General Meeting, which was held in Stockholm on Thursday, April 19, 2012, Hannu Ryöppönen was elected as the new Chairman of the Board of Hakon Invest. Lars Otterbeck, who has been Chairman of Hakon Invest since 2005, had declined re-election. April 2012 Per Strömberg took over as CEO of the ICA Group Per Strömberg took up the position of CEO of the ICA Group in April when he took over from Kenneth Bengtsson. February 2012 ICA issues SEK 2 billion dividend ICA issued a dividend of SEK 2 billion for, of which Hakon Invest s share amounted to SEK 800 M (760). Hakon Invest received the dividend from ICA in April Significant events after the end of the period August 2012 ICA improves administrative efficiency in Norway ICA has decided to implement administrative efficiency improvements in Norway. As a result of this decision, a SEK 59 M provision has been made which will be charged against ICA Norway s operating result in the second quarter of July 2012 ICA won case against Möre retailers On July 6, 2012, the 2012 the Supreme Court of Norway announced that it will not grant the Möre retailers leave to appeal. This means that the decision from Borgarting Court of Appeal in Oslo, which judged in ICA s favor earlier this spring, stands firm and the dispute between ICA Norway and these retailers has now ended. Page 3

4 Business environment and market The Swedish retail trade has enjoyed a surprisingly good development thus far in 2012, given the unease and uncertainty which still prevail about the European debt crisis and the effects that can be expected. Performance in the different sectors differed, however. While the automotive industry is losing ground, food retail in particular enjoyed success in the spring as did several specialist sectors. Taken over, retail trade increased by 3.0% in current prices in the first half of the year. Measured in fixed prices, adjusted for calendar effects, the increase was 2.5% in the period January June Food retail rose 1.2% in volume and consumer durables by 3.5% in the six-month period. The best volume development was in the electronics sector with an increase of 12% but which in current prices fell 0.4%. Sport & leisure and footwear have seen very good volume development thus far this year, up 8.2% and 7.9% respectively. At the other end books and stationary and toys lost ground in volume and current prices. The outlook for the rest of 2012 includes many uncertain variables and there is every reason to adopt a continued cautious approach to the retail market. 7,0% 6,0% 5,0% 4,0% 3,0% 2,0% 1,0% Swedish retail monthly growth June - June 2012 Change in procent compare with the same month last year 0,0% -1,0% jun jul aug sep oct nov dec jan feb mar apr may jun -2,0% Current prices Fixed prices, calender adjusted Source: HUI Page 4

5 Group performance NET SALES AND EARNINGS Since Hemma was sold as of December 31,, the entire earnings from the company are reported on the line Profit/loss from discontinued operations in the Statement of comprehensive income for. Second quarter April - June 2012 Consolidated net sales amounted to SEK 662 M (589) in the period April June. Operating profit in the Hakon Invest Group amounted to SEK 169 M (91), of which capital gains accounted for SEK 94 M. Net financial items in the Group amounted to SEK -10 M (-2), of which return from the Parent Company s investment management amounted to SEK -5 M (4). Profit before tax amounted to SEK 159 M (89). Loss from discontinued operations amounted to SEK 14 M in the previous year. A tax expense of SEK 0 M (0) is reported for the period. Profit for the period amounted to SEK 159 M (75). Earnings per share attributable to continuing operations amounted to SEK 1.09 (0.69). Period January June 2012 Consolidated net sales amounted to SEK 1,288 M (1,107) in the period January June. Operating profit in the Hakon Invest Group amounted to SEK 253 M (85), of which capital gains accounted for SEK 94 M (0). Net financial items in the Group amounted to SEK 8 M (-14), of which return from the Parent Company s investment management amounted to SEK 18 M (0). Profit before tax amounted to SEK 261 M (71). Loss from discontinued operations amounted to SEK 27 M in the previous year. A tax expense of SEK 8 M (+13) is reported for the period. Profit for the period amounted to SEK 253 M (57). Earnings per share attributable to continuing operations amounted to SEK 1.73 (0.79). Net sales per quarter *) Operating profit per quarter *) Q1 Q2 Q3 Q Q1 Q2 Q3 Q *) Full year and Q are reported excluding Hemma. Page 5

