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We make CarLife easier
Annual Report 2008
Mekonomen Annual Report 2008
Table of content
1 Year in brief, key ratios
2 CEO’s comments
4 Five-year summary
7 Corporate governance
12 Administration Report
16 Income statement, Group
17 Cash flow statement, Group
18 Balance sheet, Group
20 Income statement, Parent Company
2 1 Cash flow statement, Parent Company
22 Balance sheet, Parent Company
24 Changes in shareholders’ equity
25 Notes
52 Auditors’ report
53 Information to shareholders
53 Definitions
54 Board of directors
55 Management Group
56 Addresses
Mekonomen’s formal Annual Report comprises
pages 12 to 52. Only the formal Annual Report has
been reviewed by the company’s auditors. A more
detailed description of Mekonomen’s operations
and additional, regularly updated, financial
information are presented on Mekonomen’s
website: www.mekonomen.se
Year in brief | Mekonomen Annual Report 2008
Revenue and EBIT
Year in brief
• New store concepts launched – Mekonomen Medium
and Mekonomen Mega
• Eight Micro stores acquired from Micro AB
• M
ekonomen Direkt +46 (0)771-72 00 00 launched
in January 2009
SEK M
3,000
SEK M
300
2,750
275
2,500
250
2,250
225
2,000
200
1,750
175
1,500
150
1,250
125
1,000
100
750
75
500
250
50
2003
2004
2005
2006
2007
2008
25
EBIT
Revenue
• Revenues increased to SEK 2,691 M (2,550).
• EBIT increased to SEK 251 M (250).
• EBIT margin amounted to 9 per cent (10).
• P
rofit before tax amounted to SEK 261 M (418).
Excluding capital gains from property divestments in 2007,
profit amounted to SEK 267 M in the preceding year.
• E
arnings per share amounted to SEK 5.84 (11.03).
Excluding property divestments, earnings per
share amounted to SEK 5.98 in the preceding year.
• T
he Board of Directors proposes an ordinary dividend
of SEK 6 (6) and an extraordinary dividend of SEK 0 (5).
Earnings per share and dividend
SEK
12
12
11
11
10
10
9
9
8
8
7
7
6
6
5
5
4
4
3
3
2
2
1
2003
2004
2005
2006
Earnings per share
2007
2008
Dividend
1
Key ratios
Revenues, SEK M
EBIT, SEK M
EBIT margin, %
Profit for the year*, SEK M
2008
2007
2006
2,691
2,550
2,450
251
250
220
9
10
9
189
348
140
4.28
Earnings per share*, SEK
5.84
11.03
Cash flow ** per share, SEK
6.77
10.32
8.61
Dividend***, SEK
6.00
11.00
10.00
Return on shareholders' equity, %
20
36
14
Equity/assets ratio, %
60
67
58
*) The figures for 2007 include capital gain from the sale of property. Profit for 2007,
excluding sales of property, totalled SEK 192 M and earnings per share were SEK 5.98.
**) From continuing operations.
***) Board of Directors’ proposal for 2008. Of which, extra dividend of SEK 5 in 2007 and
SEK 7 in 2006.
1
Mekonomen Annual Report 2008 | CEO’s comments
CEO’s comments
The 2008 financial year was a strong year
for Mekonomen. Despite a weak economic
climate and business trend in the total market,
EBIT and revenue increased by 6 per cent – an
excellent confirmation that Mekonomen’s offering was well received by customers and that
our efforts were fruitful.
The primary reason for the positive trend
was commitment from our employees. The
rate of change was high and everyone in the
Group had to satisfy stringent demands. During 2008, we went from the previous promise
of ”We want to make CarLife easier” to now
saying ”We make CarLife easier”.
were well-received and contributed to strengthening
define our objective to our customers. The results of
sales and increasing revenues, however, with some
the work were summarised in the motto ”We want to
negative impact on EBIT.
make CarLife easier” for our customers.
Norway continues to develop according to plan. A
in which, despite a weaker economic trend, we in­-
higher market activities, had a negative impact on
creased our speed and implemented a number of
profit for 2008. These stores are strategically impor-
new initiatives, while sharpening our market activities.
tant and will eventually contribute positively to profit
When we summarise the year, we can confidently say
in the long term. The new concepts were also well-
that ”We make CarLife easier.”
received by our customers. The underlying revenues
increased by 6 per cent.
The change effort that commenced in 2007 in
New workshop concept
– MekoPartner and Workshop Centres
Denmark continued during 2008. We have also re­
During the year, the number of workshops affiliated
viewed our distribution and logistics, which resulted
to Mekonomen increased from 778 to 1,051, up 35 per
in a reduction in the number of warehouses during
cent. In order to supplement the current chain, Meko­
STRONGER MARKET SHARES IN SWEDEN,
the year. We went from 38 to five regional warehouses,
nomen Service Centres, the MekoPartner chain was
NORWAY AND DENMARK
while implementing measures aimed at increasing
introduced at the beginning of 2008. MekoPartner rep-
During the year, the total market for spare parts and
purchasing loyalty. We have accepted 119 workshops
resents the same high quality but the number of asso-
accessories in Scandinavia declined by 5 per cent.
into our chains and initiated adaptation of the store
ciated services, such as substitute cars, is more limited.
Despite this, Mekonomen strengthened its market
structure. A solid platform was built to achieve long-
The number of MekoPartner workshops was 199 at the
shares and increased sales in all markets. The portion
term profitability. During the year, sales and profit
end of 2008 and the number of Mekonomen Service
of consumer sales rose during 2008 in line with the
trend were positive, with an underlying revenue
Centres was 852. The largest increase in the number
strategy to improve Mekonomen’s position with end
increase of 2 per cent.
of affiliated workshops occurred in Denmark. During
consumers. The average for the Group is currently 25
the year, workshops that were previously limited to
per cent to consumers and 75 per cent to workshop
WE MAKE CARLIFE EASIER
only one or a few car makes joined Mekonomen and
customers.
During 2007, a new strategy was formed for Meko­
the inflow to these ”brand-affiliated” workshops has
nomen, with the objective of creating the prerequisites
increased. The support to workshops in the form of
to increase sales and improve profit. The basis was to
competency development and technical support
Sweden is our largest market and where we launch
our new concepts first. New launches during 2008
2
The year 2008 was a repositioning year. A year
number of newly established stores, combined with
CEO’s comments | Mekonomen Annual Report 2008
continued to improve. In addition, we have also estab-
signed agreements with a total of 22 companies, which
to develop Mekonomen, additionally strengthen our
lished workshop centres at strategic locations, which
have a combined fleet of 38,000 cars.
position and be productive for customers, owners,
employees and other cooperation partners.
only serve the workshops.
New service concept
New store concepts launched
– Mekonomen Direkt
– Mekonomen Mega and Mekonomen Medium
In January 2009, Mekonomen Direkt was launched
During the year, new store concepts were developed,
– one call to +46 (0)771-72 00 00 is all a customer
aimed at making life easy for customers and making
needs to get in touch with Mekonomen, day or night,
Håkan Lundstedt
operations and space utilisation more efficient. The
to schedule a workshop visit, for example. This is
President and CEO
new concepts, Mekonomen Mega and Medium, com-
another example of how we are making CarLife easier
bine store and workshop in the same premises and
for consumers and companies and how we simultane-
differ primarily in terms of size and location.
ously strengthen our workshop chains.
Kungens Kurva, March 2009
The new facilities were designed to satisfy customers’ requirements and demands. In order to further
FUTURE
increase accessibility, we have established new stores
I am confident of the future and that we will achieve
in a number of retail centres and also increased open-
our long-term growth target of 10 per cent annually.
ing hours.
At the end of 2008 and in early 2009, we saw an improvement in sales of our workshop services and we
New corporate concept
– Mekonomen Fleet
expect the aftermarket to stabilise already in 2009.
When we asked our customers what they wanted
Aimed at making CarLife easier for companies, a new
the most in terms of CarLife, the most important
business area was established – Mekonomen Fleet.
response was greater accessibility and an easier Car-
Mekonomen Fleet offers to handle all service and re-
Life – Mekonomen Direkt is the response to that. We
pairs on behalf of companies as well as administration
will continue in the same spirit and produce unique
of their cars. Our major competitive advantage is that
concepts and offerings aimed at satisfying each cus-
Mekonomen handles all car makes and that compa-
tomer’s specific needs – since each person and thus
nies with large fleets will be able to limit themselves to
each customer is unique – we not only service cars,
only one contact, namely with Mekonomen. We have
we serve people! With that attitude, we will continue
3
Mekonomen Annual Report 2008 | Five-year summary
FIVE-YEAR SUMMARY
INCOME STATEMENT
SEK M
2008
2007
2006
2005
2004
Net sales
2,646
2,530
2,432
2,312
2,133
Goods for resale
–1,317
–1,294
–1,275
–1,246
–1,135
Other expenses
–1,123
–1,007
–955
–918
–846
Operating revenue
251
250
220
170
168
Profit after financial items
261
418
198
162
162
Tax on profit for the year
–72
–70
–58
–44
–56
PROFIT FOR THE YEAR
189
348
140
118
106
2008
2007
2006
2005
2004
BALANCE SHEET
SEK M
ASSETS
Intangible assets
254
206
169
173
160
Other fixed assets
148
109
471
490
561
Inventories
602
554
521
534
473
Accounts receivable
217
201
200
196
175
Other current assets
116
120
188
169
67
85
290
95
38
91
1,423
1,481
1,644
1,600
1,527
831
Cash and cash equivalents
TOTAL ASSETS
SHAREHOLDERS’ EQUITY AND LIABILITIES
833
978
933
911
Minority share of shareholders' equity
Shareholders' equity, Parent Company's shareholders
18
18
20
23
23
Long-term liabilities
42
44
70
148
221
Current liabilities
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
530
441
621
518
452
1,423
1,481
1,644
1,600
1,527
2004
CONDENSED CASH-FLOW STATEMENT
2008
2007
2006
2005
Cash flow from operating activities
209
320
200
125
214
Cash flow from investing activities
–93
448
–19
–65
–163
Cash flow from financing activities
–321
–574
–122
–113
–42
CASH FLOW FOR THE YEAR
–205
194
59
–53
9
SEK M
4
Five-year summary | Mekonomen Annual Report 2008
DATA PER SHARE
Amounts in SEK per share, if not otherwise stated
2008
2007
2006
2005
2004
Profit
5.84
11.03
4.28
3.61
3.18
Cash flow
6.77
10.32
8.61
4.06
6.95
27
31.7
30.2
29.5
26.9
6
103
70
151
58.25
8.6
11
100
146
154.5
100
7.5
10
234
106.75
114.5
73.75
9.4
3.25
90
101.5
104.5
76
3.2
1.15
36
98.5
107
77.75
1.2
Shareholders’ equity
Dividends
Share of profit paid, %
Share price at the end of the year
Share price, highest for the year
Share price, lowest for the year
Direct yield, %
P/E ratio at the end of the year, multiple
12.0
13.2
24.9
28.1
31.0
Average number of shares after dilution effects
30,868,822
30,868,822
30,868,822
30,868,822
30,868,822
Number of shareholders at the end of the year
6,559
6,199
5,976
5,978
5,617
* Board of Directors’ proposal for 2008. Of which, extraordinary dividend SEK 5.00 for 2007, SEK 7.00 for 2006 and SEK 2.10 for 2005.
2008
2007
2006
2005
Sales growth, %
6
4
5
9
14
Gross margin,%
50
49
48
46
47
KEY RATIOS
EBIT MARGIN, %
2004
9
10
9
7
8
10
16
8
7
8
Capital employed, SEK M
905
1,002
1,212
1,078
1,148
Operating capital, SEK M
820
712
1,117
1,040
1,057
Profit margin, %
Return on capital employed, %
28
39
19
16
15
Return on operating capital, %
33
27
20
16
15
Return on equity, %
20
36
14
13
13
Return on total capital, %
19
27
13
11
12
Equity/assets ratio, %
Net debt/equity ratio, multiple
Interest-coverage ratio, multiple
Net indebtedness, SEK M
60
67
58
58
56
neg
neg
0.2
0.1
0.2
33
47
14
13
12
neg
neg
164
236
196
AVERAGE NUMBER OF EMPLOYEES
Sweden
732
687
684
670
627
Norway
Denmark
233
397
202
382
184
388
169
405
160
432
1,363
1,271
1,256
1,244
1,219
Sweden
123/103
114/93
115/88
115/88
112/84
Norway
44/29
42/25
39/21
39/21
37/20
Denmark
39/39
38/38
38/38
39/39
43/43
206/171
194/156
192/147
193/148
192/147
GROUP
Number of stores/of which wholly owned
GROUP
5
Mekonomen Annual Report 2008 | Quarterly data
Contd. KEY RATIOS
2008
2007
2006
2005
2004
NUMBER OF MEKONOMEN SERVICE CENTRES
Sweden
363
337
329
365
549
Norway
320
305
321
310
274
Denmark
169
136
114
93
63
GROUP
852
778
764
768
886
NUMBER OF MEKOPARTNER
Sweden
75
–
–
–
–
Norway
38
–
–
–
–
Denmark
86
–
–
–
–
GROUP
199
–
–
–
–
Q1 2008
Full-year
2007
Q4 2007
Q3 2007
Q2 2007
QUARTERLY REVIEW
Full-year
2008
Q4 2008
Q3 2008
Q2 2008
Q1 2007
NET SALES, SEK M
Sweden
1,297
340
316
347
294
1,270
328
314
330
299
Norway
630
155
156
178
142
584
150
146
154
134
Denmark
704
181
162
184
178
661
166
162
170
163
14
4
3
3
3
15
4
4
3
4
2,646
680
637
712
617
2,530
649
626
657
599
Group-wide and eliminations
GROUP
EBIT, SEK M
Sweden
211
54
60
60
38
216
51
57
55
53
Norway
76
12
22
26
16
81
17
25
20
20
–2
–7
3
2
0
–22
–21
0
1
–1
Group-wide and eliminations
Denmark
–34
–14
–6
–9
–6
–24
–4
–3
1
–18
GROUP
251
45
79
79
48
250
43
78
76
53
Sweden
16
15
18
17
13
17
15
18
16
18
Norway
12
8
14
14
11
14
11
17
13
15
Denmark
0
–4
2
1
0
–3
–13
0
1
–1
GROUP
9
7
12
11
8
10
7
13
11
9
EBIT MARGIN, %
QUARTERLY DATA, GROUP
Net financial items, SEK M
10
3
2
–1
5
168
25
137
–3
8
261
49
81
78
53
418
68
216
73
61
Tax, SEK M
–72
–13
–23
–22
–14
–70
–2
–29
–21
–18
Profit after tax, SEK M
189
36
58
56
39
348
66
187
52
43
50
51
52
50
49
49
49
51
48
47
5.84
1.13
1.79
1.72
1.2
11.03
2.13
5.94
1.62
1.34
Profit before tax, SEK M
Gross margin,%
Earnings per share, SEK
6
Corporate governance | Mekonomen Annual Report 2008
Corporate governance
CORPORATE GOVERNANCE REPORT
FOR MEKONOMEN AB (PUBL)
Mekonomen applies the Swedish Code of Corporate
Governance. Information pertaining to the Swedish
The ten largest shareholders on 31 December 2008,
according to SIS Ownership Data Corp.
Shareholders
ernance report does not represent part of the formal
Axel Johnson AB with
subsidiaries
AFA Försäkring
lng-Marie Fraim Sefastsson
Eva Fraim Påhlman
Swedbank Robur fonder
Fjärde AP-fonden
Lannebo fonder
SHB/SPP fonder
SEB fonder
Leif Möller
Annual Report and has not been reviewed by the
TOTAL
Code of Corporate Governance is found on the Coun­cil for Swedish Corporate Governance website, www.
bolagsstyrningskollegiet.se. If companies included in
the Code in no way apply the Code, this must be clearly stated and the reasons explained. Mekonomen’s
possible deviations from the Code and explanations
are reported in the running text. This Corporate Gov-
have registered participation in adequate time are entitled to participate in the Annual General Meeting and
Number of
shares
% of votes
and capital
8,951,958
3,665,330
2,040,176
2,040,176
1,341,285
1,214,185
1,142,000
892,573
791,820
319,700
29.0
11.9
6.6
6.6
4.3
3.9
3.7
2.6
2.6
1.0
registration, entitlement for items to be entered in the
22,399,203
72.6
that the Annual General Meeting shall be a consum-
vote according to their shareholdings. All information
concerning the company’s general meetings, such as
agenda in the notification, minutes, etc., are available
on the company’s website.
