Oboya Horticulture Industries AB

Transcription

Issue memorandum 2014
1
Contents
Affirmation of the Board of Directors
3
Terms, conditions and instructions
5
Trading in the shares
6
Welcome as shareholder
7
Reason for new issue and future capital requirements
8
Oboya Horticultural Industries AB
9
Group structure
10-11
Business concept
12
Events in the Company’s development
13
Presentation of the Company
14-19
Market prerequisites
20-21
Competitors
22
Strategy and goals
23
Board of Directors and CEO
24
Corporate management/Management group
25
Organization
26
Patents
27
Selected financial information
28
Consolidated Income Statement
29-30
Consolidated Balance Sheet
31
Consolidated Statement of Cash Flow
32
Parent Company Income Statement
33
Parent Company Balance Sheet
34
Comments to the financial information
35-37
Shareholders
38
Evolution of share capital
38
Information about the shares being offered
Risk factors
39-40
41
Articles of Incorporation
42-43
Tax considerations in Sweden
44-45
Complete listing of assignments of the Board of Directors
and CEO during the past five years
46-47
2
Exemption from the prospectus requirement
This memorandum has not been reviewed by the Swedish Financial Supervisory Authority. This memorandum is
exempt from the prospectus requirement in accordance with “the Securities and Clearing Operations Act – Exemptions regarding offering to the public”. The basis for the exemption is that the aggregate value of the offering of
financial instruments does not exceed 2.5 million euro during a twelve-month period.
Statements about the future
Statements about the future and other future circumstances in this memorandum reflect the current views of the
Board of Directors regarding future events and financial developments at the time of issuance of this memorandum.
These statements have been thoroughly prepared, but the reader must be aware that these as well as all other assessments of the future involve uncertainty.
Definitions
Unless otherwise specifically stated, the following definitions shall apply in this memorandum: (“The Company”
or “Oboya Horticulture” refers to Oboya Horticulture Industries AB” with corporate identity number 556362-3197.
Circumstances relating to the Company described in this memorandum are those that have occurred after the Company’s name was changed to Oboya Horticulture Industries AB and new operations were added to the Company
beginning in December 2013.
Affirmation of the Board of Directors
This memorandum was prepared by the Board of Directors of Oboya Horticulture Industries AB by reason of a new
issue and introduction for listing for trading on AktieTorget. The Board of Directors of Oboya Horticulture Industries AB is responsible for the contents of this memorandum. The undersigned hereby confirm that the Board of
Directors has taken all reasonable precautionary action to ensure that all information provided in the memorandum,
as far as the Board of Directors is aware, conforms to actual circumstances and that nothing has been withheld that
could affect the meaning of the memorandum. The Company’s auditors have not reviewed the information provided
in this memorandum.
Stenkullen, 12 september 2014
Mikael Palm Andersson Steen Bödtker
Chairman of the Board of Directors
Krister Magnusson
Robert Wu
DISSEMINATION OF THE MEMORANDUM
The share is not traded in any other country than Sweden
Zealand, USA, or any other country where the distribution
and application has not been filed for trading elsewhere.
or this offering requires additional measures as described
The offer according to this memorandum is not made to
in the previous sentence, or is in contravention with rules
persons whose participation assumes the publication of
and regulations in such country. This memorandum is
a prospectus, registration procedures or measures other
governed by Swedish law. Disputes arising from contents
than those required under Swedish law. The memorandum
of this memorandum, or related legal matters shall be
may not be distributed in Australia, Japan, Canada, New
shall be settled by Swedish courts exclusively.
3
Oboya Horticulture has streamlined its operations through
restructuring and by acquiring a number of companies. For 2015
consolidated revenue is expected to amount to approximately
MSEK 300 with a positive result.
After its most recent acquisitions, Oboya Horticulture has its own
manufacturing entities and sales companies in Denmark, Norway, Sweden,
Poland, China and Kenya.
Through organic growth and by way of acquisitions, Oboya Horticulture aims to
achieve revenue in excess of one billion kronor with continued good profitability
within a five-year period.
The appraised value of the Company is MSEK 192.2 before the proposed
offering.
The Company’s principal owners are guaranteeing the entire new issue
without compensation.
4
Terms, conditions and instructions
ISSUE VOLUME
The new issue is in a maximum amount of SEK
19,600,000 divided into 1,400,000 shares. The quotient
value of the share is SEK 0.0364.
SUBSCRIPTION PRICE
The subscription price is SEK 14.00 per share. No
commission is payable. The pre-money valuation of the
Company is MSEK 192.2 before the issue.
PRE-EMPTIVE RIGHTS
The Issue is undertaken without pre-emptive rights for
existing shareholders.
SUBSCRIPTION PERIOD
Applications for subscription may be made from 15
September until 14 October, inclusive. The Board of
Directors reserve the right to extend the subscription
period.
APPLICATION
Subscription is by special subscription application
in a minimum number of 300 shares. Incomplete or
erroneous subscription forms may be disregarded. In
the case of more than one subscription application
submitted, the one submitted last shall apply.
NOTICE OF ALLOTMENT
When allocation has been determined, a settlement note
will be sent to those who have received allotment. This
is expected to occur on 22 October 2014. Those who
have not received allotment will not receive a notice.
PAYMENT
Full payment for allotted shares shall be paid in cash not
later than 29 October 2014 (settlement date) in accordance
with instruction on the settlement note. Shares not paid
for in time may be transferred to someone else. Payment
of compensation may be demanded from those who do
not pay in time.
DELIVERY OF SHARES
Oboya Horticulture will be connected to Euro
clear
Sweden AB’s account-based securities system (the
former VPC). When payment has been made and
recorded, Euroclear will issue a VP advice showing the
number of shares registered to the VP account given
on the subscription form. Shares paid for not later than
28 October 2104 are expected to be available in the VP
accounts by 10 November 2014.
When shares are registered to an account, availability
may be delayed due to the broker’s or bank’s routines for
registration.
Applications, which are binding, shall be submitted to:
Aktieinvest FK KB
Emittentservice
SE-113 89 Stockholm
SWEDEN
Telephone: +46-8-5065 1795
Fax: +46-8-5065 1701
E-mail: [email protected]
ALLOTMENT
In making allotments, the Board of Directors will strive
to give Oboya Horticulture a broad ownership base. In
the event of oversubscription, the Board of Directors
will decide on allotment of shares, which means that
allotment may be made of fewer shares than applied
for. Allotment will not be determined based on when
during the subscription period the subscription form
was submitted.
CONDITION FOR COMPLETING THE ISSUE
The issue is contingent on fulfilling AktieTorget’s
ownership distribution requirements for listing the
share.
TRADING ON AKTIETORGET
Oboya Horticulture has been approved by AktieTorget
for trading on AktieTorget on the condition that the
distribution requirements has been fulfilled. The result
of the issue will be announced via a press release in
connection with the listing. The first day of trading is
estimated to be 14 November 2014.
The trading symbol will be OBOYA. The ISIN code for
the share is SE0005934452.
5
TRADING IN THE SHARE
AktieTorget is a securities institution that operates
listed on AktieTorget can be monitored in real time
a trading platform called MTF (Multilateral Trading
at www.aktietorget.se and at most internet and on
Facility). AktieTorget offers an effective share
the websites with financial information. Shares in
trading system (NET Nordic), available to banks and
Oboya Horticulture Industries AB will be trade on
securities brokers connected to the Norex exchanges.
AktieTorget during October 2014 on the condition that
This means that those who wish to buy and sell
the offering is completed and that the Company fulfils
shares listed on AktieTorget use their regular bank
AktieTorget’s ownership distribution requirement.
or securities broker. Share prices for companies
6
Welcome as shareholder!
Oboya Group is a corporate group that I have built during the past nine
years. The Group consists of three wholly owned operating entities,
one of which is Oboya Horticulture Industries, with operations in
manufacturing, distribution and sales of peripheral products for
efficient handling of flowers, vegetables and other plants.
The fact that I have now chosen to float a new issue and to obtain
a listing for Oboya Horticulture in Sweden is not so strange. For a
period I was responsible for purchasing by New Wave Group and
for Isaberg Rapid, which makes me well acquainted with Swedish
corporate culture among growth companies and the Swedish
capital market.
Over the past several years we have built up manufacturing of
packaging solutions, cultivation systems and distribution carts
for flowers and vegetable displays. During the last couple of
years we have also acquired companies in Poland, Denmark,
Sweden and Norway, through which additional products have
been added and meaningful access has been gained on the
European market.
The operations in Denmark, Sweden and Norway have been streamlined by concentrating major parts of the
production to our companies in Poland, while we have retained and expanded the sales organisation in Denmark,
Sweden and Norway. At the same time we have increased revenue and raised the companies’ profitability.
Another exciting company that we have started is Oboya Africa Ltd in Kenya. Africa as a continent is undergoing
strong growth and Kenya is a country with large plant and cultivation production for domestic consumption as
well as for export, with new and effective production methods.
The market for accessories for the flower and plant-growing industry is estimated to exceed 70 billion SEK and
is a highly fragmented market with a large number of distributors who buy products from a large number of
manufacturers. With Oboya Horticulture, we want to take a holistic approach in the industry by owning our
own production units, while maintaining direct contact with our customers via our own sales channels. This will
make us more responsive, allowing us to adjust production to the products demanded by the customers, at the
same time as we can develop new products and find new and better solutions for our customers.
We will continue our growth strategy of increasing revenue in the Group through organic growth and
acquisitions, thereby gaining economies of scale and a wider range of products. The listing on AktieTorget will
allow us to pay for some of the future acquisitions with our own shares. There is a number of small and mediumsized companies that are of great interest. It is therefore highly likely that we already during the next six months
will be announcing a number of interesting acquisitions. We expect to reach a volume of revenue of about MSEK
300 as early as next year and we expect to increase that volume significantly over the next several years. We are
also confident that the increase in revenue will be accompanied by higher profitability in the Group.
If you wish to be part of an exciting company with an ambition of generating revenue of a billion kronor or more
within a few years, I greet you welcome as shareholder in Oboya Horticulture.
Robert Wu
CEO of Oboya Horticulture Industries AB
7
Reason for new issue and future capital requirements
Oboya Horticulture is a corporate group with strong
growth, organically as well as through acquisition of
other companies. The corporate group today consists of
twelve companies active in production and/or sales of
products related to the flower trade.
Oboya’s strategy is to grow by acquiring companies in
the same area of operations, thereby broadening the
offering of products, streamlining production and establishing itself on new markets and among new customer
groups. The industry in which Oboya is active is currently highly fragmented and consists of a large number
of producers. There are only a few large wholesalers in
the market, however, and they are not engaged in production. This is where Oboya differs from all others by
nurturing an ambition of controlling the entire supply
chain, from production to end customer.
In order for the Company to continue to grow and make
acquisitions a capital infusion is needed and listing of the
share, thereby enabling the Company to pay for parts of
or all acquisitions in its own shares.
REASON FOR THE NEW ISSUE
The Board of Directors of Oboya Horticulture Industries AB has decided to float a public issue and then to seek
a listing of the Company’s shares on AktieTorget. The
decision of the Board of Directors was made based on a
resolution by an extra general meeting of the shareholders of Oboya Horticulture Industries AB held 28 May
2014. The reason for the floatation is to obtain capital to
ensure the Company’s ability to make new acquisitions.