6 Development in the holdings APRIL JUNE 2012 Net sales Gross margin, % Operating profit/loss Contribution to Hakon Invest s operating profit ICA 24,758 24, Forma ) ) 13 Kjell & Co Cervera inkclub Hemtex JANUARY JUNE 2012 Net sales Gross margin, % Operating profit/loss Contribution to Hakon Invest s operating profit ICA 48,067 46, ,303 1, Forma ) ) -5 Kjell & Co Cervera inkclub Hemtex JUNE 30, 2012 Holding Total assets Equity Interestbearing net debt Cash flow from operating activities Cash flow from investing activities ICA 40% 1) 41,019 10,134 1,710 3) 1, Forma 100% Kjell & Co 50% 2) Cervera 91.4% InkClub 100% Hemtex 68.5% ) 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. 2) Hakon Invest and other principal shareholders have joint control of the company through an agreement. 3) Interest-bearing net debt for ICA is exclusive of ICA Bank. 4) Including capital gain of SEK 94 M.. Page 6

7 ICA SALES AND EARNINGS ICA GROUP Second quarter April - June 2012 The ICA Group s net sales during the quarter amounted to SEK 24,758 M (24,365), an increase of 1.6%. At constant exchange rates, net sales rose 1.3%. Operating profit amounted to SEK 622 M (738), corresponding to an operating margin of 2.5% (3.0). Operating profit includes capital gains of SEK 342 M (15) and impairments of SEK 268 M (0). During the quarter nonrecurring costs relating to the discontinuation of ICA Maxi in Norway were charged against earnings in a net amount of SEK -135 M as well as costs relating to administrative efficiency improvements in Norway of SEK -59 M. Excluding these nonrecurring costs, the ICA Group s operating profit amounted to SEK 816 M (738) in the second quarter, corresponding to an operating margin of 3.3% (3.0). Period January June 2012 The ICA Group s net sales amounted to SEK 48,067 M (46,250) in the first half of the year, an increase of 3.9%. At constant exchange rates, net sales rose 3.4%. Operating profit amounted to SEK 1,303 M (1,228), corresponding to an operating margin of 2.7% (2.7). Operating profit includes capital gains of SEK 354 M (15) and impairments of SEK 274 M (0). During the period nonrecurring costs relating to the discontinuation of ICA Maxi in Norway were charged against earnings in a net amount of SEK -135 M as well as costs relating to administrative efficiency improvements in Norway of SEK -59 M. Excluding these nonrecurring costs, the ICA Group s operating profit amounted to SEK 1,497 M (1,228) corresponding to an operating margin of 3.1% (2.7) Apr Jun Apr Jun 2012 Jan Jun Jan Jun Full year Rolling 12 months Net sales 24,758 24,365 48,067 46,250 95,179 96,997 Operating profit ,303 1,228 2,505 2,579 Operating profit before nonrecurring items 1) ,497 1,228 2,505 2,773 Operating profit excluding capital gains and impairments ,223 1,213 3,101 3,098 Growth, % Operating margin, % Gross margin, % ) Operating profit before nonrecurring items is operating profit adjusted for revenue and expenses in conjunction with the discontinuation of ICA Maxi in Norway and costs relating to administrative efficiency improvements in Norway. ICA SWEDEN ICA Sweden s operating profit rose to SEK 666 M (631) in the second quarter as a result of higher sales. Among other things sales in the Cura pharmacies increased. Operating profit for the six-month period was SEK 1,202 M (1,153). ICA NORWAY Operating loss for ICA Norway in the second quarter was SEK 606 M (199). In the second quarter operating profit was charged with nonrecurring costs for the discontinuation of ICA Maxi of SEK 367 M as well as costs for improving administrative efficiency of SEK 59 M. Excluding these costs operating loss in ICA Norway amounted to SEK 180 M (199) in the second quarter. For the period January June ICA Norway reports an operating loss of SEK 726 M (433). Excluding nonrecurring costs the operating result improved to SEK -300 M (-433). Page 7