With regard to participation in the Annual General
Meeting, the Board has deemed it not financially justifiable at present to allow shareholders to participate in
the Annual General Meeting through any means other
than physical presence. It is the company’s ambition
mate body for shareholders, in accordance with the
company’s auditors.
Annual General Meeting
intentions of the Swedish Companies Act, which is
SHAREHOLDERS
The Annual General Meeting is Mekonomen’s
why the objective is that the Board in its entirety, the
Shares and shareholders
supreme governing body, at which every shareholder
representative of the Nomination Committee, the Presi-
The share capital amounted to SEK 77,172,055 on 31
is entitled to participate. The Annual General Meeting
dent, auditors and other management executives must
December 2008, represented by 30,868,822 shares.
shall be held within six months of the close of the
always be present at the Annual General Meeting.
Each share carries one voting right at the Annual Gen-
financial year. The Annual General Meeting adopts the
eral Meeting. The total market value for the company
income statement and balance sheet and the appro-
NOMINATION COMMITTEE
on 31 December 2008 was SEK 2.2 billion, based on the
priation of the company’s profit, resolves on discharge
In accordance with the resolution of the Annual
closing price.
from liability, elects the Board of Directors and where
General Meeting on 4 April 2008, Mekonomen has
applicable, auditors, and approves fees, addresses
established a Nomination Committee. The Nomina-
was 6,559. At the same date, the ten largest sharehold-
other statutory matters and passes resolutions
tion Committee shall prepare and submit proposals to
ers controlled 72.6 per cent of the capital and voting
pertaining to motions from the Board and sharehold-
the Annual General Meeting pertaining to:
rights and the participation of foreign owners accoun­
ers. The company announces the date and location
• Election of the Chairman of the Annual General
ted for 9.4 per cent of the capital and voting rights.
of the Annual General Meeting as soon as the Board
The number of shareholders on 31 December 2008
has made its decision, but not later than in connection
with the third-quarter report. Information pertaining
to the time and location is available on the company’s
website. Shareholders that are registered in Euroclear
Sweden’s shareholders’ register on the record date and
Meeting,
• Election of the Chairman of the Board and other
Board members,
• The Board fees and any remuneration for committee work,
• where appropriate, election of and fees to auditors.
7
Mekonomen Annual Report 2008 | Corporate governance
Prior to the 2009 Annual General Meeting, the Nomi­-
Wolff Huber, Helena Skåntorp, Fredrik Persson, Kenny
members prior to each meeting, which were then held
nation Committee comprises Göran Ennerfelt, repre­
Bräck and Anders G Carlberg were re-elected. Fredrik
in accordance with the agenda that was approved for
senting the Axel Johnson AB Group, Maj Charlotte
Persson was elected Chairman of the Board.
the meeting. On occasions, other senior executives
Wallin, representing AFA Försäkring, Ing-Marie Fraim
All ordinary Board members are independent in
relation to the company and its management. Three of
capacity, whenever necessary. No deviating views to
representing own shares. The Nomination Committee
the Board members are independent also in relation
be recorded in the minutes were expressed at any of
elected Göran Ennerfelt as its Chairman.
to major shareholders. The President is not a member
the meetings during the year. Matters of high signifi-
of the Board and neither is any other member of the
cance that were discussed during the year primarily
Management Group.
concerned the company’s financial performance, the
Mekonomen’s Chairman, Fredrik Persson, has been
co-opted to the Nomination Committee. The Nomina-
launch of new concepts and the company’s future
tion Committee’s proposals are to be announced in
connection with the notification to convene the An-
Board members
nual General Meeting.
It is the opinion of the Board that the Board’s structure
The Nomination Committee has the right to charge
strategy.
in terms of competency, experience and background
the company with the costs of, for example, recruiting
is compatible with the company’s operations, develop-
Assignment
head hunters and other consultants required for the
ment phase and circumstances. A presentation of edu­-
In accordance with the requirements of the Code, the
Nomination Committee to fulfil its duties. Moreover,
cation, current assignments, and the number of shares
Board’s ambition was to devote particular attention to
in connection with its assignments, the Nomination
held by Board members is found on page 54.
establishing overall goals for the operation and decide
on strategies by which to achieve the said goals, and in
Committee shall fulfil the duties that rest upon the
Nomination Committee in accordance with the Swed-
Chairman of the Board
part to continuously evaluate the operating manage-
ish Code of Corporate Governance.
The Chairman of the Board, Fredrik Persson, is not
ment, with the aim of securing the company’s govern-
employed by the company and does not have any
ance, management and control. The Board believes
limit for Board meetings or time limits pertaining to
assignments for the company beyond his chairman-
that there are functioning systems for the monitoring
the length of time Board members may sit on the
ship of the Board. It is the opinion of the Board that
and control of the company’s financial position in rela-­
Board. Auditors are elected every fourth year when
Fredrik Persson ensures that the Board conducts its
tion to the established goals; that control of compli-
the matter is submitted to the Annual General Meet-
assignments efficiently and also fulfils its duties in ac-
ance with laws and other regulations is implemented,
ing. The election of auditors took place at the 2007
cordance with applicable laws and regulations.
and that the provision of external information is open,
Mekonomen has not established any specific age
objective and relevant.
Annual General Meeting.
The Board’s working procedures
8
have participated in the Board meetings in a reporting
representing own shares and Eva Fraim Påhlman,
There are written instructions that regulate the
SPECIFIC INFORMATION ABOUT THE
The Board is responsible for the company’s organisa-
distribution of information between the Board and
BOARD’S WORK
tion and management and shall also make decisions
the President, and for the reporting process. They are
Size and composition
pertaining to strategic issues. During 2008, the Board
primarily:
At the Annual General Meeting on 4 April 2008, it was
held eight meetings, of which one was the statutory
decided that the Board shall comprise seven ordinary
meeting. The minutes of the meetings were recorded
• The rules of procedure for the Board’s work
members with no deputy members. All existing Board
by the Board’s secretary, who is the company’s CFO.
• Instructions for the President
members, Marcus Storch, Antonia Ax:son Johnson,
Relevant meeting documentation was sent to all
• Attestation regulations
Corporate governance | Mekonomen Annual Report 2008
The Board evaluates its work every second year and it
correct financial reporting. Twice per year, in con-
COMPANY MANAGEMENT
is the duty of the Chairman of the Board to ensure that
nection with preparation of the financial accounting
President’s assignments
this is done. The evaluation involves individual meet-
for the third quarter and annual financial statements,
The President is appointed and may be discharged by
ings between the Chairman of the Board and all Board
the company’s auditors report on how the company
the Board and his/her work is continuously evaluated
members. The collective opinion is that the Board’s
ensured that accounting, management and financial
by the Board, which occurs without the presence of
work during 2008 functioned well and that the Board
control function. Following the formal report, the
Company Management. Mekonomen’s President and
fulfilled the requirements of the Code pertaining to the
President and CFO leave the Board meeting to allow
CEO, Håkan Lundstedt, is also a member of the Board
Board’s assignment.
Board members to discuss with auditors without the
of Fjällbrynt AB and the MILKO Cooperative Associa-
participation of company officials.
tion and has no shareholdings or ownership in compa-
The Annual General Meeting resolved, in accord­ance with the proposal from the Nomination Commit-
nies with significant business ties with Mekonomen.
tee, to allocate Board fees amounting to SEK 1,360,000,
REMUNERATION COMMITTEE
of which SEK 320,000 pertains to a fee for the Chair-
During 2008, the Board of Directors formed a Remu-
Company Management
man of the Board and SEK 240,000 for the Vice Chair-
neration Committee to handle issues concerning
A presentation of Company Management is available
man, with the remaining amount to be distributed to
remuneration of senior executives. This was based on
on page 55.
the other Board members.
the Annual General Meeting’s resolution pertaining to
the guidelines for remuneration of Company Manage-
Remuneration of Company Management
Audit Committee
ment. The Committee comprises Fredrik Person as
Mekonomen’s Remuneration Committee makes
The entire Board of Mekonomen assumes respon-
Chairman, Marcus Storch and Anders G Carlberg. Two
decisions pertaining to remuneration of the President.
sibility for ensuring that the audit guarantees, in an
meetings were held during the year and all members
Håkan Lundstedt has a basic salary per month and
efficient manner, that the Group has acceptable pro­
were present at these meetings.
a variable salary portion, which is based on the com­
cedures for internal control and high-quality and
pany’s profit and can amount to a maximum of 50
per cent of the basic annual salary. Under his pension
terms, payment of pension premiums is made in the
Board of Directors
Present at Board meetings
Dependent/independent *
Board member since
amount corresponding to 25 per cent of basic salary.
Fredrik Persson, Chairman
8/8
B
August 2006
Other benefits take the form of a company car. Termi-
Marcus Storch, Vice Chairman
8/8
B
August 2006
nation notice is 12 months if initiated by the Company
Helena Skåntorp
8/8
O
May 2004
and six months if notice is given by the employee.
Antonia Ax:son Johnson
7/8
B
August 2006
Severance pay of six months’ salary is paid if termina-
Kenny Bräck
7/8
O
May 2007
tion is initiated by the company.
Anders G Carlberg
7/8
B
August 2006
Wolff Huber
7/8
O
August 2006
*) According to the definition in the ”Swedish Code of Corporate Governance”.
All Board members are independent of the company and its management.
O = Board members considered independent of major shareholders in the company.
B = Board members considered dependent of major shareholders in the company.
Issues pertaining to remuneration to other senior
executives are also prepared by the Remuneration
Committee. The principle for remuneration is based
on the senior executives being offered market-based
remuneration. Thus the criteria shall be based on the
significance of assignments performed, demand for
9
Mekonomen Annual Report 2008 | Corporate governance
competency, experience and performance and that
AUDITORS
interim reports, annual reports and press releases, as
remuneration shall comprise the following parts:
The auditors are appointed by the Annual General
well as financial content and presentation material, in
Meeting and are charged with reviewing the compa-
connection with meetings with the media, sharehold-
• Fixed basic salary
ny’s financial reporting and the Board’s and President’s
ers and financial institutions.
• Variable remuneration
management of the company. Deloitte AB, which has
• Pension benefits
an organisation comprising broad and specialised
Audit
• Other benefits and severance terms
competency that is well-suited to Mekonomen’s op-
The entire Board of Mekonomen assumes responsibil-
erations, has been the company’s auditors since 1994.
ity for ensuring that the audit, in an efficient manner,
The distribution between basic salary and variable
At the 2007 Annual General Meeting, Deloitte AB, with
establishes that the Group has acceptable procedures
remuneration shall be in proportion to the senior ex-
Authorised Public Accountant Lars Svantemark as the
for internal control and high-quality financial report-
ecutive’s responsibilities and authorities. The variable
Auditor in Charge, was appointed the auditing firm un-
ing. With regard to the preparation of the Board’s work,
remuneration for senior executives is based partly on
til 2011. In addition to Mekonomen, Lars Svantemark is
the Board estimates that quality assurance of the
the company’s profit and partly on individual qualit­a­-
also the auditor of Uniflex, Securitas Direct and Oxford
financial reporting, which is conducted within the
­tive parameters and can amount to a maximum of
Aviation Academy. He has also previously been the
framework of the company’s own internal control,
four months’ salary. Other benefits refer primarily
auditor of Sandvik, Elekta, Poolia and A-Com. Lars
corresponds to current requirements. The company’s
to company cars. Pension premiums are paid in an
Svantemark has no assignments in companies that
auditors personally present their plans, risk assess-
amount that is based on the ITP plan or a correspond-
are closely related to Mekonomen’s major sharehold-
ments and controls, and findings from the audit at two
ing system for employees abroad. Pensionable salary
ers or President.
Board meetings during the year, which additionally
refers to the basic salary. Severance pay if employment termination is initiated by the company can
amount to one year’s basic salary. At the 2008 Annual
General Meeting, it was also decided that in addition,
upon approval by the Board of Directors, Company
Management may receive a cash bonus from the company. The bonus will be profit-based and calculated on
the Group’s profit for the 2008 – 2010 financial years.
Remuneration to Deloitte,
SEK M
Remuneration for audit
assignments
In addition to audit assignments, Deloitte has received
the following remuneration
for consulting services during
the past three years, amount
in SEK M:
secures the Board’s information requirement. At these
2008 2007 2006 2005
4.3
4.3
3.6
3.6
ing their formal reports to enable the Board members
to conduct with the auditors without the participation
of Company Management. The Board continuously
evaluates the need to elect an Audit Committee.
0.2
1.8
1.7
1.8
BOARD OF DIRECTORS’ REPORT ON
INTERNAL CONTROL
The bonus program, in its entirety, as a total expense
for the company, may not exceed SEK 12 M for the
REPORTING AND AUDIT
In accordance with the Swedish Companies Act and
period. The criteria for the size of an individual bonus
Reporting
the Swedish Code of Corporate Governance, the
will be established by the Board.
The Board supervises the quality of the financial
Board of Directors is responsible for internal control.
reporting through instructions to the President. Jointly
This report was prepared in accordance with the
to share or share price-based incentive programs for
with the CFO and Communications Manager, the
Swedish Code of Corporate Governance, sections 10.5
Company Management.
President’s assignment is to review and quality-assure
and 10.6, and FAR/SRS’s guidance to the Swedish Code
all financial reporting including financial statements,
of Corporate Governance. The report is limited to deal
The Board has not made any decisions pertaining
10
meetings, the President and CFO leave after present-
Corporate governance | Mekonomen Annual Report 2008
with internal control pertaining to financial reporting
As a contribution to strengthening the internal control,
Information and communication
and Mekonomen has elected to only submit a descrip-
Mekonomen prepared a financial handbook in 2007
Policies and guidelines are particularly important for
tion of how internal control is organised without sub­-
that provides an overall picture of existing policies,
accurate accounting, reporting and dissemination
mitting a statement on how it functioned. This re­port
rules and regulations and procedures within the
of information. Within Mekonomen, policies and
does not represent a part of the formal annual report
financial area. This is a living document, which will be
guidelines are continuously updated pertaining to the
document and has not been reviewed by the com-
updated continuously and adapted to changes within
financial process. This occurs primarily within respec-
pany’s auditors.
the Mekonomen operation. In addition to the financial
tive Group functions aimed at the various operations
handbook, there are documents and manuals that
through e-mails, but also in connection with quarterly
Control environment
provide guidance for the daily work in stores, for
control meetings in which all financial managers/con-
The control environment represents the basis for the
example, pertaining to stock taking and cash-register
trollers participate. For communication with internal
internal control pertaining to the financial reporting.
reconciliation.
and external parties, there is a communications policy
that states guidelines for communication. The aim of
An important part of the control environment is that
decision paths, authorities and responsibilities must
Risk assessment
the policy is to ensure that all information obligations
be clearly defined and communicated between
Mekonomen conducts continuous surveys of the
are complied with in a correct and complete manner.
various levels in the organisation and that the control
Group’s risks. During these surveys, a number of items
documents are available in the form of policies,
were identified in the income statement and balance
Follow-up
handbooks, guidelines and manuals. Thus, a key part
sheet in which the risks for errors in the financial
The Board continuously evaluates the information
of the Board’s assignment is to prepare and approve
reporting are elevated. The company is continuously
submitted by the Company Management and audi-
a number of fundamental policies, guidelines and
working on these risks by strengthening the controls.
tors. The CEO and CFO also cooperate closely with
frameworks. These include the Board’s working
Furthermore, risks are addressed in a special forum,
the subsidiaries’ controllers on matters pertaining to
procedures, instructions for the President, Invest-
including questions affiliated to start-ups and acquisi-
accounts and reporting. The follow-up and feedbacks
ment policies and the Insider policy. The aim of these
tions.
concerning possible deviations arising in the internal
controls are a key part of the internal control work
policies is to create a basis for sound internal control.
Furthermore, the Board has assured that the organisa-
Control activities
since this is an efficient manner for the company to
tional structure provides distinct roles, responsibilities
The Group’s control structure is formed to manage
ensure that errors are corrected and that the control
and processes that benefit the effective management
risks that the Board deems significant for the internal
is further strengthened. Mekonomen has no internal
of the operation’s risks and facilitate target fulfilment.
control of the financial reporting. The aim of the appro­-
audit function since the above-mentioned func-
Part of the responsibility structure includes an obliga-
priate control activities is to discover, prevent and
tions fulfil this task, however, an annual evaluation is
t­ion for the Board to evaluate the operation’s per-
correct errors and deviations in the reporting. The
conducted of the requirement of a specific internal
formance and results on a monthly basis, through
control activities include reconciliation of accounts,
audit function.
appropriate report packages containing income
analytic follow-up, comparison between income state-
statements, balance sheets, analyses of important key
ments and balance sheets and control stock-taking in
ratios, comments pertaining to the business status of
warehouses and stores.
each operation and also forecasts for future periods.