The issue is aimed at private as well as institutional investors.
The proposed new issue will generate up to MSEK 19.6
before issuing costs. The issuing costs are estimated to
amount to MSEK 1. In order to secure the new issue,
the Company’s principal owner, Oboya Holding Ltd,
Hong Kong, on 1 September 2014 agreed to underwrite
the new issue in its entirety. Subscription will be on the
same terms and conditions as the public and without any
compensation whatsoever.
The reason for securing the entire proceeds of the flotation is that the principal owners feel that it is important
for the Company to obtain a market listing to allow future acquisitions to be financed with a combination of
liquid funds and own shares if the seller so wishes.
WORKING CAPITAL DECLARATION
The Board of Directors is of the opinion that Oboya
Horticulture has sufficient working capital for its future
operations. The new issue is floated to enable the Company to make additional acquisitions in the industry.
The proposed new issue covers the capital requirements
for the coming twelve months, but should a situation
arise where a major company in the industry becomes
available, the situation may change during the year.
FUTURE CAPITAL REQUIREMENTS
The Board of Directors of Oboya Horticulture Industries AB is of the opinion that the Company will not require additional working capital by way of a new issue
for the foreseeable future. However, it cannot be ruled
out that the Company’s acquisition strategy will make it
necessary to obtain additional capital in the form of new
issues in the coming years.
8
Oboya Horticulture Industries AB is a public corporation and operates under this form of association, which
is governed by the Swedish Companies Act. The Company was established in Sweden and registered on 29 June
1989 with corporate identity number 556362-3197. The
original name was A-märket Butiksutrustning AB. On
19 November 2010 the name was changed to Nu Body
Scandinavia AB. The current name, Oboya Horticulture
Industries AB, was registered 14 December 2013.
The name of the Company was changed when the current owner acquired the Company, which was then an
empty shell without operations with assets in the form
of liquid funds equal to equity. For this reason the following presentation will be based on circumstances occurring after the most recent name-change.
The object of the Company is to engage in production,
sales and rental of flowers, cultivation and store equipment, and trading in securities, owning property and
related business.
The Company has applied for connection to Euroclear
(VPC), which means that Euroclear Sweden AB will be
responsible for the Company’s share register. The domicile of the Company is the Municipality of Lerum, county of Västra Götaland.
The Company has not been party to any legal or arbitration proceedings (including not yet settled issues or
issues that may arise) during the most recent past twelve
months, and which recently have had, or could have a
significant effect on the Company’s financial position or
profitability.
Annual reports and Articles of Incorporation in paper form
may be requested from the Company or be downloaded from
the Company’s website:
Snickarevägen 2
SE-443 61 Stenkullen
SWEDEN
Telephone: +46-302-234 60
Website: www.oboya.se
9
Group structure
OBOYA
Horticulture Industries AB
(Sweden)
OBOYA
Horticulture
Poland Sp.zo.o.
(Poland)
OBOYA
Africa Ltd
(Kenya)
67 %
OBOYA
Horticulture
Industries HK Ltd
(Hong Kong)
Vefi A/S
(Norway)
Vefi Europa
(Poland)
ElmerPrint A/S
(Denmark)
Figulus AB
(Sweden)
OBOYA
Africa Ltd
(Kenya)
33 %
OBOYA
Packaging
Qingdao Ltd
(China)
OBOYA
Metal
Qingdao Ltd
(China)
The Group consists of the Swedish parent company
OBOYA Horticulture Industries AB, corporate identity
number 556362-3197, which was acquired in December
2013 for the purpose of acting as group parent company.
Also included are five wholly-owned subsidiaries and
one 67-percent owned subsidiary, and five wholly-owned sub-subsidiaries in subgroup OBOYA Horticulture
Industries HK Ltd and one wholly-owned sub-subsidiary in Vefi A/S. The entire group structure was formed
in 2014 through external as well as internal acquisitions,
which means that there is no consolidated history for the
Group, except for the semi-annual report for 2014 included in this offering memorandum.
OBOYA Horticulture Poland Sp.zo.o in Poland, with
corporate identity number 243568790, is active as a manufacturer of packaging and labels for flowers, seeds
and herbs. This subsidiary was started in 2014 and has
acquired the assets of the Polish company Eurotrade.
This company is estimated to have budgeted revenue of
MSEK 50 in 2015, half of which will be internal sales.
Vefi A/S, corporate identity number 848690112, is a
Norwegian company acquired 31 January 31, 2014. Vefi
started operations in 1949. Current operations consist
of development and sales of, among other things, plas-
OBOYA
Japan Ltd
(Hong Kong)
Qingdao Oboya
Commerce and
Trade Co Ltd
(China)
tic products for growing plants and packaging for plants
and berries, as well as industrial seeders for the floral
industry. In 2013 Vefi A/S had revenue equivalent to
MSEK 54 and a profit of MSEK 4.6.
Figulus AB, corporate identity number 556976-1827, is a
Swedish subsidiary of Vefi A/S. Its assets and name were
acquired in August 2014 from a maker of clay flower pots
in Sweden. Current operations consist of selling pots to
key customers in Sweden. The production of pots has
been moved to Vefi Europe in Poland.
Vefi Europa SP.zo.o, corporate identity number
5222714228, is a Polish company acquired 31 January
2104. The company was started in 2011 when Vefi moved all of its production of plastic products and seeders
from Norway to Poland. The company had 2013 sales
equivalent to MSEK 59 and a profit of MSEK 1.6, with
approximately MSEK 35 being intra-Group sales.
ElmerPrint A/S, corporate organisation number 76674116,
is a Danish company acquired 21 March 2014. ElmerPrint
started operations in 1978 and is specialized in printing on
plastic parts and packaging for the floral trade. The Company had 2013 revenue equivalent to MSEK 35.5 and generated a loss of MSEK 3.0.
10
OBOYA Horticulture Industries HK Ltd is registered in
OBOYA Japan Ltd, corporate identity number 1556062,
Hong Kong with corporate identity number 1928644.
The company was started in December 2013 and serves
as group parent company for the Asian sub-group. As of
August 2014 the company owns the following five subsidiaries:
is a Hong Kong company, which has been a member
of the Group since 2012 and which was acquired by
OBOYA Horticulture Industries HK Ltd 1 January 2014.
The company sells parts of Oboya’s product line on the
Japanese market. The company had 2013 revenue equivalent to MSEK 3.5 and a profit f MSEK 0.7.
OBOYA Packaging Qingdao Ltd, corporate identity
number 3702794002357, is a Chinese company that has
been a member of the Group since 2006 and was acquired by OBOYA Horticulture Industries HK Ltd on 1 June
2014. The company manufactures and sells packaging
solutions and labels for flowers, seeds and herbs. The
company had 2013 revenue equivalent to MSEK 44.7.
OBOYA Metal Qingdao Ltd, corporate identity number
3702790820774, is also a Chinese company that has been
a member of the Group since 2007, and which was acquired by OBOYA Horticulture Industries HK Ltd 1 June
2014. The company manufactures and sells logistic solutions, primarily hand carts to growers and stores. The
company had 2013 revenue equivalent to MSEK 36.2.
Qingdao OBOYA Commerce and Trade Co Ltd, corporate identity number 3702098430294, is a newly established company, active in China, with sales of Oboya’s
product line on the domestic Chinese market.
OBOYA Africa Ltd, corporate identity number 115980, is
registered in Kenya and is 33-percent owned by OBOYA
Horticulture Industries HK Ltd, while the remaining 67
percent is owned by the Parent Company, Oboya Horticulture Industries AB. Oboya Kenya is managed and
controlled by Oboya Horticulture Industries in Hong
Kong. The company is newly established and operations
consist of manufacturing of plastic products, primarily
for the African floral industry.
11
Business concept
Oboya Horticulture Industries AB’s business concept is to be a total supplier of products for the plant growing
industry with its own production facilities in Asia, Europe, Africa, and North and South America.
GOAL
Oboya Horticulture has as its long-term goal to be a
world-leading manufacturing and sales company for
consumables and logistic products for the plant growing
industry.
VISION
Oboya Horticulture will improve and contribute to the
supply chains for flowers, plants and herbs with the
aim of enhancing the industry’s efficiency, quality, the
environment and development.
BUSINESS
Since the business was started by Robert Wu in 2006,
Oboya Horticulture has concentrated on production and
service to the global and plant local growing markets.
The Company’s operations include development,
production and sales of, among other things:
• Packaging solutions for the plant growing industry for
products such as spice plants, lettuces, cut flowers, potted plants, fruits and berries that we buy in the fastmoving consumer goods market.
• Labels for flowers and potted plants.
• Pots and systems solutions for efficient growing and
distribution of herbs and plants.
• Logistics solutions in the form of carts and transportation
vessels for efficient transportation of flowers and plants.
• Fertilizers and plant food, and peat products.
• Flower displays and exhibits in stores.
Oboya Horticulture Industries AB’s is to become one
of the world’s leading total suppliers in the fast-moving
consumer goods market for flower, plant, vegetable
and herb growers and logistics companies that use
our products. The Company is active in an area where
consumers will meet the Company’s products on a daily
basis.
The Company’s customers are primarily growers or
distributors. They use peat products, fertilizers, pots,
packaging, labels, transport carriages, water-based
transportation solutions, carts and displays in their dayto-day operations, all of which are products included
in Oboya Horticulture’s line of products. Thanks to
Oboya’s broad product line customers are able to reduce
the number suppliers, thereby streamlining their
purchasing activity, something that most competitors
are unable to offer.
Given the location of the Company’s production
entities, Oboya Horticulture is close to its customers
and the regions where the products are in demand.
Innovation and development of new products is an
important element of Oboya Horticulture’s business.
At the moment the Company has more than 15 patent
applications pending and several innovation projects are
under way to develop environmentally friendly products
and solutions.
12
Events in the Company’s development
2006
Oboya Holding Ltd is established in Hong Kong by Robert Wu and Eduard Salome.
2007
Oboya Metal Products Qingdao Ltd is established in China by Robert Wu. The company produces
and sells logistics solutions, especially flower carts.
2008
Oboya Packaging Qingdao Co Ltd starts purchasing and trading operations in floral and plantrelated products.
2009
Oboya Holding Ltd establishes a sales office in Holland.
2010
2011
2012
Oboya Packaging Qingdao Co Ltd is established in China by Oboya Holding Ltd. The company
produces and sells packaging solutions for the plant and flower growing industry.
Oboya Packaging Qingdao Co Ltd starts sales in China. Offices established in Shanghai, Guangzhou,
Beijing and Xichang.
Robert Wu acquires Eduard Salome’s share of Oboya Holding Ltd. The sales office in Holland is closed.
Oboya establishes Oboya Japan Ltd, Hong Kong, and begins selling on the important Japanese
market.
Oboya Packaging Qingdao Co Ltd establishes an office in Harbin, China, with four Russian-speaking
sales representatives charged with cultivating the Russian market.
Oboya Packaging Qingdao Co Ltd establishes local production in Kunming, which is China’s
production centre for flowers.
