Interim Report January - September 2008

Transcription

1 Sida 1/18 Interim Report January - September 2008 January 1 September 30, 2008 Group revenues amounted to SEK 861 M (735). This represents an increase of 17.1% compared with the same period in The increase is mainly due to acquired operations. Operating profit in the Group, including share of profits of ICA AB, amounted to SEK 424 M (536). Net financial items amounted to SEK -245 M (145). Profit for the period amounted to SEK 180 M (1,012). The comparative figure includes positive income tax of SEK 350 M. Earnings per share amounted to SEK 1.21 (6.31) before and after dilution. The ICA Group s revenues increased by 11.0%. Operating profit amounted to SEK 1,602 M (1,840). July 1 September 30, 2008 Group revenues amounted to SEK 277 M (308). Operating profit in the Group, including share of profits of ICA AB, amounted to SEK 203 M (269). Net financial items amounted to SEK -112 M (-27). Profit for the period was SEK 89 M (241). Earnings per share amounted to SEK 0.57 (1.50). The ICA Group s revenues increased by 10.0%. Operating profit amounted to SEK 683 M (899). Key figures July - September January - September Full-year SEK M Group Revenues ,075 Operating profit Profit for the period ,012 1,326 Earnings per common share, SEK Earnings per C share, SEK Equity/assets ratio, % Return on capital employed, % Return on equity, % Parent Company Profit/loss for the period Hakon Invest, which is listed on the OMX Nordic Exchange in 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 the Nordic region s leading food retail companies. Hakon Invest also has holdings in Forma Publishing Group, Kjell & Company, Hemma, Cervera, inkclub and Hemtex. Further information about Hakon Invest is available at Hakon Invest AB (publ) Svetsarvägen 12 P.O Box 1508 SE Solna Phone Fax Corp. Id no

2 President s comments Development in the retail sector has continued to weaken in recent months, and in September this trend intensified due to the current financial crisis. This contributed to a more cautious attitude from consumers while prices have been increasingly in focus. The economic downturn we have noted since the start of the year has simply been accentuated by the crisis in the financial sector. This primarily affects loan-financed consumption, such as furniture and home electronics, but as the effects spread to the real economy it also affects fast-moving consumer goods. As far as our portfolio companies we are working so as to be well prepared for a less favorable business climate. This includes being able to quickly adapt the cost base should the market recede still further. On the other hand, we feel optimistic ahead of the fourth quarter, the most important quarter for the retail sector, on the basis of the assessments we can make as things stand today. I would also like to emphasize the measures currently under way at our companies, and which are aimed as positioning these operations correctly in the market. One example is the new concept developed by Cervera which has been very well received despite a falling market. Another is the solid platform we have built for Kjell & Company which is enabling continued efficient and economical expansion. During the autumn we conducted an extensive examination of the Hemma stores, motivated by the chain s weak market and earnings trend. This has resulted in a powerful action plan which we very much hope will be able to turn these operations in the right direction. Against this background, we have decided to provide Hemma with additional capital to so that the chain can implement necessary measures in the future. ICA continued without exception with its good sales development during the third quarter, but in common with the trend we noted earlier in the year an increasingly large component comprises price increases. In order to counteract this, ICA implemented price cuttings in both Sweden and Norway to improve the offering to customers. In Norway, prices were cut for 1,000 items in the second and third quarters and in Sweden Ett prisigare ICA (a campaign with a focus on prices) was launched in August in cooperation between ICA and the local retailers. ICA Sverige reports a good result for both the third quarter and the full nine-month period. ICA Banken continues to grow with good profitability and has had a good inflow of new customers in recent months. We are also carefully monitoring developments in the Baltic region and so far this year sales and earnings have continued to increase while some 15 new stores have opened during For ICA Norge the earnings trend remains negative and worsened due to the new price strategy and continued high shrinkage. The major action program that has been under way in Norway for some time, designed to optimize operations in the stores and improve the product range, will also improve profitability. This program was given greater weight and focus when ICA Norge s new management took over in August. ICA has decided to introduce a new, more decentralized organization in order to improve its response to the different market conditions in Sweden, Norway and the Baltic countries. This change will lead to more effective decision-making processes and make cost reductions possible. The return from our investment management so far this year must considered satisfactory in view of the negative trend in the financial markets in general. Almost SEK 1.7 billion in cash at the end of September and in principle unleveraged operations provide good opportunities for new deals. For example, at the beginning of October we increased our holding in Hemtex, which is a strategic investment for us. Claes-Göran Sylvén President and CEO Interim Report January September