8 RIMI BALTIC Rimi Baltic s operating profit in the second quarter amounted to SEK 60 M (60). Increased volumes and improved margins were counterbalanced by slightly higher costs. In local currency earnings improved somewhat. During the period January June operating profit rose to SEK 89 M (57), due to higher sales. ICA BANK During the second quarter ICA Bank s operating profit amounted to SEK 58 M (45). Business volumes were 3.1% higher during the quarter. Both increased net commissions and higher net interest contributed to the improvement in earnings. During the first half of the year operating profit amounted to SEK 97 M (61). Business volumes rose 13.2% during the six-month period which is a key reason for the improved earnings. ICA REAL ESTATE ICA Real Estate s operating profit amounted to SEK 531 M (271) in the second quarter. Operating profit includes capital gains of SEK 268 M (13) and impairment of SEK 0 M (+1). Of capital gains for the year, SEK 232 M is attributable to the Norwegian ICA Maxi-transaction. For the period January June, ICA Real Estate s operating profit was SEK 793 M (505), of which capital gains from property sales accounted for SEK 279 M (14) and impairment for SEK 6 M (0). Excluding capital gains earnings increased to SEK 520 M (491), mainly because depreciation on the sold Norwegian ICA Maxi properties ceased. ICA GROUP FUNCTIONS Operating loss for ICA Group Functions amounted to SEK 87 M (70) in the second quarter. Operating loss for ICA Group Functions in the first half of the year was SEK 152 M (115). ICA S TAX DISPUTES In 2008 the Swedish Tax Agency decided to disallow interest deductions made within the ICA Group during the period In December 2010, the Administrative Court confirmed the Swedish Tax Agency s decision and disallowed an interest deduction of SEK 3,358 M. The tax claim amounts to SEK 1,187 M (including tax surcharge and interest). Since ICA has lodged an appeal against the Administrative Court s decision to the Administrative Court of Appeal, but not been granted deferral of payment, the company paid SEK 1,187 M to the Swedish Tax Agency in January. The amount is recognized as a receivable from the Swedish Tax Agency and the tax claim constitutes a contingent liability. The oral proceedings in the Administrative Court of Appeal were held in May 2012 and the court s decision will be announced in September Page 8

9 NET SALES, ICA GROUP 2012 Apr - Jun Apr - Jun 2012 Jan - Jun Jan - Jun Full year Rolling 12 months ICA Sweden 16,697 16,197 32,068 30,355 62,500 64,214 ICA Norway 4,957 5,145 9,974 10,085 20,679 20,568 Rimi Baltic 2,589 2,533 5,007 4,866 10,089 10,229 ICA Bank ICA Real Estate ,149 1,106 2,202 2,243 ICA Group Functions Intra-group sales ,403-1,239 Net sales 24,758 24,365 48,067 46,250 95,179 96,997 OPERATING PROFIT, ICA GROUP 2012 Apr - Jun Apr - Jun 2012 Jan Jun Jan - Jun Full year Rolling 12 months ICA Sweden ,202 1,153 2,617 2,665 ICA Norway ) ,255 1) 1) 3) -1,548 Rimi Baltic ) 204 ICA Bank ICA Real Estate ,005 1,293 ICA Group Functions Total operating profit 622 4) 738 1,303 1,228 2,505 2,579 1) Including goodwill impairment of SEK 592 M. 2) Including impairment of Säästumarket brand in Estonia, SEK 21 M. 3) Including nonrecurring costs for discontinuation of ICA Maxi of SEK 367 M and costs for improving administrative efficiency in Norway of 59 M. 4) Excluding nonrecurring items the ICA Group s operating profit amounted to SEK 816 M (738) for the period January June ICA FACTS The ICA Group is one of Northern Europe s leading retail companies with a focus on food. ICA has a total of around 2,100 of its own and retailer-owned stores in Sweden, Norway, and the Baltic countries. The company also offers its customers in Sweden financial services via ICA Bank. ICA Real Estate conducts property operations. ICA s complete interim report can be accessed on ICA s website Page 9