11
Mekonomen Annual Report 2008 | Administration Report
The Board and President of Mekonomen AB (publ.), Corporate Registration Number 556392-1971,
hereby submit the Annual Report and Consolidated Accounts for the 2008 financial year.
GENERAL
In Denmark, the distribution project and reposition-
were charged against profit. Expenses in 2009 are
Mekonomen is Scandinavia’s leading spare parts
ing of stores toward new customer groups and
expected to amount to SEK 14 M per quarter. The
chain with proprietary wholesale operations,
investments in new workshops created a platform
project has a repayment period of approximately
approximately 200 stores and more than 1,000
for achieving long-term profitability. Mekonomen is
two years from 2010. In the preceding year, costs
workshops that operate under the Mekonomen
now taking the next step into this market with a new
of SEK 15 M were charged against EBIT for the year
brand. The Parent Company conducts operations in
Manager, Lars From, who will assume his position on
pertaining to the distribution project in Denmark.
the form of a liability company and has its registered
1 April, 2009.
The aim of the project is to reduce the number of lo-
The number of affiliated workshops passed 1,000
cal warehouses and enhance distribution efficiency.
is Smista Allé 11, SE-141 70 Segeltorp, Sweden. The
during 2008 and the total number of affiliated work-
Costs for planned growth investments were charged
Parent Company’s share is listed on the Mid-Cap list
shops was 1,051 at the end of the year. During January
against EBIT in all countries.
of NASDAQ OMX Nordic. The principal owner in
2009, Mekonomen Direkt was launched in Sweden.
the Parent Company is the Axel Johnson AB Group,
One call, to +46 (0)771-72 00 00, is all a customer has
Profit/loss after net financial items
which owns 29 per cent of the votes and capital.
to do to contact Mekonomen, night or day, to book a
Profit after net financial items amounted to SEK 261
workshop appointment, for example. The number of
M (418). Net financial items included a capital gain of
FINANCIAL YEAR
wholly owned stores increased by 15 during the year,
SEK 151 M pertaining to the divestment of properties.
Mekonomen had a strong year in a declining market.
of which eight were acquired in December from Micro
Net financial items, excluding gains from property
Despite a weak economic climate, Mekonomen had
AB. The total number of stores in the chain at the end
divestments, amounted to SEK 10 M (14). Net interest
higher sales and profit compared with the preceding
of the year was 206 (194), of which the number of
income amounted to SEK 4 M (2) and other financial
year.
wholly owned stores was 171 (156).
items to SEK 7 M (167), of which SEK 153 M pertains to
office in Stockholm. The address of the head office
property divestments in the preceding year. Profit
The strategy that was adopted and initiated during
2007 continued to be pursued in 2008. A number of
Revenues
after net financial items includes currency effects
investments were implemented in selected areas:
Revenues for the full year increased by 6 per cent
corresponding to an expense of SEK 3 M (pos: 13).
The new store concepts, Mekonomen Mega and
to SEK 2,691 M (2,550). Other revenues included
Mekonomen Medium – both concepts based on store
exchange-rate gains of SEK 14 M (14) and rental rev-
Profit for the year
and workshop in the same premises – investments
enues, property-related revenue, licenses, etc. The
Profit for the year amounted to SEK 189 M (348) and
in the corporate market with Mekonomen Fleet and
underlying revenue increased by 4 per cent.
earnings per share to SEK 5.84 (11.03). Of profit for the
year, SEK 180 M (341) was attributable to the Parent
the new workshop chain, MekoPartner. MekoPartner
12
represents the same high quality for consumers as
EBIT
Company’s shareholders and SEK 9 M (7) to minority
Mekonomen Service Centres, but the number of associ-
EBIT totalled SEK 251 M (250) and EBIT margin was
shareholders.
ated services, such as substitute cars, is more limited
9 per cent (10). As a result of property divestments
and the connection to Mekonomen somewhat weaker.
during the third quarter of 2007, rental expenses for
Sweden
During the year, Mekonomen also commenced
2008 increased by SEK 14 M, compared with the pre-
Net sales (external) increased by 2 per cent to SEK
work regarding the change to the new business sys-
ceding year. Expenses totalling SEK 14 M pertaining
1,297 M (1,270). The underlying net sales increased
tem, which was implemented in Sweden during 2008
to the project for Mekonomen’s new store concept,
1 per cent.
and will be implemented in Norway and Denmark
which was launched during the third quarter to en-
during 2009.
hance the efficiency of operations and store space,
EBIT amounted to SEK 211 M (216) and the operating
margin was 16 per cent (17). The number of stores
Administration Report | Mekonomen Annual Report 2008
totalled 123 (114), of which 103 (93) are wholly owned.
proprietary store was opened and one store was
able to the higher tax paid in 2008 and increased
Costs totalling SEK 3 M for the new store concept were
acquired. In connection with the acquisition in
accounts payable in 2007.
charged against profit for the year. Compared with the
Denmark, the existing store in the same district was
preceding year, rental costs increased by SEK 8 M as a
discontinued. In addition, minority shares in three
PERSONNEL
result of the property divestment during the year.
store companies were acquired. In Sweden, 15 store
The number of employees at the end of the year
managers became part-owners in individual store
totalled 1,425 (1,302) and the average number of
Norway
companies. Their ownership share amounts to 9 per
employees during the year was 1,363 (1,271).
Net sales (external) increased by 8 per cent to SEK
cent per store company.
REMUNERATION OF SENIOR EXECUTIVES
630 M (584). The underlying net sales increased by
6 per cent. EBIT amounted to SEK 76 M (81) and oper-
Investments
Remuneration of senior executives is presented in
ating margin was 12 per cent (14). Costs totalling SEK
During the year, net investments in tangible fixed
Note 5. The Board will propose to the Annual Gen-
5 M for the new store concept were charged against
assets amounted to SEK 44 M (35). In addition, invest-
eral Meeting the following guidelines for remunera-
profit for the year. The number of stores in Norway
ments in new IT systems amounted to SEK 17 M (8)
tion to senior executives.
totalled 44 (42), of which 29 (25) are wholly owned.
during the year.
Acquisitions of companies and operations were im-
The company will strive to offer its senior execu­
tives market-based remuneration, whereby the crit-
Denmark
plemented during the year totalling SEK 63 M (27). Ac-
eria based on the significance of assignments, demand
Net sales (external) in Denmark amounted to SEK
quired assets amounted to SEK 36 M (10) and acquired
for expertise, experience and performance and remu-
704 M (661). The underlying net sales increased by
liabilities to SEK 9 M (8). In addition to goodwill, which
neration shall comprise the following:
2 per cent. As a result of property divestment in
amounted to 37 (26), no intangible surplus value was
2008, rental costs increased by SEK 6 M compared
identified in connection with the acquisitions.
with the preceding year. Costs totalling SEK 5 M for
• Fixed basic salary
• Variable remuneration
the new store concept were charged against profit
FINANCIAL POSITION
• Pension benefits
for the year. In the preceding year, costs totalling
Cash and cash equivalents and short-term invest-
• Other benefits and severance terms
SEK 15 M pertaining to distribution changes were
ments amounted to SEK 85 M at the end of the
charged against profit for the year. The number of
year, compared with SEK 290 M on 31 December
The Board’s motion for the principles complies with
stores in Denmark totalled 39 (38), of which 39 (38)
2007. The equity/assets ratio was 60 per cent (67).
the preceding year’s remuneration principles and is
are wholly owned.
Interest-bearing liabilities amounted to SEK 54 M
based on existing agreements between the compa-
(6) at year-end and net cash to SEK 32 M (284). The
ny and senior executives. The distribution between
ACQUISITIONS AND START-UPS
decrease in net cash was primarily due to dividends
basic salary and variable remuneration shall be in
During 2008, ten partnership stores were acquired
to shareholders of SEK 347 M.
proportion to the responsibilities and authority
of the senior executive. The variable remunera-
and one new store opened in Sweden. The eight
stores that were acquired from Micro AB during
CASH-FLOW STATEMENT
tion of the President and other senior executives
December are estimated to increase Mekonomen’s
During the period, cash flow was negative in the
is based partly on the Group’s profit and partly on
revenue by approximately SEK 80 M per year and
amount of SEK 205 M (pos: 194). Dividends totalling
individual qualitative parameters and shall amount
will have a neutral impact on profit in 2009. Two
SEK 347 M (318) were paid to shareholders. The
to a maximum of 50 per cent of the basic salary for
stores in Stockholm were discontinued in conjunc-
divestment of properties contributed a positive
the President and a maximum of 33 per cent of the
tion with the opening of the new workshop centre.
cash-flow effect of SEK 502 M. Cash flow from operat-
basic salary for senior executives. Senior executives
In Norway, three cooperation stores were acquired
ing activities amounted to SEK 209 M (320). The
are, in addition to the President, the ten individuals
and one new store was opened. In Denmark, one
difference between the years was primarily attribut-
that jointly comprise Group Management along
13
Mekonomen Annual Report 2008 | Administration Report
with the President. Other benefits consist primarily
of a company car. Pension premiums are paid in an
amount based on the ITP plan or a corresponding
system for employees abroad. In accordance with
the employment contract, pension provisions for
the President are made in an amount corresponding
to 25 per cent of the basic salary. Pensionable salary
consists of the basic salary. Severance pay on termination of employment by the company amounts to
a maximum of one year’s salary. In addition, there
is a specific three-year bonus programme that is
calculated on the Group’s profit for the 2008–2010
financial years. The bonus programme in its entirety,
FACTORS PERTAINING TO
PROFIT BEFORE TAX
Sales volume
Exchange-rate fluctuation
NOK
EUR
DKK
Gross margin
Personnel expenses
centralised warehouse is a key factor in the logistics
Changes
Effect
+1%
+2 SEK M
+1%
+1%
+1%
Change in percentage +1 point
+1%
+4 SEK M
– 1 SEK M
+0 SEK M
+26 SEK M
–6 SEK M
RISKS AND UNCERTAINTIES
The market trend was weak during 2008. However,
there were improvements in the market for workshop services at the end of the year.
flow and accordingly, great importance has been
attached to preventive work to reduce the risk of damage in the centralised warehouse.
Insurance
Mekonomen has Group-wide insurance solutions.
Insurance coverage includes property, consequential loss, transport, the Board and President.
Value-management risks
Mekonomen strives to achieve the same level of solutions for security services, security systems and value
management for all companies within the Group.
in terms of total expense for the company, must not
Competition
exceed SEK 12 M for the period. The criteria for the
Competition in the spare parts market is fierce
size of the individual bonus shall be determined by
and within the brand independent trade there are
Shrinkage
the company’s Board of Directors.
approximately 400 stores in Sweden in which the
Activities relating to shrinkage are continuously in
four largest players, including Mekonomen, all have
progress within Mekonomen, to define what is scrap-
SENSITIVITY ANALYSIS
product ranges that cover most automotive makes.
ping, internal consumption and actual theft. The
Mekonomen’s earnings were influenced by a
The situation is similar in both Norway and Den-
activities to combat shrinkage are based on the idea
number of factors, which include, in addition to
mark, with only a few major players with complete
that it is important to focus on all aspects of shrink-
changes in sales volume and expenses, exchange-
ranges, but there is also competition from a number
age, for example, by reviewing order procedures,
rate fluctuations on imported goods, margins for
of smaller players. Accessibility is very important
delivery checks and unpacking goods. This will
purchased goods and salary changes. Virtually all
in this market, which means that delivery rate is a
improve knowledge on procedures for managing
imports originate from Europe where the currency
key factor in competition. Accordingly, Mekonomen
shrinkage, while providing a basis for increased
is primarily EUR and SEK. Imports in EUR represent
attaches great importance to logistics and related
vigilance of goods that are particularly theft-prone.
slightly less than 40 per cent of the purchased vol-
optimization activities.
Financial risks
ume. Due to the high correlation between DKK and
EUR, sales and purchases in these currency flows
Operational risks
Mekonomen’s financial policy regulates how vari-
may be matched. The table below shows the cur-
Within the company, there is significant awareness
ous types of risks shall be managed and states the
rency effects on the net flow for each currency. NOK
that the increasingly centralised IT structure could
risk exposure that the operation can accept. The
and DKK pertain to internal sales from Mekonomen
provide the Group with considerable advantages
main focus is to aim at a low risk profile. The policy
Grossist AB to individual countries, and the year’s
and improved possibilities. Consequently, preven-
identifies risks pertaining to value management,
profit in Norway and Denmark. Hedging pertaining
tive efforts are prioritized and the organisation re-
cash management and capital procurement. Refer
to the net flows and internal receivables was imple-
sponsible for this is well developed, as is planning for
also to Note 31 for a description of the financial risks
mented during the year.
continuity in operations in the event of unforeseen
identified and managed by Mekonomen.
circumstances.
It is very important for the Group’s fire protection
14
PARENT COMPANY
work that there is a well-functioning fire organisation,
The Parent Company operations comprise Group
regular internal control and training. Mekonomen’s
management and Group-wide functions and finan-
Administration Report | Mekonomen Annual Report 2008
cial management. Loss after net financial income was
BOARD OF DIRECTORS’ WORK 2008
SEK 17 M (loss: 18) excluding dividends from subsidiar-
At the Annual General Meeting in May 2008, it
ies. The average number of employees was 61 (50).
was decided that the Board shall comprise seven
ordinary members with no deputy members. All
ENVIRONMENT
current members, Fredrik Persson, Marcus Storch,
The Group does not conduct any operations
Antonia Ax:son Johnson, Kenny Bräck, Anders G
that require permits according to the Swedish
Carlberg, Wolff Huber and Helena Skåntorp were
Environmental Code. Environmental activities are
re-elected. Fredrik Persson was re-elected Chairman
concentrated on the best and most efficient way
of the Board.
to adapt operations environmentally in terms of
During 2008, the Board held eight meetings (eight),
PROPOSED APPROPRIATION OF PROFIT
Parent Company
The following profit is available for distribution by the
Annual General Meeting, SEK 000’s:
Unappropriated profit
brought forward
364,808
Profit for the year
249,692
TOTAL
614,500
distribution and packaging material. These two
of which one was the statutory meeting. At Board
The Board of Directors and President propose that profits
be distributed as follows:
“guiding principles” from the Group’s environmental
meetings, it was primarily the company’s financial
Dividend to shareholders (SEK 6.00 per share)
185,213
plan apply to both the supply and delivery of goods.
development, the launch of new concepts and the
To be carried forward
429,287
When procuring transport services, considerable
company’s future strategy that were addressed.
TOTAL
614,500
emphasis is placed on high efficiency and less re­
Within Mekonomen’s Board of Directors, there
THE BOARD’S STATEMENT CONCERNING THE
load­ing to minimise the transport distances. At the
is a Remuneration Committee, which focuses on
centralised warehouse and store warehouses, fire-
remuneration of Company Management. This
PROPOSED DIVIDEND
proof rooms for chemicals and petroleum products
Committee, which held two meetings during 2008,
Following the proposed dividend, the Parent Com-
are being constructed.
comprises Fredrik Persson, Marcus Storch and Anders
pany’s equity/assets ratio will amount to 59 per cent
G Carlberg. Other matters are handled by the Board
and the Group’s equity/assets ratio to 48 per cent.
in its entirety.
The equity/assets ratio is satisfactory considering
EVENTS AFTER THE END OF THE YEAR
that the company’s and the Group’s operations con-
There were no significant events after the end of
AUDITORS
tinue to operate profitably. It is estimated that cash
The auditor for the company is elected at the An-
and cash equivalents in the company and the Group
SHARE
nual General Meeting every fourth year. According
will remain at a satisfactory level.
