Looking - Lammhults Design Group

Transcription

2
Lammhults at a glance
24 Lammhults Office
58 Director’s report
4
CEO: On our way towards
28 Lammhults Library
63 Consolidated income
the next level
32 Lammhults Home
statement, consolidated
36 Scandinavian Eyewear
balance sheet, changes in
40 Corporate governance
consolidated shareholders
10 This is Lammhults Design
Group
10 Our operations
10 Our brand promise
11 Our organisation
11 Financial goals and
expectations for 2009
12 What makes Lammhults
ATLAS XL EASY CHAIR
report 2008
equity and consolidated
44 Lammhults Design
statement of cash flows
Group’s share
70 Supplementary information
47 Five-year overview
95 Auditor’s report
48 Board of directors
56 Senior executives
Design Group unique?
dESIgnERS: JoHAnnES FoERSom
And PETER HIoRT-LoREnzEn
YEAR oF LAunCH: 2002
LammhuLts design grOup ab
Lammengatan 2. SE-360 30 Lammhult, Sweden
Tel. +46 472 26 96 70. Fax +46 472 26 96 73
www.lammhults.com
LammhuLts Office
LammhuLts Library
LammhuLts hOme
scandinaVian eyewear
LammhuLts möbeL ab
Växjövägen 41
SE-360 30 Lammhult
Sweden
Tel. +46 472 26 95 00
Fax +46 472 26 05 70
www.lammhults.se
LammhuLts bibLiOteksdesign a/s
(formerly BCI A/S)
Dalbaekvej 1
DK-6670 Holsted
Denmark
Tel. +45 76 78 26 11
Fax +45 76 78 26 22
www.bci.dk
LammhuLts hOme ab
(formerly Voice ab)
Betavägen 17
SE-556 52 Jönköping
Sweden
Tel. +46 36 31 83 00
Fax +46 36 31 83 05
www.voice.eu
Gräshagsgatan 11
SE-554 74 Jönköping
Sweden
Tel. +46 36 30 53 00
Fax +46 36 30 53 20
www.scandinavianeyewear.se
LammhuLts bibLiOteksdesign ab
(formerly eurobib ab)
Åkergränden 7
SE-226 60 Lund
Sweden
Tel. +46 46 31 18 00
Fax +46 46 32 05 29
www.eurobib.com
ire möbeL ab
Fabriksgatan 5
SE-543 50 Tibro
Sweden
Tel. +46 504 191 00
Fax +46 504 156 75
www.iremobel.se
(formerly abstracta ab)
Lammengatan 2
SE-360 30 Lammhult
Sweden
Tel. +46 472 26 96 00
Fax +46 472 26 96 01
www.abstracta.se
seVen s.r.L.
Via Cal Lusent 61
IT-31040 Pederobba (Tv)
Italy
schuLz speyer bibLiOthekstechnik ag
Friedrich Ebert Str. 2a
DE-673 46 Speyer
Germany
Tel. +49 6232 31810
Fax +49 6232 3181 700
www.schulzspeyer.de
institut für bibLiOthek design gmbh
Germersheimer Str. 110
DE-673 54 Römerberg
Germany
Tel. +49 6232 68670
Fax +49 6232 6867-68
www.bibliothek-design.de
S70-3 STooL
dESIgnERS: BöRgE LIndAu
And Bo LIndEkRAnTz
LAMMHULTS
DESIGN GROUP
2008 IN FIGURES
net saLes............................................... SEK
901.2 million
(829.2)
85.5 million
(73.3)
9.5 per cent
(8.8)
93.3 million
(50.2)
400
(363)
Operating prOfit ....................................... SEK
Operating margin .........................................
cash fLOws frOm Operating actiVities ........ SEK
aVerage number Of empLOyees ..............................................................
2
LAMMHULTS DESIGN GROUP
2008 in brief
new strategy: Lammhults Design Group adopted a new,
brand-oriented strategy, with the focus on the Group’s strongest brand, Lammhults.
strong results: The Group reported its highest-ever sales
and operating profit, despite the fact that the climate in the
market was affected by the financial crisis and the downturn
in the economy.
stable finances: The Group’s financial position remained
strong during the year, with an equity ratio of 50.0 percent and
a debt ratio of 0.46 on 31 December. Cash flow from current
operations rose to SEK 93.3 million.
important acquisitions: Three strategically important
acquisitions were made during the year, namely the Swedish
upholstered furniture maker Ire Möbel, the German library
interiors company IFBD and Seven S.R.L, of Italy, a design
company operating in the spectacles sector.
direct yield: The Board of Directors recommends, to the
2009 Annual General Meeting, a dividend of SEK 2.50 per
share, representing a total dividend payment of SEK 21.1 million to shareholders. Direct yield thus amounts to 6.1 percent.
Our business concept
Our businesses
Our customers
business areas - percentage
shares of group’s operations
breakdown of income by
geographical region
breakdown on income by
customer category
Lammhults Design Group’s business
concept is to create positive experiences
for a global clientele through modern
interiors. Consumer insight, innovation,
design management and strong brands
are the cornerstones of our operations.
We develop products in partnership
with several of Scandinavia’s leading
designers.
Our businesses are gathered within four
business areas. Lammhults Office develops and sells furniture and interiors
for public environments such as offices
and conference facilities. Lammhults
Library is a world-leading business that
develops and sells library interiors.
Lammhults Home develops and sells
flat-pack and upholstered furniture
for the home. The Group also includes
Scandinavian Eyewear, which designs,
develops and sells spectacle frames.
We sell products to corporate customers and private individuals. However,
customers in the public sector account
for the major share of our sales. Most of
our sales go to export markets.
LAmmHuLTS oFFICE
SwEdEn
PRIvATE ConSumPTIon
LAmmHuLTS LIBRARY
EXPoRT mARkETS
CoRPoRATE ConSumPTIon
LAmmuLTS HomE
PuBLIC ConSumPTIon
SCAndInAvIAn EYEwEAR
3
Johan is sitting in the imprint Chair
Designers: peter hiort-Lorenzen anD
Johannes Foersom
Year oF LaunCh: 2005
saLes 2008: seK 1.9 miLLion
JOhan hJertOnssOn
president, LammhuLts design grOup
4
On Our way tOwards the next LeVeL
Our brand, our export potential, our independence from the business
cycle and our stable finances. These are the things I would like to
emphasise as Lammhults Design Group’s main strengths for the future.
In a few years’ time, when we look back
at the 2008 financial year, my hope is
that we at Lammhults Design Group will
say the following: it was the year when
we made the first serious steps towards
Group-wide international expansion.
Because in 2008 we made a number of
important decisions, all aimed at increasing our international presence. We introduced a new brand-oriented strategy and
concentrated our efforts on the Lammhults brand – which also meant changing
the name of the Group. We also made
several organisational changes, and three
corporate acquisitions of strategic importance. We managed to do all of these
things – despite being in the midst of a
financial crisis and economic downturn
– without jeopardising the stability of our
finances. Our net sales increased by 9%,
our operating margin ended up at 9.5%,
and we improved cash flow in our day-today operations from 50.2 to 93.3 million
Swedish kronor. This is strong proof that
we will continue to be able to cope with
investments. In view of the extreme situ-
ation in the world around us, I have to say
that we are extremely satisfied.
The decision to introduce the brandoriented strategy was without a doubt
the most important decision the company has made since it was founded. It
was not made because things were going
badly for the Group. On the contrary, at
that time we had just enjoyed two extremely successful years, both in terms
of finances and through our successful
product portfolio containing a number of
strong brands. In fact, the decision was
made because the Group was ready to
move on to the next stage of its development. By concentrating our businesses in
just two areas, interiors and eyewear, we
were able to leave behind the corporate
structure we had had up to that point
– similar to that of a holding company –
and move towards running the businesses based on a Group-wide, brand-oriented strategy. Through clearer branding
we significantly increase our chances
of sustained, profitable growth, thereby
increasing value for shareholders.
Our business concept is to create
positive experiences for a global clientele through modern interiors. We have
chosen our strongest brand – Lammhults
– to be the hub of this work. For years
Lammhults has represented values such
as innovative design, functionality and
sustainable quality. These are the values
we will now be using to an even greater
extent as tools for value creation. The key
to a successful brand strategy lies in our
ability to see into the lives of consumers.
Understanding what customers want and
need today is not enough; we also need insight into what they will want tomorrow.
This demands a great deal of our innovative abilities – what will the products of
tomorrow look like? What do we think our
customers will be looking for the day after
tomorrow? Innovative products with a
high design value, in combination with an
intensive pace of renewal in the product
portfolio, will create high profit margins
both now and in the future. The brand is
our promise to our customers. The products are proof that we keep our promises.
5
saLes 2006–2008
2006
2007
815.9
829.2
901.2
2008
operating proFit, 2006–2008
84.8
2006
2007
2008
t
73.3
85.5
he new strategy entailed a number of
major organisational changes. The first
and most obvious was the change of
name from Expanda to Lammhults Design
Group, which took place at the beginning of
July 2008. But we also made extensive changes internally and externally. Our subsidiaries
are now grouped into four business areas, of
which three are part of the Lammhults brand:
Lammhults Home, Lammhults Library and
Lammhults Office. The fourth is Scandinavian
Eyewear, which has its own brand platform
with well-known brands such as Skaga, Efva
Attling and Oscar Magnuson. Along with the
President, the business area managers constitute the new Group management team.
We have designed the brand strategy so
that we can work flexibly with several strong
brands in our portfolio. The reorganisation
gives us better opportunities to make the
6
most of synergies where sales, distribution,
purchasing and administration are concerned.
These synergies are crucial to our attempts to
increase our international presence. We need
to become shrewder and more efficient, and
to strengthen our position so we can adapt to
the increasingly stiff competition and tougher
market conditions. The interiors industry is
in the process of structural transformation.
Globalisation does not just mean changes in
distribution conditions. Customer preferences also change. We concluded early on that
consumer purchasing behaviour and demand
are being concentrated to an ever-increasing
extent in either the upper or lower price segment, and we have positioned ourselves in the
upper segment in response to this behaviour.
At the same time, globalisation is playing
into our hands. For example, it is enabling us
to cut our production costs by buying in components from low-cost countries to a greater
degree. The fact that we are well on the way
to lowering these costs can be seen in our
gross margin, which increased from 39.8% to
40.9% in 2008.
Globalisation is also helping us in our efforts to achieve growth, as it makes it easier
to reach the global market. The new organisation will also improve our chances of entering
new export markets. Our subsidiaries can
help each other in several ways, for example
by setting up joint sales channels.
Acquisitions continue to play an important part in our growth strategy. Our stable
finances give us plenty of room for manoeuvre
– on 31 December the equity ratio was 50%.
In 2008 we made three important acquisitions that strengthened us strategically in
different ways. The library business acquired
Institut für Bibliotheks-Design GmbH, a German library interiors company with sales of
around 15 million Swedish kronor. The library
business is important for us, not only due to
its success and size in the Group – 39% of our
net sales comes from libraries – but also in its
capacity as a business cycle stabiliser. Libraries are usually financed from public funds,
and these types of investments follow cycles
that are entirely separate from the general
business cycle. Lammhults Design Group is
currently the world leader in interiors for
libraries and other modern venues such as
cultural centres, winning projects in countries as diverse as the US and the United Arab
Emirates.
By purchasing a former partner, the
Italian eyewear manufacturer Seven S.R.L.,
which has sales of around 30 million Swedish
kronor, Scandinavian Eyewear also made an
acquisition that strengthened the company’s
international profile.
The third acquisition was made by Voice,
which acquired another well-known furniture manufacturer with roots in Småland,
southern Sweden: Ire Möbel AB, with sales
of around 50 million Swedish kronor. This
acquisition complements what we can already
offer consumers, as Ire Möbel specialises in
well-made upholstered furniture with a high
level of design.
During the fourth quarter, as part of our
efforts to sharpen our focus, we also made the
decision to merge our subsidiaries Lammhults
Möbel, which develops and sells furniture
for public and private environments, and Abstracta, which designs and sells room dividers
and visual aids. Our interiors offering is now
under the auspices of one company, Lammhults Möbel AB, improving our chances of
providing better service and selling additional
products to our customers, among which
architects are a key target group.
Proof that Lammhults Möbel AB is also in
the process of reinforcing its position on the
international interiors scene came at the start
of 2009. That was when the company received
its biggest order to date, when the five-star
Point Hotell Barbados in Istanbul, Turkey,
ordered designer furniture amounting to the
equivalent of ten million Swedish kronor.
L
ooking back, I can confirm that we have
clearly benefited from our relative lack
of sensitivity to the business cycle during
the last period. Those businesses most affected were those that most clearly target private customers – furniture for the home and
spectacle frames. However, these branches
make up less than 25% of sales. The library
section and Lammhults Möbel, which together represent the lion’s share of our net sales,
specifically target B2B. Aimed at offices and
public environments, they are therefore even
further ahead in the business cycle. Above all,
the proceeds from publicly financed projects,
which make up half of our net sales, limit our
business cycle dependence.
The key to success in the future is to maintain our high level of innovation in product
development. Our ambition is to continue to
focus strongly on customers – to really get under their skin and develop the products that
they are not even aware that they want.
None of this is possible without our crea-
7
gross margin, 2006–2008, per Cent
40.8
2006
39.8
2007
40.9
2008
equitY ratio, 2006–2008, per Cent
51.9
2006
52.1
2007
2008
50.0
tive designers and other innovative employees. We will continue to use our successful
model with both our own designers and in
collaboration with independent designers. I
am completely convinced that future product
development will be made easier and improved through our focus on the brand. I am
also completely convinced that, in turn, conscious branding is the key to growth and value
for shareholders. Lammhults Design Group
is rapidly heading towards a very positive and
expansive period.
johan hjertonsson
president and ceo
8
a-Line moDuLar seating
Designer: anYa sebton
9
this is LammhuLts design grOup
Our operations
It’s true that we at Lammhults Design
Group work with design and interiors.
But you could just as easily say that we
work with communication. Whether
in an office, a library or the home, an
interior needs to maximise the power of
spontaneous encounters. Our products
help create spaces where people can
meet and communicate more efficiently.
We have extensive experience of
what is required to develop successful
products for interiors, and our work centres around the needs of our customers.
Corporate law firms, doctor’s surgeries,
designer hotels, libraries, airports and
private individuals all want to put across
their own particular message through
their interiors. But these environments
need to simultaneously be functional,
creative and practical. A writing board
cannot be made less functional just
because it needs to be a more exclusive
model. A room divider should be able to
both highlight a space and screen one off.
And it should always be both innova-
10
tive and beautiful. For this reason, we
only work with Scandinavia’s foremost
designers. We also have a strong tradition of technical innovation. Lammhults
was founded in 1945 by Edvin Ståhl under the name of Lammhults Mekaniska
AB and began by manufacturing metal
details for the furniture industry. In the
1960s the designers Börge Lindau and
Bo Lindekrantz entered the frame, and
along with Edvin Ståhl they produced
furniture for public environments that
is still relevant today. The breakthrough
came in 1968 with the Bauhaus-inspired
S70 series, with its heavy, characteristically painted steel tubing. The worldfamous bar stool with a tractor seat is
still in production.
We work actively to encourage good
design. In 2008 we announced the first
round of the Lammhults Design Award,
which aims to pave the way for young
designers in Lammhults Design Group.
We received a whole host of top-quality
proposals for products in Lammhults’
business areas. The ‘Black Hole’ arm-
chair by Mathieu Gustafsson and Pär
Rickberg was declared the winner.
Our brand promise
Lammhults Design Group targets
conscious cosmopolitans who appreciate expressive design and innovative
functionality. We will offer them sustainable interiors that strengthen their
identity and make them feel secure,
proud and special.
Our organisation
LAMMHULTS OFFICE
SUBSIDIARY
�
Lammhults Möbel AB
BRANDS
�
Lammhults
�
Abstracta
LAMMHULTS LIBRARY
SUBSIDIARIES
�
�
�
LAMMHULTS HOME
SUBSIDIARIES
Lammhults Biblioteksdesign AB
(formerly Eurobib AB)
Lammhults Biblioteksdesign A/S
(formerly BCI A/S)
Schulz Speyer Bibliothekstechnik AG
�
�
�
�
�
SUBSIDIARIES
�
�
Scandinavian Eyewear AB
Seven S.R.L.
BRANDS
BRANDS
�
BRANDS
Lammhults Home AB
(formerly Voice AB)
Ire Möbel AB
SCANDINAVIAN EYEWEAR
�
Voice
Ire
�
�
�
Skaga
Efva Attling
Oscar Magnuson
Eurobib Direct
BCI
Schulz Speyer
Financial goals and expectations
Our financial goals and
expectations for 2009
The financial goals of Lammhults Design Group over the course of a business
cycle are:
• Averageannualgrowthofatleast
15%
• Anaverageannualoperatingmargin
of at least 10%
• Returnofatleast20%oncapital
employed
• Anequityratioofatleast35%
• Adebtratioofbetween0.7and1.0
• Dividendpayoutratioofapproximately 40% of earnings after tax,
taking into account the Group’s longterm capital requirements.
In view of the financial crisis and the economic downturn, we lowered our expectations for growth in sales and margins to
some degree during the year. The slump
makes it difficult to predict the market
situation over the coming year, but we
are still confident about the future. We
have internationally competitive products
and prices, and our focus on a brand-oriented strategy will in the long term help
create synergies in marketing, sales and
branding. This will mean in turn that we
can continue to expand internationally in
2009. 1. Varumärkesorienteringen
five-year summary
Gr o up
2004
2005
2006
2007
2008
613.1
642.5
815.9
829.2
901.2
36.3
34.2
84.8
73.3
85.5
5.9
5.3
10.4
8.8
9.5
453.7
445.2
462.6
483.0
577.9
Return on capital employed, %
8.1
7.9
19.0
15.0
16.6
Return on shareholders’ equity, %
8.4
7.4
17.9
12.6
14.2
46.4
49.5
51.9
52.1
50.0
debt ratio, multiple
0.72
0.59
0.43
0.40
0.46
Investments, SEk m
12.0
16.1
17.3
12.5
27.6
net sales, SEk m
operating profit, SEk m
operating margin, %
Capital employed, SEk m
Equity ratio, %
The group applies IFRS as of 2005. Comparative figures for 2004 have been restated in accordance with IFRS.
11
what makes LammhuLts design grOup unique?
Our brand focus, our export potential, our relative independence from the business cycle and
our stable finances. these are our four strategic advantages that can create value for the future.
we will explain these further in the following pages.
1. brand focus
Concentrating our efforts on our
strongest brand
In 2008 we began to concentrate our
efforts on our strongest brand: Lammhults. A brand-oriented approach gives
us more opportunities to exploit synergies in production, product development
and marketing. The brand strategy is
also largely customer-centred. Insight
into what the consumer wants and will
12
need in the future is crucial if we are to
be successful in our business. Our goal
is to always get under the skin of our
customers and develop the products
they were not even aware they wanted.
We constantly strive to achieve our five
core values: to be unique, self-assured,
receptive, innovative and thorough.
We have a collection-inspired approach to brands, which is why our
other highly valued and well-established brands, such as Voice, Abstracta
and Ire, are still available. By using our
entire brand collection, we can be more
flexible about meeting the customer’s
individual needs for interiors solutions,
always with the Lammhults brand as
a natural focal point. In the long run
our strategy will lead to more distinct
branding, greater customer focus and
greater synergies. This in turn will create sustainable, profitable growth that
increases shareholder value.
PRoduCT: CAmPuS CHAIR
dESIgnER: PETER HIoRT-LoREnzEn And JoHAnnES FoERSom
SALES 2008: SEk 38.6 mILLIon FoR THE CAmPuS SERIES, oF wHICH 21.3
mILLIon FoR THE CHAIR
ABouT THE PRoduCT: wITH ITS SLEndER LInES And STRong dESIgn
IdIom, THE CAmPuS CHAIR HAS BEComE onE oF LAmmHuLTS’ BEST SELLERS ovER THE YEARS, BoTH AS A dESIgnER ITEm And AS A FunCTIonAL
PIECE oF FuRnITuRE FoR vARIouS EnvIRonmEnTS. THE CHAIRS ARE
ALSo AvAILABLE wITH ARmRESTS And ACCESSoRIES SuCH AS A LAPToP
TABLE. THEY ARE EASY To movE, LInk TogETHER And STACk.
13
PRoduCT: AIRFLAkE
dESIgnER: STEFAn BoRSELIuS
SALES 2008: SEk 2.9 mILLIon
ABouT THE PRoduCT: STEFAn BoRSELIuS’ Sound-ABSoRBEnT Room dIvIdER
In FABRIC-CovEREd FIBRE FELT TAkES SnowFLAkES AS ITS InSPIRATIon And
CAn BE vARIEd Ad InFInITum. IT CAn BE Hung STRAIgHT oR CuRvEd, And THE
moduLES CAn BE ComBInEd In FouR dIFFEREnT modELS And FIvE dIFFEREnT
CoLouRS. THERE IS ALSo A moduLE FoR SToRIng nEwSPAPERS.
14
PRoduCT: SAHARA
dESIgnER: gunILLA ALLARd
ABouT THE PRoduCT: SAHARA, wHICH TAkES ITS InSPIRATIon FRom LodgE LIFE
In AFRICA, BECAmE An ImmEdIATE SALES SuCCESS And IS ALSo AvAILABLE AS
A SoFA. In 2008 IT wAS JoInEd BY A vERSIon wITH LEgS In wood InSTEAd oF
STEEL, PLuS An ACComPAnYIng woodEn CoFFEE TABLE.
15
PRoduCT: ImPRInT CHAIR.
dESIgnER: PETER HIoRT-LoREnzEn And JoHAnnES FoERSom
ABouT THE PRoduCT: ImPRInT IS THE RESuLT oF SEvERAL YEARS’ RESEARCH. THAnkS
To ITS EnvIRonmEnTALLY FRIEndLY mATERIALS, ITS LAunCH ATTRACTEd A gREAT
dEAL oF ATTEnTIon, And IT won THE BEST oF nEoCon InnovATIon AwARd In
CHICAgo THE SAmE YEAR. THE SEAT IS mAdE FRom BY-PRoduCTS oF THE FoRESTRY
InduSTRY THAT ARE ComPRESSEd TogETHER, uSIng SHREddEd PET BoTTLES AS A
BIndER. THE mATERIAL CAn BE FoRmEd In AS mAnY dIFFEREnT wAYS AS PLASTIC.
16
PRoduCT: ARCTIC
dESIgnER: RoLF FRAnSSon
ABouT THE PRoduCT: THE SHInY ARCTIC SToRAgE SERIES oFFERS So mAnY ComBInATIon
PoSSIBILITIES THAT THE onLY LImIT IS YouR ImAgInATIon. THIS modERn PIECE oF FuRnITuRE
CAn STAnd on THE FLooR oR BE Hung on THE wALL And IS AvAILABLE In vERSIonS RAngIng
FRom SHoE SToRAgE To SIdEBoARdS. THE woRkToP In SEvEn dIFFEREnT mATERIALS ALLowS
CuSTomERS To EXPRESS THEmSELvES In THEIR own unIquE wAY.
17
2. exports
The world is our market
We are already an international company –
the largest part of our revenue comes from export markets. Our products are available from
San Francisco in the west to Japan in the east.
We also consider that our biggest chances
of growth are in international markets. We
believe we will continue to enjoy good opportunities for expansion in these markets,
either by increasing our market share in
existing markets or by establishing ourselves
on new ones. This can take place organically
or through acquisitions of businesses within
existing businesses or associated ones. We
will also benefit from synergies when we are
able to coordinate sales and marketing efforts
internationally. The chart shows all the markets in which we currently have a presence.
18
where our revenues come from
The diagram shows the distribution of Lammhults Design Group’s net sales between Sweden
and the export markets.
SwEdEn
EXPoRT mARkETS
san FranCisCo internationaL airport, usa
proDuCt: miLibar stooL
Designer: anYa sebton
19
3. independence from the business cycle
We follow our own business cycle logic
Naturally, we are also affected by general fluctuations in the business cycle. But we haven’t
put all our eggs in one basket. The businesses
in Lammhults Home and Scandinavian
Eyewear are located early on in the business
cycle, with their great exposure to private
consumption. Lammhults Office, on the other
hand, whose customers are mainly companies and public institutions, is found later in
the cycle. And Lammhults Library follows a
business cycle that is entirely its own, since
its projects are often financed by public funds.
Libraries and education are areas that central
government and municipalities often choose
to invest in during economic downturns. And
this works in our favour.
As we said, we ’re by no means immune.
But we have a good spread of businesses. This
mitigates the total effect of business cycle
fluctuations.
20
distribution of revenues
The diagram shows the distribution between
Lammhults Design Group’s various customer
segments. This diversification mitigates the
effects of business cycle fluctuations.
PRIvATE ConSumPTIon
CoRPoRATE ConSumPTIon
PuBLIC ConSumPTIon
proJeCt: rauFoss pubLiC LibrarY, norwaY
CompLeteD in: 2008
proDuCts: Luna sounDprooF armChair anD impex sheLF sYstem
21
“To achieve record results in the midst of a financial
crisis and economic slump – this is proof of the
attractive product offerings and financial strength we
have in Lammhults Design Group.”
4. finances
We can afford to grow
Having strong finances is an important part
of our strategy. On the one hand, when the
business cycle turns, like in 2008, the chance
of organic growth becomes more remote. But
on the other, there are golden opportunities
for acquisitions. When those occasions arise,
we need to be ready.
Up to now we have maintained our level of
ambition. In 2008 we acquired three companies without jeopardising our financial
stability for a second. We increased our cash
flow from day-to-day operations to just over
93 million Swedish kronor. Our equity ratio at
the turn of the year was strong, at 50%, which
is way over our financial goal of 35%. The debt
ratio is extremely low, at 0.46%, compared
22
with the financial goal of 0.7–1.0%. Based on
our financial strength, we therefore made further two acquisitions in our library business
at the start of 2009.
There are several factors behind our
strong finances. High demand for our
products naturally forms the basis of this.