3 Significant events in January September 2008 During 2008, Hakon Invest has steadily increased its holding in Hemtex. At September 30, Hakon Invest s holding in Hemtex amounted to 5,767,238 shares, corresponding to 19.7% of the capital and voting rights. On October 20, 2008, Hakon Invest acquired an additional 1,987,900 shares in Hemtex and subsequently owns 7,755,138 shares, corresponding to 26.4% of the capital and voting rights in the company. Antonio Soares was appointed as president of ICA Norge. He was previously president of Rimi Baltic. At the same time, Edgar Sesemann was appointed as vice president and acting president of Rimi Baltic. In May 2008 ICA completed the sale of two properties to EPGF, Standard Life Investments European Property Growth Fund. These sales had a positive impact on ICA s operating profit of approximately SEK 105 M in the second quarter. At its annual meeting held on May 20, ICAhandlarnas Förbund ( the Association of ICA Retailers) decided that the Swedish ICA retailers and ICA AB should set up a joint board to handle disciplinary matters related to ICA retailers commitments and obligations. The Board of ICA AB proposed that the dividend ratio be raised from the normal 40% to 50% for Dividend received from ICA AB amounted to SEK 434 M (383). Group Revenues and profit January 1 September 30, 2008 Consolidated revenues amounted to SEK 861 M (735), of which revenues from Forma comprised SEK 629 M (553) and from Hemma SEK 232 M (182). The increase was mainly due to acquired operations in Forma and an increased holding in Hemma. Consolidated operating profit amounted to SEK 424 M (536) of which share of profits of ICA, after amortization of surplus values, amounted to SEK 501 M (601). Hakon Invest s share of profits of the portfolio companies amounted to SEK -12 M (-11), while operating loss in consolidated companies and the Parent Company together amounted to SEK 65 M (-54). Net financial items amounted to SEK -245 M (145), of which a change in the value of shares in Hemtex amounted to SEK -111 M and results from investment management amounted to SEK -124 M (148). Investment management was negatively affected in January September by the turbulence in the financial markets and generated a return of approximately -7%. During the period January September the SIX Portfolio Return Index fell 30% and the OMRX T-bill rose 3%. Positive income tax is reported for the period of SEK 1 M (331). The comparative figure includes a positive effect on income tax of SEK 350 M relating to a tax deduction in the first quarter of 2007 for losses on a shareholding attributable to previous years. Profit for the period was SEK 180 M (1,012). Earnings per share amounted to SEK 1.21 (6.31). Interim Report January September

4 July 1 September 30, 2008 Consolidated revenues amounted to SEK 277 M (308), of which revenues from Forma comprised SEK 198 M (208) and from Hemma SEK 79 M (100). Consolidated operating profit amounted to SEK 203 M (269), of which share of profits of ICA, after amortization of surplus values, amounted to SEK 212 M (274). Hakon Invest s share of profits of the portfolio companies amounted to SEK -4 M (-2), while operating loss in consolidated companies and the Parent Company together amounted to SEK 5 M (-3). Net financial items amounted to SEK -112 M (-27) of which change in value of Hemtex shares amounted to SEK -72 M and income from investment management to SEK -34 M (-25). The return from investment management corresponds to approximately -2%. During the period July September the SIX Portfolio Return Index fell 10% and the OMRX T-bill rose 1%. Income tax was SEK -2 M (-1). Profit for the period amounted to SEK 89 M (241). Earnings per share amounted to SEK 0.57 (1.50). Interim Report January September