2013
Oboya Holding Ltd acquires Nu Body Scandinavia AB, name-changed to Oboya Horticulture
Industries AB, which becomes the parent company of the Oboya Horticulture Group.
Oboya Holding Ltd establishes OBOYA Horticulture Industries HK Ltd, (Hong Kong), as parent
company for the operations in China and Hong Kong.
OBOYA Holding Ltd establishes Oboya Africa Ltd in Nairobi, Kenya, together with two local partners,
thereby owning one third of the company. The company will supply growers with products on the
important African market. In the first instance for customers in Kenya and Ethiopia.
2014
Oboya Horticulture Industries AB acquires Oboya Horticulture Industries Ltd, including its
subsidiaries.
Vefi A/S, Norway, and Vefi Europa SP.zo.o., Poland are acquired.
ElmerPrint A/S, Denmark, is acquired.
Oboya Horticulture SP.zo.o., Poland, is established. At the same time a property of approximately
3,000 square metres is acquired in Rybenik, where the company operate its business.
Oboya Horticulture SP.zo.o. also acquires the assets of a smaller producer of packaging in Poland.
The production equipment of ElmerPrint A/S is moved to Oboya Horticulture SP.zo.o. in an effort
to streamline production and lower production costs.
Vefi A/S acquires the assets and the corporate name of a smaller pot manufacturer, Figulus AB,
at the same time establishing a company with the same name. Figulus AB’s production machinery
is moved to Vefi Europa SP.zo.o.
Oboya Horticulture Industries AB acquires the shares of the external co-operation partners in
Oboya Africa Ltd. This makes the company a wholly owned subsidiary.
13
OBOYA Horticulture Industries HK Ltd
OBOYA Horticulture Industries HK Ltd is registered in
Hong Kong and serves as parent company for the Asian sub-group. The company is a pure holding company
without operations other than co-ordinating the operations of the subsidiaries in China and Asia.
Products manufactured include cultivation and irrigation equipment for industrial cultivation of flowers and
vegetables, logistics products, packaging and sales support products for the floral trade. The group’s products
are sold on most important floral markets in more than
25 countries.
The parent company has its own web shop solution
where the group’s products can be purchased. There are
websites in six different languages.
OBOYA Horticulture Industries HK Ltd works close to
its customers and offers customized products and services to customers in the floral industry.
The previous group structure was not as formalized for
the Chinese companies and this meant that that the Chinese companies all worked together and invoicing was
handled by a separate entity in the Oboya group. During
2013 Oboya Metal and Oboya Packing were streamlined
and each is now active in its own operating area. The
restricting has the effect that no consolidated data are
available from prior operating years.
Starting 1 January 2014 both organization are set and
each company has its own operational orientation. Major efforts were expended during 2014 to adapt the companies’ accounting to the IFRS accounting standard. The
transition to IFRS had the effect that the Chinese company had to record extra expenses of over MSEK 1 to introduce IFRS, and due to changes in accounting policies.
14
OBOYA Metal Qingdao Ltd
Oboya Metal manufactures products adapted to flower
and vegetable growers to increase the productivity of
their cultivation, and to wholesalers and stores to facilitate transportation and to improve the exposure of the
plants and vegetables to customers. The core of the operation is metal fabrications, such as irrigation systems
and shopping carts.
In order to move one step closer to the market, Oboya
Horticulture’s goal is to seek an acquisition in Japan, or
to establish a company in Japan.
FINANCIAL INFORMATION
1,2 MSEK
Operating profit
0,1 MSEK
Number of employees
5
CEO
FINANCIAL
INFORMATION
Revenue
Operating profit
Number of employees
CEO
Revenue
Operating profit
Number of employees
CEO
Xiaoyan He
Q1-Q2 2014
24,2 MSEK
2,0 MSEK
85
Yihe Yin
OBOYA Packaging Qingdao Ltd
Oboya Packaging manufactures and sells different types
of packaging for flower shops and growers. This can be
everything from wrapping paper for flowers to more
specialized product solutions, especially in paper and
plastic materials, but also flower sticks and other accessories used in the trade.
FINANCIAL
INFORMATION
Q1-Q2 2014
Revenue
OBOYA Africa Ltd
About 34 percent of European imports of flowers comes
from growers in Kenya and Ethiopia. This is the only region where long-term exports to the EU area is expected
to grow.
Oboya Africa, which started operations recently during
2014, has good prospects of being one of the leading
producers of packaging and distribution solutions in the
region, with distribution also to other parts of Africa.
Oboya will maintain inventory of, sell and distribute all
of its other product groups through Oboya Africa.
Q1-Q2 2014
25,7 MSEK
-1,2 MSEK
105
Jack Wang
OBOYA Japan HK LTD
Oboya Japan is a pure sales company located in Hong
Kong, but with its focus on selling Oboya Horticulture’s
products on the Japanese market.
FINANCIAL
INFORMATION
Revenue
Oboya Japan was established two years ago, in 2012, to
operate in one the world’s largest consumer markets for
flowers and plants. The company continues its positive
development and Oboya Japan HK Ltd is expected to
have sales in 2015 of about MSEK 15.
Budget 2015
25 MSEK
Operating profit
Number of employees
10
CEO
Peter Kertesz
Qingdao Oboya Commerce and Trade Co. Ltd
Oboya Commerce and Trade Co is a newly started company with an import licence for sales of imported products sold outside of Oboya Metal and Oboya Packaging
on the domestic Chinese market.
The company’s product line consists of, among other
things, products for the growers on the Chinese market.
FINANCIAL
INFORMATION
Revenue
Budget 2015
25 MSEK
Operating profit
Number of employees
CEO
20
Haifeng Wu
15
Vefi A/S
Vefi A/S is a Norwegian company which was acquired
during 2014. Vefi A/S was established in 1949 with production of plastic products. In 1965 Vefi launched disposable pots made of plastic for growing plants. In 1968
Norsk Hydro became a majority owner of the company and remained as owner until 1985, when the Møller
group acquired the entire company.
Today Vefi is solely devoted to developing systems solutions for efficient growing and distribution. All products
are manufactured by the Polish sister company, Vefi Europa.
Vefi A/S develops, manufactures and sells a broad
range of thermoformed plastic products for the gardening industry. These are products used in the process
of growing, from seed or seedlings to finished product.
The company’s packaging solutions are also used for
packaging and distribution of store-ready products, for
storage of agricultural products and foods, also in connection with freezing.
Vefi has also developed and adapted technical equipment that promotes efficient handling of agricultural products, from seed to consumer. Vefi’s systems solutions
and individual products are today marketed and sold to
customers in 15 countries.
FINANCIAL
INFORMATION
Revenue
Operating profit
Number of employees
CEO 2013
51 MSEK
4,6 MSEK
6
Jan Fuglerud
16
Vefi Europa SP.zo.o.
During 2011/2012 all production in Vefi A/S was moved
from Norway to Poland, where the newly established
company Vefi Europa took over production. Vefi Europa
has its operations in Skierniewice, about 70 kilometres
from Warsaw. The facility consists of a factory and
warehouse on a 13,000 square meter property. The
factory is equipped with, among other things, a number
of thermoplastic and injection moulding machines from
Illig, Kiefel, TFT.
Vefi Europa is one of the leading suppliers of products
made of PS foil for the gardening and vegetable industries.
The company is appreciated for its product quality and for
the VEFI system.
The VEFI system is a complete system with pots, making
for a practical way of producing, moving and exposing
flowering plants in the floral trade.
The VEFI system offers highly efficient growing of
vegetables, flowers and tobacco plants in an industrial
environment, where the grower has full control of the
growth allowing uniform plants.
Aside from plastics products the company also makes
metal shelving, transport carriages and seeders for
growers.
FINANCIAL
information
2013
Total revenue
59,0 MSEK
External revenue
23,3 MSEK
Operating profit
Number of employees
CEO
0,7 MSEK
50
Jan Fuglerud
17
OBOYA Horticulture Poland
Sp.zo.o.
OBOYA Horticulture Poland Sp.zo.o. was established in
2014 through the acquisition of a property with a 3,000
square metre building and a total area of about 5,600
square meters in Rybnik in southern Poland.
OBOYA Horticulture Poland manufactures labels and
packaging for flowers, seeds and herbs. The company
has about 40 employees and is among the largest in Europe in its niche.
The company’s manufactures products for packaging, labels and plastic pots for flowers, seeds and herbs.
During the summer of 2014 the production machinery previously with ElmerPrint AS was transferred to
OBOYA Horticulture Poland.
By concentrating the production to these products to
OBOYA Horticulture Poland, more efficient and cost-effective production is created. This will strengthen the
profitability of the Oboya Horticulture Group.
FINANCIAL
information
Budget 2015
Total revenue
50,0 MSEK
External revenue
25,5 MSEK
Operating profit
Number of employees
CEO
0,7 MSEK
40
Monika Sadlon-Losza
18
Property of ElmerPrint A/S in Vejle, Denmark.
ElmerPrint A/S
ElmerPrint A/S is a Danish Oboya subsidiary acquired
during 2014. ElmerPrint is specialized in printing on
plastic and in making labels, flower bags, flat bags, pot
handles, handles for planting flats and other packaging
solutions for the floral trade.
ElmerPrint A/S is a well-established company that
started operations already in 1978. The company operates in rented premises in Vejle in Denmark and has 12
employees working with design of the products and in
marketing and sales. Products are sold mainly to wholesalers and end customers in the Nordic countries and
Holland.
ElmerPrint has a total concept for printed packaging
solutions offered to the floral trade.
ElmerPrint also offers printed packaging solutions for
other industries, such as packaging for textiles and CD
discs.
All of ElmerPrint’s machinery was moved to the
Group’s Polish company, Oboya Horticulture Poland,
during the summer of 2014. The purpose of the move
is to improve efficiency and to streamline production,
thereby achieving improved profitability. Full effect of
the move is expected for 2015.
FINANCIAL
information
2013
Revenue
35,5 MSEK
Operating result
-3,0 MSEK
Number of employees
CEO
12
Erik Jul Nielsen
19
Market prerequisites
No verifiable data currently exist regarding the total
market potential for Oboya Horticulture Industries AB’s
area of activity. According to statistics from Global Trade (Eurostat), the world production of flowers and potted plants alone exceeds SEK 245 billion, distributed as
shown in the bar charts below.
Of the world market for flowers and potted plants, the
products represented by Oboya Horticulture Industries
AB account for at least 15 percent, which would be at
least 15 percent of the world market amounting to SEK
35 billion. Additional hereto are the markets for herbs,
vegetables, berries and fruit, and logistic solutions. The
market for herbs, vegetables, berries and fruit is believed to be at least as large as that for flowers and potted
plants. This means that the total volume of Oboya’s segment could be SEK 70 billion.
SEK billion
120
100
80
60
40
20
0
Other
Kenya
Brazil
Ecuador
South Korea
Canada
Colombia
Japan
USA
China
EU
= 2012
50,0%
40,0%
30,0%
20,0%
10,0%
= Share
Other
Kenya
Brazil
Ecuador
South Korea
Canada
Colombia
Japan
USA
China
EU
0,0%
20
Trade shows
Oboya Horticulture’s strategy is to operate globally on the most important markets in the flower and plant-growing
industry. This means that the Company gives priority to participating in the large trade shows arranged around the
world. Oboya Horticulture participated in the following trade shows during 2013:
IPM GERMANY, ESSEN, GERMANY.