10 FORMA KJELL & COMPANY Full Rolling Apr-Jun Apr-Jun Jan-Jun Jan-Jun year 12 mths Net sales Operating profit/loss excl. capital gains Operating profit/loss incl. capital gains Growth, % Operating margin, % Gross margin, % Net sales in Forma amounted to SEK 166 M (234) in the second quarter. The decrease compared with the previous year is mainly due to sold operations during the quarter. Operating loss, excluding result from divestments, amounted to SEK 9 M (+13) during the quarter. Net sales decreased in the second quarter as a result of the sale of Forma Contract and the Finnish magazines business. The remaining operations within Forma Magazines noted weak development and both advertising and circulation revenues fell compared with the previous year. Forma Books, on the other hand, increased its sales slightly compared with last year. ICA Bokförlag reports a good performance while the outcome for the book clubs was considerably less favorable. Operating loss amounted to SEK 9 M (+13) for the quarter. The lower sales contributed to decreased earnings although cost savings were implemented among other things in the marketing department. Earnings also include costs of SEK 9 M related to changes in group structure and severance pay. Review of ownership Hakon Invest announced in the interim report for January September that ownership in Forma was to be evaluated. In April 2012 an agreement was signed with the Finnish company A- lehdet Oy on a sale of the subsidiary Forma Publishing Group Oy, which is Magazines operations in Finland and Estonia. At the end of May, an agreement was then signed to sell Forma Contract to Stampen. Remaining in Forma after these divestments are Forma Magazines and Forma Books, both of which will continue to be operated with Hakon Invest as owner. Hakon Invest s review of its ownership in Forma Publishing Group is thus completed Full Rolling Apr-Jun Apr-Jun Jan-Jun Jan-Jun year 12 mths Net sales Operating profit Growth, % Like-for-like growth, % na Operating margin, % Gross margin, % Net sales in Kjell & Company in the second quarter amounted to SEK 174 M (141), an increase of 23% compared with the same period in the previous year. Like-for-like sales increased by 17%. Operating profit amounted to SEK 5 M (-9). The operating margin for the quarter was 3.0% (-6.5). Sales in Kjell & Company s stores continued to show very good growth in the second quarter. The total increase amounted to 23% and 17% in comparable units. Three new stores were opened during the quarter: in Kungsbacka, Ystad and Falun. The expanded product catalog and successful summer campaigns were among the reasons for the strong performance. Kjell & Company s operating profit improved to SEK 5 M (-9) in the second quarter. Compared with the same period in, the gross margin was 0.3 percentage points higher and operating result improved by SEK 14 M. Increased sales and reduced central costs contributed to the increase in earnings. The growth strategy for Kjell & Company remains unchanged. The focus on skilled employees and a high level of service will also continue. Four new stores have been opened thus far in The number of stores at June 30, 2012, was 61 (55). FORMA PUBLISHING GROUP FACTS Forma Publishing Group is one of Sweden s leading media companies with operations within magazines, books and digital media. Operations are organized in two business areas: Forma Books and Forma Magazines. Forma has a total of over 200 employees in Sweden. Read more at KJELL & COMPANY FACTS Kjell & Company is one of Sweden s leading retailers of home electronics accessories. Kjell & Company owns and operates 61 stores in Sweden all of which carry a complete range of approximately 7,000 items. In addition to the stores, online sales are a key channel. A high level of service and product expertise characterize the company Read more about Kjell & Company at Page 10

11 CERVERA INKCLUB Full Rolling Apr-Jun Apr-Jun Jan-Jun Jan-Jun year 12 mths Net sales Operating profit Growth, % Like-for-like growth, % na Operating margin, % Gross margin, % Full Rolling Apr-Jun Apr-Jun Jan-Jun Jan-Jun year 12 mths Net sales Operating profit Growth, % Operating margin, % Gross margin, % Net sales in Cervera amounted to SEK 164 M (155) in the second quarter. This is an increase of 7% compared with the same period in the previous year. Like-for-like sales increased by 9%. Operating loss amounted to SEK 11 M (14). The operating margin during the quarter was -6.9% (-9.0). Cervera reports good sales development in the second quarter, due among other things to strong sales of gifts for high school graduates and successful customer activities. The focus was more on store activities following the restructuring and adjustments to the product range carried out in the early months of the year. Operating loss improved to SEK 11 M (14) in the second quarter due to good sales performance. Cervera s improvements in the efficiency of its store operations and streamlining of the product range will continue in The number of wholly owned stores at June 30, 2012, amounted to 56 (56). The number of franchise stores was 22 (22). Net sales in inkclub in the second quarter amounted to SEK 128 M (119), an increase of 8% compared with the same period in the previous year. Operating profit improved to SEK 10 M (4) in the quarter, corresponding to an operating margin of 7.5% (3.4). Taken overall, inkclub s net sales were 8% higher than in the previous year. Sales of ink and toner increased during the quarter and contributed to additional sales via the single basket which includes dustclub, lightclub and batteryclub. Other customer clubs include Beautyplanet which continues to develop very well in terms of sales. inkclub operating profit rose to SEK 10 M (4). The focus in inkclub is on development of a new IT platform and a new CRM system so as to be able to capitalize on the existing customer base and create conditions for future growth. CERVERA FACTS Cervera is Sweden s leading store chain within glass, porcelain and kitchen equipment with a broad range of well-known brands. The offering consists of high-quality and design products for food preparation, serving and decoration in an inspiring store environment. The Cervera chain has 78 stores, of which 56 are wholly or partly owned stores and 22 are franchise stores.. Read more about Cervera at INKCLUB FACTS inkclub in a pure play online retailer which sells a range of consumables over the internet in 15 European countries. The core business is ink cartridges and other printer accessories, but inkclub also offers light bulbs, batteries, vacuum cleaner bags and beauty products. Customers are offered a broad product range at low prices, exclusive member offerings and fast deliveries. Read more about inkclub at Page 11