But we are also good at constantly streamlining our operations and identifying
Group-wide synergies. Buying in components from low-cost countries to a greater
extent is a prioritised area of our strategy
and something we put a lot of effort into.
This work is important, as it will enable us
to maintain our profitability, even in times
of greater hardship. If subcontractors are
given responsibility for a major part of the
processing, our own flexibility in periods of
low demand will increase.
thomas is sitting in the Cinema sport armChair
Designer: guniLLa aLLarD
thOmas JanssOn
cfO LammhuLts design grOup
23
pLaCe: Kobe, Japan
proDuCt: Cinema easY Chair
24
LammhuLts Office
Bus i n es s ar ea mana Ger : ÅkE JAnSSon
Compan i es i n t h e Bus i n es s a r ea: LAmmHuLTS
möBEL AB
Br an ds i n Cl uded i n t h e Bus i n es s a r ea:
LAmmHuLTS, ABSTRACTA.
n et s al es 2 008: SEk 353.5 mILLIon
oper at i n G mar Gi n i n 2 008: 13.2%
pr op or t i on ex por t ed: 40%
25
business and brands
There is an intrinsic
value in having an extensive offering,
especially now that the distribution
sector is consolidating. When we
develop products, we study needs segmentation. How do people behave in
different environments, and how do our
products best support this behaviour?
Once we have completed this analysis,
it becomes easier to develop products
and to position ourselves at the right
level relative to customers. A lawyers’
office full of corporate lawyers will,
after all, want to communicate one
message through their interior, while
lawyers specialising in international
law will need to communicate a quite
different message - but both will need a
fit-for-purpose and functional interior.
Åke JanssOn
business area manager
LammhuLts Office
26
Lammhults Möbel AB develops and markets
interiors for public environments, where the
demands in design, functionality and quality
are high. The business area is made up of two
brands: Lammhults, with its timelessly attractive furniture, and Abstracta, with flexible
room dividers and products for visual communication, such as writing boards. The products are developed via long-term partnerships
with Scandinavia’s foremost designers. A
large number of products have been awarded
design prizes, not only in Scandinavia but
also in other parts of the world. Lammhults’
end-users are primarily companies, other
organisations and public institutions. As a
result, architects who design and recommend interiors are an important target group.
Lammhults’ products are sold via agents and
resellers in the individual markets.
market
The company’s position in the Scandinavian
market is strong. Lammhults Möbel has long
been established as one of the major players
above all in the domestic market, Sweden. Exports account for around 40% of sales, which
is where the major potential for growth lies.
Today, Norway, Denmark, the UK, Germany,
the US and the Netherlands are the company’s
biggest export markets. As to the future,
France, Germany and the Netherlands are
especially attractive growth regions strategically, offering the business area considerable potential for growth of market shares.
However, competition in the sector is tough,
above all from German, Danish and Italian
companies.
market drivers
Moves, conversions or new-builds – these are
the major drivers of demand from customers
when it comes to interiors for public environments. These drivers create a pattern of
behaviour that can cause major fluctuations
in demand over a business cycle. By selling in
a large number of markets, and to both corporate and public-sector customers, the business
area can even out these fluctuations and
soften the effects of the business cycle. For
example, the biggest investments of corporate
customers very often materialise at the end of
the business cycle, when a strong demand for
expansion has developed. For its part, publicsector activity, for example at universities and
airports, very often looks to parameters other
than the current state of the economy when
investments are to be made. Relocations also
continue, even when times are hard.
Another influence on demand is general
trends in interiors. The way people confer and
meet professionally has changed radically
over the past two decades. Formal meetings
have been replaced by collaboration, which is
making totally new demands on developing
creative environments. The need for screening products and movable visual aids has also
expanded as more and more customers are
choosing open-plan office environments.
Finally, demand is also driven by good design.
Strong, innovative design is always at a premium.
Lammhults operates in long-term partnership
with a number of selected, eminent designers:
Gunilla Allard, Peter Hiort-Lorenzen, Johannes Foersom, Ruud Ekstrand, Love Arbén, Anya
Sebton, Stefan Borselius, Mia Wahlstein, Josef
Zetterman, Fredrik Wallner and Nina Jobs.
significant events in 2008
• SalesbythebusinessarearosebySEK40.1
million to SEK 353.5 million. An operating
margin of 13.2% was reported.
• Inthefourthquarter,adecisionwas
taken to merge Lammhults Möbel AB and
Abstracta AB. The merger took effect at
year-end. The purpose is to boost focus on
the customer, to raise the level of cost-efficiency and to make it possible to coordinate and step up efforts in product development, marketing and brand building.
• Inthecourseoftheyear,anumberofnew
products were launched: the Funk range of
tables and the Club armchair by Johannes
Foersom and Peter Hiort-Lorenzen, who
also launched a new version – Air – of their
renowned, top-selling Campus chair. A bar
stool, Mini, was added to the Millibar range
from Anya Sebton. Gunilla Allard’s Casino
easy chair was launched in a new, fully covered version, and a high table for standing
meetings was added to her Cooper series of
tables. Other products developed in 2008
and shown at the Stockholm Furniture Fair
in 2009 included Anya Sebton’s product
Area, a modular seating featuring an innovative magnetic linking device, and Gunilla
Allard’s Sahara Wood, an update of her
much-admired Sahara easy chair, with legs
in wood instead of steel. At Abstracta, Anya
Sebton presented a new screen, Triline,
Stefan Borselius added new products to
his Sense range and Mia Wahlstein and
Josef Zetterman brought out an improved
version of Enjoy. Nina Jobs presented a new
table screen and a number of new patterns
in the Alumi range.
l a mmh u l t s mö Bel a B
net sales, SEk m.
operating profit, SEk m.*
operating margin, %
Capital employed, SEk m.
2004
2005
2006
2007
2008
136.7
143.2
178.2
178.3
196.9
16.0
13.4
27.0
23.3
30.6
11.7
9.4
15.1
13.1
15.5
59.3
58.0
64.8
61.4
69.2
27.1
23.2
44.3
37.3
47.4
Investments, SEk m.
1.8
1.2
2.0
2.6
1.3
Average number of employees
78
76
79
77
78
2004
2005
2006
2007
2008
86.3
92.0
112.8
135.1
156.6
0.9
4.4
9.3
11.0
16.2
1.1
4.8
8.2
8.2
10.3
aBs tr a Cta a B (merged with Lammhults möbel, effective 2009)
net sales, SEk m.
operating profit, SEk m.*
operating margin, %
Capital employed, SEk m.
71.3
69.5
68.1
75.3
78.5
1.4
6.4
13.9
16.3
21.8
Investments, SEk m.
1.7
2.2
3.4
3.1
3.8
71
61
66
65
76
* excluding administration fees to the Parent Company.
27
proJeCt: hJörring pubLiC LibrarY, DenmarK
CompLeteD in: 2008
proDuCt: CLassiC steeL sheLF sYstem
28
LammhuLts Library
Bus i n es s ar ea mana Ger : Thomas Johannesson
Compan i es i n t h e Bus i n es s a r ea: Eurobib AB,
Schulz Speyer Bibliothekstechik Ag and BCI AS
with subsidiaries.
Eurobib direct, Schulz Speyer, BCI
n et s al es 2 008: SEk 353.4 million
oper at i n G mar Gi n : 12.3%
pr op or t i on ex por t ed: 80% (Sweden and
denmark 20%)
29
business and brands
We develop products
to a large extent during projects.
Often, we receive a request and find
a solution that turns out so well that
we’re able to standardise the product.
One such example is our round metal
shelf. As far as we know we’re the
only company currently capable of
manufacturing such shelves.
thOmas JOhannessOn
LammhuLts Library
30
The Lammhults Library business area continuously develops new creative, attractive
and functional interiors for libraries, schools
and other public meeting places. We are world
leaders in library interiors. We also sell interiors for other environments in which information materials and media are to be stored or
displayed, for example educational premises
and arts centres.
The library business is divided into two
parts: project sales of complete interiors
systems and furniture, and aftermarket sales
through catalogues and online stores, with
sales of furniture and consumables.
The business area encompasses three
large companies: Swedish Eurobib AB, German Schulz Speyer Bibliothekstechnik AG
and Danish BCI AS. Sales and marketing are
handled by a joint network of subsidiaries in
Belgium, the UK, France, Spain and Norway.
The Norwegian company is 50% owned by
Eurobib AB. In other markets around the
world, sales are made through local dealers.
Eurobib and BCI have a joint organisation, with a headquarters for project sales
in Holsted, Denmark, and the headquarters
for aftermarket sales in Lund. Schulz Speyer
has an independent organisation but works
closely with its fellow subsidiaries where for
example purchasing is concerned.
Eurobib, Schulz Speyer and BCI are the
dominant brands in their market niches.
Along with the Lammhults Group’s other
brands, this allows us to offer our customers a
unique range.
Production takes place at BCI’s own facilities
in Denmark and at subcontractors’ facilities.
market
The library interiors sector is a niche market
in which growth most often takes place by
increasing market shares and expanding
into new markets. Lammhults Library is the
only actor operating globally. It is therefore
extremely important from the strategic point
of view for Lammhults Library to continue to
expand internationally. In theory, all countries in which there are resources to invest
in education are conceivable growth areas.
Lammhults Library’s companies are currently
market leaders in the Nordic region and in
Western Europe, and they are well established in the rest of Europe, Asia and North
America. The business area is also represented to a lesser extent through dealers in North
Africa and Australia. Out of the existing markets, North America continues to be of great
interest as a growth area, along with markets
in the Middle and Far East. Sales outside the
domestic markets of Denmark and Sweden
make up around 80% of the business area’s
net sales. The overall trend is that competition is shifting from market to market, with
one to two large local actors plus a number of
smaller local actors.
market drivers
The sector is not directly affected by general
fluctuations in the business cycle – instead, it
follows its own cycle, as investments in libraries are often financed using public funds.
Customers are then dependent on the public
economy and the willingness of public authorities to invest, and require a long planning
horizon before the project is completed.
A strong market trend is for libraries to
become increasingly centralised – and bigger. You could say that they are becoming
landmarks – buildings assigned particular
importance in a community. They are no
longer simply places for books and studies –
to an increasing extent they are also turning
into meeting places and experience hubs. This
trend has made customers more inclined to
invest in library projects. At the same time
their planning has become more meticulous
and thorough, as design and architecture are
becoming increasingly crucial to the success
of the project.
A further international driver for the
library market is that increasing numbers
of countries are realising the importance
of investing in education and educational
premises.
Maintaining a high level of design is important. The Companies therefore work with well-
known designers such as Björn Dahlström,
Louise Hederström, Bernt and Mårten Cyrén.
• Salesincreasedsharplyin2008,above
all in Denmark, Germany and the Middle
East.
• Severallarge,prestigiousprojectswere
carried out, including the city library in
Strasbourg and library interiors for 140
schools in Kuwait.
• BCIpurchasedGermanlibraryinteriors
company Institut für Bibliotheks-Design
GmbH
• StartedownsalescompanyintheUK,
Thedesignconcept Ltd
• Worktoamalgamatetheorganisations
of Eurobibs and BCI continued successfully, with several savings resulting from
streamlining efforts.
l a mmh u l t s l i Br a ry
2004
2005
2006
2007
2008
net sales, SEk m
222.7
241.5
339.3
315.5
353.4
14.3
18.2
35.8
32.6
43.6
6.4
7.5
10.6
10.3
12.3
109.8
110.7
136.1
141.7
189.0
27.7
operating profit, SEk m *
operating margin, %
14.1
17.1
29.7
24.7
Investments, SEk m
3.6
6.2
7.5
3.4
5.0
134
127
150
140
150
31
soFa: ChiLL, ire
Designer: CarL henriK spaK
storage: arCtiC, VoiCe
Designer: roLF Fransson
32
LammhuLts hOme
Bus i n es s ar ea mana Ger : Sonnie Byrling
Compan i es i n t h e Bus i n es s a r ea:
Lammhults Home AB (formerly voice AB)
with subsidiary Ire möbel AB.
voice, Ire
oper at i n G mar Gi n : 3.1%
33
business and brands
We’re in a strong
position among our customers. One
explanation for this is that we’ve
managed to be innovative in product
development – we’ve identified the
interiors requirements of consumers.
We work constantly to offer attractive
interiors solutions to our target group,
based on a holistic view of the home.
We currently excel in storage solutions
and upholstered furniture, but there’s
nothing to stop us looking at new areas.
sOnnie byrLing
LammhuLts hOme
Lammhults Home business area develops
and markets products for home interiors. The
target group is made up of private consumers
and customers looking for interiors for public
areas where it is important to create a cosy,
homely atmosphere, e.g. hotels and relaxed
conference settings.
The brands Voice and Ire make up one of
the market’s strongest product ranges, offering complete solutions including upholstered
furniture and tables, chairs and storage
products. The product base of the Voice brand
comprises storage furniture, such as chests of
drawers and sideboards, and also tables and
chairs. Production is extremely flexible, as it is
based on a component concept in which components are purchased from various subcontractors for assembly and packaging at Lammhults’ own facility. This means that Voice
products can be developed with a large degree
of flexibility and adaptation to the market.
The Ire brand is known for its welldesigned upholstered furniture, including
sofas and armchairs. Its design philosophy
is one of durability and quality. The furniture is flexible and functional and can be
adapted by using different covers that can
be removed and washed. Production takes
place with the help of both modern computer technology, which ensures, for example,
the highest level of precision when cutting
cloth, and classic craftsmanship in the assembly phase.
market
Around half of Lammhults Home’s customers are located in Sweden, with the rest
34
in international markets. If we look at the
Scandinavian market, Lammhults Home
occupies a strong position. Our Nordic
neighbours – Norway, Denmark and Finland
– account for around 25% of sales. Remaining exports go to countries such as the UK,
Portugal, Germany and Japan. Customers on the Nordic markets are generally
independent, while in the rest of Europe and
in Japan they are normally major actors.
The Voice brand has no direct competitors
in the Swedish market, as Voice is the only
company that can adapt its offering to customer demands while maintaining relatively
short lead times. There is, however, some
competition from actors that directly import
similar products.
market drivers
As Lammhults Home is greatly exposed
to the consumer market, the business area
is located early on in the business cycle. It
also saw a decline in demand in 2008 as
the economic slump worsened. It is worth
remembering, however, that using the same
logic, upswings also take place earlier. There
is also space in the market, even in times
of economic downturn. People in a modern
society need storage furniture and sofas
regardless of the general economic situation.
Opportunities for growth may also be positively affected, as company prices often go
down, which benefits actors like Lammhults
Design Group who have the financial muscle
to be able to make acquisitions.
Growing public interest in high quality design also benefits market growth. We occupy
a strong position in the premium products
target group and have several sales successes
behind us, e.g. the Arctic series of storage
furniture. Ire is also a well-established brand
among consumers. The new brand strategy
also allows us to sell products from Lammhults Office to private individuals interested
in design.
Where interiors for public environments
such as hotels are concerned, our product
innovation abilities and consumer insight
work to our advantage. For example, we can
adapt our storage furniture so that it also
functions in public environments, supplementing our offering with additional Lammhults products. New trends in the workplace
also drive our market. Creative meeting
places require different types of office
environments, and soft sofas and armchairs
are becoming increasingly commonplace in
these settings.
l a mmh u l t s h o me
• LammhultsHomeABacquiredIreMöbel
AB in August 2008. Synergy gains in
sales have already emerged in the form of
increased revenue.
• Thebusinessareawassuccessfulinthe
hotel customer group, including a substantial order from Stay At, a hotel chain
specialising in cosy hotel environments for
stays longer than a week.
• Outoftheexportmarkets,Germany
developed in a particularly positive direction, with Lammhults Home increasing its
market share.
• ThelaunchofAlento,anewstorageseries,
was initiated in 2008.
• Severalproductdevelopmentprojectswith
new designers were initiated in 2008. The
results of these projects will be launched
during 2009.
2004
2005
2006
2007
2008
55.1
54.9
60.5
82.7
86.8
operating profit. SEk m *
5.3
6.2
4.9
8.1
2.7
operating margin. %
9.6
11.3
8.1
9.8
3.1
Capital employed. SEk m
39.5
40.9
38.6
36.2
57.5
Return on capital employed. %
13.4
15.6
12.5
22.0
6.1
Investments. SEk m
1.0
0.6
1.8
1.1
15.6
24
25
28
33
44
net sales, SEk m
35
36
scandinaVian
eyewear
Bus i n es s ar ea mana Ger : Joakim Brobäck
Compan i es i n t h e Bus i n es s a r ea:
Scandinavian Eyewear AB with subsidiary
Seven
Skaga, Efva Attling, oscar magnuson
oper at i n G mar Gi n: 3.9%
37
business and brands
In many ways
we function in the same way as any
other fashion company: we come out
with four collections a year and face
the same challenges as fashion companies where identifying the right designs
are concerned. An important key to
success is therefore to constantly maintain a strong focus on development and
design. We also have an enormous
competitive advantage in that we excel
in delivery reliability. We’re often able
to deliver an order in one or two days,
which is very important for both the
optician and the end customer.
JOakim brObäck
scandianaVian eyewear
38
The Scandinavian Eyewear business area
develops and sells high-quality spectacle
frames with a high design value and a clear
Scandinavian feel. The company has its own
well-known Skaga brand and develops collections within the Efva Attling and Oscar
Magnuson brands. The brands differ in character but the sense of design, attention to
detail and excellent fit are common to them
all. End customers are people who wish to
express their lifestyle and identity through
their eyewear. The business area’s direct
customers are individual opticians and
optician chains in Sweden and in the export
markets. Design, prototype production and
testing take place in Sweden, while manufacture is localised in Italy and China. New
collections are presented four times a year.
Thanks to a modern facility in Jönköping
for warehousing and distributing spectacle
frames, the company is able to provide efficient distribution services and a high level
of reliability in deliveries.
market
The European eyewear markets are roughly
similar in structure. There are often a
number of strong local chains of opticians,
plus a large number of independent opticians
in purchasing cooperatives. In turn, these
are served by a number of subcontractors,
including Scandinavian Eyewear. In Sweden
Scandinavian Eyewear is the biggest of the
Swedish subcontractors and one of the biggest suppliers of optical frames to Swedish
opticians. Its position in the rest of the Nordic
region is also strong. In total Scandinavian
Eyewear exports spectacle frames to 22 different countries.
Competition in sales to retailers can be
divided into two groups: there are spectacle
manufacturers that solely focus on ownbrand eyewear, such as the French company
Mikli and the Danish companies Lindberg
and ProDesign, and there are also a number
of international fashion houses that use their
brand to market spectacles through brand
extension. This eyewear is manufactured and
sold via brand licences throughout the world
by a number of actors, the biggest being Luxottica, Safilo, Marcolin and Marchon.
market drivers
There are two factors behind the decision of
an individual to buy new spectacles: the need
for vision correction and the need to express
his or her style. With its significant exposure
to private consumption, the business area is
located early on in the business cycle. There
are, however, factors that indicate that the
Nordic and international markets will continue to be substantial. An increasing proportion
of the population requires vision correction,
and studies show that sales of contact lenses
are not growing at the expense of the spectacle market. Fashion trends also have a major
impact on the market, and many people today
consider spectacles to be a very personal dayto-day accessory strongly linked to current
trends. This can above all be seen in the fact
that people change spectacles increasingly often. From having changed every seven years,
the average Swedish user buys new spectacles
every 3½ years. In Europe and the UK, the
equivalent frequency is every other year.
significant events in 2008:
• ScandinavianEyewearsignedanagreement with Pearle Europe, Europe’s
biggest chain of opticians. The agreement means that Scandinavian Eyewear
was once again entrusted by Synoptik,
a wholly owned subsidiary of Pearle
Europe, with supplying spectacle frames
to the chain’s stores in Sweden and
Denmark. The agreement also means that
Scandinavian Eyewear has the opportunity to supply products to the Pearle chain
throughout Europe.
sC an d i na v i an ey ewe ar
• TheItaliancompanySevenS.R.L.was
acquired. Seven designs and markets spectacle frames and is based in Pederobba,
northern Italy.
• ScandinavianEyewearcelebrated60years
in the industry by designing a retro collection, Skaga Originals, in which Skaga designers Anna Mälstad, Carina Mollsjö and
Gustav Kristensson updated six frames
based on authentic Skaga models from the
1950s and onwards. The collection was
well received by retailers, end customers
and the fashion media.
2004
2005
2006
2007
2008
net sales, SEk m
87.9
94.9
119.3
122.3
113.1
operating profit, SEk m *
13.9
14.1
31.5
15.8
3.9
operating margin, %
15.8
14.9
26.4
12.9
3.5
27.0
31.8
48.9
36.5
30.1
55.1
48.4
78.4
38.2
13.1
Investments, SEk m
3.2
5.3
2.3
1.8
1.8
43
39
44
46
49
* excluding administration fees to the Parent Company. The operating profit for 2006 contained
a capital gain after the sale of property amounting to SEk 14.2 million.
39
cOrpOrate gOVernance repOrt
governance and application
of the code
Lammhults Design Group AB is a Swedish company with limited liability (Swedish: aktiebolag). Its registered office is in
Växjö, Sweden. The Company is governed
via the Annual General Meeting of Shareholders (AGM), the Board of Directors
and the CEO in accordance with the
Swedish Companies Act and the Company’s Articles of Association, as well as
Nasdaq OMX Stockholm’s Regulations
for Issuers, including the Swedish Code
of Corporate Governance (the Code).
Effective 1 July 2008, a revised code of
corporate governance includes all companies that are quoted on the OMX or NGM
Exchanges. Governance in the Group has
been based on the Code since then. The
aim of the Code is to establish conditions
favouring an active and responsible ownership role. It is one part of self-regulation
in the Swedish business sector. The Code
is based on the principle of comply or explain, which means that it is not a crime
to deviate from one or more rules in the
40
Code provided that a justification exists
and is explained. Lammhults Design
Group does not have any deviations from
the Code in 2008 to account for.
The 2008 Corporate Governance
Report does not constitute part of the formal annual report documents and has not
been examined by the Company’s auditor.
the role of the annual general
meeting of shareholders
Shareholders’ influence in the Company is exercised at the Annual General
Meeting (AGM), which is the Company’s
highest decision-making body. At the
AGM (ordinary general meeting of
shareholders), shareholders vote on resolutions, for example, on adoption of the
annual accounts and the consolidated
financial statements, filing of the Company’s results, discharging the Members
of the Board and the CEO from liability,
election of the Board and Chairman and,
where appropriate, an auditor, how the
nomination committee is to be constituted, remuneration to the Board and the
auditors and guidelines on remuneration
to the CEO and other senior executives.
annual general meeting of 2008
Lammhults Design Group AGM, held on
29 April 2008 was attended by around
100 shareholders and guests. The
shareholders in attendance represented
70 percent of the total number of voting
rights in the Company. The 2008 AGM
adopted the annual accounts and consolidated financial statements for 2007
presented by the Board of Directors and
the CEO, resolved to authorise filing of
the Company’s results and discharged the
Members of the Board and the CEO from
liability. The AGM resolved on election
of an auditor and on remuneration to the
Board of Directors, auditor and senior
executives in accordance with the recommendations of the nomination committee. The following Board Members were
re-elected Torbjörn Björstrand (Chairman), Yngve Conradsson, Jerry Fredriksson, Erika Lagerbielke, Lotta Lundén and
Johan Sjöberg. The AGM further resolved
to issue no more than 87,500 warrants
to the Group’s senior executives, to authorise the Board to resolve to issue of no
more than 1 million Class B shares, and to
approve the Board’s proposal to change
the Company’s name from Expanda AB to
Lammhults Design Group AB. Dividend
was set at SEK 3.00 per share, made up of
ordinary dividend of SEK 2.50 per share
and extra dividend of SEK 0.50 per share.
the role of the nomination
committee
The AGM resolved that the Chairman
of the Board should, no later than at the
end of the third quarter every year, call a
meeting with the four largest shareholders in terms of equity stake or voting
rights in the Company. These parties
will then each appoint one member, who
should not be a Member of the Board, of
the Nomination Committee. The role of
the Nomination Committee is to propose
to the AGM the number of Board Members, the Chairman of the Board, other
Board Members and the remuneration of
the Board and the auditors. The Nomination Committee also proposes the auditors
in the years in which an election shall take
place. The Nomination Committee for
the 2009 AGM consists of the following
persons: Anders Hultman (Chairman, appointed by Scapa Capital), Erik Sjöström
(appointed by Skandia Life Assurance
Company), Gunnar Lindberg (appointed
by LF Småbolagsfond) and Lars Johansson (appointed by Jerry Fredriksson).
the role of the board of directors
According to the Swedish Companies
Act, the Board of Directors has overall
responsibility for the organisation and
administration of the Group, as well as
for overseeing that the quality of financial
reporting, asset management and other
financial conditions is satisfactory. The
Board takes decisions on issues relating
to the Group’s overall objectives, strategic
direction and policies, as well as on major
issues relating to finance, acquisitions,
disposals and investments. The work of
the Board of Directors of Lammhults
Design Group AB is governed by the rules
of procedure that are annually adopted by
the statutory Board meeting. The rules of
procedure regulate the Board’s working
methods and overall tasks, the holding
of meetings, the formulation of ongoing
financial reporting and the allocation of
tasks between the Board and the CEO.
The relevance and timeliness of the rules
of procedure are reviewed every year.
During the year, the Board of Directors held five ordinary meetings and
three extraordinary meetings in addition
to the statutory meeting. The meetings
were devoted to financial follow-up of
operations, strategic issues, budget discussions, acquisition and disposal issues
and external financial information. The
CEO and the CFO take part in the meetings of the Board, in a reporting capacity.