5 Development in the unlisted holdings Key figures January September 2008 Company ICA Forma Kjell & Co Hemma Cervera InkClub Revenues , , EBIT , , Cash flow from operating activities 3, Cash flow from investing activities -1, Assets 38, Equity 12, Interest-bearing net debt 2,592 1) Participating interest % 40% 2) 100% 50% 3) 61% 48% 3) 50% 3) Hakon Invest's Investment Acquisition year ) Interest-bearing net-debt for ICA is exclusive of ICA Banken. 2) Hakon Invest and Royal Ahold have joint control of ICA AB through an agreement requiring unanimity for all decisions made by the Annual General Meeting and the Board of Directors. 3) Hakon Invest and the other major owners have joint control of the company through an agreement requiring unanimity for all decisions. ICA During January September the ICA Group s revenues increased by 11.0% to SEK 66,832 M (60,187). The ICA Group s operating profit decreased to SEK 1,602 M (1,840) during the nine-month period. Operating profit includes capital gains from property sales and impairment of non-current assets of SEK 221 M (496). Excluding capital gains and impairment losses, operating profit showed a 2.8% improvement over the previous year. ICA Sverige s operating profit rose to SEK 1,898 M (1,570). This result includes capital gains from property sales and impairment of non-current assets of SEK 191 M (191). Operating profit improved due to higher sales for both store and wholesale trade as well as an improved gross margin which was partly due to the higher charges for logistics services to ICA retailers implemented in August A less favorable earnings trend for specialty items, however, had a negative impact on operating profit. ICA Norge s operating loss was SEK 311 M (242).Operating loss includes capital gains from property sales and impairment of non-current assets of SEK 30 M (304). Operating profit was negatively affected by the introduction of a new price positioning Interim Report January September

6 as well as continued high shrinkage. The decline is also due to the fact that the stores opened in 2007 and 2008 are not yet showing a profit. Rimi Baltic s operating profit amounted to SEK 161 M (29). Operating profit includes capital gains from property sales and impairment of non-current assets of SEK 0 M (1). The improvement in operating profit is also due to higher sales and an improved gross margin. ICA Banken s operating profit increased to SEK 79 M (59) during the first nine months of the year due among other things to higher commission revenues and improved net interest. The second quarter contained one-time revenue of SEK 17 M from the sale of shares in Master Card as well as higher IT costs. Operating profit also included a costs for production and exchange of debit cards. ICA Group Functions reports an operating loss of SEK 225 M (-60). The lower earnings were due to an adjustment of cost allocation within the Group, costs of a one-time bonus to employees in Sweden and higher pension costs. During the third quarter the ICA Group s revenues rose by 10.0% to SEK 22,768 M (20,697). The ICA Group s operating profit for the third quarter decreased to SEK 683 M (899). Operating profit included capital gains from property sales and impairment of non-current assets of SEK 50 M (163). Excluding capital gains and impairment, operating profit was 14.0% lower than in the same period a year ago. ICA Sverige s operating profit amounted to SEK 754 M (727). Operating profit included capital gains from property sales and impairment of noncurrent assets of SEK 54 M (36). Operating profit improved mainly due to higher sales but was negatively affected by a less favorable margin trend for specialty items. ICA Norge s operating loss was SEK 109 M (120). Operating result included capital gains from property sales and impairment of non-current assets of SEK -4 M (119). The operating result decreased due to costs in conjunction with a new price positioning and continued high shrinkage. The decline is also due to the stores opened in 2007 and 2008 not yet showing a profit. Rimi Baltic s operating profit amounted to SEK 89 M (36). Operating profit included capital gains from property sales and impairment of non-current assets of SEK 0 M (8). The improvement was due to increased sales and an improved gross margin. ICA Banken s operating profit amounted to SEK 33 M (25). The improvement in earnings was due to higher net interest and commissions. ICA Group Functions reports an operating loss of SEK 84 M (-9). The lower earnings were mainly due to an adjustment of cost allocation within the Group. The effect of the adjustment is that operating profit improved in ICA Norge and ICA Sverige and that operating profit for ICA Group Functions decreased in the third quarter. Forma During January - September Forma s revenues amounted to SEK 629 M (553). The increase is mainly explained by the operations within Forma Books and Forma Contract acquired in Operating profit amounted to SEK 4 M (-2). All business areas within Forma showed improved earnings despite restructuring costs linked to integration of acquired operations. The operations in Finland, however, are performing less well than in the previous year and led to a negative charge against earnings. Measures have been initiated to reverse the trend in Finland, including appointment of a new local management. During the third quarter Forma s revenues amounted to SEK 198 M (208). Operating profit in July September amounted to SEK 11 M (13). The Interim Report January September