12 HEMTEX Full Rolling Apr-Jun Apr-Jun Jan-Jun Jan-Jun year 12 mths Net sales Operating profit Growth, % Like-for-like growth, % na Operating margin, % Gross margin, % Hemtex s net sales amounted to SEK 204 M (201) in the second quarter, an increase of 2% compared with the same period in the previous year. Like-for-like sales increased by 8%. Operating loss amounted to SEK 29 M (57) in the second quarter, corresponding to an operating margin of -14.2%. Hemtex continued to increase its sales in the second quarter, despite fewer stores and extensive clearance sales in the corresponding quarter last year. Like-for-like sales increased by 7% in Sweden, 18% in Finland and 24% in Estonia. Operating loss amounted to SEK 36 M (50) during the quarter. This improvement reflects Hemtex s comprehensive change program, which includes lower costs and improved gross margins. Hemtex continues to develop its concept through a clear and credible communication, development of the product range, a high service level in the stores and an efficient purchasing process and distribution. The transfer to the new purchasing cooperation with ICA Global Sourcing is expected to take place in the latter part of The number of wholly owned stores at June 30, 2012, amounted to 137 (152). The number of franchise stores was 18 (20). HEMTEX FACTS Hemtex is a leading home textiles chain with operations in Sweden and Finland. Hemtex offers a value-for-money, inspiring and functional range of high quality textile products including towels, bed linen and curtains. The number of stores totals 155, of which 137 are wholly owned and 18 are operated by franchisees. To access Hemtex s complete interim report, visit the website Page 12

13 Group s financial position FINANCIAL POSITION AND LIQUIDITY At June 30, 2012, the Group s cash and cash equivalents and the current value of short-term investments amounted to SEK 1,349 M, compared with SEK 1,001 M at December 31,. The Group s interest-bearing liabilities amounted to SEK 511 M at June 30, 2012, compared with SEK 438 M at December 31,. The equity/assets ratio at the end of the period was 86.3%, compared with 85.6% at December 31,. CASH FLOW Cash flow from operating activities amounted to SEK 595 M (527). Dividend received from ICA AB amounted to SEK 800 M (760). Cash flow from investing activities amounted to SEK -153 M (4). Changes in short-term investments are included with SEK -299 M (20), while acquisitions of non-current assets are included with SEK -19 M (-16) and the sale of subsidiaries is included with SEK +165 M (0). Cash and cash equivalents increased to SEK 293 M at June 30, 2012, compared with SEK 248 M at December 31,. 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 Board and instructions to the President. 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 Invest is the financial development of the individual portfolio companies, where a worst case scenario is the loss of Hakon Invest s 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 AB, Hakon Invest 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. More information about Hakon Invest s risk management is provided on pages and of the Annual Report. No significant changes have occurred since the annual accounts were adopted. RELATED-PARTY TRANSACTIONS No significant transactions took place between Hakon Invest and related parties during the period. Parent Company performance REVENUES AND EARNINGS Second quarter April June 2012 The Parent Company s revenues amounted to SEK 0 M (0) during the second quarter of Operating loss amounted to SEK 18 M (15). Net financial items amounted to SEK 795 M (764), including the dividend from ICA AB of SEK 800 M (760). The investment return amounted to SEK -5 M (4). Profit before tax amounted to SEK 777 M (749). Tax income of SEK 0 M (0) is reported for the period. Profit for the period amounted to SEK 777 M (749). Period January June 2012 The Parent Company s revenues amounted to SEK 0 M (0) during the period. Operating loss was SEK 34 M (30). Net financial items amounted to SEK 818 M (760), including the dividend from ICA AB of SEK 800 M (760). The investment return amounted to SEK 18 M (0). Profit before tax amounted to SEK 784 M (730). Tax income of SEK 0 M (+1) is reported for the period. Profit for the period amounted to SEK 784 M (731). Page 13