Mekonomen’s share capital amounted to SEK 77 M
to a resolution of the Annual General Meeting,
and comprises 30,868,822 shares with a quotient
auditors’ fees are paid against invoices. The com­
dends do not prohibit the Parent Company or other
value of SEK 2.50 per share. All shares have the same
p­any’s auditor participates in Board meetings in
Group companies from fulfilling their obligations
voting rights. Axel Johnson AB and AFA Försäkring
conjunction with the third-quarter report and at
in the short or long term. Neither do the dividends
represent more than one tenth of the voting rights.
the Board meeting when year-end reports and
influence the Group’s ability to implement required
The Axel Johnson AB Group holds an option entitling
proposals for the Annual Report are presented and
investments. Accordingly, the proposed dividends can
the company to additionally acquire up to slightly
in this connection he/she submits the report from
be justified by what is stated in the prudence principle,
more than 3 per cent of the total number of shares
the audit of the company’s financial position and
Chapter 17, Section 3, Paragraphs 1–3 of the Swedish
from the Fraim family. The option extends until the
internal control. At the 2007 Annual General Meet-
Companies Act. For further information regarding
Fraim family’s joint ownership falls below 10 per cent.
ing, the auditing firm Deloitte AB, with Authorised
the company’s and the Group’s earnings, refer to the
Public Accountant Lars Svantemark as the Auditor
following income statement, balance sheet, cash-flow
in Charge, was elected for the next four-year period.
statement and accompanying notes.
the year.
SHARE DIVIDEND
The Board is of the opinion that the proposed divi-
The Board proposes a share dividend of SEK 6.00
(6.00) based on profit for the year and an extraordinary dividend of SEK 0.00 (5.00) per share.
15
Mekonomen Annual Report 2008 | Group
INCOME STATEMENT
SEK M
Note
2008
2007
2,646
2,530
1
Net sales
2
Other operating revenue
TOTAL REVENUES
45
20
2,691
2,550
OPERATING EXPENSES
Goods for resale
–1,317
–1,294
Other external costs
4
–456
–410
Personnel expenses
5
–633
–560
Depreciation/amortisation of tangible and intangible fixed assets
6
–34
–37
251
250
EBIT
FINANCIAL INCOME AND EXPENSES
Income from divestment of subsidiaries
5
153
Interest income
12
10
Interest expense
–8
–9
Exchange-rate difference
PROFIT AFTER FINANCIAL ITEMS
Tax on profit for the year
PROFIT FOR THE YEAR
9
1
14
261
418
–72
–70
189
348
180
341
Profit for the year attributable to:
Parent Company’s shareholders
Minority owners
9
7
189
348
5.84
11.03
30,868,822
30,868,822
27.00
31.70
Cash flow, SEK
6.77
10.32
Dividend, SEK **
6.00
11.00
102.70
99.70
Earnings per share before dilution attributable to
Parent Company's shareholders, SEK*
KEY RATIO PER SHARE
Number of shares at the end of the period
Shareholders’ equity , SEK
Pay-out ratio, %
*) No dilution is currently applicable **) Proposed dividend for 2008.
16
Group | Mekonomen Annual Report 2008
CASH FLOW STATEMENT
SEK M
Note
2008
2007
OPERATING ACTIVITIES
Profit after financial items
261
418
24
–129
285
289
–85
–34
200
255
Decrease(+)/increase(-) of inventories
–4
–15
Decrease(+)/increase(-) of receivables
–18
30
31
50
Adjusted for items not affecting liquidity
27
Tax paid
CASH FLOW FROM OPERATING ACTIVITIES
BEFORE CHANGE IN WORKING CAPITAL
CASH FLOW FROM CHANGES IN WORKING CAPITAL
Decrease(-)/increase(+) of liabilities
INCREASE(-)/DECREASE(+) RESTRICTED WORKING CAPITAL
CASH FLOW FROM OPERATING ACTIVITIES
9
65
209
320
–58
–27
–61
–43
26
518
–93
448
INVESTMENTS
Divestment(+)/acquisition(-) of subsidiaries
28
Acquisition of tangible and intangible fixed assets
Divestment of tangible fixed assets
CASH FLOW FROM INVESTING ACTIVITIES
FINANCING ACTIVITIES
Increase(-)/decrease(+) of long-term lending
Amortisation of loans
Loans raised
–10
0
–
–256
36
–
Dividends paid
–347
–318
CASH FLOW FROM FINANCING ACTIVITIES
–321
–574
CASH FLOW FOR THE YEAR
–205
194
290
95
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR
Exchange-rate difference in cash and cash equivalents
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
18
0
1
85
290
17
Mekonomen Annual Report 2008 | Group
BALANCE SHEET
SEK M
Note
31 Dec.
2008
31 Dec.
2007
232
198
ASSETS
FIXED ASSETS
INTANGIBLE ASSETS
13
Goodwill
Capitalised expenditure for IT systems
TOTAL INTANGIBLE ASSETS
22
8
254
206
TANGIBLE FIXED ASSETS
Land and buildings
10
4
3
Equipment and transport
12
112
89
Leased equipment and transport
12
TOTAL TANGIBLE FIXED ASSETS
3
5
119
97
FINANCIAL FIXED ASSETS
Other long-term receivables
15
TOTAL FINANCIAL FIXED ASSETS
Deferred tax assets
14
TOTAL FIXED ASSETS
26
10
26
10
3
2
402
315
602
554
CURRENT ASSETS
Goods for resale
Properties for divestment
Current receivables
Cash and cash equivalents
18
10
7
22
16,17
326
300
85
290
TOTAL CURRENT ASSETS
18
1,020
1,166
TOTAL ASSETS
1,423
1,481
Group | Mekonomen Annual Report 2008
BALANCE SHEET
SEK M
Note
31 Dec.
2008
31 Dec.
2007
SHAREHOLDERS’ EQUITY AND LIABILITIES
SHAREHOLDERS’ EQUITY
25
Share capital, (30,868,822 shares)
Other contributed capital
Statutory reserve
77
77
343
343
17
3
Profit brought forward including profit for the year
396
555
TOTAL SHAREHOLDERS EQUITY ATTRIBUTABLE TO
PARENT COMPANY'S SHAREHOLDERS
833
978
Minority share of shareholders' equity
18
18
TOTAL SHAREHOLDERS' EQUITY
851
996
LONG-TERM LIABILITIES
Leasing liabilities, interest-bearing
19
1
2
Deferred tax liabilities, interest-free
14
38
39
Provisions
20
TOTAL LONG-TERM LIABILITIES
3
3
42
44
1
CURRENT LIABILITIES
Liabilities to credit institutions, interest-bearing
21
50
Leasing liabilities, interest-bearing
21
3
3
22
31
455
406
Tax liabilities
Other current liabilities, non interest-bearing
21,22
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
530
441
1,423
1,481
MEMORANDUM ITEMS
Pledged assets
23
92
92
Contingent liabilities
23
19
20
19
Mekonomen Annual Report 2008 | Parent Company
INCOME STATEMENT
2008
2007
Net sales
77
74
Other operating revenue
32
6
109
80
SEK M
Note
1
TOTAL REVENUES
OPERATING EXPENSES
Goods for resale
–26
–5
Other external costs
4
–54
–46
Personnel expenses
5
–53
–47
Depreciation/amortisation and impairment of tangible and intangible fixed assets
6
–8
–5
–32
–23
300
312
EBIT
FINANCIAL INCOME AND EXPENSES
Dividend on shares in subsidiaries
Income from divestment of shares in subsidiaries
3
–3
Interest income
27
16
Interest expense
–16
–12
Exchange-rate difference
PROFIT AFTER FINANCIAL ITEMS
4
283
294
–44
Appropriations
7
–52
Tax on profit for the year
9
19
16
250
265
PROFIT FOR THE YEAR
20
1
Parent Company | Mekonomen Annual Report 2008
CASH FLOW STATEMENT
SEK M
Note
2008
2007
283
294
OPERATING ACTIVITIES
Profit after financial items
Adjusted for items not affecting liquidity
27
–1
9
282
303
Tax paid
–54
–40
CASH FLOW FROM OPERATING ACTIVITIES BEFORE
CHANGES IN WORKING CAPITAL
228
262
CASH FLOW FROM CHANGES IN WORKING CAPITAL
Decrease(+)/increase(-) of inventories
0
0
Decrease(+)/increase(-) of receivables
33
67
Decrease(-)/increase(+) of liabilities
–48
–90
INCREASE(-)/DECREASE(+) RESTRICTED WORKING CAPITAL
–15
–23
CASH FLOW FROM OPERATING ACTIVITIES
213
239
INVESTMENTS
Divestment(+)/acquisition(-) of subsidiaries
Acquisition of fixed assets
Divestment of tangible fixed assets
CASH FLOW FROM INVESTING ACTIVITIES
–2
0
–20
–12
9
0
–13
–12
FINANCING ACTIVITIES
Increase(-)/decrease(+) of long-term lending
–
221
Dividends paid
–340
–309
CASH FLOW FROM FINANCING ACTIVITIES
–340
–88
CASH FLOW FOR THE YEAR
–140
140
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
18
140
0
0
140
21
Mekonomen Annual Report 2008 | Parent Company
BALANCE SHEET
SEK M
Note
31 Dec.
2008
31 Dec.
2007
22
8
22
8
ASSETS
FIXED ASSETS
INTANGIBLE FIXED ASSETS
13
Capitalised expenditure for IT systems
TANGIBLE FIXED ASSETS
Equipment and transport
12
11
13
11
13
249
247
249
247
282
268
1
1
FINANCIAL FIXED ASSETS
Participation in Group companies
24
TOTAL FIXED ASSETS
CURRENT ASSETS, INVENTORIES, ETC.
Goods for resale
CURRENT RECEIVABLES
Accounts receivable
Receivables in Group companies
Other receivables
1
360
5
1
46
46
580
408
0
140
TOTAL CURRENT ASSETS
581
548
TOTAL ASSETS
863
816
Prepaid expenses and accrued income
TOTAL CURRENT RECEIVABLES
CASH AND BANK BALANCES
22
2
527
17
Parent Company | Mekonomen Annual Report 2008
BALANCE SHEET
SEK M
Note
31 Dec.
2008
31 Dec.
2007
77
77
SHAREHOLDERS’ EQUITY AND LIABILITIES
SHAREHOLDERS’ EQUITY
25
RESTRICTED SHAREHOLDERS' EQUITY
Share capital, (30,868,822 shares)
Statutory reserve
3
3
80
80
Profit brought forward
365
291
Profit for the year
250
265
TOTAL NON-RESTRICTED SHAREHOLDERS' EQUITY
615
556
TOTAL SHAREHOLDERS' EQUITY
695
637
138
86
3
3
Accounts payable
9
12
Liabilities to Group companies
4
50
Tax liabilities
1
16
Other liabilities
2
1
11
11
TOTAL RESTRICTED SHAREHOLDERS' EQUITY
NON-RESTRICTED SHAREHOLDERS' EQUITY
UNTAXED RESERVES
PROVISIONS
20
CURRENT LIABILITIES
Accrued expenses and deferred income
22
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
27
90
863
816
MEMORANDUM ITEMS
Pledged assets
23
92
92
Contingent liabilities
23
19
20
23
Mekonomen Annual Report 2008 | Changes in shareholders’ equity
GROUP
SEK M
OPENING BALANCE ON 1 JANUARY 2007
Share capital
Other contributed capital
Translation
reserve
Profit brought
forward
Total attributable to Parent
Company
shareholders
77
343
–11
523
933
Translation difference pertaining to foreign operations
13
Profit for the year
0
0
341
343
OPENING BALANCE ON 1 JANUARY 2008
77
343
Translation difference pertaining to foreign operations
7
348
–318
0
0
3
555
978
18
996
3
555
978
18
996
9
189
14
180
0
180
343
17
14
180
180
9
189
–340
–340
–8
–347
396
833
Acquisition/divestment of minority shares
77
13
–10
Dividends
CLOSING BALANCE ON 31 DECEMBER 2008
348
341
Profit for the year
0
7
–309
14
TOTAL REVENUES AND EXPENSES FOR THE PERIOD
953
341
Acquisition of minority shares
77
20
–309
Dividends
CLOSING BALANCE ON 31 DECEMBER 2007
Total
shareholders’
equity
13
341
TOTAL REVENUES AND EXPENSES FOR THE PERIOD
Minority
shares
–1
–1
18
851
Number of shares at 31 December 2008 amounted to 30,868,822.
PARENT COMPANY
SEK M
TOTAL, 31 DECEMBER 2006
Share capital
Statutory
reserve
Profit brought
forward
77
3
452
10
10
–10
Appropriation of profit according to Annual General Meeting resolution
Group contribution received
191
Tax on Group contribution received
–54
Dividends
–309
Profit for the year
TOTAL, 31 DECEMBER 2007
265
77
3
291
265
Appropriation of profit according to Annual General Meeting resolution
265
–265
Group contribution received
205
Tax on Group contribution received
–58
Dividends
–340
Profit for the year
TOTAL, 31 DECEMBER 2008
24
Profit/loss for
the year
250
77
3
365
250
Notes | Mekonomen Annual Report 2008
Note 1 Accounting principles
ACCOUNTING AND VALUATION PRINCIPLES
July 2008. The new interpretative statements, IFRIC
In addition to IFRS 8, IAS 1, additional amendments
The consolidated accounts were prepared in accord-
11, 12 and 14 as well as amendments to IAS 39 and
were made to IAS 23 Borrowing Costs, IAS 27
ance with International Financial Reporting Stand-
IFRS 7 do not affect the Mekonomen Group’s income
Consolidated and Separate Financial Statements,
ards (IFRS) as approved by the European Union and
statements and balance sheets.
IAS 32 Classification of Financial Instrument, IAS 39
interpretations issued by the International Financial
Financial Instruments, Recognition and Measure-
Reporting Interpretations Committee (IFRIC) for ap-
Amended accounting principles 2009
ment, IFRS 1 First-time Adoption of IFRS, IFRS 2
plication as of 31 December 2008. Furthermore, the
The new or amended standards and interpretation
Share-based Payment, IFRS 3 Business Combina-
Swedish Financial Reporting Board’s recommenda-
statements that become effective in 2009 have not
tions, Improvements to IFRSs in 2008, IFRIC 13
tion RFR 1.1, Supplementary Accounting Regulations
been used in advance in the application of these
Customer Loyalty Programs, IFRIS 15 Agreements
for Groups, has been applied.
financial statements. There are no plans for the
for the Construction of Real Estate, IFRIC 16 Hedges
advance use of the new regulations and amend-
of a net investment in a Foreign Operation, IFRIC
Swedish kronor (SEK), which is also the Group’s report-
ments that are applicable from the 2009 financial
17 Distributions of Non-cash Assets to Owners and
ing currency. All amounts are stated in SEK M unless
year. To the extent anticipated, Mekonomen has
IFRIC 18 Transfers of Assets from Customers. IFRS
otherwise stated.
not yet made an assessment of the effects on the
1 and 3, IAS 27 and 29 as well as IFRIC 15, 17 and 18
The items in the Annual Report are measured at
financial statements of the application of the new
have not yet been approved for application by the
acquisition value (cost), with the exception of certain
and amended standards below and interpretation
EU, which is why these have not been applied. It is
financial instruments, which are measured at fair
statements not described below.
anticipated that the described amendments will not
The functional currency of the Parent Company is
value.
The Parent Company’s accounts were prepared in
accordance with the Annual Accounts Act and RFR 2.1.
The Group’s main accounting principles are
IFRS 8, Operating Segments, defines what an
have any significant impact on Mekonomen Group’s
operating segment is and what information should
income statements and balance sheets, cash-flow
be submitted about these in financial statements.
statements and shareholders’ equity.
The standard requires that segment information
is presented based on management’s perspective,
CONSOLIDATED ACCOUNTS
which means that it is presented in the same manner
The consolidated accounts include the Parent Com-
Amended accounting principles 2008
as in the internal reporting. IFRS 8 is an absolute infor-
pany and all companies over which the Parent Com-
From 1 January 2008, three interpretative state-
mation standard, which is why it does not have any
pany has a controlling influence. Controlling influence
ments were issued from IFRIC. IFRIC 11, IFRIC 2
impact on the Group’s income statement and balance
refers to companies in which Mekonomen has a right
Group and Treasury Share Transactions, IFRIC
sheets, cash flow and shareholders’ equity. Application
to formulate financial and operational strategies. This
12 Service Concession Arrangements and IFRIC
of IFRS 8 will not result in any changes in the Group’s
normally occurs through ownership and voting rights
14 The limit on a Defined Benefit Asset, Minimum
segments.
of more than 50 per cent. The existence and effect of
described below.