7 downturn in earnings compared with the previous year stems from the operations in Finland. stores sales were slightly below the previous year s figures. Kjell & Company In January - September Kjell & Company s revenues amounted to SEK 293 M (228), representing a sales increase of 29%. Seven new stores were opened during the period. Another two stores will be opened during Operating loss amounted to SEK 1 M (-8). Start-up costs in conjunction with stores expansion were charged against the company s earnings both this year and in During the third quarter Kjell & Company s revenues amounted to SEK 107 M (85), corresponding to a sales increase of 27%. Operating profit in July - September amounted to SEK 5 M (0). Kjell & Company has now achieved a critical mass for continued profitable expansion. Two stores were opened in the third quarter, one in Kungsholmen in Stockholm and one in Nordstan in Gothenburg. At the end of the quarter, Kjell & Company therefore had 36 stores around the country. Hemma During January - September Hemma s revenues amounted to SEK 232 M (270). Operating loss was SEK 33 M (-8). Hemma s continued weak development is due to lower sales, clearance of stocks and nonrecurring items. Hemma is undergoing restructuring and has a new management group which has started the work of reversing this trend. During the third quarter Hemma s revenues amounted to SEK 78 M (100) and the operating loss was SEK 6 M (2). Cervera During January - September Cervera s revenues amounted to SEK 210 M (218). In comparable Operating loss amounted to SEK 34 M (-23). During the period Cervera opened a new concept store which initially generated good earnings. This store is part of a new brand platform that includes store layout, product range and communications. This concept is under evaluation for roll out in the entire chain during The company has also invested in a new distribution center and a new business system. Costs related to completed projects were charged against earnings for the first nine months of the year. During the third quarter Cervera s revenues amounted to SEK 68 M (73) and operating loss was SEK 14 M (-8). inkclub During January - September inkclub s revenues amounted to SEK 291 M (271) and operating profit was SEK 31 M (33). Marketing costs were charged against earnings for the third quarter which are linked to a very high inflow of new customers. During the third quarter inkclub s revenues amounted to SEK 94 M (85) and operating profit was SEK 10 M (14). Financial position At September 30, 2008, the Group s cash and cash equivalents and the current value of short-term investments amounted to SEK 1,680 M compared with SEK 2,292 M at December 31, The decrease is mainly due to investments carried out as well as value adjustments of short-term investments. At the end of the period investments were allocated at 8% equities, 32% fixed-income securities, 42% hedge funds and 18% cash and cash equivalents. The Hakon Invest Group s non-current financial liabilities amounted to SEK 70 M compared with SEK 73 M at December 31, Interim Report January September

8 The equity/assets ratio at the end of the period was 94.7% compared with 94.4% at December 31, Cash flow Cash flow from operating activities amounted to SEK 443 M (409). The change was largely due to a higher dividend from ICA AB and an increase in working capital. The dividend received from ICA AB amounted to SEK 434 M (383). July 1 September 30, 2008 The Parent Company s revenues amounted to SEK 0 M (0) in the third quarter of Operating loss amounted to SEK 10 M (-18). The financial result was SEK -108 M (-22). Change in value of the shares in Hemtex amounted to SEK -72 M. Investment management generated a negative return during the period. Cash flow from investing activities amounted to SEK 64 M (-431). Changes in short-term investments are included with SEK 445 M (108), while acquisition of participations in companies, primarily Hemtex, as well as investments and divestments of non-current assets are included with SEK -381 M (-539). Cash and cash equivalents amounted to SEK 298 M compared with SEK 281 M at December 31, Parent Company Revenues and profit January 1 September 30, 2008 The Parent Company s revenues amounted to SEK 0 M (0) during the period. Loss for the period was SEK 118 M (-40). Financial position The Parent Company s cash and cash equivalents and the current value of short-term investments amounted to SEK 1,647 M at September 30, 2008, compared with SEK 2,237 M at December 31, The Parent Company has no non-current financial liabilities: SEK 0 M (0). The equity/assets ratio at the end of the period was 99.0% compared with 98.9% at December 31, Operating loss was SEK 36 M (-45). The financial result amounted to SEK 200 M (536). The dividend from ICA AB had a positive effect of SEK 434 M. Change in the value of the shares in Hemtex during the period amounted to SEK -111 M. Investment management generated a negative return in January September due to the turbulence in the financial markets. Income tax of SEK 0 M (311) is reported for the period. The positive income tax in the comparative year is due to a tax deduction for losses on the shareholding in the Dutch company Royal Ahold attributable to previous years. Profit for the period amounted to SEK 164 M (872). Interim Report January September