The Board meetings were prepared
by the CEO and the CFO. The CEO provided the Board Members with written
reports and supporting documentation
at least five working days prior to each
respective meeting. The Board meetings
were alternately held in the Parent Company’s offices in Lammhult and at the offices of the various subsidiaries. Minutes
of each meeting were kept by the CFO,
and checked for accuracy first by the
Chairman and then by one other Board
Member prior to their distribution to
the Board. The Members of the Board
received monthly reports regularly
during the year, informing them of the
financial and operational developments
in the Group. The reports were drawn
up jointly by the CEO and the CFO.
of the Board is evaluated once a year. In
addition, the Board evaluates the work of
the CEO. The results were reported at the
Board’s regular meeting held in February
2009. On the basis of the results, measures are being taken on an ongoing basis
by the Chairman and management to
improve the quality of work by the Board.
composition of the board
According to the Articles of Association,
the Board is to be made up of no less than
five and no more than twelve members,
with no more than five deputies. Since
2005, the Chairman of the Board has
been Torbjörn Björstrand. All Board
Members are independent of the Company and the Company’s management. One
of the Board Members, Yngve Conradsson, has a relationship of dependence
with the biggest shareholder, Scapa Capital AB, while another, Jerry Fredriksson,
has a relationship of dependence with
the second biggest shareholder, Canola
AB. The other four Board Members are
independent of the biggest shareholders.
For further information on the individual Board Members, see page 48–49.
board of directors - attendance
and evaluation
A total of nine meetings were held in
2008, five after the AGM. The attendance at these meetings was as follows:
Torbjörn Björstrand (9), Lennart Bohlin
(3), Yngve Conradsson (9), Jerry Fredriksson (8), Erika Lagerbielke (9), Lotta
Lundén (8) and Johan Sjöberg (9). The
Board Chairman ensures that the work
FeLix easY Chair
Designer: LoVe arbén
41
board remuneration
Remuneration to the Board is subject to
resolution by the AGM. The 2008 AGM
resolved that fees to the Board Members
for the period up to the next AGM shall
amount to SEK 840 thousand (800), including SEK 240 thousand (200) to the
Chairman of the Board. The other Board
members each receive a fee of SEK 120
thousand (100). Otherwise, neither the
Chairman of the Board nor other Board
Members have received any remuneration in addition to their Board fee.
auditing
According to the Articles of Association,
the Company shall have one or two auditors or one or two auditing firms. The
Company’s auditors are elected by the
AGM for a period of four years. The current period commenced in April 2008
and will expire in conjunction with the
2012 AGM. The auditing firm KPMG
Bohlins AB was appointed auditor at the
2008 AGM, with Michael Johansson being appointed as principal auditor.
The external auditing of the Parent
Company’s and the Group’s accounts,
and of the administration by the Board
of Directors and the CEO, is conducted
in accordance with generally accepted
auditing practices in Sweden. The Company’s principal auditor attends at least
one Board meeting a year and reviews
the auditing for the year.
audit committee
The main task of the Audit Committee is
to support the Board in its work of quality assurance in the Company’s financial
reporting. The Committee meets the
Company’s auditor regularly to keep
informed of the risks (both commercial
risks and risks of errors in the financial
reporting) that have emerged in the
course of auditing. The Committee also
discusses important accounting issues
affecting the Group. The Audit Committee has been composed of Johan Sjöberg
(chairman), Erika Lagerbielke and Lotta
Lundén. The chairman of the Audit Com-
42
mittee is responsible for ensuring that
the Board as a whole is continuously kept
updated on the work of the Committee.
remuneration committee
At the statutory Board meeting in 2008,
Torbjörn Björstrand (chairman), Yngve
Conradsson and Jerry Fredriksson were
appointed to form Lammhults Design
Group’s Remuneration Committee. The
Committee submits proposals to the
Board regarding the CEO’s employment
conditions, including benefits. The remuneration of other senior executives is
determined by the Board on the basis of
proposals from the CEO. The CEO is required to inform the Remuneration Committee annually in advance of remuneration proposed for management personnel
accountable directly to the CEO.
ceO and group management
The CEO manages the business in accordance with the rules of procedure
adopted for the Board of Directors
and the CEO, and in accordance with
the Board’s instructions. The CEO is
responsible for ensuring that the Board
receives the objective, detailed and
relevant information and material for
decisions that are required to enable the
Board to take well-informed decisions.
Group management comprises the
CEO, the four Business Area Managers of
Lammhults Office, Lammhults Library,
Lammhults Home and Scandinavian
Eyewear and the CFO. Group management holds meetings approximately every other month to discuss current issues.
For further information on the individual
Board Members, see page 56–57.
The CEO and CFO also hold business
reviews with the company managements
of each business area every other month.
These forums are devoted to financial
follow-up, business development, strategic issues and discussion of acquisitions.
remuneration to ceO and group
management
Guidelines on salaries, bonuses and other
remuneration to the Company’s senior
executives are for resolution by the AGM.
For 2008, the AGM resolved that remuneration paid by the Company should be
in line with the market and competitive,
such that the Company is able to recruit,
motivate and retain competent and
skilled personnel. The CEO and other
members of Group management have
agreements for variable remuneration
over and above a fixed salary. The size
of the variable remuneration is linked
to predetermined objectives based on
individually set goals and the Group’s
results, or the results of the particular
business area. The variable remuneration
for the CEO may amount to no more than
six months’ salary per annum, and for
other senior executives to no more than
four months’ salary per annum. There
should also be scope for long-term equity
or equity-related incentive programmes.
The CEO’s remuneration is proposed
by the Remuneration Committee and is
determined by the Board. On behalf of the
Board, the CEO is authorised to negotiate
with other senior executives on their remuneration. The CEO is required to inform
the Remuneration Committee annually
in advance of remuneration proposed
for management personnel accountable
directly to the CEO. Remuneration to management personnel directly accountable to
the CEO is subject to decision by the Board.
For further information on salaries
and other remuneration, see Note 6.
internal controls and risk
management
The overall purpose of internal controls
is to ensure to a reasonable degree that
the Company’s operational strategies
and objectives are followed up and that
the investment of the owners is protected. Furthermore, internal controls are
intended to ensure that external financial reporting is, with a reasonable degree of certainty, reliable and prepared
in accordance with generally accepted
auditing practices, that applicable laws
and regulations are complied with and
that the requirements to which listed
companies are subject are observed.
The Board bears the ultimate responsibility for ensuring that the internal
controls in Lammhults Design Group
are adequate. The CEO is responsible
for ensuring that an adequate system
of internal controls is in place, one that
covers all significant risks of errors in
the Company’s financial reporting.
cOntrOL enVirOnment
The control environment is the basis
of internal controls for the financial
reporting. The Group’s internal control
structure is built inter alia on a clear division of responsibilities and roles, not only
between Board and CEO but also within
the operational activities. Policies and
guidelines are documented and evaluated
continuously by Board and management.
risk assessment
On the basis of regular discussions and
meetings within the organisation, Lammhults Design Group’s management identifies, analyses and decides on the way risks
of errors in the financial reporting are to
be managed. The Board addresses the outcome of the Company’s risk assessment
and risk management process, in order
to ensure that it encompasses every important area, and determines policy and
- where required - the actions necessary.
The Group’s significant risk and uncertainty factors include business risks in the
form of high exposure to certain sectors,
and financial risks. Financial risks, such
as currency, interest rate, finance and
liquidity risks, are managed in the main
by the Parent Company’s financial control
function, while credit risks are dealt with
primarily by the financial control function
in the particular business area.
cOntrOL actiVities
The principal aim of control activities is
to prevent or at an early stage to discover
errors in the financial reporting so that
they can be addressed and remedied.
Control activities, at both a general and a
more detailed level, are conducted both
manually and via automatic routines.
Routines and activities have been designed to deal with and remedy significant risks associated with the financial
reporting. The CEO and CFO monitor
the business areas by regular meetings business reviews - with the management
of the particular company regarding its
operations, financial position and results,
as well as its key financial and operational
ratios. The Board analyses inter alia
monthly business reports, in which the
CEO and CFO report on the past period
and comment on the financial position
and results of the Group and the particular business area. This enables significant
variations and deviations to be monitored, minimising the risks of error in the
financial reporting. The processes of endof-period and annual accounting involve
risks of error in the financial reporting.
These routines are of a less-than-repetitive nature and include several stages
where judgement is required. During control activities, it is thus important that an
efficient reporting structure should be in
operation, in which the business areas report using standardised reporting forms,
and that important income statement and
balance items receive comment.
infOrmatiOn and
cOmmunicatiOn
The information provided by Lammhults
Design Group must be accurate, open and
fast, and must be distributed simultaneously to all stakeholder groups. All communication is to be made in accordance
with the rules of Nasdaq OMX Stockholm, and with other regulations. The
financial information must give the capital and equity markets, as well as current
and future shareholders, an all-round and
clear picture of the Group, its operations,
strategy and financial development.
The Board is responsible for adopting
the Group’s annual report and year-end
financial reports, and for instructing
the CEO to submit interim reports. All
financial reports and press releases are
published on the Lammhults Website
(www.lammhults.com) at the same time
as they are made public via Nasdaq OMX
Stockholm, and are also sent to the Swedish Financial Supervisory Authority.
Each business area has a financial
controller who is responsible for maintaining high quality and high delivery
punctuality in the financial reporting.
CFO regularly informs these financial
controllers of any changes in Groupwide accounting policies and other issues relevant to the financial reporting.
fOLLOw-up
The Board’s follow-up of internal controls
for the financial reporting is conducted
partly in the form of reports from the
Audit Committee and partly through the
annual follow-up of parts of the system
of internal controls by the Company’s
external auditors within the framework
of the statutory audit. The external auditors report the outcome of their examination to the Audit Committee and Group
management. Important observations are
also communicated directly to the Board.
The Company’s principal auditor attends
at least one Board meeting a year and
reviews the auditing for the year. On that
occasion, the Board Members have an
opportunity to ask questions.
Another means of follow-up is in the
form of monthly and quarterly reports to
the Board showing financial outcomes
and the management’s comments on the
business and internal controls.
statement On internaL cOntrOLs
Nothing has emerged to indicate that
the system of internal controls is not
operating in the manner intended.
Consequently, the Board has decided not
to set up an internal audit function. The
decision will be reviewed annually.
This Corporate Governance Report
has not been examined by the Company’s auditor.
LammhuLt, 4 marCh 2009
boarD oF DireCtors
43
LammhuLts Design group’s share
lammhults design group – twelve years
on the stock market
changes in ownership
Class B shares in the Lammhults Design Group were listed on the Nordic
Small Cap list of the Nasdaq OMX Nordic Exchange on 2 October 2006. Until 16 June 2008, the shares were quoted under the Company’s former name,
Expanda AB. As of 17 June 2008, the Group’s shares have been traded under
the name of Lammhults Design Group, short name LAMM B. Between 25
June 1997 and 1 October 2006, the shares were traded on the “O” List of the
Stockholm Stock Exchange. Until 6 June 1999, the shares were quoted under
the former name of R-vik Industrigrupp AB, then under the name of Expanda
AB. At year-end 2008, Lammhults Design Group’s share capital amounted
to SEK 84,481,040, represented by 1,103,798 Class A shares, each carrying
an entitlement to 10 votes, and 7,344,306 Class B shares, each carrying an
entitlement to 1 vote.
The number of shareholders at year-end 2008 was 2,625 (2,694), 3% lower
than at the preceding year-end. A shift in ownership from private individuals to capital-rich funds took place during the year.
Among the Company’s major shareholders, Skandia Livförsäkrings AB increased its holding by 19,156 B shares to 802,763 Class B shares, representing 9.5% of the share capital and 4.4% of the votes. Odin Fonder increased
its holding by 20,800 Class B shares to 668,100 Class B shares, representing
7.9% of the share capital and 3.6% of the votes. LF Småbolagsfond reduced
its holding by 120,000 Class B shares to 719,600 Class B shares, as a result
of which the company’s holding amounts to 8.5% of the capital and 3.9% of
the votes.
dividend policy and dividend
share price
During 2008, the price of Lammhults Design Group’s shares fell 37%, from
SEK 65.25 to SEK 41.00. The highest price paid during the year was SEK
73.00 (108.50) and the lowest SEK 36.00 (53.25). The liquidity of the share
in 2008 was adversely affected by the financial crisis. The share was traded
on 82% (98) of all trading days in 2008. During the year, the total turnover
in the Company’s shares was SEK 58 million (189). Market capitalisation at
year-end was SEK 346 million (551).
Lammhults Design Group’s financial objective over a business cycle is,
while maintaining a focus on the Group’s long-term capital requirements,
that the dividend paid shall correspond to around 40% of profit after tax.
For the 2008 financial year, the Board proposes a dividend of SEK 2.50 per
share (2.50 + 0.50). The total dividend payment will thus amount to SEK 21.1
million (25.3). The proposed dividend represents a direct yield of 6.1% (4.6).
analyses of lammhults design group
During the year, analyses of Lammhults Design Group were carried out by
Swedbank Markets (Mats Larsson, tel. +46 (0)8-5859 2542) and Kaupthing
Bank (Christian Hellman, tel. +46 (0)8-791 4971).
Price movements and share turnover, 2004–2008
110
Price movements and share turnover, 2008
600
500
90
75
65
150,000
400
55
70
100,000
300
45
50
200
50,000
30
10
100
2004
2005
Lammhults Design Group B
44
2006
Afv General Index
2007
2008
0
Share turnover per month (000s)
35
25
Jan
Feb
Mar
Apr
Lammhults Design Group B
May
Jun
Jul
Aug
Afv General Index
Sep
Oct
Nov
Dec
0
Share turnover per week
PER-SHARE DATA
2004
2005
2006
2007
2008
Number of shares outstanding at year-end, thousands
Warrants, thousands 1)
Average number of shares outstanding, thousands
8,448
0
8,448
8,448
0
8,448
8,448
0
8,448
8,448
0
8,448
8,448
75
8,448
Earnings per share before dilution, SEK
Earnings per share after dilution, SEK
Cash-flow per share, SEK
Equity per share before dilution, SEK
Equity per share after dilution, SEK
2.50
2.50
4.79
31.15
31.15
2.39
2.39
5.06
33.21
33.21
6.37
6.37
8.39
38.16
38.16
4.98
4.98
5.94
40.80
40.80
6.24
6.24
11.05
46.81
46.81
Market price at year-end, SEK
Dividend per share paid/proposed, SEK 2)
P/E ratio
43.80
0.50
18
48.60
1.00
20
96.00
3.00
15
65.25
3.00
13
41.00
2.50
7
160
4.6
60
88
6.1
40
Market price/equity, %
141
146
252
Direct yield, %
1.1
2.1
3.1
Dividend, share, %
20
42
47
1) Strike price 79.00 SEK. Further information in Note 6.
2) Regular dividend of SEK 2.50/share and extra dividend of SEK 0.50/share in 2007.
Regular dividend of SEK 2.25/share and extra dividend of SEK 0.75/share in 2006.
The Group has been applying IFRS since 2005. The year shown for comparison, 2004, has been restated to reflect IFRS.
Cl ASS o f SHARE
Class A
Class B
Number of
shares
Number of
votes
Percentage
of share cap.
Percentage
of votes
1,103,798
7,344,306
8,448,104
11,037,980
7,344,306
18,382,286
13.1
86.9
100.0
60.0
40.0
100.0
Change in
share capital
Total
share capital
500,000
80,223,330
2,457,710
500,000
80,723,330
83,181,040
1,300,000
84,481,040
CHAng ES i n SHARE CAPi TAl , SEK
Year
Transaction
1997
1997
1997
1999
2001
2008
Incorporation
Rights issue
Rights issue
120,000 warrants for subscription for Class B shares were issued
Rights issue
75,000 warrants for subscription of Class B shares were issued
45
SHARE CAPi TAl , 31/12/08
Shareholding, no.
1 – 500
501 – 1,000
1,001 – 2,000
2,001 – 5,000
5,001 – 10,000
10,001 – 50,000
50,001
Total
TEn l ARg EST SHAREHol DERS, 31/12/08
Shareholders
Scapa Capital AB
Fredriksson, Jerry and company
Sjöberg, Stig and Ann-Louise
Johansson, Tage and company
Skandia Livförsäkrings AB
Sandelius, Nils-Gunnar and company
LF Småbolagsfond
Odin Förvaltning
Sjöberg, Johan and company
Sjöberg, Harriet
Total, 10 largest shareholders
Others
Total
SHAREHol DERS b y CATEgo Ry, 31/12/08
Category
Financial companies
Social insurance funds
Single-interest organisations
Other Swedish legal entities
Uncategorised legal entities
Owners resident abroad
Swedish natural persons
Total
At year-end, there were a total of 2,625 (2,694) shareholders in Lammhults
Design Group. Foreign shareholders represented 12.6% (12.2) of the capital
and 5.8% (5.6) of the votes. Institutional shareholders, including
46
Number of
shareholders
Shareholders,
as %
Percentage
of capital
Percentage
of votes
1,876
346
168
123
40
48
24
2,625
71.5
13.2
6.4
4.7
1.5
1.8
0.9
100.0
4.4
3.6
3.2
5.1
3.7
12.1
68.1
100.0
2.1
1.7
1.6
3.4
2.1
7.7
81.5
100.0
Number
Class A
Number
Class B
Percentage
of capital
Percentage
of votes
367,570
288,049
107,600
104,254
0
78,600
1,074,000
112,000
80,500
58,500
802,763
8,000
17.1
4.7
2.2
1.9
9.5
1.0
25.8
16.3
6.3
6.0
4.4
4.3
0
0
50,300
37,600
1,033,973
69,825
1,103,798
719,600
668,100
20,000
38,050
3,581,513
3,762,793
7,344,306
8.5
7.9
0.8
0.9
54.6
45.4
100.0
3.9
3.6
2.8
2.3
75.7
24.3
100.0
Number
Class A
Number
Class B
Percentage
of capital
Percentage
of votes
0
0
0
769,406
0
0
334,392
1,103,798
2,193,142
12,658
13,340
1,863,072
43,600
1,061,336
2,157,158
7,344,306
26.0
0.1
0.2
31.2
0.5
12.6
29.5
100.0
11.9
0.1
0.1
52.0
0.2
5.8
29.9
100.0
foreign-based shareholders, represented 38.3% (36.7) of the capital and
17.6% (16.9) of the votes. The ten largest shareholders represented 54.6%
(55.5) of the capital and 75.7% (76.1) of the votes.
FiVe-Year reVieW
KEy f ig URES
unit
2004
2005
2006
2007
2008
Net sales
Gross profit
Gross margin
Operating profit
Operating margin
Profit after finance items
Net margin
SEK m.
SEK m.
%
SEK m.
%
SEK m.
%
613.1
231.5
37.8
36.3
5.9
30.3
4.9
642.5
251.1
39.1
34.2
5.3
29.2
4.5
815.9
332.8
40.8
84.8
10.4
78.2
9.6
829.2
329.7
39.8
73.3
8.8
63.1
7.6
901.2
368.5
40.9
85.5
9.5
77.1
8.6
Total capital
Capital employed
Operating capital
Equity
SEK m.
SEK m.
SEK m.
SEK m.
567.4
453.7
425.5
263.2
566.9
445.2
421.5
280.6
621.3
462.6
426.2
322.4
662.0
483.0
438.6
344.7
790.5
577.9
505.2
395.5
%
%
%
%
6.5
8.1
8.2
8.4
6.3
7.9
8.1
7.4
14.5
19.0
20.0
17.9
11.1
15.0
16.9
12.6
12.1
16.6
18.1
14.2
multiple
%
multiple
%
0.72
48.9
5.0
46.4
0.59
49.8
5.6
49.5
0.43
53.2
10.7
51.9
0.40
53.2
8.9
52.1
0.46
50.5
8.0
50.0
SEK m.
SEK m.
40.4
12.0
373
42.8
16.1
342
70.9
17.3
371
50.2
12.5
363
93.3
27.6
400
Return on total capital
Return on capital employed
Return on operating capital
Return on equity
Debt/equity ratio
Risk-bearing capital, share
Interest coverage ratio
Equity/assets ratio
Cash flow from current operations
Investments
The Group has been applying IFRS since 2005. The year shown for comparison, 2004, has been restated to reflect IFRS.
Risk-bearing capital, share
Equity and deferred tax, as a percentage of total assets.
Market price/equity
Market price at year-end, divided
by equity per share.
Net margin
Profit after financial items, as a percentage of net sales
Return on equity
Profit for the year, as a percentage
of average equity.
Market price at year-end
Last price paid on the Stockholm
Stock Exchange in each year.
Return on operating capital
Operating profit, as a percentage of
average operating capital.
Direct yield
Dividend per share, as a percentage
of the market price at year-end.
Net sales
Value of the Group’s deliveries, less
deliveries between companies in
the Group.
Return on capital employed
Profit after finance items plus
financial expenses as a percentage
of average capital employed.
Equity
Equity divided by the number of
shares at year-end.
Return on total capital
Profit after finance items plus
financial expenses as a percentage
of average total capital.
Equity per share
Equity divided by the number of
shares at year-end.
Total assets
Value of all assets.
Cash-flow per share
Cash flow from current operations, divided by average number
of shares.
Gross margin
Gross profit, as a percentage of net
sales.
Rate of turnover of inventories
Cost of goods sold, divided by average inventories.
Interest coverage ratio
Profit after finance items plus financial expenses divided by financial
expenses.
Operating margin
Operating profit, as a percentage of
net sales.
Sales per employee
Net sales, divided by the average
number of employees.
Debt/equity ratio
Interest-bearing liabilities divided
by equity.
Operating capital
Total assets, less cash and cash
equivalents and other interest-bearing assets and less non-interestbearing liabilities.
Equity/assets ratio
Equity as a percentage of total assets.
P/E ratio
Market price at year end, divided by
earnings per share after tax.
Capital employed
Total assets, less non-interestbearing liabilities and deferred tax.
Dividend percentage
Proposed dividend, as percentage of
profit for the year.
Earnings per share after tax
Profit for the year, divided by the average number of shares outstanding.
47
erika LagerbieLke
Born 1960. Lives in Stockholm. Director since
2006. Professor of Glass Design, Växjö University. Designer, Orrefors Kosta Boda AB.
tOrbJörn bJörstrand
Born 1945. Lives in Växjö. Chairman. Director
since 1997.
brief backgrOund
Graduate engineer, B.Sc. Previously served as
Vice-President of Fläkt Industri AB, Vice-President of Orrefors Kosta Boda AB, President of Thule
Sweden AB and President of Södra Timber AB.
48
brief backgrOund
Industrial designer graduate, University College
of Arts Crafts and Design in Stockholm, 1983.
Works as designer in her own company Lagerbielke & Åhlman Form och Design, and in association
with Kateha AB and Talarforum.
Other directOrships
Chairman, Koncentra Marine & Power AB, Aiab
Energy AB and Pdb Datasystem AB. Director,
AnaMar AB and Alwex Transport AB.
Other directOrships
Chair, Swedish Society of Crafts & Design;
Deputy Director, House of Design, Hällefors.
Other assignments: Member of the Consultation
Committee of the Swedish Society of Crafts &
Design, Heraldry Committee of the National Archives of Sweden, Föreningen Nyckelvisskolan.
sharehOLding in LammhuLts
design grOup ab
5,000 Class B shares.
design grOup ab
0 shares.
JOhan sJöberg
Born 1952. Lives in Stockaryd. Director since
2002. Entrepreneur, President of Möbelriket AB.
brief backgrOund
Partner in AB Bröderna Sjöberg, Stockaryd, and
in Svenssons i Lammhult AB.
Other directOrships
Director, CM Form AB, Nevotex AB, Duobad AB,
Investment AB Chiffonjén, Stiftelsen Barometern,
Skattebetalarnas Förening (Swedish Taxpayers Association) and the SME Committee of the
Confederation of Swedish Enterprise.
design grOup ab
50,300 Class A shares and 37,000 Class B shares
(via company and family).
JERRY FREDRIKSSON
Born 1942. Lives in Sävsjö. Director since 2004.
Entrepreneur, President of CANOLA AB and Rådhuset AB consultancy.
lOtta luNDÉN
BRIEF BacKgROuND
Graduate economist. Previously worked in industry and also as an auditor.
BRIEF BacKgROuND
20 years of experience in retailing. For example,
BA manager at IKEA of Sweden and Commercial
Director at IKEA Singapore. President of Guldfynd/Hallbergs Guld, General Manager of Coop
Forum. Partner, Konceptverkstan.
OthER DIREctORShIpS
Chairman, KarlssonGruppen AB, BK Buss AB,
IV Produkt AB, Wetlandia AB, Trionen AB and
Morellen AB. Director, Coromatic AB, Vänerexpressen AB and Investment AB Chiffonjén,
among others.
ShaREhOlDINg IN lammhultS
DESIgN gROup aB
288,049 Class A shares and 112,000 Class B
shares (indirect ownership via company).
Born 1957. Lives in Stockholm. Director since
2005.
OthER DIREctORShIpS
Director, Green Cargo, Swedish Trade Council,
Bergendahlsgruppen, Glitter, Akademibokhandeln, Twilfit and Bemz.
DESIgN gROup aB
0 shares.
YNgVE cONRaDSSON
Born 1943. Lives in Alvesta. Director since 2005.
President of upholstered furniture company
SCAPA INTER AB since 1999.
BRIEF BacKgROuND
In association with Anders Hultman developed
furniture company SCAPA into the biggest bed
and upholsterered furniture company in the
Nordic region.
OthER DIREctORShIpS
Scapa Capital AB and Balco AB.