14 FINANCIAL POSITION The Parent Company s cash and cash equivalent and the current value of short-term investments at June 30, 2012, amounted to SEK 1,267 M, compared with SEK 797 M at December 31,. At the end of June 2012 financial investments were as follows: 18% equities (46), 47% fixed-income securities (32), 19% hedge funds (21) and 16% cash and cash equivalents (1). The Parent Company has no interest-bearing liabilities. The equity/assets ratio at the end of the period was 98.0%, compared with 98.8% at December 31,. 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 At the end of the period the number of C shares amounted to 82,067,892 and the number of common shares was 78,849,544, of which 251,870 common shares are held by Hakon Invest. Common shares and C shares carry the same voting rights but a different dividend entitlement. While common shares have an unlimited dividend entitlement, C shares do not carry entitlement to cash profit distribution. All C shares will be converted into common shares on January 1, 2016, which means that with effect from 2016 the company will only have one class of share in the form of common shares with dividend entitlement. The total number of shares will remain unchanged after the conversion. OWNERSHIP STRUCTURE Largest shareholders in Hakon Invest at June 30, 2012 Number of shares Capital and voting rights, % ICA-handlarnas Förbund 108,348, Handelsbanken Funds 1,726, Swedbank Robur Funds 1,575, Robur Försäkring 1,332, SEB Investment Management 1,282, Leif Jönsson 1,003, JPM Chase 955, Fourth Swedish National Pension Fund (AP4) 838, Försäkring AB Skandia 739, Second Swedish National Pension Fund (AP2) 621, Ten largest shareholders 118,424, Other shareholders 42,492, Total 160,917, Source: Euroclear Sweden AB Page 14

15 Financial statements CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME April June January June Full year Note Net sales ,288 1,107 2,498 Cost of goods sold ,399 Gross profit ,099 Other operating income Cost of sales ,056 Administrative expenses Other operating expenses Share of profit of companies accounted for using the equity method Profit/loss from investments in group companies Operating profit/loss Financial income Financial expense Profit/loss from investments in group companies Change in fair value of financial instruments Profit before tax Profit/loss from discontinued operations Tax Profit for the period Other comprehensive income for the period Change in translation reserve, net after tax Change in fair value reserve, net after tax Change in hedging reserve, net after tax Total other comprehensive income Comprehensive income for the period Profit/loss for the period attributable to Owners of the parent Non-controlling interests Comprehensive income for the period attributable to Owners of the parent Non-controlling interests Earnings per share before and after dilution Common share, continuing operations C share, continuing operations Page 15

16 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION June Dec Note 2012 ASSETS Non-current assets Goodwill 579, Other intangible assets 1, ,057 Interests in companies recognized according to the equity method 3,5,695 6,391 6,185 Deferred tax assets Other non-current assets Total non-current assets 7,564 7,933 8,232 Current assets Short-term investments 1,056 1, Cash and cash equivalents Other current assets Total current assets 2,135 2,076 1,828 TOTAL ASSETS 2 9,699 10,009 10,060 EQUITY AND LIABILITIES Equity 8,373 8,702 8,613 Provisions Deferred tax liabilities Non-current interest-bearing liabilities Other non-current liabilities Current interest-bearing liabilities Other current liabilities TOTAL EQUITY AND LIABILITIES 9,699 10,009 10,060 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS January June Full year 2012 Cash flow from operating activities Cash flow from investing activities Cash flow from financing activities Cash flow for the period Cash and cash equivalents at January Exchange differences in cash and cash equivalents Cash and cash equivalents at the end of the period Hemma s cash flow was included in the previous year with SEK -7 M in the item Cash flow from operating activities, with SEK -5 M in the item Cash flow from investing activities and with SEK +11 M in the item Cash flow from financing activities. Page 16

17 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY June 30, 2012 Attributable to owners of the parent Attributable to non-controlling interests Total Opening equity, January 1, , ,613 Dividend Comprehensive income for the period Closing equity 8, ,373 June 30, Attributable to owners of the parent Attributable to non-controlling interests Total Opening equity, January 1, , ,944 Comprehensive income for the period New issue Hemtex Dividend Closing equity 8, ,702 CONDENSED PARENT COMPANY INCOME STATEMENT *) April June January June Full year Note Net sales Administrative expenses Operating profit/loss Profit/loss from financial investments Profit before tax Tax Profit for the period *) Since comprehensive income for the Parent Company corresponds to profit for the year according to the income statement, no separate statement of comprehensive income is prepared. Page 17