9 Share information Share capital in Hakon Invest amounts to SEK 402,293,590 distributed among 160,917,436 shares, each with a par value of SEK Hakon Invest s earnings per share are calculated based on profit after tax and an average number of shares during the period January September of 160,720,209. At the end of the period the number of C shares amounted to 82,067,892 and the number of outstanding common shares was 78,624,244. Common shares and C shares carry the same voting rights. While common shares have an unlimited dividend entitlement, C shares do not carry entitlement to cash profit distribution, to the extent the Annual General Meeting decides on cash dividends. Such entitlement may include C shares in 2016 at the earliest. C shares carry entitlement to profit distribution through distribution in kind. In March 2008, Hakon Invest repurchased 97,100 common shares to cover allocations under the 2007 option program. Hakon Invest s holding of treasury shares then amounted to 225,300 common shares. Significant events after the end of the period ICA has decided to introduce a more decentralized organization in order to improve its response to the different needs of the markets in Sweden, Norway and the Baltic countries. The new organization will also create more efficient work processes and make cost reductions possible. In conjunction with this, Anders Nyberg will be leaving his position as Deputy President of ICA AB. Peder Larsson, COO of ICA Sverige is also leaving his position and instead Kenneth Bengtsson, President & CEO of ICA AB, will also take over as acting COO of ICA Sverige. In addition, Mats Holgerson has been appointed as COO of ICA AB. ICA s non-food operations will become a separate subsidiary and Björn Abild has been appointed as the new COO of these operations. The Board of Directors of Hemma has been authorized to carry out a new issue in a maximum amount of SEK 45 M, directed to the company s owners. Hakon Invest intends to subscribe for its share and has also guaranteed the remainder of the new issue. The Carbon Disclosure Project, CDP, which ranks listed companies globally based on how they report their carbon dioxide emissions, placed Hakon Invest in shared sixth place in this year s survey. A total of 110 Nordic companies were included in CDP s survey this year. Hakon Invest s answers relate solely to ICA s operations. Göran Blomberg was appointed CFO of Hakon Invest and will take up his position in spring He succeeds Göran Hesseborn who will leave his post in November. Other In October, Hakon Invest s Nomination Committee was appointed ahead of the 2009 Annual General Meeting. The Nomination Committee consists of four members appointed by the largest shareholders in Hakon Invest at September 12, ICAhandlarnas Förbund (The Association of ICA Retailers) appointed Håkan Olofsson, ICA retailer in Boden, and Claes Ottosson, ICA retailer Hovås, as its representatives. SEB Fonder is represented by Stefan Roos and Swedbank Robur funds by KG Lindvall. Shareholders who wish to submit proposals and comments relating to the work of the Nomination Committee are invited to do so no later than Friday, February 27, These should be addressed to Hakon Invest s Nomination Committee and send via to fredrik.hagglund@hakoninvest.se or by letter to Fredrik Hägglund, Box 1508, SE Solna. Interim Report January September

10 The Annual General Meeting of Shareholders in Hakon Invest will be held on at CET Wednesday, April 22, 2009 at Grand Hôtel in Stockholm. Risks and uncertainties Hakon Invest works with a number of basic principles for managing risks in different parts of its operations. This is regulated and managed via a formal work plan for the President and the Board. All investments are inherently uncertain and ahead of each investment Hakon Invest carries out a careful evaluation designed to identify and if possible reduce the risks that may be associated with the investment. The most comprehensive risk within Hakon Invests is the financial development of the individual portfolio companies, where a worst case scenario is the loss of our entire investment in a company. The holding in ICA AB constitutes a significant part of the company s assets and is therefore of particular importance for an assessment of Hakon Invest. Via ICA, Hakon Invest also has significant exposure to the Nordic and Baltic food retail sector. A less favorable business climate or political decisions, such as raised taxes, are factors that could have a negative impact on ICA s sales and earnings. Hakon Invest s financial policy stipulates how financial risks are to be managed and limited. The policy also provides a framework for management of financial assets, which is conducted both internally and externally. More information about Hakon Invest s risk management is provided on pages and of the 2007 Annual Report. No significant changes have occurred since the annual report was published. Related-party transactions No significant transactions between Hakon Invest and related parties took place during the period. Interim Report January September