DESIgN gROup aB
367,570 Class A shares and 1,074,000 Class B
shares (via 50%-owned company).
lammhults
design group
YOu haVE pROBaBlY mEt OuR pRODuctS BEFORE. YOu FIND thEm at
thE OFFIcE, thE lIBRaRY, thE cONFERENcE cENtER, thE aIRpORt aND
IN YOuR FRIENDS hOmES. BEhIND thIS pagE YOu wIll FIND a SElEctION
OF OuR pOpulaR pRODuctS. DO YOu REcOgNIzE aNY OF thEm?
atlas
campus
imprint stack
campus laptop
77
cinema
sahara wood
club
atlas xl
viper
planka
s70-3
millibar
mini
campus
arctic
arctic
sense
deluxe
aluline plus
ono
doremi
Qvintus
casino
saturn
funk
azzaro
arctic
arctic
imprint sQuare
spira
alumi
azzaro
chicago i
chicago iii
bodoni
cinema sport
spira
cortina
infini relax
a-line
saturday
millibar
atlas
cooper
sahara
taxi
puzzle
sahara wood
fellini
chicago
Quickly mini
cooper
newport
designers working with lammhults design group
alento
alento
cargo
bank
wave
bank
gunilla allard
love arbén
efva attling
Åke bergman
bernt
stefan borselius
birgitte borup & carsten nikolaj becker
mårten cyrén
niklas dahlman
björn dahlström
ruud ekstrand
Johannes foersom & peter hiort-lorenzen
rolf fransson
marie-louise gustafsson
bertil harstöm
louise hederström
dan ihreborn
airflake
stand by
s70-12
franz James
nina Jobs
gustav kristensson
henning larsen
peter larsen
oscar magnusson
hartmut michalke
carina mollsjö
anna mälstad
anya sebton
carl-henrik spak
strand & hvass
Jesper ståhl
mia wahlstein & Josef zetterman
fredrik wallner
werner wels
ÅKE JANSSON
JOAKIM BROBÄCK
JOHAN HJERTONSSON
President, Scandinavian Eyewear AB.
Born 1970. President since 2008.
President, Lammhults Möbel AB.
Born 1962. President since 2008.
Brief background
MBA. Various senior executive positions at
the Electrolux Group 1992–2007, including in
finance, product development and marketing.
Brief background
MBA. Employed as product and product group
manager at Thule Sweden AB, 1997–2000. Sales
manager, marketing manager and President of
Marbodal AB/Nobia Sweden, 2000–2008 (with
interruption in 2006). Also served as President of
Martela AB in 2006.
Brief background
Construction engineer, graduate engineer, Master
of Business Administration. Previously employed
as sales engineer and then marketing manager
at Alcatel IKO Kabel AB, 1992–1998, President of
Eldon Vasa AB, 1998–2003, and President of Fälth
& Hässler AB, 2003–2004. President of Abstracta
AB, 2004–2008. Since November 2008, President
of Lammhults Möbel AB.
Shareholding in Lammhults
Design Group AB
30,000 Class B shares and 100,000 warrants.
Design Group AB
0 shares.
Design Group AB
0 shares and 12,500 warrants.
President and Chief Executive Officer, Lammhults Design Group AB. Born 1968. President
since 2007.
thOmas JOhannessOn
thOmas JanssOn
CFO, Lammhults Design Group AB. Born 1968.
CFO since 2003.
Business Area Manager, Lammhults Library,
and President, Eurobib AB and Schulz Speyer
Bibliothekstechnik AG. Born 1957. President since
1993.
sOnnie byrLing
President, Voice AB. Born 1961. President since
2008.
brief backgrOund
MBA. Previously employed as economist at Volvo
Articulated Haulers AB, 1993–1997, and as senior
economist at Lammhults Möbel AB, 1997–2003.
brief backgrOund
Systems designer. Previously employed as
systems designer/programmer at Perstorp AB,
controller at Perstorp Special Kemi and financial
manager at BTJ AB.
brief backgrOund
Previously employed as marketing and product
manager in Ericsson Group, President of subsidiary in SYSteam Group, 1995–2003, and President
of Scandinavian Eyewear 2003–2008.
design grOup ab
design grOup ab
design grOup ab
57
repOrt Of the bOard Of directOrs
The Board of Directors and the CEO of
Lammhults Design Group AB, corporate registration number 556541-2094,
hereby present their annual report and
consolidated accounts for the period 1
January 2008–31 December 2008.
Lammhults Design Group conducts
its business activities in the form of
a public limited company (Swedish:
aktiebolag). Its registered office is in the
Municipality of Växjö, in Kronoberg
County. The Company’s address is: Box
75, SE-360 30 Lammhult, Sweden.
this is Lammhults design group
Serving a global clientele, Lammhults
Design Group’s business concept is to
create positive experiences through modern interiors. Consumer insight, design
management and strong brands are the
foundations on which the Group’s operations are based. The Group’s activities are
conducted in two areas: design, development and sale of products for interiors of
public environments, homes and offices,
as well as design, development and sale of
58
spectacle frames. Operations are organised into four business areas: Lammhults
Office, Lammhults Library, Lammhults
Home and Scandinavian Eyewear. The
Group is made up of the following wholly
owned subsidiaries: Lammhults Möbel
AB, Abstracta AB (amalgamated into
Lammhults Möbel AB at the start of
2009), Eurobib AB (name changed 2009
to Lammhults Biblioteksdesign AB),
Schulz Speyer Bibliothekstechnik AG,
BCI/AS (name changed 2009 to Lammhults Biblioteksdesign A/S) plus subsidiary IFDB, Voice AB (name changed 2009
to Lammhults Home AB) plus subsidiary
Ire Möbel AB and Scandinavian Eyewear
AB plus subsidiary Seven SRL. The
Group also includes a number of foreign
sales companies and dormant companies.
• Anewstrategywasadoptedtofocus
organisational resources around the
Group’s strongest brand, Lammhults.
• In2008,theGroup’snamewas
changed from Expanda to Lamm-
•
•
•
•
hults Design Group. Since 17 June
2008, shares in the Group have been
traded under the short name LAMM
B on the Nordic list of OMX Nordic
Exchange Stockholm.
Adecisionwastakentomergethe
subsidiaries Abstracta AB and Lammhults Möbel AB into one company
named Lammhults Möbel AB. The
merger was implemented in the first
quarter of 2009. The new company is
headed by Åke Jansson, CEO.
On12March,theGroup’ssubsidiary
Scandinavian Eyewear AB acquired
100% of the shares outstanding in
Seven S.R.L, an Italian design company in the eyewear industry with
sales corresponding to approximately
SEK 30 million.
On18March,thesubsidiaryBCIA/S
acquired the German library interiors company Institut für BibliotheksDesign GmbH (IFBD). The company
has sales corresponding to around
SEK 15 million.
On6August,thesubsidiaryVoiceAB
acquired 100% of the shares outstanding in Ire Möbel AB, a highly reputed company with a strong product
range in upholstered furniture, and
sales totalling around SEK 50 million.
significant events after year-end
• Workbeganonfindingasuccessor
to CEO Johan Hjertonsson, who will
leave the Group no later than at midyear 2009.
• InFebruary2009,thesubsidiary
Schulz Speyer Bibliothekstechnik AG
acquired the Belgian company Schulz
Benelux BVBA, with sales in the order of approximately SEK 15 million.
• InFebruary2009,thesubsidiaryBCI
A/S acquired the Dutch company
NBLC Systemen B.V, with sales of
about SEK 20 million.
financial summary for 2008
The Group’s net sales totalled SEK 901.2
million, an increase of 9% on the preceding year. Growth was achieved in part
organically, with around 4% of growth
for the year, and in part via the acquisitions of Seven, IFBD and Ire Möbel,
which together accounted for 5%.
The gross margin strengthened relative to the preceding year, from 39.8% to
40.9%. The growth was attributable to
an overall higher sales volume, combined
with improved cost efficiency in purchasing. This had such a positive effect
on the gross margin as to more than outweigh the negative trend in the product
mix produced by a decline in the share of
sales represented by spectacle frames.
The operating profit was charged
with costs of just over SEK 3 million
in connection with restructuring of
the Group’s companies. Taking these
costs into account, the operating profit
amounted to SEK 85.5 million (73.3),
representing an operating margin of
9.5% (8.8). The profit after financial
items was SEK 77.1 million (63.1). The
profit after tax totalled SEK 52.7 million (42.0). This generated earnings per
share of SEK 6.24 (4.98).
The Group’s financial position remains
strong, despite the impact on the cash flow
of the price paid to the former owners of
Seven, IFDB and Ire and additional acquisition costs paid to Schulz Speyer. The
equity ratio was 50.0% (52.1) at year-end,
and the debt ratio was 0.46 (0.40). Our
financial position therefore continues to allow scope for acquisitions without departing from the Group’s goals for equity ratio
and debt ratio. Cash flows from operating
activities amounted to SEK 93.3 million
(50.2). The improvement was attributable
in the main to increased advance payments
from customers, higher trade payables and
other current payables and more efficient
inventory management. Cash and cash
equivalents amounted to SEK 72.8 million
sumer wants and will need in the future
is crucial. In our branding efforts we are
constantly striving to achieve our five
core values : to be unique, self-assured,
receptive, innovative and thorough.
the market in 2008
The market climate felt the impact of the
economic downturn and the continued
unrest in the financial markets. However, Lammhults Design Group’s relative
insensitivity to the business cycle attenuated the effects of the downturn. Part of
the explanation lies in an effective diversification of operations. Only 39% of sales
were attributable to operations in Sweden, while the remainder was generated
in export markets. In addition, the Group
group financial highlights
Gr o up
2004
2005
2006
2007
2008
613.1
642.5
815.9
829.2
901.2
36.3
34.2
84.8
73.3
85.5
5.9
5.3
10.4
8.8
9.5
453.7
445.2
462.6
483.0
577.9
8.1
7.9
19.0
15.0
16.6
Return on shareholders’ equity, %
8.4
7.4
17.9
12.6
14.2
46.4
49.5
51.9
52.1
50.0
net sales, SEk m
operating profit, SEk m
operating margin, %
Equity ratio, %
debt ratio, multiple
0.72
0.59
0.43
0.40
0.46
Investments, SEk m
12.0
16.1
17.3
12.5
27.6
373
342
371
363
400
The group applies IFRS as of 2005. Comparative figures for 2004 have been restated in accordance with IFRS.
(44.4) at year-end. The Group’s unused
credit facilities including cash equivalents
totalled SEK 161.1 million (125.3).
new brand strategy
In 2008 we began concentrating our efforts on our strongest brand, Lammhults.
A brand-oriented approach gives us
greater opportunities to create synergies
in production, product development and
marketing. With clearer branding, we
are better able to achieve sustainable,
profitable growth, thereby increasing
shareholder value. The brand strategy
involves a sharp focus on customers and
their needs. Insight into what the con-
is not to any notable extent exposed to the
consumer market. Less than 25% of sales
consist of sales for private consumption,
while more than 75% are to the public
sector and corporate customers.
PRIvATE
CoRPoRATE
PuBLIC
59
Consequently, the downturn was most
keenly felt by companies in the Group
that sell products intended for private
consumption, Voice and Scandinavian
Eyewear, which reported lower sales
than in the preceding year, excluding
acquisitions. This was attributable in
the main to generally falling demand
for occasional-purchase items among
consumers. On the other hand, Business
Areas Lammhults Library and Lammhults Office, whose sales are primarily
to public sector and corporate customers, reported higher sales in 2008. Over
the full year, the Group’s total order
bookings rose by 5%, from SEK 847.7
million SEK 894.3 million. Acquisitions
accounted for 4% of the increase. Order
bookings at year-end were 5% higher
than in the preceding year, at SEK 117.3
million (111.2). The improvement was
mainly attributable to the fact that
Schulz Speyer, the German side of the
Group’s library interiors operations, reported very high order bookings, while
Cooper easY Chair
60
LammhuLts Library
BCI, Eurobib, Schulz Speyer and IFBD
sell library interiors, as well as products for public sector consumption.
Sales rose sharply in 2008, above all
in Denmark, Germany and the Middle
East, with profits considerably exceeding those in the preceding year. During
2008, major orders were delivered to
Strasbourg and Campère in France,
each to a value of SEK 7 million, and
to Kuwait to a value of SEK 13 million.
The gross margin was boosted by the
increased sales volume, in that the fixed
production costs are spread over a larger
volume. The market-leading position in
Germany also boosted the sales volume
and improved profitability. The business
area also cut costs through the reorganisation implemented in the preceding
year at Eurobib and BCI, with project
sales being concentrated in the premises
in Denmark, and after-market sales being concentrated in Lund.
ing from low-cost countries. In January
2009, Lammhults booked its biggest
order ever, for nearly SEK 10 million, a
delivery to a five-star hotel in Turkey.
Abstracta’s biggest increases were
posted in Sweden, Denmark and
Germany. The products for which the
highest sales increases were recorded
were Abstracta’s exclusive glass writing
boards and Softline screens. Several of
the Company’s products, including Alumi
and Airflake, also achieved major sales
successes in their very first year after
launch. However, the fourth quarter was
characterised by a minor decline in order
bookings, compared to the preceding year.
In the fourth quarter, a decision was
taken to merge the two subsidiaries
Lammhults Möbel AB and Abstracta AB.
The name of the new company is Lammhults Möbel AB. The merger was completed in the first quarter of 2009 and the
CEO of the new company is Åke Jansson.
Both brands, Lammhults and Abstracta,
remain in use. The purpose of the merger
is develop an even more customer-based
and cost-efficient approach, to enable
greater investments in product development, marketing and brand building.
LammhuLts Office
Sales, order bookings and profits improved at both Lammhults Möbel AB,
which sells furniture for public environments, and Abstracta AB, which sells
products for room division, for example
office partitions, and for visual communication, such as writing boards, for
public environments.
Lammhults Möbel reported increased sales, above all in the Nordic region, the USA and Germany. While sales
in the Swedish market still dominate, a
clear improvement in export sales was
observed. In all, export sales rose by
18%. As a result, export sales by Lammhults Möbel, as a share of total sales,
increased by 46% to 49%. The gross
margin increased during the year as a
result of a higher export share and an
increased share of component purchas-
LammhuLts hOme
Lammhults Home incorporates Voice
AB, which has a strong product offering in storage furniture, desks, dining
room furniture and chairs, and Voice’s
subsidiary Ire Möbel AB, which is
similarly strong in upholstered furniture, including sofas and armchairs.
The business area focuses mainly on
the consumer sector, although it also
has exposure to the corporate market.
Sales and profits for Voice AB declined
from those reported in the preceding
year. This may be ascribed above all to
the decline in the economy, in view of
Voice’s considerable exposure to the
private consumer market. However, the
trend was also to some extent the result
of inadequate planning for the supply
of new products. Nevertheless, sales
improved over the second half-year after
Scandinavian Eyewear also had strong
order bookings.
market developments – business
areas
Voice’s acquisition of Ire Möbel, whose
sales and profit growth were in line with
expectations. Synergy gains had already
emerged in the fourth quarter, in the
form of increased revenue. In December,
a hotel interiors project to a total value
of SEK 5 million for the two companies
was completed, with delivery scheduled
during the first quarter of 2009.
Scandinavian Eyewear designs, develops and sells spectacle frames, with
well-known brands such as Skaga, Efva
Attling and Oscar Magnuson. Compared
to the preceding year, sales and profits
declined, above all in the Nordic markets
through the impact of the downturn in
the economy. In addition, the optician
industry is undergoing restructuring,
with increased polarisation towards
budget and premium products at the expense of the mid-price segment. Budget
operators are expanding and consolidation is taking place in the retail sector.
Adjustments in resources and costs have
been implemented and have already
made a certain impact. Sales to the UK
and Poland, Scandinavian Eyewear’s
two biggest export markets outside the
Nordic region, rose somewhat in 2008.
In addition, an order was received from
Poland in December for delivery in the
first half of 2009. The operations of subsidiary Seven have generated a surplus
well in line with expectations since the
company was acquired in March 2008.
market developments – parent
company
The Parent Company’s business activities embrace Group management, certain Group-wide functions and acquisition financing. Net sales amounted to
SEK 6.8 million (6.2), with a loss of SEK
-11.5 million after financial items (loss
of -45.9). Internal Group dividends and
thereby related impairment of carrying
amounts for shares in subsidiaries and
associated companies make year-onyear comparisons difficult.
investments and depreciation
The Group’s investments in production
and IT equipment amounted to SEK 10.2
million (11.2) and in land and buildings
SEK 16.2 million (1.0). Investments in
work in progress totalled SEK 1.1 million
(0.3). The expansion of Voice’s property in
Jönköping accounted for SEK 15.0 million
of the investments in buildings and land.
Total depreciation according to plan during the year was SEK 15.4 million (14.9).
development work
Product development, in house and
in partnership with customers, is an
important part of the Group’s operations. The Group’s products are to be
characterised by creativity and high
design values, drawing on the expertise of designers both in and outside
the organisation. The main focus is
capital goods and consumer durables for
public environments, homes and offices.
Product development shall be driven
by creativity and design in combination with other essential factors such as
production sustainability, functionality, quality, environment and price. The
costs associated with this process are
not normally sufficient for them to fulfil
the criteria for reporting as an asset, but
instead are accounted for as administration costs in the consolidated income
statement; see Note 5. No development
costs were capitalised during the year.
risks and uncertainty factors
The significant risk and uncertainty factors faced by Lammhults Design Group
include business risks in the form of high
exposure to certain sectors. The Group
is also exposed to a number of financial
risks. Chief among these are currency
risks relating to fluctuations in exchange
rates in conjunction with exports and
imports, interest risks in connection
with liquidity and debt management,
and credit risks in connection with
sales. The Group’s sales are above all
conducted in SEK, EUR, DDK and NOK
while purchases are mainly made in
SEK, EUR, DKK and USD. In addition,
the Group is to a certain degree exposed
to commodities risk. Financial risks, risk
management and financial policies are
described in more detail in Note 27.
financial goals and expectations
for 2009
The financial goals of Lammhults Design Group over a business cycle are:
• Averageannualgrowthofatleast15%
• Anaverageannualoperatingmargin
of at least 10%
• Returnoncapitalemployedofat
least 20%
• Anequityratioofatleast35%
• Adebtratioofbetween0.7and1.0
• Adividendpayoutratioofapproximately 40% of profits after tax,
taking into account the Group’s longterm capital requirements.
In april 2008 the board of directors decided on the above mentioned financial
goals. Before that, the financial goals
were connected to a specific period of
time, and the goal for the annual operating margin was 12 percent.
In view of the financial crisis and the
economic downturn, we lowered our
expectations to some degree as regards
growth in sales and margins during the
year. The repercussions of the financial
crisis and the current downturn make
market predictions difficult for the next
year. Nevertheless, with our internationally competitive products and prices, we
can look to the future with confidence.
The focus on a brand-oriented strategy
that has been implemented will in the
long term help to create synergies in
marketing, sales and brand activities,
and will feed through into continued
expansion outside Scandinavia in 2009.
environmental development
within the group
While developing, manufacturing and
marketing safe products of the highest
quality that satisfy the demands of the
market, Lammhults Design Group is re-
61
quired to maintain a close focus on environmental factors. Every company in the
Group has established an environmental
policy aligned with the Group-wide
policy adopted by the Board of Directors.
The operations of Lammhults Möbel
AB (which now also includes the former
Abstracta AB) and Eurobib AB have been
certified to ISO 14001. None of the Group’s
companies is engaged in operations that
in themselves may be classified as particularly hazardous to the environment.
human resources
Operations within the Group are as far
as possible required to make best use of
the skills and experience that have been
built up in the Parent Company and subsidiaries. Knowledge transfer with regard to product development, marketing,
distribution and export sales, as well as
purchases from low-cost countries, form
a central element of the Group’s strategic focus. Lammhults Design Group
endeavours to create safe and healthy
work environments, as well as tasks that
encourage personal development on the
part of the Group’s employees. At yearend, the average number of employees
was 400 (363). Of the total number of
employees in the Group, 37% (41) were
women. The costs of wages, salaries and
other remuneration amounted to SEK
166.3 million (148.7).
guidelines for remuneration to
senior executives
The Chairman and Members of the
Board receive remuneration as determined by resolution at the Annual General Meeting of Shareholders (AGM). No
separate remuneration is paid for committee work. The AGM has adopted the
following guidelines for the remuneration of senior executives: Wages, salaries
and other conditions of employment for
the CEO and other senior executives
shall be in line with the market and competitive, such that the Company is able to
recruit, motivate and retain competent
and skilled personnel. The Group’s senior
62
executives, excluding the CEO, comprising five individuals, currently have an
agreement for variable remuneration
over and above a fixed salary. The size
of the variable remuneration is linked to
predetermined goals based on individually set objectives and the Group’s results,
or each respective subsidiary’s results.
The variable remuneration for senior executives, excluding the CEO, may equal
no more than four monthly salary payments per annum. There should also be
scope for long-term share-based or share
price-based incentive programmes.
The variable remuneration for the
current CEO was to equal no more than
six monthly salary payments per annum, together with the possibility of a
long-term bonus equal to no more than
one year’s salary in respect of the period
2008–2010. As the CEO has resigned,
his opportunity to receive the long-term
bonus has been revoked.
On termination of an employment
contract by the Company, a period of
notice of 6 months shall apply, with severance pay equivalent to no more than
12 months’ fixed salary for the CEO and
other senior executives.
Agreements for pension benefits
shall be entered into individually. For
the CEO, an annual pension premium
amounting to thirteen times Sweden’s
‘Base Amount’ (Swedish: prisbasbelopp)
shall be paid. For other senior executives, pension costs shall amount to a
maximum of 25% of the fixed and variable salary. The terms and conditions
of pensions shall be based on definedcontribution pension schemes. The
retirement age shall be 65 years.
corporate governance
The company is governed by the Annual
General Meeting, Board of Directors
and CEO under the terms of the Swedish
Companies Act and Articles of Association, along with Nasdaq OMX Stockholm’s rules for issuers, including the
Swedish Code of Corporate Governance.
The work of the Board of Directors of
Lammhults Design Group is governed
by the rules of procedure annually
adopted by the statutory Board meeting.
Nine Board meetings were held in 2008.
The Board has also appointed an audit
committee and a remuneration committee that study and prepare the Board’s
decisions regarding important issues in
the respective areas. More information
on the work of the Board and corporate
governance is available in the 2008
corporate governance report.
Ownership
The total number of shares outstanding
in Lammhults Design Group is 8,448,104,
represented by 1,103,798 class A shares,
each carrying ten votes, and 7,344,306
class B shares, each carrying one vote.
Scapa Capital AB owns shares representing 25.8% of the votes, while Jerry
Fredriksson and company own shares
representing 16.3% of the votes. According to Chapter 6, Section 2 of the Swedish
Annual Reports Act, listed companies
must disclose details of certain circumstances that could affect the possibility
of the Company being taken over via a
public offer to acquire shares in the Company. No such circumstances exist with
regard to Lammhults Design Group AB.
proposed appropriation of profits
The Board of Directors proposes that
the profits available for distribution,
SEK 147,564 143, be allocated as follows: Dividend to the shareholders:
SEK 2.50 per share (2.50 + 0.50). The
total dividend payment amounts to SEK
21,120,260 (25,344,312).
To be carried forward: SEK
126,443,883.
annual general meeting
The Annual General Meeting (AGM)
will be held in Lammhult on 29 April
2009. The Board of Directors will
propose that the AGM should approve a
new share issue, comprising eight hundred thousand shares, to finance future
acquisitions.
Consolidated inCome statement
Amounts in SEK m.
Note
2008
2007
Net sales
Cost of goods sold
Gross profit
2, 3
901.2
–532.7
368.5
829.2
–499.5
329.7
4
5
13, 14, 15
3, 6, 7, 8, 13, 29
8.9
–191.4
–92.4
–8.1
–
85.5
3.8
–167.6
–84.2
–2.4
–6.0
73.3
9
2.6
–11.0
–8.4
2.8
–13.0
–10.2
77.1
63.1
Other operating income
Cost of sales
Administrative expenses
Other operating expenses
Participations in results of associated companies
Operating profit
Finance income
Finance costs
Finance costs – net
Profit before income tax
Income tax
Profit for the year
10
–24.4
52.7
–21.1
42.0
Earnings per share, SEK (no dilution)
21
6.24
4.98
Proposed dividend per share, SEK
20
2.50
3.00
63
Consolidated BalanCe sheet
Amounts in SEK m.
Note
31/12/08
31/12/07
ASSETS
Non-current intangible assets
Property, plant and equipment
Financial investments
Deferred income tax assets
Total non-current assets
11, 12
13
16
10
195.1
141.3
4.1
0.6
341.1
155.4
123.4
0.2
–
279.0
Inventories
Income tax assets
Trade receivables
Other receivables
Prepaid expenses and accrued income
Cash and cash equivalents
Total current assets
TOTAL ASSETS
17
10
18
162.2
6.1
185.0
12.5
10.8
72.8
449.4
790.5
147.8
1.1
169.4
10.9
9.4
44.4
383.0
662.0
EQUITY
Share capital
Other contributed capital
Reserves
Retained earnings including net profit for the year
Total e quity
20
84.5
41.2
26.1
243.7
395.5
84.5
41.2
3.0
216.0
344.7
114.4
0.2
4.8
4.3
3.9
127.6
90.9
0.2
2.3
0.4
7.6
101.4
68.1
15.1
62.4
31.6
31.4
58.8
267.4
395.0
790.5
47.4
11.2
54.1
21.3
20.7
61.2
215.9
317.3
662.0
LIABILITIES
Non-current interest-bearing liabilities
Other non-current liabilities
Provisions for pensions
Other provisions
Deferred income tax liabilities
Total non-current liabilities
Current interest-bearing liabilities
Advance payments from customers
Trade payables
Income tax liabilities
Other liabilities
Accrued expenses and deferred income
Total current liabilities
Total liabilities
TOTAL EQUITY AND LIABILITIES
19
22, 27
24
25
10
22, 27
For information on the Group’s pledged assets and contingent liabilities, see Note 30.
64
10
26
ChanGes in the GRoUP’s eQUitY
Translation
reserve
Retained
earnings
incl. profit
for the year
Total
equity
–0.2
–
0.2
–
–
–
–2.4
5.4
–
–
–
3.0
199.3
–
–
42.0
–25.3
216.0
322.4
5.4
0.2
42.0
–25.3
344.7
–
–
–1.9
–
–
–
–1.9
3.0
25.0
–
–
–
–
28.0
216.0
–
–
52.7
–25.3
0.3
243.7
344.7
25.0
–1.9
52.7
–25.3
0.3
395.5
Share capital
Other
contributed
capital
Hedging
reserve
Opening shareholders’ equity 01/01/07
Change in translation reserve during the year
Change in hedging reserve during the year
Profit for the year
Dividend paid
Closing shareholders’ equity 31/12/07
84.5
–
–
–
–
84.5
41.2
–
–
–
–
41.2
Change in translation reserve during the year
Change in hedging reserve during the year
Profit for the year
Dividend paid
Warrant programme, premiums paid in
84.5
–
–
–
–
–
84.5
41.2
–
–
–
–
–
41.2
Amounts in SEK m.