Funding Requirements and their interaction. IFRIC
IAS 1, Presentation of Financial Statements, means
potential voting rights, which are currently available for
12 has not been approved by the EU and has thus
that the presentation of financial statements will
exercise or conversion, are taken into account when an
not been applied. During autumn 2008, IASB made
change in certain respects and that new, optional
assessment is made of whether the Group can exercise
amendments to IAS 39 and IFRS 7, which were also
terms for reports are proposed. The Mekonomen
controlling influence over another company. Subsidiar-
approved for application in the EU, which states
Group’s future presentation of financial statements is
ies are included in the consolidated accounts from the
that under specific conditions it is permissible to
thus affected by the introduction. The amendment
point in time at which controlling influence is achieved
reclassify certain financial assets effective from 1
will not have any impact on the amounts recognised.
and excluded from the consolidated accounts from the
25
Mekonomen Annual Report 2008 | Notes
point in time at which the controlling influence ceases.
to fair values attributable to acquisition of operations
Group as lessee
The consolidated accounts were prepared in accord-
with functional currencies other than SEK are treated
Assets held under financial leasing agreements
ance with the purchase method, which means that
as assets and liabilities in the acquired operations’
are recognised as fixed assets in the consolidated
the carrying amount of shares in subsidiaries of the
currencies and translated at the exchange rates on the
balance sheets at fair value at the beginning of the
Parent Company is eliminated against shareholders’
closing date.
leasing period or at the minimum leasing fees if
equity including the proportion of equity contained
this is lower. The liability that the lessee has to the
in the untaxed reserves of each Group company. If
Segment reporting
lessor is recognised in the balance sheet under the
applicable, the accounting records of subsidiaries
The Mekonomen Group uses geographic regions as
heading “Lease agreement” divided into long-term
are adjusted to comply with the same principles that
primary segments, since the Group’s organisation
and short-term liabilities. Leasing payments are
apply for the other Group companies. All internal
and control is based on geographical division. The
divided between interest and amortisation of debt.
transactions between Group companies and inter-
regions consist of each country, Sweden, Norway
Interest is divided over the leasing period so that
company transactions were eliminated during the
and Denmark. Secondary segments are not reported
each reporting period is charged with an amount
preparation of the consolidated accounts.
since Mekonomen only has one line of business.
corresponding to a fixed interest rate of the liability
Profit/loss for each segment includes the contribution received by the segment through wholesale
recognised directly in profit and loss in the income
Transactions in foreign currencies are translated into
operations. This is to facilitate comparison between
statement. Lease fees that are paid during operating
Swedish kronor (SEK) according to the exchange rate
segments.
lease agreements are systematically expensed over
on the date of the transaction. Monetary items (assets
the leasing period.
and liabilities) in foreign currencies are translated into
Revenue recognition
SEK according to the exchange rate on closing date.
Sales of goods are recognised at delivery/handover
Remuneration to employees
Exchange-rate gains and losses that arise in connection
of products to the customer, in accordance with
The Group has both defined-contribution and
with such translations are recognised in profit and loss
conditions of sale. Sales are recognised net after
defined-benefit pension plans. A defined-benefit
in the income statement as Other operating revenue
deduction of discounts and value-added tax. Sales
pension plan is a pension plan that guarantees an
and/or Other operating expense. Exchange-rate differ-
from the centralised warehouse to stores occur in
amount, which the employee receives as pension
ences that arise in foreign long-term loans and liabilities
the currency of the receiving country. Consequent-
benefits upon retirement, normally based on several
are recognised in financial income and expenses.
ly, exchange-rate fluctuations only affect wholesale
different factors, for example, salary and period of
operations. Intra-Group sales are eliminated in the
service. A defined-contribution pension plan is a
consolidated accounts.
pension plan in which the Group, after having paid
Translation of foreign subsidiaries
When the consolidated accounts were prepared, the
Interest revenues are recognised on an accruals
its pension premium to a separate legal entity, has
Group’s foreign operations’ balance sheets were trans-
basis over the term by applying the effective interest
fulfilled its commitments towards the employee.
lated from their functional currencies to SEK based
method.
on the exchange rates on the closing date. The
26
reported during each period. Interest expenses are
Translation of transactions in foreign currency
Defined-contribution plans are recognised as an
expense in the period to which the premiums paid are
income statements were translated at the average
Leasing
annual exchange rate. Translation differences that
A financial leasing contract is an agreement accord-
arose were recognised against translation reserves
ing to which the financial risks and benefits that are
culated using the Projected Unit Credit Method where-
in shareholders’ equity. The accumulated translation
connected to ownership of an object are essentially
by expenses are distributed over the employee’s
differences were transferred and recognised as part
transferred from the lessor to the lessee. The leasing
period of employment. These commitments, meaning
of capital gains or capital losses in cases where foreign
object refers primarily to company vehicles, distri-
the liabilities that are recognised, are measured at the
operations were divested. Good­will and adjustments
bution vehicles and forklift trucks.
present value of expected future payments, taking
attributable.
Pension expenses for defined-benefit plans are cal-
Notes | Mekonomen Annual Report 2008
estimated future salary increases into account, apply-
benefit plan, which is the reason why the ITP plan is
asset is recovered or the debt settled. Deferred tax is
ing a discount rate corresponding to the interest on
recognised as a defined-contribution plan in accord-
recognised as revenues or expenses in the income
first-class corporate bonds or government bonds is-
ance with IAS 19.30.
statement, except in cases when it pertains to transac-
sued in the same currency as the pension is to be paid
Remuneration in connection with termination
tions or events that are recognised directly against
in, with a remaining duration that is comparable to
can be paid when an employee has served notice
shareholders’ equity. The deferred tax is then also rec-
the current commitment and with deductions for the
of termination prior to the expiration of the normal
ognised directly against shareholders’ equity. Deferred
fair value of plan assets. Should a net asset arise, this
pension date or when an employee accepts voluntary
tax assets and tax liabilities are offset when they are
will be recognised only to the extent that it represents
retirement. The Group recognises liabilities and
attributable to income tax that is debited by the same
future financial benefits, for example, in the form of re-
expenses in connection with a termination of employ-
authority and when the Group intends to pay the tax
payments or reduced future premiums. Accumulated
ment, when Mekonomen is unquestionably obligated
with a net amount.
actuarial gains and losses, outside the so-called cor-
to either terminate employment prior to the normal
ridor, are recognised in profit and loss in the income
termination date or to voluntarily pay remuneration
GOODWILL
statement as revenues or expenses, distributed over
to encourage early retirement.
Goodwill comprises the amount by which the ac-
the employee’s average remaining estimated period of
employment until retirement.
The corridor represents the higher of 10 per cent of
the present value of the defined-benefit pension obli-
Mekonomen reports a liability and an expense for
quisition value exceeds the fair value of the Group’s
bonuses when there are legal or informal obliga-
portion of the acquired subsidiary’s identifiable net
tions, based on earlier practice, to pay bonuses to
assets on the date of acquisition. If in conjunction
employees.
with the acquisition, the fair value of the acquired as-
gation and 10 per cent of the value of the plan assets.
sets, liabilities and contingent liabilities exceeds the
Expenses pertaining to employment during previous
TAX
acquisition value, the surplus is recognised directly
periods are recognised directly in profit and loss in the
The Group’s total tax expense comprises current
in profit and loss in the income statement. Goodwill
income statement unless changes in the pension plan
tax and deferred tax. Current tax is tax that shall be
has an unspecified useful life and is recognised
are subject to the employees remaining in service
paid or received pertaining to the current year and
at acquisition value with deduction for accumu-
during a stipulated period. In such cases, the expense
adjustments of prior years’ current tax. Deferred tax
lated impairments and accumulated amortisation
pertaining to the employment period from previous
is calculated based on the difference between the
implemented prior to the transition to IFRS. In the
periods will be distributed according to the straight-
carrying amounts and the values for tax purposes
divestment of an operation, the portion of goodwill
line method over the earnings period. Expenses for
of company assets and liabilities. Deferred tax is
attributable to this operation that has not been
service during the present period are recognised as
recognised according to the balance sheet method.
amortised is recognised in the calculation of gain or
personnel expenses.
Deferred tax liabilities are recognised in principle on
loss on the divestment. Goodwill is allocated to the
all taxable temporary differences, while deferred tax
lowest cash-generating unit.
One of the Group’s defined-benefit pension plans
comprises a multi-employer defined-benefit pension
assets are reported to the extent that is probable that
plan (the ITP plan at Alecta). In accordance with Me-
the amount can be utilised against future taxable
Other intangible assets
konomen’s accounting principles, a multi-employer
surplus.
Expenditure for the development and implementa-
defined-benefit plan is recognised based on the rules
The carrying amount on deferred tax assets is
tion of IT systems can be capitalised if development
of the plans and reports its proportional share of the
assessed at each accounting year-end and reduced to
costs are estimated to exceed SEK 1 M. An individual
defined-benefit pension obligations and of plan assets
the extent that it is no longer probable that sufficient
assessment is conducted on each occasion. Capitali-
and expenses related to the plan in the same manner
taxable surplus will be available to be utilised either in
sation is permissable if it is probable that future fi-
as for any other similar defined-benefit pension plan.
its entirety or partially against the deferred tax asset.
nancial benefits will be accrued to the company and
However, Alecta has not been able to present suffi­
cient information to facilitate reporting as a defined
Deferred tax is calculated based on the tax rates
that are expected to apply for the period when the
the acquisition value of the asset can be calculated
in a reliable manner.
27
Mekonomen Annual Report 2008 | Notes
Tangible fixed assets
value. Impairment losses are recognised in profit
recognised either as an asset or liability, depending
Tangible fixed assets are recognised as assets in the
and loss in the income statement in the period in
on changes in the exchange rate. A financial asset or
balance sheets if it is probable that future financial
which they are established.
financial liability is recognised in the balance sheet
benefits will be accrued to the company and the
With regard to goodwill items, an impairment test is
when the company becomes party to the contrac-
acquisition value of the asset can be calculated in
conducted at least once a year. Refer also to Note 13 for
tual conditions of the instrument. Accounts receiva-
a reliable manner. Tangible fixed assets, primarily
information on how this test is performed.
bles are recognised when an invoice is sent and
comprising equipment, computers and means of
accounts payable are recognised when an invoice
transport are recognised at acquisition value with
Assets held for sale
has been received. With the exception of cash and
deduction for accumulated depreciation and any
Fixed assets that Mekonomen has offered for sale,
cash equivalents, only an insignificant portion of
impairment. Depreciation of tangible fixed assets is
which are also immediately available for sale and for
the financial assets is interest-bearing, which is why
recognised as an expense so that the asset’s value is
which the carrying amount will largely be recovered
interest exposure is not reported. The maximum
depreciated according to the straight-line method
through the sale, are recognised as current assets.
credit risk corresponds to the carrying amount.
over its estimated useful life. The following percent-
Such assets are valued and thereby recognised at
The terms for long-term and short-term loans are
ages were applied for depreciation:
the lowest of the carrying amount and fair value
stated in separate note disclosures; other financial
after deductions for selling expenses.
liabilities are non interest-bearing. A financial asset,
FIXED ASSETS
Per cent
Land improvements and
permanent equipment in buildings
Equipment
5–10
10–15
or portion thereof, is eliminated when the rights
Inventories
contained in the contract are realised or mature. A
Inventories are recognised at the lower of the acqui-
financial liability, or portion thereof, is eliminated as
Vehicles
20
sition value and net realisable value. The acquisition
it is regulated when the commitment in the agree-
Servers
20
value is established by using the first in/first out
ment has been fulfilled or has been terminated in
Workplace computers
33
principle (FIFO).
another manner.
A provision for estimated obsolescence in inventoImpairment losses
ries is established when there is an objective basis to
Calculation of fair value, financial instruments
At each accounting period, an assessment is made
assume that the Group will be unable to receive the
When establishing the fair value of derivatives,
to determine whether there is any indication that
book value when inventories are sold in the future.
official market listings on the balance-sheet date are
an impairment loss should be recognised on any
The size of the provision amounts to the difference
used. If no such information is available, a valuation
of the Group’s assets. If there is such an indication,
between the asset’s carrying amount and the value of
is conducted applying established methods, such as
the asset’s recoverable value is established. The
expected future cash flows. The reserved amount is
discounting future cash flows to the quoted market
recoverable value is deemed to be the higher of the
recognised in profit and loss in the income statement.
rate for each term. Translation to SEK is based on the
asset’s value in use in operations and the value that
The inventory value was reduced by the value
would be received if the asset were to be divested to
included in the inter-company profit from goods sold
an independent party, that is, the asset’s net realis-
from the wholesaler to the company’s own stores.
able value. The value in use is the present value of
28
quoted exchange rate on the balance-sheet date.
Long-term receivables
Long-term receivables comprise primarily deposits
all inward and outward payments attributable to the
Financial instruments
and lease-purchase agreements. These are recog-
asset during the period in which it is expected to be
Financial assets recognised as assets in the balance
nised at the accrued acquisition value.
utilised in operations, plus the present value of the
sheet include loan receivables, accounts receivables
net realisable value at the end of its useful life. If the
and cash and cash equivalents. Liabilities in the
Accounts receivable
calculated recoverable value is less than the carry-
balance sheet include long-term and short-term
Accounts receivables are recognised net after
ing amount, the asset is impaired to its recoverable
loans and accounts payable. A currency derivative is
provisions for possible bad debts. The expected
Notes | Mekonomen Annual Report 2008
term of accounts receivable is short, which is why
Loans
the Group’s and the Parent Company’s accounting
the amount is recognised at nominal value without
Liabilities to credit institutions, overdraft facilities
principles are stated below.
discounting in accordance with the method for ac-
and other liabilities (loans) are initially recognised
crued acquisition value. A provision for possible bad
at fair value net after transaction costs. Thereafter,
Tax
debts on accounts receivable is made when there
loans are recognised at accrued acquisition value.
The amounts reserved as untaxed reserves consist
are objective indications to assume that the Group
Possible transaction costs are distributed over the
of taxable temporary differences. Due to the link
will not be able to receive all the amounts that are
loan period applying the effective interest method.
between accounting and taxation, the deferred tax
due for payment in accordance with the receiva-
Long-term liabilities have an estimated term longer
liabilities that are attributable to the untaxed re-
bles’ original conditions. The size of the provision
than one year while short-term liabilities have a term
serves, are not recognised separately in a legal entity.
consists of the difference between the asset’s carry-
of less than one year.
The changes in untaxed reserves are recognised in
ing amount and the value of estimated future cash
accordance with Swedish practice in the income
flows. The reserved amount is recognised in profit
Share capital
statement for individual companies under the
and loss in the income statement.
Ordinary shares are classified as share capital. Tran­s­-
heading “Appropriations.” The accumulated value
action costs in connection with a new share issue
of provisions are recognised in the balance sheet
Cash and cash equivalents
are recognised as a deduction, net after tax, from
under the heading “Untaxed reserves,” of which 26.3
Cash and cash equivalents comprise cash funds
proceeds from the new share issue.
per cent are regarded as deferred tax liabilities and
held at financial institutions and current liquid in-
73.7 per cent as restricted shareholders’ equity.
vestments with a term from the date of acquisition of
Cash-flow statement
less than three months, which is exposed to only an
The cash-flow statement was prepared in accord-
Reporting of Group contributions
insignificant risk of fluctuations in value. Cash and
ance with the indirect method. The recognised
Mekonomen recognises Group contributions and
cash equivalents are recognised at nominal value.
cash flow comprises only transactions that result in
shareholders’ contributions in accordance with the
inward and outward payments.
statement from the Swedish Financial Reporting
Derivative instruments
Board, URF 2. Shareholders’ contributions are recog-
Mekonomen applies hedge accounting with regard
Parent Company’s accounting principles
nised directly against non-restricted shareholders’
to receivables in foreign currencies. Hedging is con-
The accounts of the Parent Company were prepared
equity with the receiver and as an increase in the
ducted using foreign-exchange forward contracts
in accordance with the Swedish Annual Accounts
item “participations in Group companies” with the
with a maximum term of three months. Hedged
Act and the Swedish Financial Reporting Board’s
provider. Group contributions that are paid and
receivables in foreign currencies are recognised at
recommendation RFR 2.1, Reporting of Legal Enti-
received with the aim of minimising the Group’s tax
the interest rate applying on the balance-sheet date
ties. Application of RFR 2.1 means that the Parent
payments are recognised as a reduction or increase
and hedging instruments are recognised separately
Company shall, in the annual accounts for a legal
in non-restricted shareholders’ equity.
at fair value in the balance sheet.
entity, apply all of the IFRS and statements that have
been approved by the EU where this is possible
Pensions
Accounts payable
within the framework of the Swedish Annual Ac-
Defined-benefit and defined-contribution pension
The expected term for accounts payable is short,
counts Act and the law on safeguarding of pension
plans are recognised in accordance with the present
which is why the debt is recognised at nominal value
commitments and taking into account the link
Swedish accounting standard, which is based on the
without discounting according to the method for
between accounting and taxation. The recommen-
regulations in the law on safeguarding of pension
accrued acquisition value.
dation specifies which exceptions and additions
commitments.
shall be made from IFRS. The differences between
29
Mekonomen Annual Report 2008 | Notes
NOTE 2 Reporting of geographic segments
Sweden
Norway
Eliminations and
central items
Denmark
2008
2007
2008
2007
2008
2007
External net sales
1,297
1,270
630
584
704
661
Internal revenues
603
467
0
28
18
7
2
7
1
1,927
1,754
637
586
711
OPERATING REVENUE
211
216
76
81
Assets
693
873
173
179
2008
Total
2007
2008
2007
15
15
2,646
2,530
–603
–467
0
0
3
1
45
20
662
–585
–451
2,691
2,550
–2
–22
–34
–24
251
250
406
311
–60
–42
1,212
1,320
211
161
211
161
REVENUES
Other revenues
TOTAL REVENUES
0
Undistributed assets
TOTAL ASSETS
693
873
173
179
406
311
151
119
1,423
1,481
Liabilities
702
657
113
80
242
168
–477
–445
580
460
–8
25
–8
25
–485
–420
572
485
35
Undistributed liabilities
TOTAL LIABILITIES
Investments, tangible assets
702
657
113
80
242
168
18
11
4
4
19
14
Investments, IT systems
Depreciation (tangible assets)
3
6
44
17
8
17
8
15
14
4
5
7
12
5
6
31
37
Average number of employees for the period
671
637
233
202
397
382
61
50
1,363
1,271
Number of own stores
103
93
29
25
39
38
171
156
20
21
15
17
0
0
35
38
123
114
44
42
39
38
206
194
EBIT margin, %*
16
17
12
14
0
–3
9
10
Sales increase, %
10
5
9
9
7
–0
6
4
2,872
2,754
2,734
2,901
1,791
1,733
1,974
2,007
314
339
326
399
–5
–58
184
197
Number of partnership stores
NUMBER OF STORES IN THE CHAIN
KEY FIGURES
Sales/employee, SEK 000s
(converted into one-year balance)
Operating profit per employee, SEK 000s
(converted into one-year balance)
* When calculating the EBIT margin for the segments, internal sales were excluded.