11 Key figures for Hakon Invest July - September January - September Full-year SEK M Gross margin, % Operating margin, % Net margin, % Return on equity, % Return on capital employed, % Equity/assets ratio, % Shares Earnings per common share, SEK Earnings per C share, SEK Share price at the end of the period, SEK Dividend per common share, SEK 6.00 Dividend, M 472 Dividend ratio, % 50.3 Equity per share, SEK Cash flow per share, SEK Number of common shares 78,624,244 78,721,344 78,721,344 Number of C shares 82,067,892 82,067,892 82,067,892 Number of shares at the end of the period 160,692, ,789, ,789,236 Average number of shares 1) 160,720, ,821, ,813,095 1) Before and after dilution Definitions Capital employed Balance sheet total less non-interest bearing liabilities and provisions. Cash flow per share Cash flow for the period divided by the total number of shares. Dividend payout ratio Dividend as a percentage of the Parent Company s profit for the period. Earnings per common share Profit for the period, excluding minority interests, divided by the average total number of shares. Earnings per C share Same definition as in the case of earnings per common share, since common shares and C shares provide entitlement to equal participation in earnings and shareholders equity. The C share does not, however, give entitlement to a cash dividend, as opposed to the common share. Equity/assets ratio Equity including minority interests as a percentage of the balance sheet total. Equity per share Equity excluding minority interests divided by the total number of shares. Gross margin Gross profit as a percentage of revenues. Net margin Profit for the period as a percentage of revenues. Operating margin Operating profit as a percentage of revenues. Return on capital employed Profit after financial items plus financial expenses, calculated on a rolling 12- month period as a percentage of average capital employed during the same period. Return on equity Profit for the period, excluding minority interests, calculated on the basis of a rolling 12-month period as a percentage of average equity excluding minority interests during the same period. Interim Report January September

12 Financial statements Condensed consolidated income statement July - September January - September Full-year SEK M Revenues ,075 Cost of goods sold Gross profit Other operating income Selling expenses Administrative expenses Other operating expense Share of profit of companies accounted for using the equity method Operating profit Net financial items Profit after net financial items Income tax Profit for the period ,012 1,326 Of which attributable to equity holders of the parent ,015 1,334 Of which attributable to minority Earnings per share, before and after dilution (SEK) Common share C-share Interim Report January September

13 Condensed consolidated balance sheet Sep 30, Dec 31, SEK M ASSETS Non-current assets Goodwill Other intangible assets Interests in companies accounted for using the equity method 7,085 6,767 7,016 Other non-current assets Total non-current assets 7,926 7,441 7,636 Current assets Short-term investments 1,382 2,355 2,011 Cash and cash equivalents Other current assets Non-current assets held for sale Total current assets 2,119 3,004 2,743 TOTAL ASSETS 10,045 10,445 10,379 EQUITY AND LIABILITIES Equity 9,516 9,472 9,796 Non-current liabilities Current liabilities TOTAL EQUITY AND LIABILITIES 10,045 10,445 10,379 Condensed consolidated cash flow statement January - September Full-year SEK M 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 Interim Report January September

14 Condensed consolidated statement of changes in equity Changes in consolidated equity September 30, 2008 SEK M Attributable to equity holders of the parent Attributable to minority Opening equity January 1, , ,796 Exchange rate differences, etc Total income and expense recognized directly in equity Total Profit/loss for the period Total income and expense Purchase of treasury shares Payment for call options 1-1 Dividend Closing equity 9, ,516 Changes in condensed consolidated equity September 30, 2007 SEK M Attributable to equity holders of the parent Attributable to minority Opening equity January 1, ,650-8,650 Exchange rate differences, etc Total income and expense recognized directly in equity Total Profit for the period 1, ,012 Total income and expense 1, ,264 Purchase of treasury shares Payment for call options 2-2 Acquisition Dividend Closing equity 9, ,472 Interim Report January September

15 Condensed Parent Company income statement July - September January - September Full-year SEK M Revenues Administrative expenses Operating loss Result from financial investments Profit/loss after financial items Appropriations Profit/loss before tax Tax Profit/loss for the period Condensed Parent Company balance sheet Sep 30, Dec 31, SEK M ASSETS Non-current assets Interests in group companies Interests in joint ventures 2,960 2,960 2,960 Other non-current assets 1, ,052 Total non-current assets 4,454 3,894 4,218 Current assets Short-term investments 1,381 2,355 2,010 Cash and cash equivalents Other current assets Total current assets 1,678 2,499 2,245 TOTAL ASSETS 6,132 6,393 6,463 EQUITY AND LIABILITIES Equity 6,073 6,327 6,392 Non-current liabilities Current liabilities TOTAL EQUITY AND LIABILITIES 6,132 6,393 6,463 Interim Report January September