18 CONDENSED PARENT COMPANY BALANCE SHEET June Dec Note 2012 ASSETS Non-current assets Investments in group companies 1,198 1,198 1,198 Interests in joint ventures 2,960 2,960 2,960 Other non-current assets 1,000 1,016 1,098 Total non-current assets 5,158 5,174 5,256 Current assets Short-term investments 1,056 1, Cash and cash equivalents Other current assets Total current assets 1,308 1, TOTAL ASSETS 6,466 6,372 6,118 EQUITY AND LIABILITIES Equity 6,335 6,312 6,043 Non-current liabilities Current liabilities TOTAL EQUITY AND LIABILITIES 6,466 6,372 6,118 NOTE 1, ACCOUNTING PRINCIPLES Page 18

19 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. 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 carrying amounts of assets and liabilities. Fair value may deviate from these estimates. New accounting principles 2012 New and revised accounting standards and interpretations that apply from 2012 are very limited in scope and have not affected the financial reporting.. NOTE 2, SEGMENT REPORTING Net sales Operating profit Profit/loss before tax Profit/loss for the period Jan Jun Forma Cervera Hemtex inkclub Discontinued operations Other incl. eliminations Total 1,288 1, Assets Liabilities Investments Depreciation and impairment Jan Jun Forma Hemma Cervera Hemtex inkclub Other incl. eliminations 8,190 8, Total 9,699 10,009 1,329 1, Page 19

20 NOTE 3, INTERESTS IN COMPANIES RECOGNIZED ACCORDING TO THE EQUITY METHOD Book value June 30 Share of profits January June ICA AB 5,544 5, Bra förlag AB Trade Press AS Kjell & Co Elektronik AB inkclub Development AB ,695 6, NOTE 4, PROFIT/LOSS FROM DISCONTINUED OPERATIONS Income statement Hemma 2012 Apr Jun Apr Jun 2012 Jan Jun Jan Jun Income Expenses Operating profit/loss Financial items Profit/loss for the period Page 20

21 KEY FIGURES FOR HAKON INVEST April June January June Full year Gross margin, % Operating margin, % Net margin, % Return on capital employed, % Return on equity, % ,1 Equity/assets ratio, % Share data Earnings per common share attributable to continuing operations, SEK Earnings per C share attributable to continuing operations, SEK Earnings per common share attributable to discontinued operations, SEK Earnings per C share attributable to discontinued operations SEK Share price at end of period, SEK Dividend per common share, SEK Dividend, Dividend payout ratio, % Equity per share, SEK Cash flow per share, SEK Number of common shares 78,597,674 78,597,414 78,597,674 78,597,414 78,597,414 Number of C shares 82,067,892 82,067,892 82,067,892 82,067,892 82,067,892 Total number of shares at end of period 160,665, ,665, ,665, ,665, ,665,306 Average number of shares 160,665, ,652, ,665, ,652, ,658,964 Average number of shares after dilution 160,776, ,719, ,704, ,719, ,745,311 Page 21

22 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 22, 2012 Hannu Ryöppönen Chairman of the Board Anders Fredriksson Deputy Chairman of the Board Peter Berlin Cecilia Daun Wennborg Andrea Gisle Joosen Magnus Moberg Jan Olofsson Claes-Göran Sylvén President & CEO The information in this interim report is such that Hakon Invest must disclose pursuant to the Swedish Securities Market Act and/or the Swedish Financial Instruments Trading Act. The information was submitted for publication at CET on Wednesday, August 22, The report has not been reviewed by the company s auditors. For further information, please contact: CEO Claes-Göran Sylvén CFO Göran Blomberg IR Pernilla Grennfelt Press and analyst meeting Wednesday, August 22, CET Scandic Anglais Humlegårdsgatan 23, Stockholm Webcast Follow the presentatiaon via webcast at Financial calendar 2012/2013 Sep 21 Capital market day Nov 14 Interim report January September 2012 Feb 13 Bokslutskommuniké 2012 Apr 16 AGM 2013 May 7 Interim report January - March 2013 Aug 21 Interim report January June 2013 Page 22