)
30
Notes | Mekonomen Annual Report 2008
NOTE 3 Significant appreciations and assessments
The preparation of the annual accounts and applica-
PROPERTIES FOR SALE
mentioned types of intangible assets can be identified.
tion of various accounting standards are based to
During 2007, the majority of the Group’s properties
The only asset that could be suitable is customer rela­-
a certain extent on management’s assessments or
were sold and five of the remaining seven were di­-
tions, but these are normally not so strong as to be
assumptions and appreciations that are considered
vested in 2008. The remaining two properties are
considered justifiable to report as assets separate
reasonable under the circumstances. These assump­-
still classed as properties held for sale, since the
from goodwill. However, an examination is conducted
­t ions and appreciations are frequently based on
decision to sell these remains and activities to imple-
at each acquisition. The remaining surplus value is
historic experience but also of other factors, includ-­
ment the sales are in progress.
allocated to goodwill.
ing expectations on future events. The results
could differ if other assumptions and appreciations
COMPANY ACQUISITIONS
were used and the actual outcome will, in terms of
In conjunction with acquisitions, analyses are
definition, rarely agree with the estimated outcome.
prepared in which all identifiable assets and li-
The assumptions and appreciations made by Me-
abilities, including intangible assets, are identified
konomen in the 2008 annual accounts, and which
and measured at fair value at the acquisition date.
had the greatest impact on results and assets and
In accordance with IFRS 3, acquired identifiable in-
liabilities, are discussed below.
tangible assets, for example, customers, brands and
order backlog, shall be separated from goodwill. This
GOODWILL
applies if these fulfil the criteria as assets, meaning,
In assessing the impairment requirement for good-
they are possible to separate or are based in contrac-
will, appreciations and assessments are conducted,
tual or other formal rights, and that their fair values
for example, on the relevant company’s future earn-
can be established in a reliable manner.
ings capacity and growth. These assumptions are
described in detail in Note 14, Intangible fixed assets.
Pertaining to the type of operations acquired
by Mekonomen, it is highly unusual that the above-
NOTE 4 Audit expenses
Group
2008
Parent Company
2007
2008
2007
DELOITTE AB
Audit fee
4
4
1
1
Consultant fee
0
2
0
1
TOTAL
4
6
1
2
Audit assignment refers to the review of the annual
signments that rest upon the company’s auditor to
mentation of such other assignments. Everything
report and accounting as well as the Board’s and
perform and advice or other assistance resulting
else is “other assignments.”
President’s management of operations, other as-
from observations during such a review or imple-
31
Mekonomen Annual Report 2008 | Notes
NOTE 5 A
verage number of employees, salaries, other remuneration
and social security contributions
2008
AVERAGE NUMBER OF EMPLOYEES
2007
No. of employees
Of whom, men %
No. of employees
Of whom, men %
Sweden
61
53
50
64
TOTAL IN PARENT COMPANY
61
53
50
64
Sweden
671
83
637
85
Denmark
397
88
382
87
Norway
233
85
202
87
TOTAL IN SUBSIDIARIES
1,302
85
1,221
86
GROUP TOTAL
1,363
84
1,271
85
Salaries and other
remuneration
Soc. security
expenses (of which
pension costs
Salaries and other
remuneration
Soc. security
expenses (of which
pension costs
17,290
30,307
PARENT COMPANY
SUBSIDIARIES
SALARIES, REMUNERATION, ETC., SEK 000s
Parent Company
32,691
(5,287)
Subsidiaries
470,311
106,278
408,841
(28,885)
GROUP TOTAL
503,002
123,568
Board and
President*
(of which bonus, etc.)
97,696
(26,921)
439,148
(34,172)
SALARIES AND OTHER REMUNERATION DISTRIBUTED BETWEEN THE PRESIDENT
AND BOARD MEMBERS AND OTHER EMPLOYEES, SEK 000s
14,429
(3,772)
112,125
(30,693)
Board and
Other
President*
employees (of which bonus, etc.)
Other
employees
PARENT COMPANY
Mekonomen AB
TOTAL IN PARENT COMPANY
5,872
26,819
6,960
(864)
(414)
(1,703)
23,347
(969)
5,872
26,819
6,960
23,347
(864)
(414)
(1,703)
(969)
14,002
180,895
12,625
158,345
(1,485)
(1,216)
(1,266)
(960)
1,647
172,136
2,304
153,616
(82)
(0)
(248)
(0)
Norway
14,763
86,868
11,656
70,295
(487)
(622)
(260)
(115)
TOTAL IN SUBSIDIARIES
30,412
439,899
26,585
382,256
(2,054)
(1,838)
(1,774)
(1,075)
36,284
466,718
33,545
405,603
(2,918)
(2,252)
(3,477)
(2,044)
SUBSIDIARIES IN SWEDEN
SUBSIDIARIES ABROAD
Denmark
GROUP TOTAL
*) Remuneration to the Board of Directors and President includes the Parent Company and, where appropriate, subsidiaries in respective countries.
32
Notes | Mekonomen Annual Report 2008
REMUNERATION TO SENIOR EXECUTIVES
performance and that remuneration shall comprise
Fees are paid to the Chairman of the Board and
the following parts: - fixed basic salary, variable remu-
Commitments for old-age pension and family pen-
Board members in accordance with the resolution of
neration, pension benefits, other benefits and termina-
sion for salaried employees in Sweden are secured
the Annual General Meeting. The annual Board fee
tion terms. The variable remuneration for other senior
through insurance with Alecta. According to a state-
totalling SEK 1,360,000 (1,275,000) was established in
executives, excluding the President, is based partly on
ment from the Swedish Financial Reporting Board,
accordance with the resolution of the 2008 Annual
the Group’s profit and partly on individual qualitative
RFR 3, this is a defined-benefit plan that comprises
General Meeting. From this, SEK 320,000 (300,000)
parameters and can amount to a maximum of four
several employers. In the 2008 financial year, the
represents fees to the Chairman of the Board and
months’ salary. Other benefits refer primarily to com-
company did not have access to such information
SEK 240,000 (225,000) to the Vice Chairman.
pany cars. Pension premiums are paid in an amount
that made it possible to recognised this plan as a
No fees are paid to the Boards of other subsidiaries.
based on the ITP plan. Pensionable salary refers to the
defined-benefit plan. ITP pension plans that are
The President, Håkan Lundstedt, has a basic salary
basic salary. Severance pay for termination on the part
secured through insurance with Alecta are there-
of SEK 300,000 per month and a variable salary por-
of the company can total a maximum of one annual
fore reported as defined-contribution plans. The
tion, which is based on the company’s profit and can
salary. Matters pertaining to remuneration to Board
annual fees for pension policies signed with Alecta
amount to a maximum of 50 per cent of the basic an-
members shall be prepared and resolved by the Board
amounted to SEK 2 M (3). Alecta’s surplus can be dis-
nual salary. Pension provisions are paid in an amount
of Directors. At the 2008 Annual General Meeting,
tributed to policyholders and/or the insured. At the
corresponding to 25 per cent of the basic salary. Other
it was also resolved, upon approval by the Board of
end of 2008, Alecta’s surplus, in the form of the col-
benefits consist of a company car. The period of notice
Directors, that Company Management may receive
lective consolidation level, amounted to 112 per cent
is 12 months if termination is initiated by the company
a cash bonus from the company. The bonus shall be
(152). The collective consolidation level comprises
and six months if initiated by the employee. In the
profit-based and calculated on the Group’s profit for
the market value of Alecta’s assets as a percentage
case of termination on the part of the company, sever-
2008–2010 – financial years. The bonus program, in
of insurance commitments calculated according to
ance pay amounting to six months’ salary is paid.
its entirety, as a total expense for the company, shall
Alecta’s actuarial calculation commitments, which
amount to a maximum of SEK 12 M for the period.
are not in agreement with IAS 19.
Remuneration of other senior executives will
be paid according to the principles adopted at the
The criteria for the size of an individual bonus shall
2008 Annual General Meeting. This means that the
be determined by the Board of Directors. The Board
company shall strive to offer its senior executives
of Directors intends to propose that the 2009 Annual
market-based remuneration, that the criteria shall
General Meeting approve the continued application of
accordingly be based on the significance of assign-
these basic guidelines.
Pensions
ments, competency requirements, experience and
EXECUTIVES/OCCUPATION CATEGORY
Basic salary
Bonus
Board fees
Fredrik Persson, Chairman of the Board
320
Marcus Storch, Vice Chriaman of the Board
240
Antonia Ax:son Johnson, Board member
160
Kenny Bräck, Board member
160
Anders G Carlberg, Board member
160
Wolff Huber, Board member
160
Helena Skåntorp, Board member
Other benefits
Pension premiums
160
Håkan Lundstedt, President
3,648
864
58
912
Other senior executives, 10
11,541
681
1,094
2,972
15,189
1,545
1,152
3,884
1,360
33
Mekonomen Annual Report 2008 | Notes
Of all the company’s officers and senior executives,
Establishment Manager, Corporate Communica-
five are women. At year-end, the number of senior
tions Manager, Head of Business Development and
executives was 11, who also comprise the Group’s
Head of Operations for Norway, Denmark, Sweden
management team. In addition to the President,
and Mekonomen Grossist.
they are the Group’s IT Manager, HR Manager, CFO,
Parent Company
SICK LEAVE, %
2008
Age category: 29 years or younger
2007
–
–
Age category: 30 - 49 years
1.8
1.9
Age category: 50 years or older
1.0
2.0
TOTAL
1.6
1.9
Women
2.4
4.1
Men
1.0
0.8
0
0
Of which, long-term sick leave
The portion of employees in the 29 years and younger age category is too low to facilitate the implementation of a complete specification.
NOTE 6 Depreciation/amortisation and impairment of tangible and intangible fixed assets
Group
Planned depreciation of equipment and transport
Amortisation of capitalised expenditure for IT systems
Planned depreciation of properties
TOTAL DEPRECIATION ACCORDING TO PLAN
Impairment of intangible assets
TOTAL DEPRECIATION/AMORTISATION AND IMPAIRMENT
34
Parent Company
2008
2007
2008
31
37
4
5
3
–
3
–
2007
0
0
–
–
34
37
8
5
–
–
–
–
34
37
8
5
Notes | Mekonomen Annual Report 2008
NOTE 7 Appropriations
Parent Company
2008
2007
Provision, tax allocation reserve
–46
–44
Changes in excess depreciation
–6
0
–52
–44
Total appropriations
NOTE 8 Net profit/loss on financial instruments reported in income statement
Group
NET PROFIT/NET LOSS
Parent Company
2008
2007
2008
2007
7
–1
6
–1
–3
–3
0
0
2008
2007
2008
2007
SWEDEN
–49
–57
–39
–37
Other countries
–21
–20
–
–
TOTAL CURRENT TAX
–70
–77
–39
–37
Of which, financial instruments categorised as:
Holdings for trading, derivative
Accounts receivable, impairments
NOTE 9 Tax on profit for the year
Group
CURRENT TAX
Changes in deferred tax temporary differences
Tax on Group contributions, net
RECOGNISED TAX EXPENSES
Parent Company
–2
7
–
–
–
–
58
54
–72
–70
19
16
TAX ON PROFIT FOR THE YEAR
Recognised profit before tax
261
418
231
250
Tax according to applicable tax rate, 28%
–73
–117
–65
–70
–2
–1
–1
0
Tax on standard interest on tax allocation reserves
Tax effects on expenses that are not tax deductible
Other non-deductible expenses
Other non-taxable revenue
–1
0
0
–1
2
0
85
87
Tax effects on current tax, property transaction Sweden
–
43
–
–
Tax effects on deferred tax, property transaction Denmark
–
12
–
–
Tax effects on current tax, property transaction Denmark
–
–7
–
–
Effects on adjustments from the preceding year
2
0
–
–
Tax effects utilised, non-valued,, loss carryforwards Sweden
REPORTED TAX EXPENSES
–
1
–
–
–72
–70
19
16
35
Mekonomen Annual Report 2008 | Notes
NOTE 10 Buildings and land
Land and buildings
Improvement costs,
third-party property
Total
457
3
460
OPENING ACQUISITION VALUE, 1 JANUARY 2007
Purchase, rebuilding and extensions, conversions
Reclassifications
–455
OPENING ACQUISITION VALUE, 1 JANUARY 2008
0
0
–1
–456
1
3
4
2
2
–1
–
–1
0
5
5
–96
–1
–97
Purchase, rebuilding and extensions, conversions
Sales/disposals
CLOSING ACQUISITION VALUE, 31 DECEMBER 2008
OPENING ACCUMULATED DEPRECIATION, 1 JANUARY 2007
Depreciation according to plan for the year
Reclassifications
OPENING ACCUMULATED DEPRECIATION, 1 JANUARY 2008
0
0
0
96
–
96
0
–1
–1
0
0
Depreciation according to plan for the year
Sales/disposals
0
CLOSING ACCUMULATED DEPRECIATION, 31 DECEMBER 2008
CLOSING RESIDUAL VALUE ACCORDING TO PLAN, 31 DECEMBER 2008
0
–1
–1
4
4
0
The buildings are depreciated at 2–4 per cent
During 2007, the majority of the Group’s properties
properties were divested, the remaining two are
depending on classification. Permanent equipment
were divested, six of the remaining seven were
classed as “properties held for resale,” since they are
was depreciated at 5–10 per cent based on the calcu-
classed as “properties held for resale” at 31 Decem-
still for sale.
lated economic lifetime.
ber 2007. During 2008, five of the seven remaining
PROPERTIES HELD FOR RESALE
PROPERTY/CITY/COUNTRY
Initial value
Revaluation
during the year
Carrying
amount
Date of reclassification as
properties held for resale
Tunnbindaren 4, Växjö, Sweden
3
3
January 2007
Romberga 23:25, Enköping, Sweden
4
4
January 2007
7
7
31 Dec. 2008
Buildings
31 Dec. 2008 31 Dec. 2007
Of which, land
Buildings
TAX ASSESSMENT VALUE, PROPERTIES
Tax assessment value, Sweden
36
–
4
1
3
31 Dec. 2007
Of which, land
1
Notes | Mekonomen Annual Report 2008
NOTE 11 Classification of financial assets and liabilities 2008
Loan
receivables
and accounts
receivables
Other
liabilities
Hedging
accounting
Amortised
cost
Amortised
cost
Fair
value
Intangible fixed assets
–
–
Tangible fixed assets
–
–
Deposits paid
6
Non financial
assets/
liabilities
Total
–
254
254
–
119
119
–
–
–
6
20
–
–
–
20
Deferred tax assets
–
–
–
3
3
Inventories
–
–
–
602
602
ASSETS
Lease-purchase agreements
217
–
–
–
217
Other current receivables
Accounts receivable
–
–
–
21
21
Properties for sale
–
–
–
7
7
Other assets (derivatives)
–
–
5
–
5
Prepaid expenses and accrued income
–
–
–
83
83
Cash and bank balances
85
–
–
–
85
328
–
5
1,089
1,423
Shareholders' equity
–
–
–
851
851
Provisions
–
–
–
3
3
Long-term liabilities
–
–
–
39
39
Current liabilities
–
–
–
41
41
Liabilities to credit institutions
–
50
–
50
Accounts payable
–
268
–
268
Current tax liabilities
–
–
–
Other liabilities (derivatives)
–
–
0
Accrued expenses and prepaid income
–
–
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES
–
318
TOTAL ASSETS
SHAREHOLDERS’ EQUITY AND LIABILITIES
22
22
–
149
149
0
1,105
1,423
0
During the year, the income statement was not influenced by changes in value of short-term investments.