16 Note 1 Accounting principles This interim report is prepared according to the rules for interim reporting in the Annual Accounts Act and IAS 34 Interim Financial Reporting. The accounting principles and calculation methods applied are the same as those applied in the most recent annual accounts and consolidated accounts. In order to prepare financial reports in accordance with IFRS, management is required to make assessments and estimates and to make assumptions that affect the application of the accounting principles and the carrying amounts in the income statement and balance sheet. Estimates and assumptions are based on historical experience and are regularly reviewed. The results of these estimates and assumptions are then used to determine the recognized values of assets and liabilities. Fair value may deviate from these estimates. Note 2 Segment reporting January - September Publishing operations White goods operations * Other, incl. Eliminations Total SEK M External revenues Operating profit/loss Profit/loss after financial items Profit/loss for the period , ,012 Assets ,151 9,459 10,045 10,445 Liabilities Investments Depreciation * White goods operations was added during the second quarter 2007 and refers to the operations in Hemma. Note 3 Interests in companies accounted for using the equity method Book value Share of profit September, 30 January - September SEK M ICA AB 6,470 6, Bra Förlag AB Trade Press AS Kjell & Co Elektronik AB Hemmabutikerna i Sverige Utveckling AB Cervera AB inkclub Development AB ,085 6, Interim Report January September

17 Note 4 Acquisitions On June 16, Hakon Invest s wholly owned subsidiary Forma acquired Tidningsförlaget AB, which includes the magazine Leva. The magazine writes about personal development, psychology and health, relationships, etc. 100% of the shares were acquired for SEK 5 M including acquisition costs, there is also a conditional additional purchase price of a maximum of SEK 3 M. The purchase price allocation (PPA) is preliminary. The entire surplus value is allocated to goodwill. The value of goodwill mainly includes synergies within organization. On September 26 and September 30, Hakon Invest s wholly owned subsidiary Forma concluded agreements to acquire the company Hälsa & Helhet and Energica Förlag. These acquisition give Forma access to the magazine HÄLSA, the book club Vitalis and to publishing operations within Energica Förlag. applying analytical and other review procedures. A review has a different focus and is substantially less in scope than an audit conducted in accordance with Standards on Auditing in Sweden RS and other generally accepted auditing practices in Sweden. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed on the basis of a review does not give the same level of assurance as a conclusion expressed on the basis of an audit. Based on our review, nothing has come to our attention that causes us to believe that the interim report is not, in all material respects, prepared for the Group in accordance with IAS 34 and the Annual Accounts Act, and for the Parent Company, in accordance with the Annual Accounts Act.. Stockholm, November 5, 2008 Claes-Göran Sylvén President and CEO Review Report We have reviewed the interim report for Hakon Invest AB as at September 30, 2008, and the ninemonth period that ended on that date. The Board of Directors and the President are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review. Stockholm, November 5, 2008 Ernst & Young AB Erik Åström Authorized Public Accountant We conducted our review in accordance with the Standard on Review Engagements SÖG 2410, Review of Interim Financial Information Performed by the Independent Auditors of the Entity. A review consists of making inquiries, primarily to persons responsible for financial and accounting matters, and Interim Report January September

18 The information in this interim report is such that Hakon Invest must disclose pursuant to the Swedish Securities Exchange and Clearing Operations Act and/or the Swedish Act on Trading in Financial Instruments. The information was submitted for publication at CET on Wednesday, November 5, Press and analyst meeting At CET on Wednesday, November 5, Hakon Invest will hold a press and analyst meeting in Salén Konferens at Norrlandsgatan 15 in Stockholm. Notify attendance at ir@hakoninvest.se. The press and analyst meeting will be webcast and can be followed at Financial calendar For further information, please contact President and CEO Claes-Göran Sylvén CFO (leaving in November 2008) Göran Hesseborn Acting CFO Charlotte Hjorth Head of IR Pernilla Grennfelt Year-end report for January December 2008 will be presented on Wednesday, February 18, Interim report for January March 2009 will be presented on Wednesday, May 6. Interim report for January June 2009 will be presented on Wednesday, August 19. Interim report for January September 2009 will be presented on Wednesday, November 4. Annual General Meeting Hakon Invest s 2009 Annual General Meeting will be held on Wednesday, April 22 at CET at Grand Hôtel in Stockholm, conference venue Stockholm. ICA AB ICA s complete interim report can be accessed at Interim Report January September