The most important “horticulture fair”
in Europe. 57,000 visitors from around
the world.
IPM RUSSIA, MOSCOW,
RUSSIA.
Russia’s largest and oldest
“horticulture fair”. 20,000 visitors
from 31 countries.
IPM CHINA HORTIFLOREXPO, BEIJING, CHINA.
The most important ”horticulture fair” in China. 18,000
visitors from 49 countries.
OFA SHORT COURSE, OHIO, USA
The most important “horti
culture fair” in North
America. More than 10,000
HORTI ASIA, BANGKOK, THAILAND.
The most important “horticulture fair” in South
East Asia. 5,500 visitors from Thailand and adjacent
countries.
ELMIA GARDEN, JÖNKÖPING, SWEDEN.
The most important
“horticulture fair” in
Scandinavia. About
3,100 visitors.
IFTEX, Nairobi, Kenya.
The most important
“horticulture fair” in
Africa and one of the
two-three largest in the world. About 3,500 visitors
from 54 countries.
EXPO FLORA, MOSCOW, RUSSIA.
Russia’s largest fair for
flowers. 18,600 visitors from
49 countries.
In addition to these fairs, Oboya Horticulture has participated in a large number of local fairs, regional fairs,
and seminars in China, Japan, Central and Eastern Europe.
During 2014 and beyond the strategy is that the Company will participate in all of these fairs and possibly
some others that management finds to be interesting
and valuable.
IPM, GANGZHOU, CHINA.
The most important fair for southern China and to some
extent also globally since there are many foreign visitors
and exhibitors.
PROFLORA, BOGOTA, COLOMBIA
The most important
“horticulture fair” in South
America. More than 10,000
The purpose of participating in fairs and trade shows
is to make Oboya Horticulture better known and to become one of the large players in the industry. In addition hereto, valuable contacts are made with customers,
suppliers, co-operation partners and other important
people in the industry.
21
Competitors
Oboya Horticulture Industries AB operates in a fragmented and competitive market. There is a large number of producers of various products that compete with
the Company’s product line. Competitors are often small
and medium-sized companies niched to a particular product group. The sell to wholesalers and are not in regular
direct contact with end customers.
Oboya Horticulture Industries’ strength is that the
Group is represented in different markets around the
world and has different production bases that operate
as close to the end customers as possible. Oboya Horticulture also has a well-established sales and distribution network where deliveries are often made directly to
growers and end users.
As far as the Board of Directors is aware, there are currently no competing companies with Oboya Horticulture Industries AB’s goal of becoming a producing supplier
to growers and users of the fullest possible product line.
Oboya Horticulture’s competitive advantage is that
growers can turn to a single supplier, who is also a producer, thereby achieving smoother and more efficient
purchasing.
Oboya achieves significant synergies from its relative size and geographic spread, in part due to effective
purchasing and the ability to deliver the entire product
line in most markets where the customer is located. This
competitive advantage ever more important as more
units are established and acquired.
22
Strategy and goals
VISION
Oboya Horticulture aims to improve and contribute
to flowers’, plants’ and herbs’ supply chains, i.e. the
industry’s supply chain with a view to improving
efficiency, quality, the environment and development.
STRATEGY
Oboya Horticulture intends to grow, in part in the form
of organic growth, in part by acquiring companies with
complementing product lines, but also make acquisitions
aimed at establishing a presence in new markets.
In addition to the organic growth, the Company expects
to increase growth further by at least 20 percent per year
by making strategic acquisitions.
Acquisitions will be strategically aimed at businesses
that will add new products to the Company, or will
provide additional geographic coverage.
In terms of profitability, it is the goal of the Board of
Directors to achieve a profit margin of seven percent,
which is considered to be realistic within a few years.
In China, based in Harbin, the Company sales and CSR
representatives dedicated to the Russian market. In the
long term the Board of Directors sees Russia as a very
interesting market. The Company’s planning includes
the opening of offices and a warehouse in Moscow with
local employees.
DIVIDEND POLICY
The Company does not have a history of paying dividends
to its shareholders. The dividend policy for the future
will be determined by when the Board of Directors
feels that the Company has sufficient resources to pay a
dividend to the owners.
Thanks to agreements and important alliances Oboya
Horticulture achieved strong growth during 2014 on the
North American market. With about 11 percent of the
world’s consumption of cut flowers and plants, North
America represents a major market potential for the
Company. Strong growth is expected for the next several
years and the Company is exploring opportunities for
establishing or acquiring businesses.
MARKET POTENTIAL
Oboya Horticulture has a very small market share of the
world market. The Board of Directors is of the opinion
that there are opportunities to grow significantly, with
the vision of generating revenue of SEK one billion with
good profitability within a five-year period.
FINANCIAL GOALS
Oboya Horticulture has as its goal to grow organically
by at least 20-30 percent per year in existing markets for
the next few years.
23
Board of Directors and CEO
MIKAEL PALM ANDERSSON, B. 1965. CHAIRMAN
Master of law degree from the University of Lund. Works today as Executive Chairman
of Oboya Horticulture Industries AB. Previously Managing Partner of Advokatbyrån
Wåhlin and partner of Advokatbyrån Berglund & Co. He also has a history from New
Wave Group, where he was CEO of subsidiary HEFA AB Sweden and other subsidiaries
in Europe.
Shareholding: 600,000 class B shares
STEEN BÖDTKER, B. 1957. DIRECTOR – INDEPENDENT
Master degree in Strategic Leadership from Erasmus University Rotterdam, Holland.
Steen now lives in Denmark and is employed as CEO of Expedit Gruppen, which is a
Danish listed company with revenue of more than MSEK 500. Steen was the owner
of ElmerPrint A/S until the company was acquired by Oboya Horticulture Industries
AB, where he also held a position as administrative director. Previously held different
managerial positions in Vink Gruppen.
Shareholding: 0 shares
KRISTER MAGNUSSON, B. 1966. DIRECTOR
MBA from Handelshögskolan i Göteborg. Works today as CFO of AB Traction and
its subsidiary Nilörngruppen AB. Previously CFO of other medium-sized listed and
unlisted companies.
ROBERT WU, B. 1965. DIRECTOR AND CEO
Robert Wu was born and grew up in China. Educated at a Chinese banking college,
but was also educated in Sweden in business. Now a Swedish citizen. Robert has been
employed by People’s Bank of China, later by ACG-Nyströmgruppen in Borås as sales
manager, Isaberg Rapid AB as regional manager for Asia, a managerial position with
New Wave Group AB, before he started Oboya Group in 2006, where he has been active
as CEO. Member of and one of the founders of Chinese Flower Associations.
Shareholding: 1,995,600 class A shares and 8,204,500 class B shares via closely related company.
The Board of Directors can be reached via the Company’s mail address:
Oboya Horticulture Industries AB, Snickarevägen 2, SE-443 61 Stenkullen, SWEDEN
Auditor
KPMG AB
Norra Hamngatan 22
SE-411 06 Göteborg
SWEDEN
Telephone: +4-31-61 48 00
With Chief Auditor
Johan Pauli, Authorised Public Accountant
Member of Föreningen Auktoriserade Revisorer, FAR
24
Corporate management/Management group
ROBERT WU, B. 1965. CEO.
Started Oboya in 2006.
Shareholding: 1,995,600 class A shares and 8,204,500 class B
shares via closely related company.
MIKAEL PALM ANDERSSON, B. 1965.
EXECUTIVE CHAIRMAN.
Active in the Group since 2011.
HENRIK HANG, B. 1982. FINANCIAL MANAGER.
Starts 27 October 2014
MBA from Handelshögskolan I Kalmar. Has worked as financial manager and Business
Unit Controller at Yara Helsingborg AB.
PETER KERTESZ, B. 1960. CHIEF OPERATION OFFICER.
Employed since 2014
Peter comes from Royal Flowers Inc., Miami, FL, USA, where
he worked as Global Sales & Marketing Director.
JAN FUGLERUD, B. 1954. CEO OF VEFI AS, VEFI EUROPA AND FIGULUS AB.
Active in the Vefi companies since 2007.
Active in plant growing since 1977, on his own and also in co-operation with Svegro in
Sweden and elsewhere.
Shareholding: 400,000 class B shares via closely related company.
JACK (CHANLIN) WANG, B. 1981. GENERAL
MANAGER OF OBOYA PACKAGING QINGDAO LTD.
Employed by Oboya since 2009 and worked in his
present position since 2012.
Bachelor of Economics from Shangdong Financial and
Economics University.
Corporate management can be reached via the Company’s mail address:
Oboya Horticulture Industries AB, Snickarevägen 2, SE-443 61 Stenkullen, SWEDEN
25
Organization
COST-EFFECTIVE ORGANISATION
The Group’s parent company, Oboya Horticulture
Industries AB, has four employees in managerial
functions. Production and product development take place
in subsidiaries in China, Poland and Kenya. The Group has
a total of 342 employees.
BOARD PRACTICES
The Board of Directors is elected by the regularly scheduled
annual general meeting of shareholders for one year at a
time. The current Board of Directors was elected by an
extra general meeting of shareholders held 28 May 2014.
The current Board of Directors consists of four members,
of which one director is independent. Members of the
Board Directors are Mikael Palm Andersson, Chairman,
Robert Wu and Krister Magnusson, and the independent
director Steen Bödtker.
The Board of Directors plans to hold four meetings where
minutes are taken during the coming year. Agenda during
the meetings include topics such as budget, business plans,
financial statements, capital expenditures, financing,
personnel and matters concerning contracts.
The Company does not apply The Swedish Code for
Corporate Governance since the Company’s shares are not
traded on a regulated marketplace. From this follows that
the Company has no election committee, nor a committee
to deal with auditing and compensation issues. These
matters are dealt with by the Board of Directors.
SALARIES AND COMPENSATION
No directors’ fees have been paid in prior years. Again at
the most recent general meeting of shareholders, it was
decided that no directors’ fees shall be paid. Future fees will
be determined annually by the Annual General Meeting.
CEO Robert Wu has an employment agreement that runs
with six months’ mutual notice of termination. Robert has
a salary of SEK 100,000 per month, plus social benefits. In
addition, he has a company car, a Volvo V60. The salary
will be paid starting 1 December 2014.
After termination of assignment no salary will be paid to
either directors or the CEO.
Audit fee will be paid in accordance with invoice approved
by the Board of Directors.
TRANSACTION WILL CLOSELY RELATED PARTIES
Oboya Horticulture Industries AB has a liability to the
Company’s principal owner, Oboya Holding HK Ltd, in the
amount of MSEK 4.5 originating from the acquisition of
the Chinese businesses. The liability will be repaid during
the second half of 2015 at the earliest, provided that the
Company’s financial position allows it.
Oboya Packaging Qingdao Ltd and Oboya Metal Qingdao
Ltd in China has guaranteed loans totalling MCNY 24 to
the owners of a closely related company. The guarantees
are attributable to the crosswise guarantee commitment
in the former Oboya group. The guarantees will expire
during next six months.