65
Consolidated Cash flow statement
2008
2007
77.1
22.7
–25.8
63.1
23.7
–9.8
74.0
77.0
–3.0
–10.1
32.4
93.3
–16.7
–0.9
–9.2
50.2
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment
Sales of property, plant and equipment
Purchases of non-current intangible assets
Sales of non-current intangible assets
Purchases of subsidiaries, net impact on liquidity
Investments in financial assets
Cash flows from investing activities
–27.5
0.2
–0.3
0.1
–45.3
–0.8
–73.6
–12.5
0.7
–
0.1
–
–
–11.7
CASH FLOWS FROM FINANCING ACTIVITIES
Premiums received for subscription warrants
Loans raised
Repayments of loans
Dividend paid
Cash flows from financing activities
0.3
55.0
–23.9
–25.3
6.1
–
35.4
–40.7
–25.3
–30.6
25.8
44.4
2.6
72.8
7.9
36.1
0.4
44.4
Amounts in SEK m.
Note
33
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before income tax
Adjustment for non-cash items
Income tax paid
Cash flows from operating activities
before changes in working capital
Cash flow from changes in working capital
Changes in inventories 1)
Changes in current receivables 1)
Changes in current liabilities 2)
Cash flows for the year
Cash and cash equivalents at beginning of year
Translation difference in cash and cash equivalents
Cash and cash equivalents at year-end
1) Increase (–) / decrease (+)
2) Increase (+) / decrease (–)
66
PaRent ComPanY
inCome statement
Amounts in SEK m.
Net sales
Gross profit
Operating profit
Result from financial items
Result from participations
in Group companies
Result from participations
in associated companies
Amortisation of financial receivable
in associated company
Other interest income
Interest expenses
Loss after financial items
Income tax
Loss for the year
PaRent ComPanY
BalanCe sheet
Note
2008
2007
2, 3
6.8
6.8
6.2
6.2
–14.1
–
–
–7.3
–11.6
0.1
–0.1
–5.4
4
5
6, 7, 13, 29
9
13
10
–
–27.1
–
–5.0
–
3.5
–7.7
–11.5
–5.0
1.8
–5.2
–45.9
1.5
–10.0
3.9
–42.0
Amounts in SEK m.
PROPERTY, PLANT AND EQUIPMENT
Non-current financial assets
Participations in Group companies
Total non-current financial assets
Total non-current assets
Note
31/12/08
31/12/07
13
0.5
0.3
11, 32
349.7
349.7
350.2
327.2
327.2
327.5
108.7
0.1
0.9
109.7
83.8
0.2
1.7
85.7
6.3
116.0
466.2
3.4
89.1
416.6
84.5
41.2
84.5
41.2
–1.9
159.5
–10.0
273.3
–
196.2
–42.0
279.9
23
45.2
13.1
58.3
44.6
–
44.6
23
47.0
0.6
63.9
18.6
0.6
3.9
134.6
466.2
40.9
0.6
36.7
8.4
0.6
4.9
92.1
416.6
CURRENT ASSETS
Current receivables
Receivables from Group companies
Other receivables
Prepaid expenses and accrued income
Total current receivables
Cash and bank balances
Total current assets
TOTAL ASSETS
19
EQUITY
Restricted equity
Share capital (1,103,798
class A shares each carrying
an entitlement of 10 votes and
7,344,306 class B shares each
carrying an entitlement of 1 vote)
Statutory reserve
20
Unrestricted equity
Fair value reserve
Profit brought forward
Loss for the year
Total equity
LONG-TERM LIABILITIES
Liabilities to credit institutions
Liabilities to Group companies
Total non-current liabilities
CURRENT LIABILITIES
Liabilities to credit institutions
Trade payables
Liabilities to Group companies
Income tax liabilities
Other liabilities
Accrued expenses and deferred income
Total current liabilities
TOTAL EQUITY AND LIABILITIES
26
67
PledGed assets and ContinGent liaBilities
– PaRent ComPanY
Amounts in SEK m.
Pledged assets
Contingent liabilities
Note
2008
2007
30
30
269.2
3.8
246.7
3.9
ChanGes in the PaRent ComPanY’s eQUitY
Share capital
Statutory
reserve
Fair value reserve
Translation
reserve
Profit
brought
forward
Profit/loss
for the year
Total
equity
Transfer of profit/loss for preceding year
Group contributions received
Loss for the year
Dividend paid
84.5
–
–
–
–
84.5
41.2
–
–
–
–
41.2
–
–
–
–
–
–
136.3
47.1
38.1
–
–25.3
196.2
47.1
–47.1
–
–42.0
–
–42.0
309.1
–
38.1
–42.0
–25.3
279.9
Transfer of profit/loss for preceding year
Translation differences for the year
Loss for the year
Dividend paid
84.5
–
–
–
–
–
84.5
41.2
–
–
–
–
–
41.2
–
–
–1.9
–
–
–
–1.9
196.2
–42.0
–
30.6
–
–25.3
159.5
–42.0
42.0
–
–
–10.0
–
–10.0
279.9
–
–1.9
30.6
–10.0
–25.3
273.3
Amounts in SEK m.
68
PaRent ComPanY Cash flow statement
Amounts in SEK m.
Note
2008
2007
33
CASH FLOWS FROM OPERATING ACTIVITIES
Loss after financial items
Adjustment for non-cash items
Income tax paid
before changes in working capital
–1.5
–4.0
–0.2
–45.9
31.4
0.0
–15.7
–14.5
Cash flow from changes in working capital
Changes in current receivables 1)
Changes in current liabilities 2)
–32.2
37.2
–10.7
13.8
–43.9
–44.6
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment
Sales of property, plant and equipment
Purchases of subsidiaries, net impact on liquidity
Cash flows from investing activities
–0.3
–
–22.6
–22.9
–0.1
0.2
–
0.1
CASH FLOWS FROM FINANCING ACTIVITIES
Loans raised
Repayments of loans
Dividend paid
Erhållen utdelning
Group contributions paid
Cash flows from financing activities
27.7
–18.9
–25.3
–
53.3
–0.3
36.5
23.0
–15.1
–25.3
64.5
–
–
47.1
2.9
3.4
6.3
2.6
0.8
3.4
Cash flows for the year
Cash and cash equivalents at beginning of year
Cash and cash equivalents at year-end
1) Increase (–) / decrease (+)
2) Increase (+) / decrease (–)
69
Note 1. Accounting policies
Amounts in SEK million unless otherwise indicated.
in greater detail, been applied consistently in all periods presented in the
Group’s financial statements. Furthermore, the Group’s accounting policies
have been applied consistently by the Group’s companies.
compliance with standards and legislation
revised accounting policies
The consolidated financial statements have been prepared in accordance
with International Financial Reporting Standards (IFRS) issued by Interna
tional Accounting Standards Board (IASB), as well as the interpretations
issued by International Financial Reporting Interpretations Committee
(IFRIC) and approved by the European Union. Furthermore, the Swedish
Financial Accounting Standards Council’s recommendation RFR 1.1, Supple
mentary Rules for Consolidated Financial Statements, has been applied.
The Parent Company applies the same accounting policies as the Group,
other than in the cases set out below in the section “Parent Company’s
Accounting Policies”. The variances that exist between the policies of the
Parent Company and the Group are attributable to limitations in the ability
to apply IFRS in the Parent Company that follow from the Swedish Annual
Accounts Act and the Swedish Pension Obligations Vesting Act (“Trygg
andelagen”), and in certain cases to tax considerations.
The annual accounts and consolidated accounts were approved for issue
by the Board of Directors on 16 March 2009. The consolidated income state
ment and balance sheet and the Parent Company’s income statement and
balance sheet will be presented for adoption by the Annual General Meeting
of Shareholders, to be held on 29 April 2009.
principles of valuation applied in preparation
of the financial statements
Assets and liabilities are reported at their historic acquisition value, except
for certain financial assets and liabilities, which are accounted for at fair
value. Financial assets and liabilities that are measured at fair value consist
mainly of derivative instruments. Noncurrent assets and disposal groups
that are held for sale are reported at the lower of previous carrying amount
and the fair value less costtosell.
functional currency and reporting currency
The Parent Company’s functional currency is the Swedish krona (SEK),
which is also the reporting currency for the Parent Company and the Group.
The financial statements are thus presented in Swedish kronor. All amounts
are rounded off to SEK million, unless otherwise stated.
judgements and estimates in the financial statements
The preparation of financial statements in conformity with IFRS requires
the Company management to make judgements, estimates and assumptions
that affect the application of the accounting policies and the amounts re
ported for assets, liabilities, revenues and expenses. The actual outcome
may differ from these estimates and judgements. The estimates and assump
tions are reviewed on a regular basis. Changes in the estimates are accounted
for in the period in which the change takes place if the change affects only
that period, or in the period in which the change takes place and future
periods, if the change affects both the current period and future periods.
Judgements made by the Company’s management on application of IFRS
that have significant impact on the financial statements and estimates made
that may require major adjustments to the financial statements of the follow
ing year are described in greater detail in Note 35.
significant accounting policies applied
The accounting policies set out below have, with the exceptions described
70
The following new and revised standards and interpretations have been
applied in the preparation of the financial statements for 2008:
IFRIC 11 IFRS 2 – Group and Treasury Share Transactions provides guid
ance firstly on how equitysettled payments should be classified, where at
settlement the company buys its own equity instruments from another party,
or where owners of the company transfer the instruments, and secondly on
how transactions should be classified where the company’s employees are
granted or have rights to equity instruments of the company’s parent. The
interpretation has been effective as of the beginning of the 2008 financial
year. Application is retroactive.
IFRIC 14 IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding
Requirements and their Interaction explains how the limit defined in IAS 19
on a definedbenefit asset is to be interpreted and also states how this limit is
affected by any minimum funding requirements in the pension plan. The in
terpretation also indicates when minimum funding requirements may result
in a liability. The interpretation has been effective as of the beginning of the
2008 financial year. Application is retroactive as of the beginning of 2007.
The abovementioned accounting policies have not had any impact on the
Group’s results or financial position.
new ifrs and interpretations not yet applied
A number of new or revised standards and interpretations will come into
effect for the first time in the next financial year and have not been applied
early during the preparation of these financial statements. There are no
plans for early adoption of new or revised provisions that are for application
for financial years after 2009.
Amendments to IFRS 2 ShareBased Payments are clarified, for example
which conditions constitute “vesting conditions”, that all other conditions
constitute “nonvesting conditions” and how “nonvesting conditions”
should be accounted for. The amendment is to be applied to financial years
beginning on 1 January 2009 or later.
Revised IFRS 3 Business Combinations and amended IAS 27 Consolidated
and Separate Financial Statements require changes in consolidated finan
cial reporting and accounting for acquisitions. The revised standards are to
be applied to financial years beginning on 1 July 2009 or later.
IFRS 8 Operating Segments defines what an operating segment is, and what
information on them is to be provided about them in the financial statements.
The standard, which has been adopted by the EU, is to be applied to financial
years beginning on 1 January 2009 or later.
Amendments to IAS 1 Presentation of Financial Statements require a number
of changes in the presentation of the financial statements and propose a
number of noncompulsory titles for financial statements. The way that the
amounts reported are determined is not affected. The amended IAS 1 is to
be applied to financial years beginning on 1 January 2009 or late.
Amendments to IAS 23 Borrowing Costs state that borrowing costs that are
directly attributable to the acquisition, construction or production of assets
that require a considerable amount of time to complete for their intended
use or sale must be capitalised. The amendment is to be applied to financial
years beginning on 1 January 2009 or later.
Amendments to IAS 27, Cost of an Investment in a Subsidiary, Jointly
Controlled Entity or Associate. These are to be applied to financial years
beginning on 1 January 2009 or later. The amendments deal for example
with accounting for dividend payments received from subsidiaries, associated
companies and joint venture companies, and with how the establishment of
a new parent company is to be accounted for. The amendment is to be applied
to financial years beginning on 1 January 2009 or later.
Amendments to IAS 32 Financial Instruments: Presentation and IAS 1 Pres
entation of Financial Statements, that were made under the heading of “Dis
closure of Puttable Financial Instruments and Obligations Arising on Liqui
dation”, require that certain very limited financial instruments that are in
the nature of equity instruments but that were previously to be accounted
for under liabilities instead now have to be reported as equity. The interpre
tation is to be applied to financial years beginning on 1 January 2009 or later.
IAS 39 Financial Instruments: Recognition and Measurement: Eligible
Hedged Items. This is to be applied to financial years beginning on 1 January
2009 or later. The amendment is a clarification of how the rules set out in
IAS 39 are to be applied in two hedge accounting issues. These address one
sided risk in a hedged item and inflation in a financial hedged item.
IFRIC 16 Hedges of a Net Investment in a Foreign Operation clarifies, for
example, that only the risk in the functional currencies of the parent com
pany and the foreign operation concerned may be hedged. The interpreta
tion also addresses the issue of where in the group the hedging instrument
may be held if hedging accounting is used and if the method of consolidation
affects the amount that is reclassified from equity to profit or loss, i.e. step
bystep or direct consolidation. The interpretation is to be applied to finan
cial years beginning on 01 October 2008 or later.
classification etc.
Noncurrent assets and noncurrent liabilities essentially consist of
amounts that are expected to be recovered or paid after more than twelve
months from the balance sheet date. Current assets and current liabilities
essentially consist of amounts that are expected to be recovered or paid
after more than twelve months from the balance sheet date. Where a bal
ance sheet item includes an amount that is expected to be recovered or paid
both within or after twelve months from the balance sheet date, the rele
vant information is provided in a note on the balance sheet item concerned.
controlling influence exists, shares with potential voting rights that may be
used or converted without delay are considered.
Subsidiaries are reported using the acquisition method of accounting.
Under this method, the acquisition of a subsidiary is regarded as a transac
tion through which the group indirectly acquires the subsidiary’s assets and
takes over its liabilities and contingent liabilities. The value on consolidation
is measured via an acquisition analysis performed at the time of the acquisi
tion. The analysis determines the acquisition value of the shares or the busi
ness activity and the fair value on the acquisition date of acquired identifiable
assets and assumed liabilities and contingent liabilities. The acquisition value
for the subsidiary’s shares and business activities consists of the total of the
fair values on the acquisition date of the assets acquired, liabilities incurred
or acquired and equity instruments issued, provided as a purchase considera
tion in exchange for the net assets acquired, as well as transaction costs di
rectly attributable to the acquisition. In the case of acquisitions of businesses
where the acquisition cost exceeds the fair value of assets acquired and liabil
ities assumed, as well as contingent liabilities accounted for separately, the
difference is accounted for as goodwill. When the difference is a negative one,
it is taken directly to the income statement. The financial statements of sub
sidiaries are included in the consolidated financial statements from the date
of acquisition until the date on which the controlling influence ceases.
Associated companies
Associated companies are companies over which the Group has a significant
– but not controlling – influence, over the operational and financial manage
ment, usually via a holding of between 20% and 50% of the voting rights. As
of the time at which the significant influence is obtained, participations in
the associated company are accounted for in the consolidated accounts using
the equity method. In the consolidated income statement, the Group’s share
of results from participations in associated companies, due to the owners of
the Parent Company, is after adjustment for any depreciation, impairment
costs and dissolutions of surplus and deficit values, reported via the consoli
dated income statement as “Share in result from associated companies”.
Joint ventures
From an accounting viewpoint, joint ventures are companies for which the
Group, through a cooperation agreement with one or several parties, jointly
exercises a decisive influence over the operational and financial manage
ment. Shareholdings in joint ventures are consolidated in the Group’s
accounts using the proportional method.
A segment is an identifiable part of the Group from a reporting viewpoint
that either provides goods or services (lines of business) or goods and serv
ices within a certain economic environment (geographic area), that are
exposed to risks and opportunities that differ from other segments. The
Group’s primary segments are lines of business.
Transactions eliminated in consolidation
Intragroup receivables and liabilities, income or expenses and unrealised
gains or losses arising from internal Group transactions between Group com
panies, are eliminated in their entirety in preparation of the consolidated
accounts. Unrealised gains arising from transactions with associated compa
nies and joint ventures are eliminated to an extent that corresponds to the
Group’s ownership stake in the company. Unrealised losses are eliminated in
the same way as unrealised gains, but only to the extent that no impairment
requirement exists.
principles of consolidation
foreign currencies
Subsidiaries
Subsidiaries are companies over which Lammhults Design Group AB exer
cises a controlling influence. A controlling influence consists of a direct or
indirect right to determine the financial and operational strategies of the
company in order to obtain economic benefits. In establishing whether a
Transactions in foreign currencies
Transactions in foreign currencies are translated to the functional currency
at the exchange rate prevailing on the day of the transaction. The functional
currency is the currency in the primary financial environments in which
the companies conduct their operations. Monetary assets and liabilities in
segment reporting
71
foreign currencies are translated to the functional currency at the rate of
exchange prevailing on balance sheet date. Any exchange rate differences
arising on translation are accounted for in the income statement. Nonmon
etary assets and liabilities reported at their historical acquisition value are
translated at the exchange rate prevailing at the time of the transaction.
Nonmonetary assets and liabilities reported at fair value are translated to
the functional currency at the rate prevailing at the time the fair value of
the item was measured.
Financial statements of foreign operations
Assets and liabilities of foreign operations, including goodwill and other
surplus and deficit values on consolidation, are translated from the respec
tive foreign operation’s functional currency to the Group’s reporting cur
rency, SEK, at the exchange rate prevailing on balance sheet date. Income
and expenses in a foreign operation are translated to SEK at an average ex
change rate. Any translation differences arising at translation of currencies
of foreign operations are reported directly in equity as a translation reserve.
Deferred tax is calculated using the balance sheet method on the basis of
temporary differences between reported and fiscal values of assets and lia
bilities. Temporary differences are not taken into account for any difference
arising in the first accounting for goodwill, nor in the first accounting for
assets and liabilities that are not business combinations and at the time of
the transaction do not affect either reported or taxable income. In addition,
temporary differences attributable to participations in subsidiaries and as
sociated companies that are not expected to be reversed within the foresee
able future are not taken into account either. The valuation of deferred tax
is based on how the underlying assets or liabilities are expected to be real
ised or settled. Deferred tax is calculated in accordance with the tax rates
and tax rules established, or in practice established, by the balance sheet
date. Deferred tax assets relating to nondeductible temporary differences
and taxloss carryforwards are reported only to the extent that it is proba
ble that these can be used. The value of deferred tax assets is reduced when
it is no longer considered likely that they can be used.
financial instruments
Hedging of net investment in a foreign operation
The Group spans activities in several countries. In the consolidated balance
sheet, investments in activities outside Sweden are represented by reported net
assets in subsidiaries. To a certain extent, measures have been taken to reduce
currency risks associated with these investments. This has been done by rais
ing loans or signing forward contracts in the same currency as the net invest
ments. At the financial yearend, these loans are accounted for having been
translated to SEK at the yearend exchange rate, while forward contracts are
reported at fair value. The effective portion of exchange rate fluctuations in
the period in connection with the hedging instruments is recognised directly
in equity in the translation reserve, in order to address and wholly or partly
match the translation differences reported in connection with the net assets
in the foreign operations for which hedging has been obtained. The transla
tion differences arising from both net investment and hedging instruments
are dissolved and recognised in the income statement when the foreign oper
ation is disposed of. In cases where the hedging is not effective, the ineffec
tive portion is recognised directly in the income statement.
income
Sale of goods
Revenue from the sale of goods is recognised in the income statement when
significant risks and benefits associated with the ownership of the goods
have been transferred to the buyer. Revenue is not recognised if it is not
probable that the economic benefits will pass to the Group. If significant
uncertainty prevails concerning payment, associated costs or risk of re
turns, or if the seller retains an involvement in the daytoday management
generally associated with ownership, revenue is not recognised. Revenue is
recognised at the fair value of what is received or expected to be received,
less any discounts granted.
tax
Income taxes are comprised of current tax and deferred tax. Income taxes
are reported in the income statement except when the underlying transac
tion is accounted for directly in shareholders’ equity, whereby the associated
tax effect is reported in equity. Current tax is tax that will be paid or received
with regard to the current year on the basis of the tax rates established, or in
practice established, by the balance sheet date. Current tax also includes any
adjustment of current tax attributable to earlier periods.
72
Financial instruments accounted for on the balance sheet include, on the
assets side, cash and cash equivalents, loan receivables, trade receivables,
financial investments and derivatives. On the liabilities side, financial instru
ments include trade payables, loan liabilities and derivatives.
Recognition on and derecognition from the balance sheet
A financial asset or a financial liability is recognised on the balance sheet
when the Company becomes a party in accordance with the contractual
terms and conditions of the instrument. Trade receivables are recognised
on the balance sheet when the invoice has been sent. A liability is recog
nised when the counterparty has performed his obligation and a contractu
al duty to pay exists, even if an invoice has not yet been received. Trade pay
ables are recognised when an invoice has been received. A financial asset is
derecognised from the balance sheet when the contractual rights are per
formed, expire or the company no longer has control over them. The same
applies to a part of a financial asset. A financial liability is derecognised
from the balance sheet when the contractual obligation is fulfilled or other
wise expires. The same applies to a part of a financial liability. A financial
asset and a financial liability are offset and recognised as a net amount on
the balance sheet only when a legal right to offset the amounts exists, and
there is an intention to settle the items with a net amount or to realise the
asset and settle the liability at the same time. Acquisition and sale of finan
cial assets are reported on the transaction date, which is the day on which
the company undertakes to acquire or dispose of the asset.
Classification and measurement
Financial instruments that are not derivatives are initially measured at
acquisition value, corresponding to the fair value of the instrument plus
transaction costs for all financial instruments other than those in the cate
gory of financial measured at fair value via the income statement, which are
reported at fair value less transaction costs. When first recognised, a finan
cial instrument is classified on the basis of the purpose for which the instru
ment was acquired. This determines how the financial instrument is meas
ured after the first accounting occasion, as described below.
Derivative instruments are measured initially at fair value. As a result, trans
action costs are charged to the income for the period. Subsequently, deriva
tive instruments are accounted for in the way described below. If derivative
instruments are used for hedge accounting, and to the extent this is effective,
value changes of the derivative instrument are reported on the same line as
the hedged item in the income statement. Even if hedge accounting is not
used, value gains and losses on the derivative are recognised as income or
expenses, respectively, under operating income, or under net financial items,
based on the purpose of how the derivative instrument is used and whether
this use relates to an operating item or a financial item. In the case of hedge
accounting, any ineffective portion is reported in the same way as for value
changes of derivatives that are not used for hedge accounting. If hedge ac
counting is not applied in the use of interest swaps, the interest coupon is
accounted for as interest and any other change in value for the interest swap
is reported under other financial income or other financial expense.
Cash and cash equivalents consist of cash and immediately available funds
with banks and equivalent institutions, as well as current investments with
a term of less than three months from the time of acquisition, that are ex
posed only to an insignificant risk of value fluctuations.
Loan receivables and trade receivables
Loan receivables and trade receivables are financial assets that are not deriva
tives, that have defined or definable payments and that are not listed on an
active market. These assets are reported at accumulated acquisition value. The
accumulated acquisition value is decided on the basis of the effective interest
rate calculated at the time of acquisition. Trade receivables are reported at the
amount that is expected to be received, i.e. after a deduction for bad debts.
Other financial liabilities
Loans and other financial liabilities, e.g. trade payables, are reported via this
category. These liabilities are reported at accumulated acquisition value.
The categories in which the Group’s financial assets and liabilities, respec
tively, are classified are indicated in the Note entitled Financial risks and
financial policies.
Financial guarantees
Under the Group’s financial guarantee agreements, the Group has an under
taking to reimburse the holder of any debt instrument in respect of losses
sustained by the holder if a stated debtor fails to make payment when due, in
accordance with the original or amended contractual terms and conditions.
Financial guarantee agreements are initially accounted for at fair value, i.e.
normally the amount the issuer received in compensation for the guarantee
issued. In the subsequent valuation, the liability linked to the financial guar
antee is reported at the higher of (i) the amount reported in accordance with
IAS 37, Provisions, contingent liabilities and contingent assets, or (ii) the
amount originally reported after deduction – where appropriate – of accu
mulated accruals, as reported in accordance with IAS 18, Revenue.
derivatives and hedge accounting
The Group’s derivative instruments have been acquired to obtain financial
protection for the risks relating to interest rate and exchange rate exposures
to which the Group is exposed. Embedded derivatives are accounted for sep
arately if they are not closely related to the host contract. Derivatives are
measured initially at fair value. As a result, transaction costs are charged to
the income for the period. Subsequently, derivative instruments are meas
ured at fair value and value changes reported in the way described below. To
meet the requirements for hedge accounting stipulated in IAS 39, there must
be a clear link to the hedged item. Moreover, the hedging must effectively
protect the hedged item, hedging documentation must be drawn up and the
effectiveness of the hedging must be measurable. Gains and losses on hedg
ing arrangements are accounted for in the income statement at the same
point in time as gains and losses are reported for the items hedged.
Receivables and liabilities in foreign currencies
Currency forward contracts are used to hedge the currency risk of assets
and liabilities. To protect against currency risk, hedge accounting is not
applied, since a financial hedging arrangement is reflected in the accounts
in that both the underlying receivable or liability and the hedging instru
ment are accounted for at the exchange rate on the balance sheet date and
the exchange rate fluctuations are recognised via the income statement.
Value changes relating to operationally related receivables and liabilities
are recognised in operating profit or loss, while value changes relating to
financial receivables and liabilities are reported under net financial items.
Cash-flow hedging
The currency forwards used to hedge future cash flows and forecast sales
in foreign currencies are reported on the balance sheet at fair value. Value
changes are recognised directly in equity in the hedging reserve until the
hedged flow reaches the income statement, at which time the accumulated
value changes in the hedging instrument are transferred to the income state
ment where the effects of the hedged transaction on income are matched.