37
Mekonomen Annual Report 2008 | Notes
NOTE 11 Classification of financial assets and liabilities 2007
Investments
held to
maturity
Loan
receivables
and accounts
receivables
Other
liabilities
Hedge
accounting
Amortised
cost
Amortised
cost
Amortised
cost
Fair
value
Intangible fixed assets
–
–
–
Tangible fixed assets
–
–
–
Deposits paid
–
4
Lease-purchase agreements
–
5
Non financial
assets/
liabilities
Total
–
206
206
–
97
97
–
–
–
4
–
–
–
5
ASSETS
Other financial fixed assets
–
1
–
–
–
1
Deferred tax assets
–
–
–
–
2
2
Inventories
–
–
–
–
554
554
Accounts receivable
–
201
–
–
–
201
Other current receivables
–
–
–
–
23
23
Properties for sale
–
–
–
–
22
22
Other assets (derivatives)
Prepaid expenses and accrued income
Cash and bank balances
–
–
–
–
76
76
140
–
–
–
–
140
–
150
–
–
–
150
140
361
0
0
980
1,481
Shareholders' equity
–
–
–
–
996
996
Provisions
–
–
–
–
3
3
Long-term liabilities
–
–
–
–
39
39
25
TOTAL ASSETS
SHAREHOLDERS’ EQUITY AND LIABILITIES
Current liabilities
–
–
–
–
25
Liabilities to credit institutions
–
–
6
–
–
6
Accounts payable
–
–
241
–
–
241
31
Current tax liabilities
–
–
–
–
31
Other liabilities (derivatives)
–
–
–
1
–
1
Accrued expenses and prepaid income
–
–
–
–
139
139
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES
0
0
247
1
1,233
1,481
During the year, the income statement was not influenced by changes in value of short-term investments.
38
Notes | Mekonomen Annual Report 2008
NOTE 12 Equipment and transport
OPENING ACQUISITION VALUE, 1 JANUARY 2007
Purchases
Sales/disposals
Exchange-rate fluctuations
Equipment,
transport
Leasing
Total
273
14
288
30
5
35
–10
–
–10
5
0
5
298
19
317
Purchases
43
2
Sales/disposals
–9
OPENING ACQUISITION VALUE, 1 JANUARY 2008
Exchange-rate fluctuations
CLOSING ACQUISITION VALUE, 31 DECEMBER 2008
OPENING DEPRECIATION, 1 JANUARY 2007
Sales/disposals
Exchange-rate fluctuations
Depreciation for the year
OPENING DEPRECIATION, 1 JANUARY 2008
Sales/disposals
Exchange-rate fluctuations
Depreciation for the year
CLOSING ACCUMULATED DEPRECIATION, 31 DECEMBER 2008
CLOSING RESIDUAL VALUE ACCORDING TO PLAN, 31 DECEMBER 2008
45
–9
12
12
344
21
365
–182
–11
–192
0
–3
8
–3
8
–32
–4
–36
–209
–14
–223
9
9
–5
–5
–27
–4
–31
–232
–18
–250
112
3
115
LEASING
Leasing contracts refer to the leasing of distribution vehicles in Sweden and Norway and fork-lifts in Denmark
and Sweden.
Leasing expenses for the year
FUTURE LEASING FEES FOR IRREVOCABLE LEASING CONTRACTS
FALLING DUE FOR PAYMENT:
2008
2007
6
3
2008
2007
Within one year
140
105
Later than one year but within five years
367
310
After five years
181
199
688
614
Of the future leasing fees, leased premises represent SEK 667 M (604)
39
Mekonomen Annual Report 2008 | Notes
Parent Company
EQUIPMENT AND TRANSPORT
2008
2007
OPENING ACQUISITION VALUE
37
34
Purchases
3
4
Sales/disposals
0
–1
CLOSING ACQUISITION VALUE
Opening depreciation
Sales/disposals
Depreciation for the year
CLOSING ACCUMULATED DEPRECIATION
CARRYING AMOUNT
40
37
–24
–20
0
1
–4
–5
–29
–24
11
13
NOTE 13 Intangible fixed assets
Goodwill
IT investments in
Parent Company
Total
169
9
178
26
8
34
198
17
216
Acquisitions
37
17
54
Divestments
–2
Translation differences, currency
–1
OPENING ACQUISITION VALUE, 1 JANUARY 2007
Acquisitions
Translation differences, currency
OPENING ACQUISITION VALUE, 1 JANUARY 2008
CLOSING ACCUMULATED ACQUISITION VALUE, 31 DECEMBER 2008
3
3
–2
–1
232
34
267
OPENING ACCUMULATED AMORTISATION, 1 JANUARY 2007
0
–9
–9
Impairment
–
–
–
OPENING ACCUMULATED AMORTISATION, 1 JANUARY 2008
0
–9
–9
Amortisation according to plan for the year
–
–3
–3
CLOSING ACCUMULATED AMORTISATION, 31 DECEMBER 2008
0
–12
–12
232
22
254
CLOSING RESIDUAL VALUE ACCORDING TO PLAN, 31 DECEMBER 2008
The recognised goodwill value is partly attributable to the wholesale operation and partly to Mekonomen’s
stores in Sweden, Norway and Denmark. The amount is divided into SEK 40 M and SEK 192 M, respectively. The
division of SEK 192 M according to countries is as follows: Sweden SEK 122 M, Norway SEK 49 M and Denmark
SEK 21 M.
40
Notes | Mekonomen Annual Report 2008
IMPAIRMENT TESTING OF INTANGIBLE
The forecast after 2012 is based on growth of 2 per
ments. In the plans that are the basis for cash flows,
FIXED ASSETS
cent. The present value of the forecast cash flows is
Company Management assumes that the price
The assessment of the value of the Group’s goodwill
calculated by applying a discount rate of 10 per cent
trend will amount to only a few per cent annually.
items was based on the value in use of the cash-gene­-
after tax. The same conditions apply to those mar-
The volume trend is calculated to be between 2 and
rating units. For Mekonomen, this unit means an
kets in which Mekonomen is active, which is why the
5 per cent annually up to 2012. Price and volume de-
individual store; in some cases several stores are
same rate is used for all units. With a discount factor
velopments vary a total of between 2 and 5 per cent.
included in one company and an assessment of the
of 14 per cent, the value in use for all of the units will
Assessments are conducted taking into account
individual company as a whole is conducted. The
exceed the carrying amount. Assumptions from
the trends in the most recent years. Company Man-
value in use is based on the cash flow that the unit is
company management are included in this type of
agement estimates that, even taking into account
expected to generate in the Group in the future. The
calculation, assessment and assumption. The future
reasonable deviations from assumed prerequisites,
future cash flow used in the calculation of each unit’s
cash flows of several units are based on similar
the recoverable value will not decrease to such an
value in use is based on the 2009 business plan for
assumptions. Important assumptions, which when
extent that it is less than the carrying amount.
each unit. Subsequently, the cash flows will be based
changed have a major impact on the cash flow, are
on the unit’s business plan, which extends to 2012.
assumptions on future price and volume develop-
NOTE 14 Deferred taxes
The table below states the Group’s deferred tax assets and tax liabilities for each category. The deferred tax
liabilities are recognised after deduction of any tax assets if sub-items can be offset.
TAX ASSETS, LOSS CARRYFORWARDS
Deferred tax assets, Norway
Opening
balance,
1 Jan. 2007
Recognised
as income
during 2007
Other changes in 2007
Closing
balance
31 Dec. 2007
4
–2
–
2
–1
0
–
–1
Adjustment to prior years
–
–
1
1
Translation differences, currency
0
–
0
0
TOTAL TAX ASSETS, 31 DECEMBER 2007
3
–2
1
2
1 Jan.
2008
2008
2008
31 Dec.
2008
Estimated tax on reversed net asset goodwill
TAX ASSETS, LOSS CARRYFORWARDS
Deferred tax assets, Norway
Estimated tax on reversed net asset goodwill
2
2
4
–1
0
–1
–
Adjustment to prior years
1
Translation differences, currency
0
TOTAL TAX ASSETS, 31 DECEMBER 2008
2
2
–1
3
1 Jan.
2007
2007
2007
31 Dec.
2007
64
TAX LIABILITIES
–1
Untaxed reserves
64
4
–5
Surplus value on fixed assets
39
–20
–17
8
3
Estimated tax on reversed net asset goodwill
Deferred tax asset, deficit, Denmark
0
0
2
10
–3
1
–2
Temporary tax benefits from inter-company profit
–20
–2
–22
Other
–18
5
–13
Translation differences, currency
–1
TOTAL TAX LIABILITIES, 31 DECEMBER 2007
69
0
–9
–22
39
41
Mekonomen Annual Report 2008 | Notes
TAX LIABILITIES
1 Jan.
2008
Untaxed reserves
64
2
10
2
Surplus value on fixed assets
Estimated tax on reversed net asset goodwill
Deferred tax asset, deficit, Denmark
2008
31 Dec.
2008
3
–
67
–2
–
0
–
12
2008
–2
0
–
–2
Temporary tax benefits from inter-company profit
–22
–1
–
–23
Other
–13
–3
–
–17
0
–
1
1
39
–1
1
38
Translation differences, currency
TOTAL TAX LIABILITIES, 31 DECEMBER 2008
Other changes during 2007 refer to the sale of the company, Bileko Konsult AB, in connection with the
divestment of the Group’s property portfolio. Estimated tax on reversed net asset goodwill arises during
the reversal of amortisation on net asset goodwill in the Group.
NOTE 15 Other long-term receivables
Group
31 Dec.
2008
Rental deposits paid
Hire-purchase contract
Other receivables
TOTAL OTHER LONG-TERM RECEIVABLES
31 Dec
2007
6
4
20
5
0
1
26
10
No impairment of long-term receivables was conducted during the year.
NOTE 16 Current receivables
Group
Accounts receivable
2007
217
201
Other receivables
26
23
Prepaid expenses and accrued income
83
76
326
300
TOTAL
42
2008
Notes | Mekonomen Annual Report 2008
Accounts receivable
ACCOUNTS RECEIVABLES, GROUP
2008
2007
Accounts receivables
233
218
Provisions in bad debts
–16
–17
TOTAL ACCOUNTS RECEIVABLES
217
201
Provisions for bad debts
Provision for bad debts at the beginning of the year
Provision for companies acquired during the year
Net change in provision
2008
2007
–16
–15
0
0
–2
–2
Recovered prior impairment losses
2
1
Translation difference in opening balance
0
–1
TOTAL PROVISIONS FOR BAD DEBTS
–16
–17
2008
2007
Receivables due between 0–30 days
60
48
Receivables due between 31–60 days
12
3
RECEIVABLES THAT ARE DUE BUT NOT IMPAIRED
Accounts receivables
Receivables due longer than between 60–90 days
5
1
77
52
Interest income on accounts receivables during the year was SEK 4 M (3).
NOTE 17 Prepaid expenses and accrued income
Group
Prepaid rents
Prepaid leasing fees
Prepaid insurance
Accrued supplier bonus
Parent Company
2008
2007
2008
18
15
2
2
0
1
–
0
2007
2
2
–
0
52
49
41
42
Other interim receivables
11
9
3
2
TOTAL
83
76
46
46
43
Mekonomen Annual Report 2008 | Notes
NOTE 18 Cash and cash equivalents
Group
31 Dec.
2008
Bank deposits
Parent Company
31 Dec.
2007
31 Dec.
2008
31 Dec.
2007
140
–
140
–
Cash and bank balances
85
150
0
0
CASH AND CASH EQUIVALENTS
85
290
0
140
NOTE 19 L
ong-term liabilities to credit institutions and leasing companies
Group
31 Dec.
2008
31 Dec.
2007
1
1
Liabilities to leasing companies
0
1
TOTAL LONG-TERM LIABILITIES, INTEREST-BEARING
1
2
SWEDEN
Liabilities to leasing companies
NORWAY
NOTE 20 Provisions
44
In conjunction with the divestment of the Group’s
inspections performed. Mekonomen’s guarantee
properties in 2007, a guarantee provision total-
commitment totalled SEK 22 M and the remaining
ling SEK 3 M was made in the Parent Company
SEK 19 M is recognised as a contingent liability in
pertaining to consulting responsibility for property
memorandum items.
Notes | Mekonomen Annual Report 2008
NOTE 21 Current liabilities
Group
Short-term portion of bank loans
Overdraft facility
Liabilities to leasing companies
TOTAL CURRENT LIABILITIES, INTEREST-BEARING
Accounts payable
Other liabilities
Provisions
31 Dec.
2008
31 Dec.
2007
–
1
50
–
3
3
53
4
268
241
37
16
1
10
Accrued expenses and deferred income
149
139
TOTAL CURRENT LIABILITIES, INTEREST-BEARING
455
406
Provisions refer to reserves in Denmark for expenses pertaining to the distribution project, which commenced in 2007.
Expenses pertain to rents for premises. The remaining portion will be paid during 2009.
NOTE 22 Accrued expenses and deferred income
Group
Parent Company
2008
2007
2008
2007
5
8
2
4
Accrued holiday pay
66
54
3
3
Accrued social security contributions
26
23
4
4
–
1
–
–
10
9
–
–
Accrued salaries
Prepaid rental revenue
Accrued bonus/contract expense
Other interim liabilities
TOTAL
42
44
2
0
149
139
11
11
45
Mekonomen Annual Report 2008 | Notes
NOTE 23 Memorandum items
Group
LIABILITIES TO CREDIT INSTITUTIONS
31 Dec.
2008
Parent Company
31 Dec.
2007
31 Dec.
2008
31 Dec.
2007
Property mortgages, subsidiaries
92
92
92
92
TOTAL
92
92
92
92
19
19
19
19
–
1
–
1
CONTINGENT LIABILITIES
Guarantee commitment, Mekonomen AB
Surety commitment, Norway
The guarantee commitment refers to a guarantee pertaining to consulting responsibility for inspections
performed by an external consulting company in connection with the sale of the Group’s properties in
Denmark and Sweden. The guarantee extends for 10 years.
NOTE 24 Participations in Group companies
Corp.
Reg. No.
Share of
equity, %
Mekonomen Grossist AB/Stockholm
556062-4875
100
40
Mekonomen Detaljist AB/Stockholm
556157-7288
100
5
Mekonomen Finans AB/Stockholm
556179-9676
100
1
Mekonomen Fleet AB/Stockholm
556720-6031
100
2
Mekonomen Vilande Fyra AB/ Stockholm
556729-1439
100
0
Mekonomen Vilande Fem AB/ Stockholm
556729-1579
100
0
Mekonomen Vilande Sex AB/ Stockholm
556724-9254
100
0
30 07 81 28
100
980 748 669
100
NAME OF COMPANY/REGISTERED OFFICE, SWEDEN
No. of
stores
Carrying
amount
NAME OF COMPANY/REGISTERED OFFICE, DENMARK
Mekonomen Danmark A/S / Odense
39
177
NAME OF COMPANY/REGISTERED OFFICE, NORWAY
Mekonomen Norge AS/Oslo
PARTICIPATIONS IN GROUP COMPANIES, TOTAL
46
24
249
Notes | Mekonomen Annual Report 2008
Contd. PARTICIPATION IN SUBSIDIARIES
Contd. PARTICIPATION IN SUBSIDIARIES
Corp. Reg.
No.