There are no other transactions with closely related parties
except those reported here, and the offset issue reported
below.
OFFSET ISSUES
Oboya Horticulture has floated three issues during 2014,
two of which were offset issues, where liabilities in the
Company were offset against shares. In total, the share
capital has increased by SEK 34,578,322.
Chairman Mikael Palm Andersson receives a fee of SEK
150,000 per month, which is invoiced via his company, for
the work he performs in the Group.
26
Patents
Oboya Horticulture Industries AB holds 15 patents and
patents pending in the Chinese sub-subsidiaries. These
patents and patents pending are:
ZL 2010 2 00029384 applicable to cut-bag equipment.
Patent granted 2010.
ZL 2010 2 00029399 applicable to transportation carriages
for flowers. Patent granted 2010.
ZL 2010 2 00029365 applicable to packaging bag for
cultivated flowers. Patent granted 2010.
ZL 2010 2 02227411 applicable to packaging for flowers.
ZL 2010 2 02227430 applicable to packaging bag for fresh
flowers. Patent granted 2010.
ZL 2010 2 0002937X applicable to packaging bag for
flowers. Patent granted 2010.
ZL 2011 2 05663582 applicable to transportation carriages
for flowers. Patent granted 2011.
ZL 2011 2 05663031 applicable to electrical machine for
removal of thorns on flowers. Patent granted 2012.
ZL 2011 2 03245036 applicable to binding fresh flowers.
ZL 2013 2 02334173 applicable to information displays.
ZL 2013 2 04064380 applicable to moving, displaying and
planting flowers in trays. Patent granted 2013.
ZL 2011 1 02549819 applicable to binding flowers.
Patent pending 2011.
ZL 2014 2 02703115 applicable to packing tables for fresh
flowers. Application submitted 2014.
ZL 2014 2 03061375 applicable to flower pot trays.
Application submitted 2014.
ZL 2014 2 03563418 applicable to packaging holder for
flower nutrients. Application submitted 2014.
POTENTIAL CONFICTS OF INETEREST
None of the directors or members of senior management
have any potential conflicts of interest with Oboya Horticulture Industries AB where private interests conflict
with the Company’s interests.
None of the directors or members of senior management
of Oboya Horticulture Industries AB have, or have had,
direct or indirect involvement in any business transactions that are unusual in nature, or in their contractual
agreements with the Company.
27
Selected financial information
The financial information provided below is derived
from consolidated financial statements as of 20 June
2014. The consolidated financial statements have been
prepared in accordance with International Financial
Reporting Standards, IFRS, and interpretation statements from the International Reporting Interpretations Committee, IFRIC, as adopted by EU, with the
exception that notes to the financial statements have
been omitted. The Parent Company is reported in accordance with the Swedish Annual Accounts Act.
As of 1 January 2014, both organizations have their
own operational structure. Major efforts were expended during 2014 to adapt the companies’ accounting to
the IFRS accounting standard. The transition to IFRS
had the effect that the Chinese company had to record
extra expenses of over MSEK 1 to introduce IFRS, and
due to changes in accounting policies.
Oboya Horticulture Industries AB was acquired in December 2013 to serve as parent company of the Oboya
Horticulture Industries Group. All subsidiaries have
been acquired subsequently, both by way of internal
transfers from the other Oboya Group and by way of
external acquisitions. By the other Oboya Group is
meant the previous group, of which the now acquired
companies were a part (and which now are outside
the Oboya Horticulture Industries AB). The previous
group structure was not as formalized for the Chinese
companies, which all worked together, which meant
that invoicing was handled by a separate entity in the
Oboya Group. During 2013 Oboya Metal and Oboya
Packing were streamlined and now have their own
operating areas. The restructuring has the effect that
there is no consolidated comparative data from prior
operating years.
• The Vefi companies from 1 February.
• ElmerPrint from 21 March.
• Oboya Horticulture Industries HK Ltd from 1 January,
and its subsidiaries:
• Oboya Japan Ltd from 1 January
• Oboya Metal and Oboya Packaging in China from
1 June. Until 31 May, these companies had been audited
by the companies’ auditors, RSM China.
The consolidated data below include the following companies:
The following companies are not included since they
were acquired or established after 30 June 2014:
• Oboya Horticulture Poland Sp.zo.o.
• Oboya Africa Ltd
• Figulus AB
• Qingdao Oboya Commerce and Trade Co Ltd
28
Consolidated
Income Statement
The income statement below applies to the Oboya Horticulture Group for the first six months of 2014. Here, the
acquired companies have been consolidated in accordance with the purchase method of accounting from the day
of taking possession. In addition hereto, a pro forma statement has been prepared for the same period, where all
units that were part of the Group as of 30 June 2014 are included as if they had been a part of the Group during
the entire period.
Pro forma
SEK thousand
Jan-jun 2014
Jan-jun 2014
53 547
112 505
127
137
53 674
112 642
OPERATING REVENUE
Net revenue Other operating income
Total operating revenue
OPERATING EXPENSES
-38 250
-82 460
Personnel expenses
Raw materials and supplies
-6 571
-11 808
Depreciation, amortization and impairment
-1 658
-3 061
-6 458
-10 789
-52 937
-108 118
Other external expenses
Total operating expenses
Operating profit
737
4 524
RESULT FROM FINANCIAL ITEMS
Financial income
541
542
Financial expense
-2 556
-4043
Total financial items
-2 015
-3 501
Result after financial items
-1 278
1 023
Taxes
Result for the period
880
938
-398
1 961
Whereof attributable to:
The Parent Company’s equity holders
-398
1 961
29
SEK thousand
CONSOLIDATED STATEMENT OF COMPREHENSIVE RESULT
Result for the period
Jan-jun 2014
Pro forma
Jan-jun 2014
-398
1 961
Loss on hedging of currency risk in foreign operations
-1 387
-1 387
Translation differences for the period when translating
foreign operations
3 467
3 467
21 123
21 123
22 805
25 164
22 805
25 164
Items that have been or may be converted into profit for the period
Items that cannot be converted to profit for the period
Period’s revaluation of tangible non-current assets
Comprehensive profit for the period
Comprehensive profit for the period attributable to:
The Parent Company’s equity holders
30
Consolidated
Balance Sheet
SEK thousand
6/30/2014
ASSETS
Intangible non-current assets
60 529
Tangible non-current assets
75 690
Financial non-current assets
2 826
Total non-current assets
139 045
Inventories
23 133
Receivables
49 377
Cash and cash equivalents
Total current assets
9 148
81 658
TOTAL ASSETS220 703
EQUITY ANDLIABILITIES
Equity attributable to the Parent Company’s
equity holders
38 563
Total equity
38 563
Long-term liabilities 77 189
Current liabilities 104 951
Total liabilities
182 140
TOTAL LIABILITIES AND EQUITY
220 703
For other financial instruments, such as trade receivables, loans receivable
and long- and short-term liabilities, the carrying value is a reasonable
approximation of fair value.
PLEDGED ASSETS
Pledged assets and collateral for own liabilities
Corporate mortgages
28 686
0
Real estate mortgages
20 414
Contingent liabilities
26 900
SUMMARY STATEMENT OF CHANGES IN
CONSOLIDATED EQUITY
SEK million
Opening balance
6/30/14
0,1
New issue
29,5
Change in composition of the Group
-13,8
Comprehensive profit for the period
22,8
Closing balance
38,6
31
Consolidated Statement of Cash Flow
SEK thousand
Jan-jun 2014
OPERATING ACTIVITIES
-1 278
Adjustment for items not included in cash flow, etc.
4 269
CASH FLOW FROM OPERATING ACTIVITIES
BEFORE CHANGES IN WORKING CAPITAL
2 991
Cash flow from changes in working capital
Increase (–) Decrease (+) in inventories
Increase (–) Decrease (+) in operating receivables
–2 403
–18 670
Increase (+) Decrease (–) in operating liabilities
14 507
Cash flow from operating activities
-3 575
INVESTMENT ACTIVITIES
Acquisition of financial non-current assets
Acquisition of intangible non-current assets
Acquisition of tangible non-current assets
–15 657
–63
–3 467
Cash flow from investment activities
–19 187
FINANCING ACTIVITIES
Loans raised/repaid
New issue
2 649
29 108
Cash flow from financing activities
31 757
Cash flow for the year
8 995
Cash and cash equivalents at beginning of year
153
Cash and cash equivalents at end of year
9 148
Key Financial Indicators
SEK thousand UNLESS OTHERVISE STATED
2014
Net revenue
56 547
Operating expenses
–52 937
Operating profit
737
Result before taxes
–1 248
Operating margin (%)
1%
Intangible assets
60 529
9 148
Current liabilities
104 951
Equity ratio (%)
17%
Balance sheet total
220 703
Current ratio (%)
56%
Number of employees
342
Definitions of key financial indicators
Operating margin
Operating result/Net revenue
Current ratio
Current assets, not including inventories/current liabilities
Equity ratio
Equity/Balance sheet total
32
Parent Company
Income Statement
SEK thousand
Jan-jun 2014
OPERATING REVENUE
Other operating revenue
281
Total operating revenue
281
OPERATING EXPENSES
Other external expenses
-714
Total operating expenses
-714
Operating result -433
RESULT FROM FIANCIAL ITEMS
Financial income
Financial expense
Total financial items
323
-1 020
-697
-1 130
Taxes
Result for the period and also comprehensive result
-1 130
33
Parent Company
Balance Sheet
SEK thousand
6/30/2014
ASSETS
Shares in Group companies 36 782
Total non-current assets
36 782
Due from Group companies
13 556
Other external receivables
916
2 977
Total current assets
17 449
TOTAL ASSETS
54 231
EQUITY AND LIABILITIES
Equity
Total equity
28 462
28 462
Long-term liabilities
22 826
Current liabilities
2 943
Total liabilities
25 769
TOTAL LIABILITIES AND EQUITY
54 231
34
Comments to the financial information
REVENUE
The Group was formed during the year so the consolidated data include only a part of the companies’ revenue.
The table below shows the acquisition dates and each
company’s contribution to net revenue.
NET
REVENUE
CONSOLIDATED
FROM
Oboya Packaging Qingdao Ltd
3 381
2014-06-01
Oboya Metal Qingdao Ltd
2 671
2014-06-01
Oboya Japan Ltd
1 196
2014-06-01
COMPANY
Vefi AS
27 842
2014-02-01
Vefi Europa
26 006
2014-02-01
9 534
2014-03-21
ElmerPrint
Consolidation elimination
-17 083
Total net revenue
53 547
In a pro forma summation from 1 January of the above
companies, net revenue would have been MSEK 112.5
distributed as follows:
NET
REVENUE
COMPANY
25 349
23 885
Oboya Japan Ltd
1 196
Vefi AS
33 380
Vefi Europa
31 904
Elmerprint
18 416
-21 625
Total net revenue
112 505
EXPENSES
Extra expenses were incurred during the year for the introduction of IFRS, recruitment costs and valuation of
assets in a total estimated amount of MSEK 1.