Hedging of interest-rate fixing – cash-flow hedging
Interest swaps are used to hedge against uncertainties in future interest
rate flows relating to loans at variable interest rates. These interest rate
swaps are reported at fair value on the balance sheet. In the income state
ment, the interest coupon portion is accounted for on an ongoing basis as
interest income or interest expense. Any other value change in interest rate
swaps is reported directly in the hedging reserve in equity until the hedged
item affects the income statement and for as long as the criteria for hedge
accounting and effectiveness are satisfied. Any profit or loss attributable to
the ineffective portion is reported in the income statement.
Hedging of fair value
When a hedging instrument is used to hedge a fair value, the derivative is
accounted for at fair value on the balance sheet and the hedged asset/liability
is also accounted for at fair value with regard to the risk hedged. The value
change in the derivative is recognised in the income statement along with
the value change in the hedged item. Fairvalue hedging is used to protect
the value of assets and liabilities that appear on the balance sheet but are not
accounted for at fair value, as well as the value of contractual flows.
Hedging of interest-rate fixing – fair-value hedging
Interest rate swaps are used as hedging instruments to secure protection
against the risk of any change in fair value in the company’s own borrowing
at fixed interest rates. In the accounts, fairvalue hedging is then used and
the hedged item is translated at fair value with regard to the risk hedged
(the riskfree interest rate) and value changes are reported in the income
statement in the same way as for the hedging instrument.
Hedging of net investments
Investments in foreign subsidiaries (net assets, including goodwill) have to
a certain extent been hedged via the raising of foreign currency loans, which
on the balance sheet date have been translated at the exchange rate on that
date. Translation differences in financial instruments used for hedging to
protect the value of net investment in a Group company are recognised, to
73
the degree that the hedging is effective, in equity. The object is to neutralise
the translation differences that affect equity on consolidation of Group com
panies.
property, plant and equipment
Owned assets
Property, plant and equipment are reported in the Group at acquisition
value after deduction of accumulated depreciation and possible impairment
losses. The acquisition value includes the purchase price and costs directly
associated with the asset to bring it into place and to a condition that it may
be used in accordance with the objective of the acquisition. Loan costs are
not included in the acquisition value of inhouse produced property, plant
and equipment. Accounting policies for impairment losses are set out below.
Property, plant and equipment that consist of parts with different useful
lives are handled as separate components.
The carrying amount for an asset classified as property, plant and equipment
is derecognised from the balance sheet on its retirement or sale, or when no
future economic benefits are anticipated from its use or its retirement/sale.
A profit or loss that may arise upon the retirement or sale of an asset is made
up of the difference between the selling price and the asset’s carrying amount,
less directlyrelated costs to sell. Any such profit or loss is reported as other
operating income or expense.
Leased assets
Lease contracts are classified under either financial or operating leases. Fi
nancial leasing exists when the financial risks and benefits associated with
the ownership are essentially transferred to the lessee. All other leases are
classified as operating leases.
Assets leased under financial lease contracts are accounted for as noncur
rent assets on the balance sheet and measured initially at either the fair
value of the leased asset or the current value of the minimum lease charges
at inception of the lease, whichever is the lower. Commitments to pay future
leasing charges have been reported as noncurrent and current liabilities.
The leased assets are depreciated over the useful life of each particular as
set, while the lease payments are reported as interest and amortisation of
the liabilities.
Assets leased under operating leases are generally not reported as an asset
on the balance sheet. Furthermore, operating leases do not give rise to a lia
bility.
Principles of depreciation
Depreciation is applied on a straightline basis over the estimated useful life
of the particular asset. Land is not depreciated. The Group applies component
depreciation, according to which depreciation is based on the estimated use
ful life of each component.
Estimated useful lives:
Buildings
Land improvements
Plant and machinery
Equipment, tools, fixtures and fittings
10–100 years
20 years
5–10 years
3–10 years
The buildings consist of a number of components with different useful lives.
The principal constituents are buildings and land. No depreciation is ap
74
plied to land, since its useful life is considered to be unlimited. Buildings
consist of several components with varying useful lives.
The following main groups of components have been identified and provide
the basis for the depreciation of buildings:
Building structures
100 years
Structural additions, interior walls, etc.
50 years
Installations : heating, electricity, water,
sanitation, ventilation, etc.
35–50 years
Exterior surfaces: facades, roofing, etc.
10–40 years
Interior surfaces, machinery and equipment, etc.
10–15 years
Depreciation methods applied, residual values and useful lives are reviewed
at every yearend.
intangible assets
Goodwill
Goodwill represents the difference between the acquisition value of the op
erational acquisition and the fair value of the assets acquired, liabilities as
sumed and contingent liabilities.
Goodwill is valued at acquisition value less any accumulated impairment.
Goodwill is allocated to cashgenerating units and is reviewed at least once
a year for any impairment. Goodwill that may have arisen at acquisition of
associated companies is included in the carrying amount of shares in associ
ated companies.
With respect to goodwill in acquisitions that took place prior to 1 January
2004, the Group has not applied IFRS retroactively during the period of
transition but instead has taken the carrying amount on that date as the
Group’s acquisition value, following an impairment assessment.
Other intangible assets
Other intangible assets acquired by the Group are recognised at acquisition
value less accumulated amortisation and impairment. Costs related to inter
nally generated goodwill and internally generated brands are recognised in
the income statement as and when they arise.
Principles of depreciation
Depreciation is recognised in the income statement on a straightline basis
over the estimated useful life of each intangible asset, provided the length
of such useful lives is not indefinite. The useful lives are reviewed at least
once a year. Goodwill and other intangible assets with an indefinite useful
life, or that are not yet ready for use, are tested for impairment annually and
in addition as soon as indications emerge to suggest that the value of the as
set has declined. Intangible assets with finite useful periods are amortised
from the time when they are available for use.
The estimated useful lives are as follows:
Brands
10 years
The useful lives are reviewed every year.
inventories
Inventories are valued at acquisition value or net sale value, whichever is the
lower. Provision has been made for the risk of obsolescence. The acquisition
value for inventories is calculated by applying the firstin, firstout (FIFO)
method, and takes account of expenses arising at acquisition of the inventory
assets and transport of such assets to their current location and condition. In
the case of manufactured goods and work in progress, the acquisition value
includes a reasonable proportion of indirect costs based on a normal level of
capacity. The net sale value is the estimated sale price in current operations,
less estimated costs for completion and bringing about a sale.
impairment losses
On every balance sheet date, the Group’s reported assets are reviewed to
determine whether there is any indication of impairment. IAS 36 is applied
in connection with any impairment of assets other than financial assets,
which are reported in accordance with IAS 39, Assets Held for Sale and Dis
posal Groups, which are measured in accordance with IFRS 5, Inventories
and Deferred Tax Assets.
Impairment of tangible and intangible assets and of
participations in associated companies and joint ventures
If there is any indication of any impairment, the recoverable amount for the
asset is estimated. In addition, in the case of goodwill and other intangible
assets with an indefinable useful life and intangible assets that are not yet
ready for use, the recoverable amount is calculated each year. If it is not pos
sible to determine essentially independent cash flows for a particular asset,
and its fair value less costs to sell cannot be used, the assets are classified
during appraisal of impairment at the lowest level where it is possible to
identify essentially independent cash flows, a “cashgenerating unit”.
An impairment loss is recognised when the carrying amount of an asset or
cashgenerating unit exceeds the recoverable value. An impairment cost is
recognised as an expense in the income statement. When an impairment loss
has been identified for a cashgenerating unit, the amount of impairment
loss is in the first instance allocated to goodwill. Impairment losses are then
applied on a pro rata basis to other assets of the unit.
The recoverable amount is the fair value less cost to sell and value in use,
whichever is the higher. In calculating of the value in use, future cash flows
are discounted using a discount factor reflecting the riskfree interest rate
and the risk associated with the particular asset.
Reversal of impairment losses
An impairment for assets within the scope of IAS 36 is reversed if (i) there is
an indication that the impairment no longer exists and (ii) a change has taken
place in the assumptions on which the calculation of the recoverable amount
was based. However, an impairment loss for goodwill is never reversed. An
impairment is reversed only if the carrying amount of the asset after reversal
does not exceed the carrying amount that would have been reported, less a
deduction for depreciation where appropriate, if no impairment loss had been
applied.
remuneration to employees
Defined-contribution pension plans
Definedcontribution pension plans are those in which the Company’s obli
gations are confined to the contributions that the Company has undertaken
to pay. In such cases, the size of the employee’s pension is determined by the
contributions the Company pays into the plan or to an insurance company,
and the return on capital that the contributions produce. The Company’s
obligations in terms of contributions to definedcontribution plans are rec
ognised as an expense in the income statement, as they are earned through
services performed by the employee for the Company during a period.
Defined-benefit pension plans
The Group’s net obligations regarding definedbenefit pension plans are
computed separately for each plan via an estimate of the future remunera
tion that the employees have earned through their employment in both the
current and previous periods. This remuneration is discounted to a present
value, and the fair value of any administration assets is deducted.
According to a statement (UFR 3) from the Swedish Financial Reporting
Board, this is a definedbenefit plan jointly operated by several employers.
For the 2008 financial year, the Company has not had access to the informa
tion required to enable it to account for this plan as a definedbenefit plan.
As a result, the pension plan under the ITP (Supplementary Pension for
Salaried Employees in Industry and Commerce) scheme, secured through
an insurance policy with Alecta, is reported as a definedcontribution plan.
The Company applies Recommendation 4 of the institute for the accounting
profession in Sweden (FAR) regarding the reporting of pension liabilities and
pension costs. Pension obligations that are not secured through an insurance
policy with Alecta are accounted for as a provision in the balance sheet, to
the extent allowed by the Swedish Pension Obligations Vesting Act, under
the heading “Provision for Pensions”, other than the part guaranteed via the
payment of premiums.
Severance payments
Costs relating to the termination of employment are reported only if the
Company is demonstrably obliged, without any realistic possibly of with
drawal, by a formal detailed plan to terminate an employment before the
normal time. When payments are made as an offer to encourage voluntary
redundancy, a cost is reported if it is considered likely that the offer will be
accepted and the number of employees who will accept the offer can be reli
ably be estimated.
Share-related benefits
The Company does not offer any sharerelated benefits.
provisions
earnings per share
The calculation of earnings per share is based on the portion of the Group’s
net profit for the year attributable to the Parent Company’s shareholders, and
on the weighted average number of shares outstanding during the year. In cal
culating diluted earnings per share, the net profit and the average number of
shares is adjusted to take account of dilutive potential ordinary shares, which
during the reporting period arise from convertible securities and warrants
issued to employees. Dilution from options and warrants affects the number
of shares; it arises only when the redemption price is lower than the market
price, and rises as the difference between redemption price and market price
increases.
A provision differs from other liabilities in that uncertainty is attached to
the time of payment or the size of the amount needed to discharge the pro
vision. A provision is reported in the balance sheet when there is an existing
legal or informal obligation arising from an event that has occurred, and it
is probable that an outflow of financial resources will be required in order to
settle such obligation and a reliable estimate of the amount can be made.
Warranties
Estimated costs for product warranties are reported in the main on a cur
rent basis as and when the warranty item arises.
75
Restructuring
A provision for restructuring is reported when a detailed and formal restruc
turing plan is established, and when the restructuring has either been started
or has been announced publicly. No provision is made for future operating
costs.
non-current assets held for sale,
and discontinued operations
The significance of a noncurrent asset (or a disposal group) being classified
as being held for sale is that its carrying amount will be recoverable mainly
through being sold and not through being used.
Immediately prior to the classification as being held for sale, the carrying
amount of the assets (and all assets and liabilities in a disposal group) shall
be determined in accordance with applicable standards. At first classification
as being held for sale, noncurrent assets and disposal groups are reported at
the lower of carrying amount and fair value, after deduction of costs to sell.
Under IFRS 5.5, certain balance sheet items are exempt from the measure
ment rules applicable to IFRS 5.
A gain is recognised for every increase in the fair value, less costs to sell.
This gain is limited to an amount that corresponds to all previous impair
ment losses recorded. Any losses arising from a reduction in value at first
classification as being held for sale are recognised in the income statement.
Subsequent value changes, both gains and losses, are also recognised in the
income statement.
Group using the equity method. In the Parent Company, the shareholding is
reported using the acquisition method.
Anticipated dividends
Anticipated dividends from subsidiaries are reported when the Parent Com
pany has the sole right to decide the size of such dividend, and the Parent
Company has determined the size of the dividend prior to the Parent Com
pany publishing its financial statements.
Net investments
Investments in foreign subsidiaries (net assets including goodwill) have to a
certain extent been hedged by the raising of foreign currency loans and the
use of overdraft facilities in foreign currency. At yearend, these loans are
reported at the rate of exchange prevailing on the balance sheet date, other
than in the Parent Company’s accounts, where the loans are reported at the
acquisition rate of exchange for loans and overdraft facilities in foreign cur
rencies for the purchase of shares in Group companies.
Leased assets
In the Parent Company, all lease contracts are reported in accordance with
the rules on operating leases.
Tax
In the Parent Company untaxed reserves on the balance sheet are reported
without being divided into equity and deferred tax liability, as distinct from
practice in the Group. In the income statement, there is, similarly, no sepa
rate reporting of part of the appropriations as deferred tax liability.
contingent liabilities
A contingent liability is recognised when a possible commitment arises in
connection with events that have occurred and where its existence is con
firmed only by one or several uncertain future events, or when a commit
ment exists that is not reported as a liability or provision on the basis that
it is unlikely that an outflow of resources will be required.
accounting policies of the parent company
The Parent Company has prepared its annual accounts in accordance with
the Swedish Annual Accounts Act (1995:1554) and Recommendation RFR
2.1, Accounting by Legal Entities, issued by the Swedish Financial Report
ing Board. The Swedish Financial Reporting Board’s statements on listed
companies are also applied. Under RFR 2.1, the Parent Company is required,
in preparing the annual accounts for the legal entity, to apply all IFRS’s and
statements approved by the EU, as far as this is possible within the frame
work of the Swedish Annual Accounts Act and the Swedish Pension Obliga
tions Vesting Act, and taking account of the relationship between account
ing and taxation. The recommendation states the exceptions and additions
to be made from and to IFRS.
differences between the accounting policies
of the group and parent company
The differences between the accounting policies of the Group and the Parent
Company are set out below. The accounting policies of the Parent Company
indicated below have been applied consistently in all periods presented in the
Parent Company’s financial statements.
Subsidiaries and associated companies
Shares in subsidiaries are reported in the Group using the purchase method.
Shares in subsidiaries are reported in the Parent Company using the acqui
sition method. Shares in associated companies are accounted for in the
76
Group contributions and shareholder contributions to legal entities
The Company reports Group contributions and shareholder contributions in
accordance with the statement (UFR 2) from the Swedish Financial Report
ing Board. Shareholder contributions are taken directly to the equity of the
receiver and are capitalised in shares and participations by the donor, provid
ed that no writedown is required. Group contributions are reported on the
basis of their financial significance. Thus, Group contributions paid and
received with the objective of minimising the Group’s total tax are charged
directly to profits brought forward after a deduction for the related tax effect.
Note 2. Revenue analysis
The net sales of SEK 901.2 m (829.2) are made up entirely of sales of goods.
Net sales by the Parent Company, totalling SEK 6.8 m (6.2), comprise pay
ments from the Group’s subsidiaries for administrative services.
Note 3. Segment reporting
Segment reporting is based on the Group’s lines of business and geographi
cal areas. The Group’s internal reporting is based on the legal structure,
which implies that segment information based on the internal reporting
system does not fulfil the requirements of segment reporting in IAS 14.
Because the Group’s risks and opportunities are principally affected by dif
ferences between the products that are produced, the lines of business have
been chosen as the primary criterion for classification and the geographic
areas as the secondary criterion. Lammhults Design Group has chosen to
use a classification of lines of business based on the categories of customer
that our company sells to, i.e. private consumption, corporate consumption
and public consumption, because this classification provides an adequate
basis for understanding the risks and opportunities to which the Group’s
operations are exposed. The potential for growth and the effects of the busi
ness cycle differ significantly in these various segments. The results, assets
and liabilities of the segments include directly attributable items, as well as
items that can be allocated to the segments in a reasonable and reliable
manner. Assets and liabilities that have not been allocated to segments are
deferred tax assets and deferred tax liabilities, financial investments and
financial liabilities.
lines of business
Sales intended for private consumption, corporate consumption and public
consumption are influenced by different economic cycles. Scandinavian
Eyewear sells products for private consumption. BCI, Eurobib and Schulz
Speyer sell products for public consumption. The major share of Voice’s and
Ire’s sales is made to private consumers, while a minor share goes to corpo
rate consumers. Most of Abstracta’s sales go to corporate consumers, while
a small part goes to the public sector. Lammhults’ Möbel’s customers con
sist primarily of companies and the public sector. Private individuals repre
sent only a minor portion. Other operations include Groupwide functions.
lines of business (primary segments)
Group
Private
consumption
2008
2007
Corporate
consumption
2008
2007
Public
consumption
2008
2007
Income
External sales
Internal sales
Total i ncome
201.7
–
201.7
205.9
–
205.9
222.4
1.9
224.3
197.7
0.2
197.9
477.1
3.9
481.0
425.6
4.4
430.0
–
6.8
6.8
Profit/loss
Operating profit/loss
per line of business
10.1
24.4
27.5
21.2
62.2
45.3
Net financial items
Tax cost for the year
Profit/loss for the year
–
–
10.1
–
–
24.4
–
–
27.5
–
–
21.2
–
–
62.2
–
–
45.3
185.7
–
185.7
132.6
–
132.6
141.7
–
141.7
131.1
–
131.1
388.3
–
388.3
Liabilities
Non-allocated liabilities
Total liabilities
61.1
–
61.1
33.6
–
33.6
34.6
–
34.6
32.1
–
32.1
Investments
Depreciation
Impairment losses
14.4
3.5
–
3.0
3.3
–
6.4
4.2
–
3.7
4.3
–
Other disclosures
Assets
Non-allocated assets
Total assets
geographical areas
The Group’s segments are divided into three geographical areas: Sweden,
Rest of Europe and Rest of the World. Geographical regions are the Group’s
secondary basis of classification. The information presented on segmental
income is classified according to the geographical location of our customers.
Other
operations
2008
2007
Elimination
2008
2007
Total
2008
2007
–
6.2
6.2
–
–12.6
–12.6
–
–10.8
–10.8
901.2
–
901.2
–14.1
–11.6
–0.2
–6.0
85.5
73.3
–
–
–14.1
–
–
–11.6
–
–
–0.2
–
–
–6.0
–8.4
–24.4
52.7
–10.2
–21.1
42.0
350.5
–
350.5
2.0
–
2.0
2.5
–
2.5
717.7
72.8
790.5
616.7
45.3
662.0
75.2
–
75.2
64.7
–
64.7
5.6
–
5.6
6.4
–
6.4
176.5
218.5
395.0
136.8
180.5
317.3
6.6
7.6
–
5.4
7.2
–
0.5
0.1
–
0.4
0.1
5.0
27.9
15.4
–
12.5
14.9
5.0
829.2
–
829.2
Information on the assets in the respective segments and the investments
during the period in property, plant and equipment and in intangible non
current assets is based on geographical areas according to where the assets
are located. Net sales by the Group outside Sweden represent 61 percent (60)
of the total net sales.
Koncernen
Sweden
2008
2007
Rest of Europe
2008
2007
Net sales per geographical market
Assets per geographical market
Investments per geographical market
347.5
543.7
22.8
490.1
245.5
5.1
329.0
490.9
9.2
464.9
171.1
3.3
Rest of the World
2008
2007
63.6
1.3
0.0
35.3
0.0
0.0
Group
2008
2007
901.2
790.5
27.9
829.2
662.0
12.5
77
Note 4. Other operating income
Group
Exchange rate gains
Parent Company
Exchange rate gains
2008
2007
8.3
0.6
8.9
3.4
0.4
3.8
–
0.1
Note 5. Other operating expenses
Group
Exchange rate losses
Reversals of acquired order bookings
2008
2007
6.0
1.6
0.5
8.1
2.3
–
0.1
2.4
Development costs in the amount of SEK 18.7 m (15.9) have been expensed
and included in operating costs as administration costs. Development is con
ducted to a certain extent in the form of orderbased development, which is
reported in accordance with IAS 2 and is thus paid by the specific customer.
Reversals of acquired order bookings, totalling SEK 1.6 m in 2008, pertain to
the depletions of the market value of the acquired order bookings at Seven
(SEK 1.2 m) and Ire Möbel (SEK 0.4 m).
Parent Company
Exchange rate losses
2008
2007
–
0,1
Note 6. Employees, personnel costs and
remuneration of senior executives
Remuneration to employees
2008
2007
Group
Salaries and remuneration etc.
Pension costs
Social welfare charges
Total, Group
166.3
11.4
40.6
218.3
148.7
10.7
34.9
194.3
Average number
of employees
Parent Company
Sweden
Subsidiaries
Sweden
Denmark
Germany
Other countries
Total, subsidiaries
Total, Group
2008
Of
men, %
2007
Of
men, %
3
67
2
100
261
56
38
42
397
400
69
50
66
40
63
63
241
53
30
37
361
363
64
42
70
46
59
59
31/12/08
Percentage
Women
31/12/07
Percentage
Women
Parent Company
Board of Directors
Other senior executives
33
0
29
0
Total, Group
Boards of Directors
Other senior executives
11
19
9
20
Gender breakdown in
senior management teams
remuneration to senior executives
Guidelines
The Chairman and Members of the Board receive remuneration as deter
mined by resolution at the Annual General Meeting of Shareholders (AGM).
No separate remuneration is paid for committee work. No agreements exist
with regard to future pensions or severance pay, either for the Chairman of
the Board or for other Board Members.
The AGM has adopted the following guidelines on the remuneration of sen
ior executives: Wages, salaries and other conditions of employment for the
CEO and other senior executives shall be in line with the market and com
petitive, such that the Company can recruit, motivate and retain competent
and skilled personnel. The Group’s senior executives, excluding the CEO and
comprising in all five individuals who make up the Group management team,
have an agreement for variable remuneration over and above a fixed salary.
The size of the variable remuneration is linked to predetermined objectives
based on individually set goals and the Group’s results, or the results of the
particular subsidiary. The variable remuneration for senior executives may
total no more than four monthly salary payments per annum. There should
also be scope for longterm equity or equityrelated incentive programmes.
On termination of an employment contract by the Company, a period of no
tice of 6 months shall apply, with severance pay totalling no more than 12
months’ fixed salary for the CEO and other senior executives.
Agreements on pension benefits shall be entered into individually. For the
CEO, an annual pension premium amounting to thirteen times Sweden’s
“Base Amount” (Swedish: prisbasbelopp) shall be paid. The pension is of the
definedcontribution type. No agreement exists regarding early retirement.
For other senior executives, pension costs shall amount to a maximum of 25
percent of the fixed and variable salary. The pensions are definedcontribu
tion, and no agreements exist regarding early retirement.
78
breakdown of salaries and other remuneration – per country and per senior
executives and other employees – & social welfare charges, parent company
2008
Parent Company
Salaries and other remuneration
Sweden
(of which, bonuses etc.)
Social welfare charges
of which, pension costs
2007
Senior
executives
(8 persons)
Other
employees
(1 person)
Senior
executives
(9 persons)
Other
employees
(0 persons)
3.9
(0.4)
0.3
(–)
5.0
(0.4)
–
(–)
2.2
0.9
0.2
0.1
2.4
0.7
–
–
breakdown of salaries and other remuneration, pension costs
and pension commitments for senior executives per country, group
2008
Senior
executives
(50 persons)
2007
Senior
executives
(54 persons)
Sweden
Pension costs
29.9
(2.7)
4.8
25.8
(2.8)
4.6
Denmark
Pension costs
3.7
(0.5)
–
3.1
(0.3)
–
Germany
Pension costs
Total, Group
Pension costs
2.4
(1.2)
–
36.0
(4.4)
4.8
4.0
(2.4)
0.4
32.9
(5.5)
5.0
Group
No pension commitments have been entered into on behalf of senior executives in the Group.
79
Remuneration and other benefits, Parent Company, 2008
SEK 000s
Board Chairman
Torbjörn Björstrand
Remuneration from Parent Company
Board member
Lennart Bohlin
Board member
Yngve Conradsson
Board member
Jerry Fredriksson
Board member
Erika Lagerbielke
Board member
Lotta Lundén
Board member
Johan Sjöberg
CEO
Johan Hjertonsson
Other senior executives (1 person)
Total
Basic salary,
Variable
Board fee remuneration
Severance
payment
Other
benefits
Pension
Other
cost remuneration
Total
230
–
–
–
–
–
230
25
–
–
–
–
–
25
115
–
–
–
–
–
115
115
–
–
–
–
–
115
115
–
–
–
–
–
115
115
–
–
–
–
–
115
115
–
–
–
–
–
115
1,800
300
–
111
662
–
2,873
856
3,486
140
440
–
–
98
209
253
915
–
–
1,347
5,050
“Other benefits” refers to company cars. The pension costs are definedcontribution pension plans. The Group does not offer any sharerelated remuneration.
80
Remuneration and other benefits, Parent Company, 2007
SEK 000s
Basic salary,
Variable
Board fee remuneration
Board Chairman
Board member
Lennart Bohlin
Board member
Yngve Conradsson
Board member
Jerry Fredriksson
Board member
Erika Lagerbielke
Board member
Lotta Lundén
Board member
Johan Sjöberg
CEO
Johan Hjertonsson
CEO
Marcus Larsson
Other senior executives (1 person)
Total
Severance
payment
Other
benefits
Pension
Other
cost remuneration
Total
188
–
–
–
–
–
188
94
–
–
–
–
59
153
94
–
–
–
–
–
94
94
–
–
–
–
–
94
94
–
–
–
–
–
94
94
–
–
–
–
–
94
94
–
–
–
–
–
94
450
450
–
9
170
–
1,079
979
–
1,558
67
318
–
2,922
834
3,013
–
450
–
1,558
97
173
200
688
–
59
1,131
5,941
In addition to his Board fee, Lennart Bohlin received SEK 59 thousand for
consultancy assignments as acting CEO during the period July–Septem
ber 2007.
Variable remuneration for the CEO, Johan Hjertonsson, consisted of a fixed
bonus amounting to three months’ salary in the financial year 2007.
After 31 August 2007, Marcus Larsson received severance pay equal to his
current monthly salary for a period of twelve months. Salary from any new
employment shall be deducted during this period.
“Other benefits” refers to company cars. The pension costs are defined
The subscription price is set at an amount corresponding to 143 percent of
the volumeweighted average price paid for Class B shares on the Nasdaq
OMX Nordic Exchange in Stockholm during the period from 6 May 2008 to
19 May 2008, inclusive.
Six senior executives in the Group each acquired 12,500 warrants. The
warrants were offered on commercial terms at a price established on the
basis of a market value estimated for the warrants using the Black & Scholes
valuation model and calculated by the independent valuation institution
Öhrlings PricewaterhouseCoopers. The offer price was set at SEK 3.67 per
warrant, representing a total acquisition price of SEK 45,875 per executive.
The redemption price for the warrants is SEK 79.00.
contribution pension plans. The Group does not offer any sharerelated
remuneration.
incentive programme for senior executives
On 29 April 2008, the Company issued 75,000 warrants for the period
2008–2010. Each warrant entitles the holder to subscribe for one new Class
B share in the Company during the period from 31 March 2010 to 31 May
2010, inclusive.
81
Note 7. Fees and expenses of auditors
Group
2008
2007
KPMG /Michael Johansson
Auditing services
Other services
Other auditors
Auditing services
Other services
1.6
0.7
0.3
0.2
Parent Company
2008
2007
1.3
0.5
0.3
0.3
0.6
0.1
0.3
0.3
–
0.1
Parent Company
Result from
participations
in Group
companies
2008
2007
Dividends
Impairment losses
Capital gain on sale
of participations
–
–
“Auditing services” is defined as examining the annual accounts and
accounting records, as well as the management of the Company by the
Board of Directors and the CEO, other tasks that the Company’s auditors
are obligated to perform, and advisory services and other assistance occa
sioned by observations made during said examination or performance of
said tasks. All other assignments are “Other services”.
–
–
5.5
–32.6
–
–
–
–
–
–
–
–27.1
–
–
–5.0
–5.0
Parent Company
Interest income, Group companies
Interest income on non-impaired
loans receivable
Note 8. Operating expenses allocated
by type of cost
Group
2008
2007
Costs of goods and materials
Personnel costs
Depreciation
Impairment losses
407.3
218.3
15.4
–
183.6
824.6
426.3
194.3
14.9
5.0
119.2
759.7
Group
Impairment of financial receivables
Interest expense on defined-benefit
pension commitments
Interest expense on financial liabilities
Exchange rate fluctuations
Financial expenses
Net financial items
82
Parent Company
Interest expense, Group companies
Interest expense, financial liabilities
Interest income
and similar profit
and loss items
2008
2007
3.5
1.5
–
3.5
0.3
1.8
Interest expense
and similar profit
and loss items
2008
2007
–1.0
–6.2
–0.5
–7.7
–0.7
–4.5
–
–5.2
Note 10. Taxes
Note 9. Net financial items
Interest income on non-impaired
loans receivable and trade debtors
Interest income on bank balances
Interest income on trade payables
Financial income
Result from
participations
in associated
companies
2008
2007
reported in the income statement
2008
2007
0.1
1.6
0.5
0.4
2.6
0.4
1.7
0.4
0.3
2.8
–
–5.0
–0.2
–9.6
–1.2
–11.0
–0.1
–7.6
–0.3
–13.0
–8.4
–10.2
2008
2007
Current tax expense
Tax expense for the period
–27.3
Adjustment of tax attributable to previous years
–1.4
–28.7
–20.9
–0.7
–21.6
Deferred tax expense
Deferred tax pertaining to temporary
differences and tax loss carry-forwards
Total reported tax expense in the Group
4.3
–24.4
0.5
–21.1
Parent Company
2008
2007
Group
Current tax income
Tax income for the period
Adjustment of tax attributable to previous years
Total reported tax income in the
Parent Company
2.9
3.9
–1.4
–
1.5
3.9
Note 11. Acquisition of business operations
reconciliation of effective tax
Group
Pre-tax profit
Tax as per current tax rate
for the Parent Company
Effect of other tax rates for
non-Swedish subsidiaries
Non-deductible costs
Non-taxable income
Increase in tax loss carry-forwards without
corresponding capitalisation of deferred tax
Utilisation of previous non-capitalised
tax loss carry-forwards
Tax attributable to previous years
Reported effective tax
2008
2007
77.1
63.1
21.6
17.7
0.2
0.5
–
1.8
2.1
–0.2
0.7
–
–
1.4
24.4
–1.0
0.7
21.1
2008
2007
–11.5
–45.9
–3.2
0.3
–
1.4
–1.5
–12.9
10.6
–1.6
–
–3.9
SEVEN
On 12 March 2008, Scandinavian Eyewear acquired 100 percent of the
shares outstanding in Seven S.R.L., an Italian design company in the eye
wear industry, at a cost of SEK 16.1 m in cash. The fixed purchase consid
eration amounted to SEK 13.3 m (including legal and auditing expenses
amounting to SEK 0.4 m). The estimated supplementary purchase consider
ation totalled SEK 2.8 m. In recent years, the company’s sales have amount
ed to around SEK 30 m, of which Scandinavian Eyewear have accounted for
approximately half. The company’s profitability has been stable and closely
in line with profitability in our own eyewear business. Scandinavian Eye
wear holds a marketleading position in the Nordic spectacles market and,
through the acquisition of Seven, will further consolidate its position in
both domestic and export markets. The two companies have been engaged
in a colloborative relationship for the past 15 years, within which the com
panies have together developed products that have been marketed and sold
in the north European market.
impact of the acquisition of seven in 2008
Parent Company
Pre-tax profit
Tax as per current tax rate
for the Parent Company
Non-deductible costs
Non-taxable income
Tax attributable to previous years
Reported effective tax
reported on the balance sheet
Deferred tax assets and liabilities
Group
Property, plant
and equipment
Interest-bearing
liabilities
Pension provisions
Financial instruments
Tax assets/
liabilities, net
Deferred
tax asset
2008
2007
Deferred
tax liability
Net
2008
2007 2008
2007
–
–
8.8
8.2
–8.8
–8.2
–
0.6
–
0.6
–
–
–4.1
–
–0.8
–
–
–
4.1
0.6
0.8
0.6
–
–
0.6
0.6
3.9
8.2
–3.3
–7.6
Through 2008, the subsidiary contributed SEK 4.4 m to the Group’s operating
profit and SEK 3.1 m to the Group’s profit after tax. On the basis of Seven’s
accumulated operating profit during the period 1 January 2008–31 December
2010, the former owners qualify for an addon purchase consideration. At an
average operating profit of no less than EUR 0.2 m, an addon purchase con
sideration of EUR 0.3 m becomes due. At an average operating profit of no less
than EUR 0.4 m, an addon purchase consideration of EUR 0.6 m becomes
due. In view of the actual growth in profits during 2008 and expectations
regarding 2009 and 2010, it is anticipated that the addon purchase consid
eration will amount to SEK 2.8 m (EUR 0.3 m) and will be accounted for as
goodwill. The addon purchase consideration will be paid in cash.
Even though the north European eyewear market weakened during 2008
through the impact of a downturn in the occasionalpurchase sector and
expansion in the budget sector, Seven posted improved profits via attractive
product offerings and costefficient processes. As a result, there is unlikely
to be any particularly pressing need to adjust the value of goodwill over the
next few financial years.
The value of goodwill includes the value of synergy gains in both purchasing
and sales via a strengthened market position relative to important dealers,
as well as the personnel’s expertise in design and product development.
BC Interieur S.A.R.L., France, a subsidiary of BCI A/S, Denmark, has non
capitalised tax loss carryforwards totalling SEK 2.3 m. Scandinavian Eye
wear AS, Norway, a subsidiary of Scandinavian Eyewear AB, Sweden, has
noncapitalised tax loss carryforwards totalling SEK 7.3 m that will gradu
ally expire during the period 2011–2017.
parent Company
The Parent Company does not report any deferred tax assets or any deferred
tax liabilities. Deferred taxes attributable to participations in Group and
associated companies have not been reported.
83
The acquisition had the following impact on the Group’s assets and liabilities.
seven – net assets at time of acquisition
Value reported
Fair
in Seven before
value
acquisition adjustment
Intangible assets
Financial non-current assets
Inventories
Trade receivables and other
receivables
Trade payables and other
operating liabilities
Deferred tax liability
Net identifiable assets
and liabilities
Goodwill on consolidation
Total purchase consideration, cash*
Estimated add-on purchase
consideration
Cash (acquired)
Net cash outflow
Fair value
reported
in Group
–
0.9
2.9
4.4
1.2
–
–
–
1.2
0.9
2.9
4.4
6.3
5.7
–0.3
–
6.0
5.7
–9.9
–
–
–0.4
–9.9
–0.4
10.3
0.5
10.8
5.3
16.1
–2.8
–5.7
7.6
IFBD
On 18 March 2008, BCI A/S acquired the whole of the business that had
been conducted by Institut für BibliotheksDesign GmbH (IFBD), a German
library interiors company, at a cost of SEK 2.9 m. The payment was made in
cash. The fixed purchase consideration amounted to SEK 2.6 m The estimated
addon purchase consideration totalled SEK 0.3 m. In recent years, the com
pany’s sales have amounted to around SEK 15 m, at profitability in line with
our own profitability in the library business. The German market accounts for
the major share of sales, but sales are also made regularly to Italy, Belgium,
Switzerland and Austria. The company is a pure knowledge and project
based company without any production on its own account.
impact of the acquisition of ifbd in 2008
In 2008, the Group’s profit after was charged with the company’s aftertax
loss of SEK –0.7 m. Based on IFBD’s accumulated pretax profit for the pe
riod 1 January 2008 to 31 December 2009, the previous owners qualify for
an addon purchase consideration. At an accumulated pretax profit in the
range of EUR 0–0.180 m, an addon purchase consideration equal to 50 per
cent of the profit becomes due. At an accumulated pretax profit in excess of
EUR 0.180 m, an additional equal to 30 percent of the profit becomes due. In
view of the actual growth in profits during 2008 and expectations regarding
2009, it is anticipated that the addon purchase consideration will amount
to SEK 0.3 m (EUR 0.3 m) and will be accounted for as goodwill. The addon
purchase consideration will be paid in cash.
The library sector is in a phase of rapid expansion and a number of trends
are identifiable. Libraries are being centralised and are becoming larger. New
libraries have become status symbols and high design values and architec
tural ambitions are very often in play when new libraries are built. Libraries
are being transformed from places where people borrow books into locations
where people meet and mingle for relatively long periods of time. All of these
The value of goodwill includes the value of an expanded distribution network
in the library sector, synergy gains in the form of more efficient purchasing
and greater sales potential via marketleading positions in publicsector pro
curement. as well as the expertise of the personnel in the library sector.
ifbd – net assets at time of acquisition
*Including fees for legal and auditing services in the amount of SEK 0.4 m.
84
trends, allied to the fact that the German government is increasingly invest
ing in knowledge and education, suggest positive developments for IFBD.
As a result, there is unlikely to be any particularly pressing need to adjust
the value of goodwill over the next few financial years.
Value reported
Fair
in IFBD before
value
and liabilities
Total purchase consideration, cash
consideration
Net cash outflow
Fair value
reported
in Group
0.1
–
0.1
0.1
–
0.1
2.8
2.9
–0.3
2.6
IRE MÖBEL
On 6 August 2008, Voice AB acquired 100 percent of the shares outstanding
in Ire Möbel AB, a highlyreputed company in the furniture sector. The pur
chase consideration of SEK 19.9 m was paid in cash. The fixed purchase con
sideration amounted to SEK 15.2 m (including legal and auditing expenses
totalling SEK 0.2 m). The estimated supplementary purchase consideration
totalled SEK 4.7 m. Following a number of years of strong growth, the com
pany’s sales in 2007 totalled approximately SEK 45 m, at a level of profitabil
ity in line with the Group’s other home furniture operations. The Swedish
market accounts for the major share of sales, but products are also regularly
exported to Norway, Denmark, Germany, the Netherlands and Belgium.
impact of acquisition of ire möbel in 2008
In 2008, the subsidiary contributed SEK 2.6 m to the Group’s profit after
financial items and SEK 1.8 m to the Group’s profit after tax. Based on Ire’s
accumulated pretax profit for the period 1 June 2008 to 31 May 2010, the
previous owners qualify for an addon purchase consideration. At an accu
mulated profit of SEK 4.5 m after financial items, an addon purchase con
sideration of SEK 3.0 m becomes due. At an accumulated profit of SEK 9.0 m
after financial items, an addon purchase consideration of SEK 6.0 m becomes
due. If the accumulated profit falls within the range of SEK 4.5 m–SEK 9.0 m,
an addon purchase consideration becomes due on a pro rata basis between
a minimum of SEK 3.0 m and a maximum of SEK 6.0 m. In view of the actual
profit realised during the period 1 June 2008–31 December 2008 and the ex
pectations for the period 1 January 2009–31 May 2010, the addon purchase
consideration is estimated at SEK 4.7 m and is reported as goodwill. The
addon purchase consideration will be paid in cash.
Voice and Ire together hold a strong position in the sector comprising home
interiors and public environments such as hotels. Voice offers a strong prod
uct range in flatpack furniture, while Ire is similarly wellplaced in uphol
stered furniture, including sofas and armchairs. Together, Voice and Ire will
offer one of the strongest product ranges in the market, with a unique style
and design. Consequently, there is unlikely to be any particularly pressing
need to adjust the value of goodwill over the next few financial years.
The following cashgenerating units have reported goodwill values in the
Group.
The value of goodwill includes synergy gains in sales, marketing and
administration, as well as the personnel’s expertise in design, product
development and production of upholstered furniture for the home.
ire möbel – net assets at the time of acquisition
Value reported
Fair
in Ire Möbel before
value
Intangible assets
Inventories
Trade receivables and other
receivables
Deferred tax liability
and liabilities
Total purchase consideration, cash*
consideration
Cash (acquired)
Net cash outflow
Fair value
reported
in Group
0.1
0.3
0.1
7.1
0.4
–
–
–
0.5
0.3
0.1
7.1
2.6
2.6
–
–
2.6
2.6
–6.6
–0.3
–
0.1
–6.6
–0.2
5.9
0.5
6.4
13.5
19.9
–4.7
–2.6
12.6
* Including fees for legal and auditing services in the amount of SEK 0.2 m.
Note 12. Intangible non-current assets
Group
Accumulated acquisition values
Carrying amount
at 1 January 2007
Business acquisitions
Exchange rate differences
for the year
Carrying amount
at 31 December 2007
Carrying amount
at 1 January 2008
Business acquisitions
Other investments
Disposals
for the year
Carrying amount
at 31 December 2008
Tenancy
rights
Goodwill
Total
–
–
0.2
–
130.9
21.3
131.1
21.3
–
–
3.0
3.0
–
0.2
155.2
155.4
–
0.1
–
–
0.2
–
0.3
–0.1
155.2
24.9
–
–
155.4
25.0
0.3
–0.1
–
–
14.5
14.5
0.1
0.4
194.6
195.1
Brands
impairment appraisements for cash-generating
units containing goodwill
Lammhults Library (BCI, Eurobib
and Schulz Speyer)
Lammhults Home (Voice & Ire)
Scandinavian Eyewear
Abstracta
2008
2007
124.0
29.0
23.3
18.3
194.6
103.4
15.5
18.0
18.3
155.2
The value of the Group’s intangible assets is reviewed annually through im
pairment appraisements. The recovery value of the cashgenerating units
above is based on a number of important assumptions, as described below.
Assumptions concerning future cash flows are based on 2009 budgets and
the assessments for the following four years made by each company’s man
agement team.
The market trends for the Group’s library interiors companies (BCI, Eurobib
and Schulz Speyer) are that libraries are being centralised and becoming larg
er, design and architecture are becoming more and more important when new
libraries are built, and an increasing number of countries are realising the im
portance of investing in education. These are important factors that will fa
vour the Group’s units, and form the basis for forecasting cash flows over the
next five years. Furthermore, a rationalisation program is in progress, requir
ing a higher proportion of purchases from lowcost countries, which it is an
ticipated will have a positive effect on cash flows in the next five years.
Sales by Voice and Ire are mostly to private customers, while a small propor
tion goes to corporate customers. The two companies together hold a strong
position in the sector comprising home interiors and public environments,
such as hotels. Voice offers a strong product range in flatpack furniture,
while Ire is similarly wellplaced in upholstered furniture, including sofas
and armchairs. Together, the companies will offer one of the strongest prod
uct ranges in the market, with a unique style and design, which will create
the conditions for growth in the companies’ cash flows.
Scandinavian Eyewear sells spectacle frames for private consumption. As
a result of good design, highly efficient marketing and sales and better deliv
ery reliability than its competitors, the company’s profitability has clearly
surpassed that of its competitors. With continued investments in these are
as, combined with the business concept that is effective in Scandinavia and
is also spreading to other markets, the conditions are in place for further
favourable growth in the company’s cash flows.
Because the major share of Abstracta’s sales are to corporate customers,
operations are sensitive to and dependent on the business cycle. Dependence
on developments in the Swedish market, where 70 percent of the company’s
sales are generated, is considerable. It is anticipated that the economic climate
will weaken over the next year. However, the market investments initiated
on the export side, sales successes for the company’s exclusive glass writing
boards and the development of new products will compensate for a possible
downturn of the market in Sweden.
85
The cash flows forecast for after the first five years are based on an annual
rate of growth of 2 percent, which is deemed to correspond to the longterm
rate of growth in the markets for the units. The discount rate before tax
used at the end of 2008 is 17.4 percent (19.3) for equity financing and 3.7 per
cent (5.6) for debt financing. The longterm financing of operating capital
for the above units has been determined as consisting of 60 percent equity
and 40 percent loans. The company management’s view is no changes that
can reasonably be anticipated in the major assumptions will lead to the esti
mated recovery values of the units falling to below their carrying amount.
Note 13. Property, plant and equipment
Buildings
and land
Plant and
machinery
Equipment,
tools, fixtures
and fittings
Work in
progress
Total
Carrying amount 1 January 2007
New acquisitions
Reclassifications
Sales and disposals
Carrying amount at 31 December 2007
144.1
1.0
–0.1
–
0.8
145.8
73.3
7.1
–0.1
–0.8
0.3
79.8
74.3
7.3
–0.7
–11.7
0.2
69.4
3.1
0.3
–3.1
–
–
0.3
294.8
15.7
–4.0
–12.5
1.3
295.3
Carrying amount at 1 January 2008
Acquired via business acquisitions
New acquisitions
Reclassifications
Sales and disposals
145.8
–
16.2
–
–
2.7
164.7
79.8
0.2
2.0
–
–0.1
1.0
82.9
69.4
1.0
8.2
–
–0.2
0.6
79.0
0.3
–
1.2
–0.2
–
0.2
1.5
295.3
1.2
27.6
–0.2
–0.3
4.5
328.1
Accumulated depreciation and impairment losses
Depreciation for the year
Reclassifications
Sales and disposals
–53.0
–4.0
–
–
–57.0
–55.7
–5.0
0.1
0.7
–59.9
–60.5
–5.9
–
11.4
–55.0
–
–
–
–
–
–169.2
–14.9
0.1
12.1
–171.9
Reclassifications
Sales and disposals
–57.0
–4.2
–
–
–61.2
–59.9
–4.6
–
0.1
–64.4
–55.0
–6.5
–
0.3
–61.2
–
–
–
–
–
–171.9
–15.3
–
0.4
–186.8
Carrying amounts
1 January 2007
31 December 2007
91.1
88.8
17.6
19.9
13.8
14.4
3.1
0.3
125.6
123.4
Carrying amounts
1 January 2008
31 December 2008
88.8
103.5
19.9
18.5
14.4
17.8
0.3
1.5
123.4
141.3
Group
86
Depreciation and impairment losses are spread over the following items in
the income statement.
taxable values
Group
Taxable values, buildings (in Sweden)
Taxable values, land (in Sweden)
31/12/08
31/12/07
34.5
4.9
34.5
4.9
Equipment, tools,
fixtures and fittings
Parent Company
New acquisitions
Sales and disposals
0.9
0.1
–0.4
0.6
depreciation according to plan, by function
Group
2008
2007
Cost of goods sold
Selling expenses
–10.6
–0.9
–3.9
–15.4
–8.7
–1.6
–4.6
–14.9
depreciation according to plan, by function
Parent Company
New acquisitions
0.6
0.3
0.9
Group
–0.3
–0.2
0.2
–0.3
Financial expenses
–0.3
–0.1
–0.4
impairment losses, by function
0.6
0.3
1 January 2008
31 December 2008
0.3
0.5
2007
–0.1
–0.2
2008
2007
–
–5.0
impairment losses, by function
Accumulated depreciation
Sales and disposals
Carrying amounts
1 January 2007
31 December 2007
2008
Financial costs amounting to SEK 0.0 m (5.0) pertain to the impairment loss
on financial receivables in associated companies.
Parent Company
2008
2007
–
–5.0
Impairment of financial receivables
financial leasing
Group
Equipment held under financial lease contracts is accounted for at a carry
ing amount of SEK 2.9 million (2.1).
Note 14. Participations in associated
companies
Group
31/12/08
31/12/07
–
–
–
–
1.0
–1.1
0.1
–
Carrying amount at beginning of the year
Disposal of associated companies
Share of profit/loss in associated companies
Carrying amount at year-end
values on consolidation of owned portion of income, profit, assets and liabilities.
2007
Associated companies
Parent Company:
Galleri Stolen i Stockholm AB
Land
Income
Profit/loss
Assets
Liabilities
Equity
Owned portion, %
Sweden
46.9
0.2
–
–
–
–
Because the associated company was sold in December 2007, the income and profit shown for 2007 refer to the period January – November 2007.
87
Note 15. Participations in joint ventures
Note 19. Cash and cash equivalents
The Group has a 50percent stake in the joint venture company BS Eurobib
AS. The company’s principal operations consist of the sale of library interi
ors. Its head office is in Oslo, Norway. The shareholding is reported using the
proportional method of accounting, as this provides a more accurate picture
of the Group’s share of the company’s operations.
2008
2007
14.7
–13.7
1.0
15.1
–14.1
1.0
Non-current assets
Current assets
Total assets
0.2
4.6
4.8
0.2
4.4
4.6
Non-current liabilities
Current liabilities
Total liabilities
Net assets
0.2
2.0
2.2
2.6
0.2
1.8
2.0
2.6
Group
Income
Costs
Profit/loss
Note 16. Financial investments
Group
31/12/08
Cash and cash equivalents are
made up of the following items:
Cash and bank balances
Balance on Group account with Parent Company
Total as per the balance sheet
and cash flow statement
31/12/07
66.5
6.3
41.1
3.3
72.8
44.4
Note 20. Equity
dividend
After the balance sheet date, the Board of Directors proposed the follow
ing dividend. The dividend will be submitted to the AGM for approval on
29 April 2009.
SEK 2.50 per ordinary share (3.00),
of which SEK 2.50 (2.50) ordinary dividend
and SEK 0.00 (0.50) extra dividend
Reported dividend per share
2008
2007
21.1
2.50
25.3
3.00
equity management
Group
At beginning of the year
Acquired via business acquisitions
Purchases
Carrying amount at end of the period
31/12/08
31/12/07
0.2
3.9
–
4.1
0.1
–
0.1
0.2
The Group’s financial objective is to maintain a good capital structure and
financial stability, and thereby to retain the confidence of investors, lenders
and the market, as well as to form a foundation for continued development
of its business operations. Against that background, the Group’s goals for its
debt ratio have been set at 0.7–1.0 and for its equity ratio at no less than 35
percent. The outcomes on 31 December 2008 were 0.46 (0.40) for the debt
ratio and 50.0 percent (52.1) for the equity ratio. Equity is defined as the
sum of shareholders’ equity. The Group’s equity totalled SEK 395.5 million
(344.7) and the Parent Company’s equity SEK 273.3 million (279.9).
31/12/08
31/12/07
44.1
18.2
99.9
162.2
31.9
21.8
94.1
147.8
The Board of Directors’ ambition is to maintain a balance between high yield,
which can be achieved through higher borrowing, and the benefits and secu
rity offered by a sound capital structure. The financial goals of the Group over
an economic cycle are to obtain a return of no less than 20 percent on capital
employed. In 2008, the return on capital employed was 16.6 percent (15.0).
Note 17. Inventories
Group
Raw materials and consumables
Work-in-progress
Finished products and goods for resale
Carrying amount at end of the period
Note 18. Trade receivables
Trade receivables are reported after taking account of bad debt losses in
curred during the year, which totalled SEK 4.3 m (2.9) in the Group. No bad
debt losses were incurred by the Parent Company.
The Group’s policy is to pay a dividend, taking into account the longterm
capital requirement, totalling approximately 40 percent of profit after tax.
The Board of Directors has proposed a dividend of SEK 2.50 per share, cor
responding to 40 percent of profit after tax, to the 2009 AGM. Over the past
five years, the total dividend has amounted on average to 42 percent of prof
it after tax. The Group will also pay an additional dividend when the capital
structure and operational financing requirements allow. Decisions regard
ing an additional dividend reflect an ambition to distribute to the sharehold
ers funds that are not deemed necessary for the development of the Group.
The Group has paid additional dividends over and above ordinary dividends
on two occasions – in 2006 and 2007.
The Board of Directors proposes that the AGM should approve the issue of
eight hundred thousand shares to finance future acquisitions.
No changes took place during the year with regard to the Group’s equity man
agement. Neither the Parent Company nor any of the subsidiaries are subject
to external equity requirements.