OPERATING PROFIT
Operating profit for the period amounted to TSEK 737
allocated as follows:
COMPANY
Oboya Japan Ltd
OPERATIVE
PROFIT
CONSOLIDATED
FROM
-75
2014-06-01
-122
2014-06-01
72
2014-06-01
2 488
2014-02-01
Vefi Europa
2 204
2014-02-01
Elmerprint
-2 393
2014-03-21
Vefi AS
OHIAB
-633
-804
Total operative profit
737
In a pro forma summation from 1 January of the above companies, operative profit would have been TSEK
4,524 distributed as follows:
OPERATIVE
PROFIT
COMPANY
-421
2 031
Oboya Japan Ltd
72
Vefi AS
3 453
Vefi Europa
3 132
Elmerprint
-2 031
OHIAB
-633
-1 079
Total operative profit
4 524
FINANCIAL INCOME AND EXPENSE
Financial income is mainly attributable to FX gains.
MSEK 1.7 of the financial expenses totalling MSEK 2.6
is attributable to FX losses. The foreign exchange losses
are mainly attributable to the acquisition of Vefi Europa
in Poland, where additional consideration is booked in
NOK, whereas the asset is booked in PLN. This means
that the FX loss in NOK is added to the financial expense
and the FX gain in PLN is charged to equity, i.e. reported
on a net basis. This liability was not hedged since it is
only an estimate that most likely will be different when
realized in 2017.
TAXES
The positive tax is attributable to deferred tax and a
change in untaxed reserves.
RETURN ON EQUITY AND TOTAL CAPITAL
The return on total capital amounted to 3.6 percent and
the return on equity was negative.
CAPITAL EXPENDITURES
Capital expenditures were mostly in the form of acquisitions during the year. The internally acquired companies (acquired from other parts of the Oboya Group) are
reported at a value equivalent to book value of equity in
the acquired companies.
The externally acquired companies recorded before 30
June refer to ElmerPrint A/S (Denmark) and Vefi Europa (Poland) with a total estimated purchase price of
MSEK 62.5. MSEK 14.6 of the total estimated purchase
money have been disbursed and MSEK 47.9 is carried as
a liability; MSEK 20.6 is attributable to fixed purchase
money and the remaining amount depends on the pro-
35
fitability of each acquired company. Additional consideration depends on profitability during the period 20142016 for each company and will be disbursed in 2017.
This means that the total purchase money may differ,
both positively and negatively, relative to the estimate.
However, in accordance with IFRS 3 Business Combinations - Anticipated Acquisition Method, 100 percent of
the total estimated purchase money has been recorded
already now, and future purchase money is carried as a
liability.
The acquisition of Vefi A/S and Vefi Europa takes place
in two steps, where 50.1 percent of the shares were acquired as of 31 January 2014 and the remaining 49.9 percent will be acquired in 2017, with the price depending
profitability. Since both the Company and the seller are
bound to the acquisition in 2017, the estimated purchase
money is carried as a liability in its entirety. The liability
relating to the minority item has reduced the minority’s share of equity. The seller also has the right to its
share of dividends for the years 2014-2017, however in a
maximum amount of MNOK 10.5, which is carried as a
liability in the Group.
Any deviations from the estimates of future purchase
money will be booked in the income statement.
NON-CURRENT ASSETS
Total non-current assets amount to MSEK 139, MSEK
60 of which was intangible non-current assets, MSEK
76 was tangible non-current assets and MSEK 3 was financial non-current assets. All non-current assets were
acquired during 2014, either in the form of capital expenditures or as acquisition of subsidiaries.
The Group’s intangible assets amounted to MSEK 60.5.
In the acquisition analyses for the externally acquired
companies intangible assets in the amount of MSEK 57.3
are carried, MSEK 18.0 of which is attributable to Market investments, MSEK 11.9 to Trademarks and MSEK
27.4 to Goodwill. The remaining MSEK 3.2 is intangible
assets.
Market investments are amortized over ten years on a
straight-line basis. Trade Marks and Goodwill are not
amortized, but instead tested on an ongoing basis using
a so-called Impairment test.
The Company applies IFRS for the Group’s business properties, which had a positive effect on other comprehensive profit equivalent to MSEK 28.2, which, in turn, had
a positive effect on consolidated equity in the amount
of MSEK 21.2 and a deferred tax liability of MSEK 7.0.
The increase in value is in its entirety attributable to two
business properties in China, the appraisal of which was
performed by an outside, the appraisal method of which
has been verified by the Chinese companies’ auditors.
MSEK
CARRYING VALUE
SQUARE METRE
AREA, BUILDING
13,2
8 000
6,2
3 000
12,6
4 300
Oboya Packing Qingdao Ltd
23,3
7 300
COMPANY
Vefi Europa Sp.zo.o.
Oboya Hoticulture Poland Sp.zo.o. 1)
ElmerPrint A/S 2)
1)
0,3
Acquired after 6/30.
2)
Refers to leasehold improvements.
Non-current assets are depreciated on a straight-line
basis over the expected period of useful life, which for
equipment, tools and installations is estimated to be
5 – 10 years.
CURRENT ASSETS
Current assets amount to a total of MSEK 81.7, of which
inventories are MSEK 23.1, receivables MSEK 49.5, and
cash and cash equivalents MSEK 9.1.
Receivables include trade receivables, tax assets, prepaid
expenses and accrued income and other receivables. A
major portion of the receivables are trade receivables.
EQUITY
At the end of the period equity amounted to MSEK 38.8,
an increase by MSEK 38.7 for the period. Refer to the
specification below the consolidated balance sheet on
page 30.
LIABILITIES
The Company’s liabilities amounted to MSEK 181.3 at
the end of the period, MSEK 77.2 of which was longterm liabilities and MSEK 104.7 current liabilities.
MSEK 47.9 of the long-term liabilities refer to estimated
future consideration for acquisitions.
The Company’s long-term liabilities at the end of the period have a tenor of less than five years.
CASH FLOW
Cash flow from operating activities, after changes in
working capital, amounted to MSEK –3.6.
Acquisition of intangible and tangible non-current assets, both in the form of capital expenditures and acqui-
36
sition of subsidiaries, entailed a negative cash flow of
MSEK 19.2.
Financing activities added a total of MSEK 31.8.
Cash flow during the period amounted to MSEK 9.0, resulting in cash and cash equivalents of MSEK 9.1 on the
balance sheet date.
KEY FINANCIAL INDICATORS
The Group’s equity ratio was 17 percent. The equity ratio after the proposed new issue is estimated to be 29
percent.
AVERAGE NUMBER OF EMPLOYEES
At the end of the period the number of employees in the
Group was 342.
PARENT COMPANY
Oboya Horticulture Industries AB’s result amounted to MSEK –1.1. Cash and
cash equivalents amounted to MSEK
3.0 as of 30 June. The parent Company’s equity ratio was 53 percent as of 30
June. The Parent Company has no external bank loans. The external loans
are attributable to future additional
consideration in connection with the
acquisition of subsidiaries. Additional consideration has not been hedged in the Parent Company.
CHANGE OF THE COMPANY’S FINANCIAL
POSITION AFTER SUMITTING THE MOST
RECENT FINANCIAL STATEMENTS
Aside from the most recent setoff issue, which added
TSEK 6,023 during August 2014, there have been no
major changes after the 30 June 2014 balance sheet date.
On 25 November Oboya Horticulture will present its
quarterly report for the third quarter of 2014. The report will be published on the Company’s and AktieTorget’s website.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents are incorporated in this memorandum by reference: The most recent Annual Report and audit report and the Company’s auditor’s review of the Parent Company’s income statement and
balance sheet as of 30 June 2014. These documents can
be downloaded from www.oboya.se
37
Shareholders
NUMBER OF
NUMBER OF
PROPORTION
PROPORTION
CLASS A SHARES
CLASS B SHARES
OF VOTES
OF CAPITAL
1 995 600
8 204 500
88,9 %
74,3 %
Luco AB
600 000
1,9 %
4,4 %
Mikael Palm Andersson
600 000
1,9 %
4,4 %
Regal Prospect Investment Ltd
482 880
1,5 %
3,5 %
Oboya Investment HK Ltd
427 459
1,3 %
3,1 %
JAFU Holding A/S
400 000
1,3 %
2,9 %
19-08-2014
Oboya Holding HK Ltd
Rapid Invest A/S
300 000
0,9 %
2,2 %
Krister Magnusson
282 000
0,9 %
2,1 %
Other shareholders 434 959
1,4 %
3,1 %
11 731 798
100,0 %
100,0 %
1
Total
1
1 995 600 The Company has a total of 11 shareholders.
AFTER NEW ISSUE
ASSUMING FULL SUBSCRIPTION
NUMBER OF
NUMBER OF
PROPORTION
PROPORTION
CLASS A SHARES
CLASS B SHARES
OF VOTES
OF CAPITAL
1 995 600
8 204 500
85,1 %
67,4 %
Luco AB
600 000
1,8 %
4,0 %
600 000
1,8 %
4,0 %
Regal Prospect Investment Ltd
482 880
1,5 %
3,2 %
Oboya Investment HK Ltd
427 459
1,3 %
2,8 %
JAFU Holding A/S
400 000
1,2 %
2,6 %
Rapid Invest A/S
300 000
0,9%
2,0%
Krister Magnusson
282 000
0,9 %
1,9 %
Other shareholders
434 959
1,3 %
2,8 %
Proposed new issue
1 400 000
4,2 %
9,3 %
Total
13 131 798 100,0 %
100,0 %
Oboya Holding HK Ltd
1 995 600
On May 28, 2014 the Annual General Meeting of Oboya Horticulture Industries AB resolved to issue up to 500,000 warrants to personnel and
key individuals in Oboya Horticulture Industries AB. Refer to page 39.
Evolution of share capital
EVENT
INCREASE IN
TOTAL NUMBER
INCREASE OF
TOTAL SHARE
QUOTIENT
NUMBER OF SHARES
OF SHARES
SHARE CAPITAL
CAPITAL
VALUE
1989 Formation of the company
500
500
50 000
50 000
100
1999 New issue
500
1 000
100 000
100 000
100
2014 New issue 3 000
4 000
300 000
400 000
100
11 996 000
12 000 000
-
400 000
0,033
-
12 000 000
37 142
437 142
0,036
2014 New issue2
1 282 880
13 282 880
46 733
483 875
0,036
2014 New issue 444 518
13 727 398
16 193
500 068
0,036
1 400 000
15 127 398
51 000
551 068
0,036
1
2014 Split 3 000:1
2014 Increase of share capital
3
2014 Proposed new issue
Upon formation of the Company and in connection with the new issues in 2014, shares issued were paid for in full by cash or in the form of
setoff issues.
Resolved by the Annual General Meeting held 15 April 2014.
Resolved by an extra general meeting held 28 May 2014. Issue price SEK 10.80.
3
Resolved by an extra general meeting held 15 August 2014. Issue price SEK 13.55.
1
2
38
Information about the shares being offered
The share capital in Oboya Horticulture Industries AB
amounts to SEK 500,068, divided into 1,995,600 class A
shares and 11,731,798 class B shares. Upon completion
the proposed new issue of 1,400,000 class B shares, the
share capital will amount to SEK 551,068. The Company will then have 15,127,398 shares outstanding, divided
into 1,995,600 class A shares and 13,131,798 class B shares. According to applicable articles of incorporation, the
Company’s share capital may consist of up to 40,000,000
shares, of which 4,000,000 may be class A shares and
36,000,000 may be class B shares.
The class A shares entitle its holders to ten votes each
and the class B shares entitle its holders to 1 vote. All
shares have the same right to receive dividends and a
portion of the Company’s retained earnings as well as
assets in a liquidation. The Company’s shareholders have
pre-emptive rights in new issues, in proportion to the
number of shares and class of shares held. The shares are
issued in accordance with Swedish law and denominated
in Swedish kronor (SEK).
SHARE REGISTER
The Company’s share register is maintained by Euroclear
Sweden AB, Box 7822, SE-103 97 Stockholm, Sweden,
who registers the shares to the person holding them.
TRADING SYMBOL
The trading symbol for the Company’s share is OBOYA
B. The ISIN code for the share is SE0006258340.
DIVIDEND
All shares carry the same right to receive dividends.
The new shares entitle their holder to receive dividends
starting for the 2014 financial year. Any dividend will
be resolved and paid following the regularly scheduled
Annual General Meeting. Disbursement is handled by
Euroclear Sweden AB. Withholding of tax is normally
handled by Euroclear, or in the case of shares held in the
name of a nominee, by the custodian. The right to receive dividends accrues to the party who on the record day
is registered as owner in the share register maintained
by Euroclear. Shareholders have the right to a share of
the Company’s surplus in a liquidation commensurate to
the number of shares held.
In the event that a shareholder cannot be reached by
Euro
clear, the shareholder’s claim to the dividend
amount remains and is only limited by the statute of limitations rules. If statutes of limitation are invoked, the
dividend amount accrues to the benefit of the Company.
There are no restrictions for payment of dividends on
the shares, nor any special circumstances for shareholders resident outside Sweden to take into account and
payment is made via Euroclear in the same manner as
to shareholders who are Swedish residents. However, for
shareholders who are not tax residents in Sweden, normal Swedish withholdings tax is deducted (refer to page
43, Tax issues in Sweden).
DILUTIVE EFFECTS
All shares being offered are part of the new issue floated
by the Company. There will thus be no sale of existing
shares. For existing shareholders who do not subscribe
for the full number of shares held, there will be a dilutive
effect of a total of 1,400,000 newly issued class B shares, which is equivalent to approximately 10.2 percent
of the shares in Oboya Horticulture if the issue is fully
subscribed.
There are no additional authorizations or commitments
by any general meeting of shareholders beyond the proposed new issue that affect the number of shares outstanding in the Company.
OTHER INFORMATION ABOUT THE SHARES
The Company’s share may be freely transferred to other
parties. The shares are not subject to offers made in conjunction with mandatory offers, right of redemption or
redemption obligation. Nor has the Company’s shares
been subject to public offer during the current or prior
financial year. Amendment of the rights of shareholders
require a general meeting of shareholders qualified majority resolution.
VALUATION OF THE SHARES
The valuation on which the issue price for the offering
is based on the assessment of the Board of Directors of
market potential and the expected return. This assessment is based on the expected future level of sales and
the planned expansion of operations. The Board of Directors makes the overall assessment that the issue price
of SEK 14 constitutes a reasonable valuation of the Company in today’s market situation. The valuation of the
Company, pre-money, is MSEK 192.2.
LOCK-UP AGREEMENT
In consultation with AktieTorget an agreement has been
concluded between Oboya Horticulture and the Company’s largest shareholder, Oboya Holding HK Ltd, according to which the principal owner undertakes not to sell
39
more than 10 percent per year of its holding of shares in
the Company for the next three years after the listing of
the shares on AktieTorget. Depending on circumstances,
AktieTorget may grant exemptions from the agreement.
OPTIONS
The Annual General Meeting of Oboya Horticulture
Industries AB held 28 May 2014 resolved to issue up to
500,000 warrants to personnel and key individuals in
Oboya Horticulture Industries AB. No warrants have
been issued as of 30 June 2014, however.
One (1) warrant entitles the holder the right to subscribe
for one (1) class B share at the redemption price of SEK
20 during the period 15 October 2017 until 15 November
2017. The cost of exercising the warrant and acquiring
one class B share during the above mentioned subscription period is SEK 20.
The cost of each warrant is SEK 1.40 and the subscription period for the warrant is 15 August 2014 until 15
September 2014.
With deviation for the preferential rights of shareholders, the warrants may be subscribed for by employees
of the Company and other key individuals as decided
by the Board of Directors. The reason for the deviation
is to create an incentive programme for employees and
consultants deemed to be important for the Company.
MARKET MAKER
Oboya Horticulture currently has no agreement with
ant party to guarantee liquidity in trading of the share.
40
Risk factors
An investment in Oboya Horticulture is a business
opportunity, but also involves risk. These risks can be
difficult to quantify because of external factors and the
Company’s business orientation. The entire invested
capital may be lost. In companies with little or no
history the risk can be regarded as particularly high. In
order to evaluate the Company it is important to take
into account the persons who will run the business,
their background, and the risk profile of the activities
to be undertaken. Those who are complementing a
purchase of shares in Oboya should seek the advice of
qualified advisors. Below is an account of a number of
risk factors important in the evaluation of the Company
and its share. These risk factors are not listed in order of
priority and do not purport to be complete.
CORPRATE RISKS
Limited resources
Oboya Horticulture is a relatively small company on
the world market with limited resources in terms
of management, administration and capital. For
implementation of the strategy it is important that
resources are utilized in a for the Company optimal
manner. There is a risk that the Company’s resources
are not sufficient and that it will therefore be affected by
financially and operatively related problems.
Valuation risks
The Company’s future earnings depend on the valuation
of the intangible and the tangible assets. Any impairment
thereof may have consequences for the Company’s
financial position. Guarantees issued may also have to
be fulfilled may also have a detrimental effect on the
Company’s financial position.
Dependency on key individuals and personnel
Oboya Horticulture bases its success on a small
number of persons in leading positions with respect to
knowledge, experience and creativity. The Company
is working hard on reducing its dependency by having
good documentation of routines and procedures.
Earnings capacity and capital requirement
It is conceivable that it will take longer than expected
for the Company to achieve positive cash flow. Nor can
it be excluded that Oboya Horticulture will be calling for
new external capital in the future. In such a case there
are no guarantees that capital can be obtained on terms
advantageous for the shareholders. Inability to generate
sufficient earnings may affect the market value of the
Company.
Acquisitions
Oboya Horticulture has as its strategy to acquire other
companies in the industry in order to grow more quickly.
Acquisitions are often a risky proposition since the seller
has better insight into what is being sold and the buyer
must achieve synergy effects with the existing business.
There is a risk that the acquired companies are not of the
quality promised, which may entail significant costs for
the buying company and its shareholders.
Selling risk
It is not possible to state with certainty that the sales
numbers held in prospect by Oboya’s management
and Board of Directors can be achieved. The quantity
of products sold may be lower, and the time it takes to
get established in the market may be longer than the
Company in today’s situation may believe.
Exchange rate fluctuations
Most of the Company’s products are manufactured in
China and Poland. They are then sold in large parts
of the world. The Company’s profitability measured
in Swedish kronor may change due to exchange rate
fluctuations, without underlying changes in earnings in
the local currency where the companies are active.
MARKET RISKS
Liquidity of the share
Oboya Horticulture’s share is today not trade in any
marketplace. However, the share will be introduced
for trading on AktieTorget provided the distribution
requirement for the share can be met and the now
proposed new issue is in fact floated. There are no
guarantees that newly issued shares can be sold at levels
satisfactory to the holder at any given point in time.
Fall in share prices
The stock market may decline overall for different
reasons such as higher interest rates, political moves,
exchange rate fluctuations and weaker cyclical
circumstances.
The stock market is also to a great extent affected by
psychological factors. A share such as Oboya’s is affected
in the same way as all other shares by these factors,
which by their very nature often are difficult to predict
and difficult to protect yourself against.
41
Articles of Incorporation
§ 1 The Company’s name is Oboya Horticulture Indu-
stries AB. The Company is public.
§ 2 The Board of Directors has its registered office in
Lerums Kommun, Västra Götalands län.
§ 3 The Company shall engage in manufacturing, sales
and rental of flower, growing and store equipment, and
trading in securities, own real estate and related business.
§ 4 The Company share capital shall not be less than
SEK 500,000 and not more than SEK 2,000,000.
The above provisions shall not constitute any restriction in the capacity to make decisions about issuance of
shares in the form of a cash issue or in the form of an
offset issue with deviation from the pre-emptive rights
of shareholders.
In the case of an increase of the share capital in the form
of a bonus issue, new shares shall be issued of each class
relative to the number of shares of the same class previously outstanding. Old shares of a certain class shall
than entitle the holder to new shares of the same class.
The aforementioned shall not entail any limitation as to
the possibility of issuing shares of a new class, after due
amendment of the Articles of Incorporation.
§ 5 The Company may issue two classes of shares, desig-
nated class A and class B.
§ 6 The number of shares outstanding shall not be less
than 10,000,000 and not be more than 40,000,000.
Class B shares shall entitle their holder to ten votes and
class B shares shall entitle their holder to one vote.
A total of 4,000,000 class A shares may be issued and a
total of 36,000,000 class B shares may be issued.
If the Company decides to issue new class A shares and
class B shares in the form of a cash issue or in the form of
an offset issue, owners of class A and class B shares shall
have pre-emptive right to subscribe for new share of the
same class relative to the number of shares previously
owned by the holder (primary pre-emptive right). Shares not subscribed for using primary pre-emptive right
shall be offered to all shareholders for subscription (subsidiary pre-emptive right). If the thus offered shares are
not sufficient for subscription with subsidiary pre-emptive right, the shares shall be distributed relative to the
number of shares previously owned and, to the extent
that is not possible, by drawing lots.
If the Company decides to issue only new class A shares
or class B shares in the form of a cash issue or in the form
of an offset issue, all shareholders, regardless of whether
they own class A or class B shares, shall have pre-emptive right to subscribe for new shares relative to the number of shares previously owned.
If the Company decides to issue warrants or convertibles
in the form of a cash issue or in the form of a offset issue,
shareholders have the right to subscribe for warrants as
if the issue were for new shares that may be subscribed
for due to an option or pre-emptive right to subscribe for
convertibles as if the issue was for the shares the convertibles may be exchanged for.
§ 7 The Board of Directors shall consist of not less than
3 and not more than 6 members, with not more than
three deputies. The Chairman of the Board of Directors
shall be elected by the general meeting of shareholders.
If the Chairman leaves his or her assignment during his
or her term of office, the Board of Directors shall elect
a Chairman for the period until the adjournment of the
next following general meeting of shareholders.
One or two auditors, with one or two deputies, or a registered auditing firm shall be appointed by the annual
general meeting of shareholders.
§ 8 Notice for general meeting of shareholders shall be
given in the form of advertisement in Post- och Inrikes
Tidningar and on the Company’s website. That notice
has been given shall be advertised in Dagens Industri.