88
Note 21. Earnings per share
Note 24. Pensions
defined-benefit pension plans
2008
2007
Earnings per share
Profit for the period
52.7
Weighted number of ordinary shares outstanding
8.4
Earnings per share before and after dilution
6.24
42.0
8.4
4.98
instruments that may result in future dilution
In 2008, the Company had an outstanding warrant programme comprising
75,000 warrants. In the programme, each warrant entitles the holder to sub
scribe for one new Class B share in the Company, of which share the redemp
tion price (SEK 79.00 per share) exceeded the average price for the ordinary
shares. These warrants therefore do not represent any potential dilution
effect and have been omitted from the calculation of earnings per share
after dilution. If the market price should in future rise to a level above the
redemption price, these warrants will result in dilution.
Note 22. Interest-bearing liabilities
This note provides information about the Company’s contractual conditions re
garding interestbearing liabilities. For further information on the Company’s
exposure to interest risk and the risk of exchange rate fluctuations, see Note 27.
Group
Bank loans with maturity 1–5 years
from balance sheet date
Bank loans with maturity more than
5 years from balance sheet date
Current liabilities
Bank overdraft facility
Current portion of bank loans
Total interest-bearing liabilities
31/12/08
31/12/07
81.3
61.2
33.1
114.4
29.7
90.9
30.1
38.0
68.1
182.5
26.3
21.1
47.4
138.3
Part of Scandinavian Eyewear’s and Ire Möbel’s retirement pension and fami
ly pension commitments have been secured through pension provisions on the
balance sheet that are insured with FPG/PRI. The plan is a definedbenefit pen
sion scheme and the provision at the end of 2008 amounted to SEK 2.4 m (2.3)
and SEK 0.4 m (0.0), respectively. Commitments for retirement pensions and
family pensions for other salaried employees in Sweden are secured through
an insurance policy with Alecta. According to a statement (UFR 3) from the
Swedish Financial Reporting Board, this is a definedbenefit plan jointly oper
ated by several employers. For the 2008 financial year, the Company has not
had access to the information required to enable it to account for this plan as
a definedbenefit plan. As a result, the pension plan under the ITP (Supple
mentary Pension for Salaried Employees in Industry and Commerce) scheme,
secured through an insurance policy with Alecta, is reported as a defined
contribution plan. The year’s charges for pension insurance policies contract
ed with Alecta amount to SEK 3.0 m (3.2). Surpluses at Alecta may be allocated
to policy holders and/or the insured. At the end of 2008, Alecta’s surplus,
expressed as the collective consolidation ratio amounted to 112 percent (152).
The collective consolidation ratio is made up of the market value of Alecta’s
assets as a percentage of the insurance commitments, calculated on the basis
of Alecta’s actuarial assumptions, which do not correspond to IAS 19.
defined-contribution pension plans
In Sweden, the Group operates definedcontribution pension plans for its
employees, which are paid for entirely by the various companies. Outside
Sweden, definedcontribution pension plans are operated, paid for partly by
the subsidiaries and partly by charges paid by the employees. Payment into
these plans is made on an ongoing basis as required by the rules applying to
the particular plan.
Group
2008
2007
Costs of definedcontribution plans
11.4
Parent Company
2008
2007
10.7
0.9
0.7
Note 25. Other provisions
financial leasing liabilities
The Group’s liabilities under financial lease contracts total SEK 2.9 m (2.1).
Liabilities under financial lease contracts in the Group consist of future leas
ing charges arising from contracts under financial leasing. Leasing charges
that are due within one year are reported as current liabilities.
Bank loans with maturity 1–5 years
from balance sheet date
Kortfristiga skulder
Checkräkningskredit
Kortfristig del av banklån
31/12/08
30.1
16.9
47.0
31/12/07
0.5
3.8
4.3
0.4
–
0.4
31/12/07
Group
31/12/08
31/12/07
45.2
31/12/08
Note 26. Accrued expenses and
deferred income
Note 23. Liabilities to credit institutions
Parent Company
Group
Guarantee commitments
Severance payments, Seven S.R.L., Italy
44.6
26.3
14.6
40.9
Accrued employeerelated expenses
Other items
31.9
26.9
58.8
24.0
37.2
61.2
Parent Company
31/12/08
31/12/07
1.7
2.2
3.9
2.8
2.1
4.9
Accrued expenses consisting of the estimated addon purchase consideration
to the previous owners of Schulz Speyer Bibliothekstechnik AG are included
in Other Items for the Group in the amount of SEK 0.0 million (21.3).
89
Note 27. Financial risks and financial policies
By the nature of its business operations, the Lammhults Design Group is
exposed to various kinds of financial risks. Financial risks refer to fluctua
tions in the Company’s results and cash flow as a result of fluctuations in
exchange rates and changes in interest rate, refinancing and credit risks.
The Group’s policies and guidelines for management of financial risks have
been prepared by the Board of Directors and constitute a framework for its
financial operations. The responsibility for the Group’s financial transac
tions and risks is managed centrally by the Group’s management team. The
overall objective is to provide costefficient financing and to minimise nega
tive impact on the Group’s results through market fluctuations.
liquidity risks
Liquidity risk refers to the risk of the Group encountering problems with
fulfilling its obligations relating to financial liabilities. The aim is that the
Group should be capable of meeting its financial commitments both during
upswings and downswings without major unforeseen costs and without risk
ing the Group’s reputation. According to a resolution by the Board of Direc
tors, the Group’s liquidity margin, in the form of cash and cash equivalents
and unused bank overdraft facilities, must represent no less than 10 percent
of total assets. At yearend, the liquidity margin amounted to 20.4 percent
(18.9). The Group strives to minimise its borrowing requirement by employ
ing excess liquidity in the Group via cash pools set up by the Parent Compa
ny’s financial control function. Liquidity risks are managed centrally, on be
half of the entire Group, by the Parent Company’s financial control function.
credit risks
Commercial credit risk covers customers’ payment capacity, and is managed
by the respective subsidiary through careful monitoring of payment reliabili
ty, by followingup customers’ financial reports and via continuous communi
cation. Customers have their creditworthiness checked through information
about their financial position being collected from various credit agencies. To
minimise credit risks, the Group’s companies use letters of credit, bank guar
antees, credit insurance and advance payments from customers. In the case
of major projects, payment flows prior to delivery are hedged. There was no
significant concentration of credit exposure on balance sheet date.
market risks
Market risk is defined as the risk that the fair value of, or future cash flows
from, a financial instrument may vary as a result of changes in market prices.
IFRS classifies market risks into three categories: currency risk, interest risk
and other price risks. The principal market risks that affect the Group are
interest risks and currency risks.
Speyer amounted to SEK 10.0m (15.0) at yearend. It has a variable rate of
interest but has been taken out with an interest rate cap through which the
Group has ensured that the interest rate on the loan will never exceed 4.1
percent. Another EUR loan to finance the acquisition of Schulz Speyer (add
on purchase consideration) amounted at yearend to 20.2 m (0.0) is a variable
rate loan. The loan is capped at 5.5 percent and has a minimum rate of 3.4
percent. The Group also has a variable rate EUR loan, to finance a building,
amounting to SEK 12.1 m at yearend. The loan has an interest rate cap
ensuring that the interest on the loan will never exceed 5.0 percent.
currency risks
The risk that fair values and cash flows relating to financial instruments may
fluctuate when the value of foreign currencies change is known as currency
risk. The Group is exposed to various types of currency risks. The primary
exposure concerns purchases and sales in foreign currencies, where the risk
may consist partly of fluctuations in the currency of a financial instrument or
customer or supplier invoice, and partly of the currency risk in anticipated
or contracted payment flows; this is known as transaction exposure. Currency
fluctuations also exist in the translation of the assets and liabilities of foreign
subsidiaries to the Parent Company’s functional currency; this is known as
conversion exposure. Another area that is vulnerable to currency risks is that
represented by payment flows in loans and investments in foreign currencies.
transaction exposure
The Group’s invoicing to markets outside Sweden amounted to SEK 553.7 m
(502. 7) during the year. Invoicing in foreign currencies totalled SEK 540.1 m
(452.6), as set out below:
invoicing in foreign currencies (converted to sek):
Currency
EUR
DKK
NOK
USD
Other foreign currencies
Total
90
324.0
116.0
65.7
9.8
24.6
540.1
2007
%
Amount
%
60
21
12
2
5
100
274.1
85.2
59.7
10.2
23.4
452.6
61
19
13
2
5
100
The Group’s purchases in foreign currencies amounted to SEK 296.3 m (255.0),
as set out below:
purchases in foreign currencies (converted to sek):
interest risks
Interest risk is the risk that the value of a financial instrument may vary as
a result of changes in market interest rates. The Group’s net financial items
and results are affected by fluctuations in interest rates. The Group is also
indirectly affected by the influence of interest rates on the economy in gen
eral. The Lammhults Design Group believes that shortterm fixing of inter
est rates is compatible with the Group’s operations from a risk perspective.
On that basis, the majority of the Group’s loans are taken up at variable in
terest rates. Variable rates of interest have also often been lower than long
term rates in recent years, which in turn has had a positive effect on the
Group’s results. Management of the Group’s exposure to interest rates is
centralised, i.e. the Group’s management is charged with identifying and
handling such exposure. The Company’s interestbearing liabilities amount
ed to SEK 182.5 m (138.3) at yearend. Of these interestbearing liabilities,
SEK 181.9 m (138.3) have a variable rate of interest and SEK 0.6 m (0.0)
a fixed rate of interest. An EUR loan to finance the acquisition of Schulz
2008
Amount
Currency
EUR
DKK
USD
NOK
Other foreign currencies
Total
2008
Amount
145.5
84.2
33.3
13.8
19.5
296.3
2007
%
Amount
%
49
28
11
5
7
100
122.3
73.6
36.9
15.3
6.9
255.0
48
29
14
6
3
100
The Group’s aim is to use forward contracts to limit currency risks in future
payment flows. Using the best possible information regarding future flows,
approximately 50 percent of anticipated net flows for the next 12 months are
hedged. IAS 39 has been applied as of 1 January 2005. The Group classifies
the forward contracts that it uses to hedge forecast transactions as cash
flow hedges. Changes in the fair value of forward contracts are therefore
reported in equity. At yearend 2008, forward contracts showed a deficit of
SEK 1.9 m (0.0).
translation exposure
In normal circumstances, the Group does not seek protection for its transla
tion exposures in foreign currencies. However, for its acquisition of shares in
BCI in 2002 and in Schulz Speyer in 2006, the Parent Company raised loans
in DKK and EUR, respectively, to protect against those currency exposures.
The currency difference on these loans for the year amounts to SEK –8.2 m
(–2.4) and has been taken directly to equity. For more on how translation
exposure is treated in the accounts, see Note 1 Accounting Principles –
Hedging of net investments.
Investments in foreign subsidiaries have to a certain extent been hedged by
the raising of foreign currency loans or the use of overdraft facilities in for
eign currency. At yearend, these loans are reported at the rate of exchange
on the balance sheet date, other than in the Parent Company where they are
reported at the acquisition rate of exchange for loans, or overdraft facilities
in foreign currencies for the purchase of participations in Group companies.
Note 29. Operational leasing
lease agreements where the company is the lessee
Total of nonterminable lease payments:
sensitivity analysis
In order to manage interest and currency risks, the Group’s aim is to mini
mise the effects of shortterm fluctuations in the Group’s results. In the long
term, however, lasting changes in exchange rates and interest rates impact
on the consolidated results. As per 31 December 2008, it is estimated that
a general rise of 1 percent in interest rates will reduce the Group’s profit
before tax by approximately SEK 1.1 m (0.7). A general rise of 1 percent of
the SEK against other currencies will, it is estimated, reduce the Group’s
profit before tax by approximately SEK 2.0 m (2.0) for 2008. Changes in the
value of currency forward contracts are disregarded in this estimate.
Note 28. Measurement of financial assets
and liabilities at fair value
fair value
Fair value is the amount at which an asset could be transferred or a liability
settled between knowledgeable parties who are independent of each other
and who have an interest in the transaction being carried out.
Fair value and carrying amount are shown in the balance sheet below:
Carrying
amount
2008
Fair
value
2008
Carrying
amount
2007
Fair
value
2007
Financial investments
Trade receivables
Other receivables
4.1
185.0
12.5
72.8
4.1
185.0
12.5
72.8
0.2
169.4
10.9
44.4
0.2
169.4
10.9
44.4
Currency forward
contracts (liabilities)
Bank loans
Trade payables
Other liabilities
2.7
152.4
30.1
62.4
31.4
2.7
152.4
30.1
62.4
31.4
0.1
112.0
26.3
54.1
20.7
0.1
112.0
26.3
54.1
20.7
Carrying
amount
2008
Fair
value
2008
Carrying
amount
2007
Fair
value
2007
0.1
6.3
62.1
30.1
0.6
0.6
0.1
6.3
75.7
30.1
0.6
0.6
0.2
3.4
59.2
26.3
0.6
0.6
0.2
3.4
61.4
26.3
0.6
0.6
Group
Parent Company
Other receivables
Bank loans
Trade payables
Other liabilities
Group
31/12/08
31/12/07
Lease charges
for the year
Within one year
Between one and
five years
Parent Company
31/12/08
31/12/07
4.1
3.0
3.7
3.1
–
–
–
–
6.2
9.4
–
–
Note 30. Pledged assets and
contingent liabilities
Group
31/12/08
31/12/07
Pledged assets
For own liabilities
and provisions
Property mortgages
Chattel mortgages
Net assets in
subsidiaries
Other securities
Shares in subsidiaries
Total pledged assets
Contingent liabilities
Sundry surety bonds
Warranties
Other contingent
liabilities
Total contingent
liabilities
Parent Company
31/12/08
31/12/07
60.0
58.7
43.0
56.0
–
–
–
–
481.1
0.4
–
600.2
390.6
–
–
489.6
–
–
269.2
269.2
–
–
246.7
246.7
3.8
1.6
3.9
1.5
3.8
–
3.9
–
0.2
0.2
–
–
5.6
5.6
3.8
3.9
91
Note 31. Closely related parties
summary of transactions with closely related parties
transactions with key people in leading positions
Of the Parent Company’s total purchases and sales measured in SEK, 4 per
cent (1) of the purchases and 100 percent (100) of sales pertain to other com
panies within the overall group of which the Company is part. The Parent
Company has a close relationship with the subsidiaries stated in Note 32
and jointventure companies listed in Note 15.
The Company’s Board Members, with close family members and wholly
or partly owned companies, control 45 percent (45) of the voting rights in
the Company. Yngve Conradsson controls 25.8 percent (25.8) of the voting
rights through a 50percent owned company, Jerry Fredriksson and com
pany control 16.3 percent (16.3) of the voting rights, and Johan Sjöberg and
company control 2.8 percent (2.8) of the voting rights of the Company.
In the preceding year, the Parent Company also had a close relationship
with an associated company that, however, was sold in December 2007, as
described in Note 14. In the 2007 financial year, the associated company
purchased goods from the Group to a value of SEK 0.4 m, and on 31 Decem
ber 2007 the associated company had a liability to the Group in the amount
of SEK 0.2 m In the 2007 financial year, the associated company sold goods
to the Group to a value of SEK 4.0 m.
The CEO controls 0.2 percent (0.0) of the voting rights in the Company. Six
senior executives are participating in the Group’s warrant programme. For
more information on salaries and remuneration to the Board Members and
senior executives, see Note 6.
Transactions with closely related parties are priced at generally accepted
market conditions.
Note 32. Participations in Group companies
31/12/08
31/12/07
Purchases
Carrying amount 31 December
361.1
22.5
383.6
361.1
–
361.1
Accumulated impairment losses
Impairment losses for the year
At year-end
Carrying amount 31 December
–33.9
–
–33.9
349.7
–1.4
–32.5
–33.9
327.2
Parent Company
The impairment losses for the year are reported in the income statement on
the line “Result from participations in Group companies”.
specification of the parent company’s and the group’s shareholdings in group companies:
Subsidiary/Company Reg. No./Reg.
Number of shares
Lammhults Möbel AB / 556058-2602 / Växjö
Eurobib AB / 556038-8851 / Lund
BCI A/S / 87 71 97 15 / Holsted, Denmark
Schulz Speyer Bibliothekstechnik AG / HRB 2951SP / Speyer, Germany
Voice AB / 556541-0700 / Jönköping
Ire Möbel AB / 556065-2710 / Tibro
Expanda Invest AB / 556535-2290 / Växjö
Abstracta AB / 556046-3852 / Växjö
Scandinavian Eyewear AB / 556052-8514 / Jönköping
Atran AB / 556035-8508 / Falkenberg
Sydostinvest AB / 556210-3498 / Växjö
92
30,000
50,000
50,000
11,250
10,000
300,000
6,000
1,000
Shares in %
100
100
100
100
100
100
100
100
100
100
100
31/12/08
Carrying amount
31/12/07
Carrying amount
34.3
39.8
73.9
65.4
40.7
–
94.3
–
–
1.1
0.2
349.7
34.3
39.8
73.9
42.9
40.7
–
94.3
–
–
1.1
0.2
327.2
Note 33. Cash flow statement
Note 34. Events after the balance sheet date
interest paid and dividend received
On 12 February 2009, Schulz Speyer Bibliothekstechnik AG acquired 100
percent of the shares outstanding in Schulz Benelux BVBA, Schulz Speyer’s
dealer in Benelux. The former main owner of the company and the compa
ny’s management will continue to work at the company. The purchase con
sideration was paid in cash and there is a possibility of an addon purchase
consideration being paid. The Company has sales of around SEK 15 m and
six employees. It is located at Holsbeck, just outside Brussels, Belgium.
Group
2008
2007
Dividend received
Interest received
Interest paid
–
2.7
–11.0
–
3.1
–8.0
Parent Company
2008
2007
–
3.5
–7.7
5.5
2.0
–5.2
adjustment for non-cash items
Group
2008
2007
Parent Company
2008
2007
Depreciation
Impairment losses
Unrealised exchange
rate differences
Share of profit/loss
Profit/loss on sale of
non-current assets
Provisions for pensions
15.4
–
14.9
5.0
0.1
–
0.2
32.0
6.5
2.9
–4.1
–0.8
–
1.0
–
–
–0.1
0.1
–0.1
0.2
–
–
–
–
Other provisions
0.8
22.7
–0.2
23.7
–
–4.0
–
31.4
On 12 February 2009, BCI AS acquired the entire business that had been
operated by NBLC Systemen B.V., which acts as dealer for BCI and Eurobib
in the Netherlands. The purchase consideration was paid in cash. The com
pany has sales of approximately SEK 20 m and three employees, who will
continue to work in the business. The company is located in Eide, in the east
of the Netherlands.
Eurobib NV, headquartered in Antwerp, Belgium, is already part of the Group.
Schulz Benelux, NBLC Systemen and Eurobib NV will together make a power
ful sales organisation for the library division in the Benelux region, with a level
of profitability in line with that elsewhere in the Group. Both acquisitions are
expected to make positive contributions to Group profits in the current year.
Through these two strategic acquisitions, Lammhults Library will significantly
strengthen its position in the Benelux region and become a market leader in
this important library market.
schulz benelux – net assets at the time of acquisition
acquisition of subsidiaries
Group
2008
2007
Acquired assets and liabilities
Intangible non-current assets
Inventories
Operating receivables
Total assets
Non-current provisions
Non-current interestbearing liabilities
Deferred tax liabilities
Current operating liabilities
Total provisions and liabilities
Purchase consideration paid
Less: Estimated add-on
purchase consideration
Less: Cash and cash equivalents
in the acquired operation
Effect on cash and
cash equivalents
Parent Company
2008
2007
45.8
1.3
3.0
11.5
8.9
8.3
78.8
–
–
–
–
–
–
–
22.6
–
–
–
–
–
22.6
–
–
–
–
–
–
–
3.4
–
–
–
0.7
0.9
12.4
17.4
–
–
–
–
–
–
–
–
–
–
–
–
–61.4
–
–22.6
–
7.8
–
–
–
8.3
–
–
–
–45.3
–
–22.6
–
non-utilised credits
Group
2008
2007
Non-utilised credits, total
88.4
81.0
Parent Company
2008
2007
72.0
Value reported in
Schulz Benelux
Fair value
before acquisition adjustment
Intangible assets
Inventories
Trade receivables and
other receivables
and liabilities
Purchase consideration paid,
cash
consideration
Cash (acquired)
Net cash outflow
Fair value
reported in
Group
–
0.5
2.3
0.1
–
–
0.1
0.5
2.3
3.6
2.7
–
–
3.6
2.7
–3.7
–
–3.7
5.4
0.1
5.5
0.7
6.2
–1.1
–2.7
2.4
nblc systemen – net assets at the time of acquisition
Value reported in
NBLC Systemen
Fair value
before acquisition adjustment
Purchase consideration paid, cash
Net cash outflow
Fair value
reported in
Group
2.6
2.6
2.6
71.5
93
Note 35. Important estimates
and assessments
The Company’s management has discussed with the audit committee the
development, choice and disclosures relating to the Group’s major account
ing policies and assessments, and their application.
significant sources of uncertainty in estimates
Impairment tests for goodwill
When computing the recovery value of cashgenerating units for the assess
ment of any impairment loss for goodwill, several assumptions as to future
circumstances and estimates of parameters have been made, of which a sum
mary is set out in Note 12. As may be seen in Note 12, changes in the precon
ditions for these assumptions and estimates during 2009 could have a sig
nificant effect on the value of goodwill. However, the view is taken that no
significant risk exists for any major adjustment of goodwill during the forth
coming year.
Exposure to foreign currencies
Changes to exchange rates can have relatively major effects on the Compa
ny in general. A detailed analysis of exposure to foreign currencies, as well
as of the risks associated with changes in foreign currency rates, is set out
in Note 27.
Tax
Extensive assessments are made to determine current and deferred tax liabil
ities and assets, and in particular the value of deferred tax assets. In this proc
ess, the Lammhults Design Group must assess the likelihood of the deferred
tax recoverable being offset against future taxable profits. The actual outcome
may differ from these assessments, for example, because of a change in the
future business climate or amended tax regulations, or because of the eventual
result of a tax authority’s or a fiscal court’s as yet uncompleted examination of
tax returns submitted. For more information, see Note 10.
Note 36. Information on the Parent Company
Lammhults Design Group AB is a Swedish company with limited liability
(Swedish: aktiebolag). Its registered office is in Växjö, Sweden. The Parent
Company’s Class B shares are listed on the Nordic Small Cap list of the
Nasdaq OMX Nordic Exchange Stockholm. The address of the head office is
Lammhults Design Group AB, Box 75, SE36030 Lammhult, Sweden. The
consolidated accounts for 2008 comprise those of the Parent Company and
its subsidiaries, which together are known as the Group. The Group also
includes shareholdings in jointventure companies.
certification by the board of directors
The Board of Directors and the CEO certify that the annual accounts have
been prepared in accordance with generally accepted accounting practices
in Sweden, and that the consolidated accounts have been prepared in accord
ance with the international standards referred to in the European Parlia
ment and Council’s (EU) Directive No. 1 1606/2002 of 19 July 2002 on the
application of International Accounting Standards. The annual accounts and
the consolidated accounts provide a true and fair view of the Group’s and
Parent Company’s position and results. The Report of the Board of Directors
for the Group and Parent Company provides a true and fair overview of the
Group’s and Parent Company’s operations, position and results, as well as
significant risks and factors of uncertainty to which the Parent Company
and the companies included in the Group may be exposed.
Lammhult, 16 March 2009
Chairman
Jerry Fredriksson
Yngve Conradsson
Erika Lagerbielke
Johan Sjöberg
Lotta Lundén
Johan Hjertonsson
CEO
Our auditor’s report was submitted on 16 March 2009
KPMG AB
Michael Johansson
Authorised Public Accountant
94
aUditoR’s RePoRt
To the Annual General Meeting of Shareholders
in Lammhults Design Group AB (publ)
Corp. id. no. 556541-2094
We have audited the annual accounts, the consolidated accounts, the account
ing records and the administration of the Board of Directors and the President
of Lammhults Design Group AB (publ) for the year 2008. The Company’s
annual accounts and consolidated accounts are included in the printed version
of this document on pages 58–94. These accounts and the administration of
the company are the responsibility of the Board of Directors and the President,
who shall also ensure that the Annual Accounts Act be applied when preparing
the annual accounts and that the International Financial Reporting Standards
(IFRS) as adopted by the European Union and the Annual Accounts Act be
applied upon the preparation of the consolidated accounts. Our responsibility
is to express an opinion on the annual accounts, the consolidated accounts
and the administration based on our audit.
I conducted my audit in accordance with generally accepted auditing stand
ards in Sweden. Those standards require that I plan and perform the audit
to obtain reasonable but not absolute assurance that the annual accounts
and the consolidated accounts are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the accounts. An audit also includes assessing the accounting
principles used and their application by the Board of Directors and the Pres
ident and significant estimates made by the Board of Directors and the Presi
dent when preparing the annual accounts, as well as evaluating the overall
presentation of information in the annual accounts and the consolidated
accounts. As a basis for our opinion concerning discharge from liability, we
examined significant decisions, actions taken and the circumstances of the
company in order to be able to determine the liability, if any, to the company
of any board member or the President. We also examined whether any board
member or the President has, in any other way, acted in contravention of the
Companies Act, the Annual Accounts Act or the Articles of Association. We
consider that our audit gives us reasonable grounds for our statements below.
The annual accounts have been prepared in accordance with the Annual
Accounts Act and, thereby, give a true and fair view of the company’s finan
cial position and results of operations in accordance with generally accepted
accounting principles in Sweden. The consolidated accounts have been pre
pared in accordance with the International Financial Reporting Standards
(IFRS) as adopted by the European Union and the Annual Accounts Act and
give a true and fair view of the Group’s financial position and results of oper
ations. The Report of the Board of Directors is consistent with the contents
of the annual accounts and the consolidated accounts.
We recommend to the Annual General Meeting of Shareholders that the
income statements and balance sheets of the Parent Company and the Group
be adopted, that the profit be dealt with in the Parent Company in accordance
with the proposal in the administration report and that the members of the
Board of Directors and the President be discharged from liability for the
financial year.
Växjö, 16 March 2009
KPMG AB
Michael Johansson
Authorised Public Accountant
95

Looking - Lammhults Design Group

Transcription

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