Shareholders who wish to participate in the proceedings
of general shareholder meetings must have their names
entered in a transcript of or other representation of the
shareholder register reflecting the status five days before the shareholder meeting, and also notify the company not later than 12:00 noon on the day stated in the
notice for the meeting. This day must not be a Sunday,
other public holiday, Saturday, Midsummer Night’s Eve,
Christmas Eve or New Year’s Eve and must not fall later
than on the fifth day before the shareholder meeting.
At shareholder meetings shareholders may be accompanied by one or two assistants, but only if the shareholder has notified the company accordingly in accordance
with the previous paragraph.
42
§ 9 In addition to the location where the Board of Di-
rectors has its registered office, general meetings of shareholders may be held in Göteborg.
§ 10 The following matters may be brought before the
Annual General Meeting:
1) Election of Chairman to lead the proceedings of the
meeting.
2) Preparation and approval of electoral register.
3) Approval of the agenda.
4) Election of one or two persons to approve the minutes
taken at the meeting.
5) Determination of whether the meeting has been duly
convened.
6) Presentation of the annual accounts and audit report,
and as the case may be consolidated financial statements
and audit report for the group.
7) Resolutions regarding:
a. adoption of the income statement and balance sheet,
and as the case may be, consolidated income statement
and consolidated balance sheet.
b. dispositions of the company’s profit or loss in accordance with the adopted balance sheet.
c. discharge from liability for the members of the board
of directors and the CEO.
8) Determination of the number of directors and deputies, and as the case may be, auditors and deputy auditors
or registered auditing firm to be elected by the general
meeting of shareholders.
9) Determination of fees to the Board of Directors and
the auditor.
10) Election of Board of Directors and auditor.
11) Election of chairman of the Board of Directors.
12) Other matters to be brought before the general meeting of shareholders in accordance with the Swedish
Companies Act or the Articles of Incorporation.
§ 11 The Company’s financial year shall be the calendar
year.
§ 12 Upon request by holders of class A shares, class A
shares may be converted to class B shares. Request for
conversion shall be submitted in writing to the Company’s Board of Directors. Such request shall state how
many shares the shareholder wishes to convert. The
Board of Directors shall in January each year deal with
the matter of converting of class A shares to class B shares, whose owners have so requested during the preceding year. However, if the Board of Directors finds that
grounds exist, deal with matters of conversion also at
other times than stated above. Conversion shall without
delay be submitted for registration and is deemed completed when registration has taken place.
§ 13 The Company’s shares shall be registered in a recon-
ciliation register in accordance with the Law on Registration of Financial Instruments.
______________________
Articles of Association adopted by an extra general meeting of shareholders held 19 August 2014.
43
Tax considerations in Sweden
INTRODUCTION
The following is a summary of the tax consequences
for investors, who are or will be shareholders in Oboya
Horticulture Industries AB. The summary is based on
current legislation and is only intended to be general information.
The tax treatment of each individual shareholder depends in part on such shareholders individual situation.
Special tax consequences, not described in the following,
may affect certain categories of taxpayers, including
persons who are not Swedish residents. Among other
things, the presentation does not cover cases where a
share is held as a current asset or is held by a partnership.
DIVIDEND
Dividends received are taxable in their entirety for individuals and estates. Taxation takes place in income from
capital. The current tax rate is 30 percent.
For the holdings of legal persons of so-called capital investment shares the entire dividend is taxable income
from business activities. The current tax rate is 22 percent.
For Swedish corporations and incorporated associations
dividends from business-related shares are tax free. Listed shares are considered to be business-related on the
condition that the shareholding represents not less than
10 percent of the votes, or that the holding relates to the
business. Tax exemption for dividends on listed shares
assumes that the shares have not been sold within one
year from when the shares became business-related for
the holder. The holding period requirement must be fulfilled at the time when the dividend is paid.
SELLING OF SHARES
Average method – When selling share in Oboya Horticultural Industries AB the average method should be
used regardless of whether the seller is physical or a legal
person. According to this method the cost of a share is
the average cost for shares of the same kind calculated
based on the actual cost giving due consideration to
changes that have occurred (such as split or bonus issue)
with respect to the holding. For market-listed shares the
so-called standard rule may be used as an alternative to
the average method. Under this rule the tax basis may be
20 percent of the selling price after deductions.
Private individuals – When selling shares individuals
and estates are taxed for the capital gain in income from
capital. The current tax rate is 30 percent. Capital losses
on shares are deductible in the same year against gains
on other shares or other listed shares (except in the case
of shares in mutual funds holding only Swedish debt
instruments). To the extent the loss is not fully deductible as described above, 70 percent thereof is deductible against other capital income. If there is a deficit in
income from capital, the tax may be reduced on income
from employment and business and property tax up to
30 percent for deficits amounting to a maximum of SEK
100,000 and up to 20 percent for larger deficits. Deficits
cannot be saved to later tax years.
Legal entities – Legal entities, with the exception of
estates, are taxed for capital gains in income from business at the current rate of 22 percent. The gain is calculated according to normal rules, however.
Capital losses on shares held as a capital investment may
only be offset against capital gains on shares and equity-related instruments. If certain requirements are fulfilled losses can also be offset against capital gains on
shares and equity-related instruments arising in companies in the same group, on the condition that group
contribution rights exist. Losses not utilized may be utilized against capital gains on shares and equity-related
instruments without any time limitation going forward.
For business-related holdings of listed shares the rule
applies that no deductibility is allowed at the same time
as gains are not taxable on the condition that the shares are not sold within one year from the time when the
shares became business-related with the holder.
Closely held companies – Special rules apply to closely
held companies. These rules only apply to shareholders,
or related parties active in such company to a significant
extent. The description in the prospectus only refers to
cases where the owner is passive and these special rules
are therefore not dealt with here.
INVESTMENT SAVINGS ACCOUNT
For individuals holding shares in investment savings accounts there is no capital gains tax on a sale of the shares.
Nor is there any right to make deductions upon a sale
44
of the shares. There is no withholding tax on any dividends. All taxation takes place via a yield tax based on
the capital base of the account, regardless of whether a
gain or a loss has occurred in the account. The yield tax
is 0.5 percent, payable annually.
INHERITANCE AND GIFT TAX
The Swedish inheritance and gift tax was abolished on
17 December 2004. As a consequence there is no tax on
inheritance and gifts when shares are acquired as an inheritance or gift.
INVESTOR DEDUCTION
Starting 1 December 2013 individuals who acquire shares in a small-sized company in a new issue may take a
deduction for half of the payment for shares in income
from capital. A maximum deduction of SEK 650,000 per
year is allowed, which is equivalent to acquisition of shares for SEK 1,300,000. This deduction is equivalent to a
15 percent tax deduction of the amount invested. If the
shares are sold within 5 years the taxpayer will be liable
to repay the tax deduction received. An investment in
Oboya Horticulture Industries AB makes it possible to
obtain this tax reduction for persons who are taxable for
the capital gain in Sweden.
WITHHOLDING TAX
Dividend income from Sweden to shareholders resident
abroad is normally subject to withholding tax. The tax
rate is currently 30 percent, which is typically reduced
by the double-taxation treaty applicable in each case.
However, dividends received by a foreign company that
has held business-related shares for at least one year will
be tax-free if the exemption had existed if the foreign
company had been a Swedish company. In Sweden it
is normally Euroclear that is responsible for deducting
withholding tax. In cases where the shares are registered
in the name of a nominee, the custodian is responsible
for withholding tax deduction.
45
Complete listing of all Swedish board memberships during
the past five years of the Board of Directors and the CEO
NAME
CORPORATE ID NUMBER
POSITION
TIME
Chairman
Shop Service Center, SSC i Lerum AB
556340-0810
Chairman
12/9/14–
556362-3197
Chairman
14/8/14–
Director, CEO
13/12/14–19/8/14
Advokaten Kersti Ingmar AB
556452-3099
Deputy
11/11/99–
MPA Consulting AB
556553-7742
Director, CEO
24/3/98–
EN Com AB
556589-7807
Liquidator
5/11/10–17/4/13
Liquidation completed 17/4/13
Cordovan btb Gbg AB
556605-0125
LunchExpress I Sverige AB
556663-9075
Bankruptcy proceedings initiated 11/2/13
Pro Assistans Sveriga AB
556747-6717
Director
6/9/13–
Oboya Automotive AB
556769-9052
Chairman
26/10/12–
Oboya Shop Concept AB
556772-5667
Chairman
3/07-12–
Screendoc AB
556775-2570
Chairman
24/3/09–11/6/10
BOLOTTEN FASTIGHETS AB
556798-3753
Deputy
10/4/12–17/9/12
Merex International AB
556833-4410
Chairman
17/12/10–24/4/14
Advokatfirman Wåhlin AB
556834-1027
Director, CEO
20/12/10–25/10/12
Sunloto Entertainment AB
556922-7647
Director
20/3/13–
Luco Holding AB
556970-3613
Deputy
11/6/14–
Liquidator
Chairman
26/5/09–27/12-10
5/2/10–23/8/12
In the following companies Mikael Palm Andersson has, or during the past five years has had, direct ownership
exceeding 10 percent: MPA Consulting AB
Steen Bödtker
Director
Expedit Holding AB
556695-7691
Director, CEO
Merger initiated
Expedit Retail Solutions ERS AB
556696-0646
Chairman
Expedit AB
556173-9383
Chairman
Expedit Sverige AB
556631-6377
Chairman
556362-3197
Director
8/3/00–
Director of various Danish companies and organizations.
46
Krister Magnusson
Director
Nilörn Branding Ab
556025-3493
Deputy
Nilörn AB
556080-6092
23/5/11
Chairman
24/2/09
Director
31/5/14–24/2/09
Nilörn Produktion AB
Chairman
24/2/09–
Director
31/5/14–24/2/09
556101-0173
Director
19/8/14–
556362-3197
Chairman
14/12/13–19/8/14
HKN Invest AB
556729-2908
Deputy
3/7/07–
Pro Assistans Sverige AB
5567417-6717
Chairman
26/1/09–
Oboya Automotive AB
556769-9052
Director
14/3/14–
556772-5667
Director
3/7/12–
Sunloto Entertainment AB
556922-7647
Deputy
20/3/13–
Robert Wu
Director, CEO
Director, CEO
18/8/14–
Director
12/5/14–18/8/14
556362-3197
Pro Assistans Sverige AB
5567417-6717
Director
21/10/11–6/9/13
Oboya Automotive AB
556769-9052
Director
14/3/14–
556772-5667
Director
11/12/08–3/7/12
JW Far East Trading
650623-0876 001
Owner
In the following companies Robert Wu has, or during the past five years has had, direct ownership exceeding
10 percent: JW Far East Trading
None of the directors or members of senior management have been convicted during the past five years in
fraudulent offenses, have been subject to official sanctions, or been prohibited by court order from serving as
a member of the Company’s administrative, management or control bodies, or from an overarching function in
the Company. Any bankruptcy, liquidation or receivership proceedings are disclosed in the listing above. None
of the directors or persons who are members of management have private interests that conflict with the
Company’s interest.
47
Snickarevägen 2, SE-443 61 Stenkullen, SWEDEN
Telephone: +46-302-244 80
Issue memorandum 2014 48
Website: www.oboya.se

Oboya Horticulture Industries AB

Transcription

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