Share of
equity, %
No. of
stores
Mekonomen Motala AB/Motala
Mekonomen Alingsås AB/Alingsås
556596-3690
75
1
Mekonomen Märsta AB/Sigtuna
Mekonomen Arvika AB/Arvika
556528-3750
80
1
Mekonomen Nacka AB/Nacka
556204-0294
100
1
Mekonomen B2C AB/Stockholm
556767-7405
100
8
Mekonomen Norrköping AB/Norrköping
556376-2797
75
2
Mekonomen Backaplan AB/Göteborg
556226-1338
100
1
Mekonomen Norrtälje AB/Stockholm
556178-9719
60
1
Mekonomen Borås City AB/Borås
556078-9447
91
2
Mekonomen Nyköping AB/Nyköping
556244-0650
75
1
NAME OF COMPANY/REGISTERED OFFICE
SWEDEN
NAME OF COMPANY/REGISTERED OFFICE
Corp. Reg.
No.
Share of
equity, %
No. of
stores
556311-8750
100
1
556596-3674
100
1
Mekonomen Bromma AB/Stockholm
556230-5101
91
1
Mekonomen Nässjö AB/Nässjö
556187-8637
100
2
Mekonomen Enköping AB/Enköping
556264-2636
100
1
Mekonomen Osby AB/Osby
556408-8044
91
1
Mekonomen Eskilstuna AB/Eskilstuna
556613-5637
100
1
Mekonomen Oskarshamn AB/Oskarshamn
556631-8589
75
1
Mekonomen Falkenberg AB/Falkenberg
556213-1622
70,2
1
Mekonomen Partille AB/Göteborg
556731-1401
91
1
Mekonomen Falköping AB/Falköping
556272-1497
100
1
Mekonomen Piteå AB/Piteå
556659-8966
75
1
Mekonomen Falun AB/Falun
556559-3927
60
2
Mekonomen Ronneby AB/Ronneby
556649-9017
100
1
Mekonomen Farsta AB/Stockholm
556528-4766
91
1
Mekonomen Sandviken AB/Sandviken
556201-1295
91
1
Mekonomen Finspång AB/Finspång
556594-1951
100
1
Mekonomen Segeltorp AB/Huddinge
556580-2351
91
1
Mekonomen Gislaved AB/Gislaved
556261-4676
100
1
Mekonomen Skellefteå AB/Skellefteå
556389-4095
100
1
Mekonomen Gävle AB/Gävle
556353-6803
91
1
Mekonomen Skåne Ystad AB/Ystad
556565-3085
100
1
Mekonomen Göteborg Ringön AB/Göteborg
556561-6751
100
1
Mekonomen Sollefteå AB/Sollefteå
556216-9424
80
1
Mekonomen Hedemora AB/Hedemora
556308-8011
100
1
Mekonomen Sollentuna AB/Sollentuna
556462-0416
85
2
Mekonomen Helsingborg AB/Helsingborg
556044-4159
75
2
Mekonomen Solna AB/Stockholm
556213-3073
91
1
Mekonomen Hudiksvall AB/Hudiksvall
556428-1102
75
1
Mekonomen Sundsvall AB/Sundsvall
556201-1675
100
2
Mekonomen Härnösand AB/Härnösand
556217-2261
80
1
Mekonomen Söderhamn AB/Söderhamn
556509-4132
75
1
Mekonomen Hässleholm AB/Hässleholm
556678-0622
91
1
Mekonomen Södertälje AB/Södertälje
556405-5498
100
1
Mekonomen Järfälla AB/Stockholm
556660-3196
91
1
Mekonomen Sölvesborg AB/Sölvesborg
556216-4250
75
1
Mekonomen Jönköping AB/Jönköping
556237-5500
100
1
Mekonomen Torslanda AB/Göteborg
556583-3893
100
1
Mekonomen Kalmar AB/Kalmar
556236-8349
91
1
Mekonomen Trollhättan AB/Trollhättan
556515-0298
91
3
1
Mekonomen Karlshamn AB/Karlshamn
556649-9090
100
1
Mekonomen Täby AB/Täby
556632-9958
91
Mekonomen Karlskoga AB/Karlskoga
556196-2605
100
1
Mekonomen Uddevalla AB/Uddevalla
556550-5004
100
1
Mekonomen Karlskrona AB/Karlskrona
556649-9082
100
1
Mekonomen Umeå AB/Umeå
556483-3084
81,8
1
Mekonomen Kramfors AB/Kramfors
556496-1810
91
1
Mekonomen Uppsala AB/Uppsala
556092-4218
91
3
Mekonomen Kristianstad AB/Kristianstad
556171-9203
80
1
Mekonomen Varberg AB/Varberg
556261-0161
75
1
1
Mekonomen Landskrona AB/Landskrona
556646-4813
100
1
Mekonomen Vetlanda AB/Vetlanda
556653-4219
100
Mekonomen Lidköping AB/Lidköping
556761-3012
75
1
Mekonomen Vimmerby AB/Vimmerby
556232-5877
100
1
Mekonomen Linköping AB/Linköpin
556202-9545
100
1
Mekonomen Värnamo Norra AB/Värnamo
556530-9266
75
1
Mekonomen Ljungby Odlaren AB/Ljungby
556111-9719
100
1
Mekonomen Västberga AB/Stockholm
556192-0314
91
1
Mekonomen Ludvika AB/Ludvika
556470-4210
100
1
Mekonomen Västerås AB/Västerås
556344-5492
75
2
Mekonomen Luleå AB/Luleå
556338-4071
100
1
Mekonomen Växjö AB/Växjö
556192-0439
100
1
Mekonomen Lund AB/Lund
556531-0108
100
1
Mekonomen Åkersberga AB/Österåker
556632-9966
91
1
Mekonomen Lycksele AB/Lycksele
556687-8095
75
1
Mekonomen Örebro Aspholmen AB/Örebro
556344-0717
75
2
Mekonomen Malmö Fosie AB/Malmö
556493-7018
100
2
Mekonomen Örnsköldsvik AB/Örnsköldsvik
556465-6287
75
1
Mekonomen Malmö Värnhem AB/Malmö
556530-7237
100
–
Mekonomen Östersund AB/Östersund
556296-5243
100
1
Mekonomen Mariestad AB/Mariestad
556261-0179
50
1
Primexxa Strängnäs AB/Stockholm
556422-3872
60
1
Mekonomen Mjölby AB/Mjölby
556362-0565
75
1
Mekonomen Mora AB/Mora
556363-2487
80
1
103
47
Mekonomen Annual Report 2008 | Notes
Contd. PARTICIPATION IN SUBSIDIARIES
Corp. Reg.
No.
Share of
equity, %
No. of
stores
Mekonomen Arendal AS/Arendal
982 434 696
100
1
Mekonomen Askim AS/Askim
974 209 772
100
1
Mekonomen Björkelangen AS/Björkelangen
989 903 551
100
1
Mekonomen Bodö AS/Bodö
986 489 576
100
1
Mekonomen Drammen AS/Drammen
924 843 543
100
1
Mekonomen Fredrikstad AS/Fredrikstad
881 509 032
100
1
Mekonomen Grenland AS/Porsgrund
984 690 703
100
1
Mekonomen Hamar AS/Hamar
984 006 047
100
1
Mekonomen Harstad AS/Harstad
982 952 379
100
1
Mekonomen Haugesund AS/Haugesund
983 509 622
100
1
Mekonomen Horten AS/Horten
990 815 798
100
1
Mekonomen Jessheim AS/Jessheim
987 696 109
100
1
Mekonomen Kolbotn AS/Oslo
990 815 739
100
1
Mekonomen Kongsberg AS/Kongsberg
937 161 786
75
1
Mekonomen Kongsvinger AS/Kongsvinger
992 102 217
100
1
Mekonomen Molde AS/Molde
985 793 417
100
1
Mekonomen Moss AS/Moss
939 161 260
100
1
Mekonomen Oslo AS/Oslo
938 215 103
100
1
Mekonomen Sandefjord AS/Sandefjord
990 815 844
100
1
Mekonomen Sandnes AS/Sandnes
992 302 577
100
1
Mekonomen Sandvika AS/Sandvika
982 707 862
100
1
Mekonomen Sarpsborg AS/Sarpsborg
910 155 520
100
1
Mekonomen Ski AS/Ski
983 098 525
100
1
Mekonomen Stavanger AS/Stavanger
983 935 214
100
1
Mekonomen Sörlandsparken AS/Kristiansand
981 508 939
100
1
Mekonomen Tromsö AS/Tromsö
942 591 322
100
1
Mekonomen Trondheim AS/Trondheim
979 462 026
100
1
Mekonomen Tönsberg AS/Tönsberg
934 256 867
75
1
Mekonomen Ålesund AS/Ålesund
981 929 276
100
NAME OF COMPANY/REGISTERED OFFICE
NORWAY
1
29
TOTAL NUMBER OF STORES
48
171
Notes | Mekonomen Annual Report 2008
NOTE 25 Shareholders’ equity
SHARE CAPITAL
Statutory reserve
basis for the resolution of the Annual General Meeting
The share capital amounted to SEK 77 M and consists
The purpose of the statutory reserve is to allocate
for dividends for the year.
of 30,868,822 shares at a par value of SEK 2.50 per
profit to cover any future losses.
DIVIDEND TO PARENT COMPANY’S
share.
PROFIT BROUGHT FORWARD
SHAREHOLDERS
OTHER CAPITAL CONTRIBUTIONS
Comprises prior years’ profit brought forward after any
The Board of Directors proposes a dividend of SEK
The amount consists of the Parent Company’s Statu-
provisions to statutory reserves and after dividends.
6.00 per share, which gives a total dividend of SEK
tory reserve.
Profit for the year is included in this amount. The Par-
185,212,932.
ent Company’s Profit brought forward represents the
TRANSLATION DIFFERENCES, FOREIGN SUBSIDIARIES
2008
2007
Accumulated translation differences in Norway
23
3
Accumulated translation differences in Denmark
–6
0
17
3
NOTE 26 Capital
Mekonomen manages its capital to ensure that the
equity, for which the proportions and changes dur-
At least once per year, the Board of Directors
units in the Group can continue to operate, while
ing the year are described in the Group’s changes
reviews the capital structure and takes this into
dividends to shareholders are maximised through a
in shareholders’ equity on page 24 and in Note 25,
account when making decisions on, for example,
good balance between liabilities and shareholders’
Shareholders’ equity.
dividends or raising new loans.
equity. The Group’s capital consists of shareholders’
NOTE 27 Adjustments for non-cash items
Group
Parent Company
31 Dec.
2008
31 Dec.
2007
Depreciation/amortisation
34
Change in value, derivatives
–7
–
Guarantee provisions
Exchange-rate differences
Capital gain/loss from divestment of fixed assets
Other non-cash items
31 Dec.
2008
31 Dec.
2007
37
8
5
1
–6
1
–
–
3
6
–15
0
0
–10
–152
–3
0
0
0
0
0
24
–129
–1
9
49
Mekonomen Annual Report 2008 | Notes
NOTE 28 Acquisitions and divestment of subsidiaries
ACQUISITIONS DURING 2008
2008
The amounts above include acquisition of companies and operations, as well as the acquisition
VALUE OF ACQUIRED ASSETS AND LIABILITIES
Tangible fixed assets
4
Inventories
30
Current receivables
2
Cash and cash equivalents
0
of minority shares in Västberga, Hässleholm and
Trollhättan. The acquired Micro stores are located
in Borås, Eskilstuna, Gävle, Helsingborg, Malmö,
Löddeköpinge, Uddevalla and Uppsala. Informa-
Current liabilities
–9
ACQUIRED NET ASSETS
26
Goodwill
37
aggregated form, since not every individual acqui-
Total purchase price
63
sition is deemed large enough to warrant separate
0
reporting. The acquisition of the eight Micro stores
63
represents about 50 per cent of the total purchase
Cash and cash equivalents in the acquired companies
IMPACT ON THE GROUP'S CASH AND CASH EQUIVALENTS
tion on company acquisitions is submitted in
price. In addition to goodwill, no intangible surplus
ACQUIRED SUBSIDIARIES/OPERATIONS
Country
Acquisition
date
Shareholding and
share of voting rights
Oddvar Ohlsen AS
Norway
February
100
Assets and liabilities
Koblingsdepotet A/S
Denmark
May
100
Assets and liabilities
HCJ Bilutrustning AB
Sweden
June
100
Assets and liabilities
Björkelangen Bildeler AS
Norway
July
100
Company
Bildelespesialisten AS
Norway
November
100
Company
partners in individual store companies. Their share-
AD-butik
Sweden
December
100
Assets and liabilities
holding amounts to 9 per cent per store company.
Micro stores, eight
Sweden
December
100
Assets and liabilities
The total purchase price for these shareholdings
value was identified in conjunction with the
Object
acquisitions. The purchase price also includes any
transaction expenses, which are not recognised
separately since the amounts are insignificant.
In Sweden, 15 store managers signed on as
amounted to SEK 5 M.
ACQUISITIONS DURING 2007
2007
VALUE OF ACQUIRED ASSETS AND LIABILITIES
Tangible fixed assets
Inventories
Current receivables
Cash and cash equivalents
Long-term liabilities
Current liabilities
1
6
2
1
–2
–6
ACQUIRED NET ASSETS
50
2
Goodwill
26
Total purchase price
28
Cash and cash equivalents in the acquired companies
–1
IMPACT ON THE GROUP'S CASH AND CASH EQUIVALENTS
27
Shareholding and
share of voting rights
ACQUIRED SUBSIDIARIES 2007
Country
Acquisition date
Skogveien Bilvaruhus AS
Norway
February
100
Company
Nacka Autodelar Peter Stiebel AB
Sweden
May
100
Company
Carmek AB, company
Sweden
September
100
Company
GG Bildelar AB
Sweden
October
100
Operation
Autoprodukter i Ed AB
Sweden
December
100
Operation
Autoprodukter i Ed AB
Sweden
December
100
Operation
Object
Notes | Mekonomen Annual Report 2008
NOTE 29 Transactions with related parties
During the year, Mekonomen AB sold goods and services to Group companies totalling SEK 72 M (67).
NOTE 30 Approval of the Annual Report
The Annual Report and the consolidated accounts
2009. The consolidated income statement and bal-
ment and balance sheet will be subject to the approval
were approved for issue by the Board on 16 March
ance sheet and the Parent Company’s income state-
of the Annual General Meeting on 22 April 2009.
loans and investments in the same currency. If for
some reason matching is not achieved, hedging shall
be implemented using currencies forward contract.
With regard to foreign shareholders’ equity, the principal rule is that Mekonomen shall not hedge this
exposure. However, if major foreign investments are
made that require separate financing, the decision
can be made to recognise the entire or part of the
financing in the acquisition currency.
term of a maximum of three months. Within this
time frame, it is estimated that increased financial
expenses, as an effect of changed interest rates,
could be offset through changes in retail prices. In
order to manage possible interest-rate risks, relevant
instruments in the market can be used.
NOTE 31 Financial risks
Mekonomen AB is exposed to risks in terms of currency, credit, interest rates and liquidity through its
operations. The management of these risks is regulated in accordance with the finance policy adopted
by the Board of Directors.
Currency risks
Exchange-rate risks occur when exchange-rate fluctuations have a negative impact on the Group’s profit
and shareholders’ equity. Currency exposure arises
in connection with cash flows in foreign currencies
(transaction exposure) as well as in translation of
loans/receivables in foreign currencies and in foreign subsidiaries’ translation of balance sheets and
income statements into SEK (translation exposure).
During 2008, exchange-rate fluctuations had a nega­tive impact on the Group’s income before tax amount-­
ing to SEK 3 M (pos: 13). The most important currency
in terms of transaction exposure is EUR, which
represents 40 per cent of imports as well as
NOK and DKK pertaining to internal sales from
the Grossist operations to Norway and Denmark.
NOK and DKK are the most important currencies as regards translation exposure. The finance
policy permits hedging of the net currency flows
using external financial contracts. Since negative
exchange-rate fluctuations are expected to be offset
in customer pricing within one to three months, the
hedging horizon shall not exceed three months.
With regard to financial assets and liabilities, the
policy states that internal loans and investments
in foreign currencies shall be matched by external
Credit risks
The Group’s financial transactions give rise to credit
risks in relation to financial counterparties. Credit
risks or counterparty risks refer to the risk of loss if
the counterparty does not fulfil its commitments.
Mekonomen’s credit risks primarily comprise accounts payable, which are distributed over a large
number of counterparties. The maximum credit
risk corresponds to the carrying amount of financial
assets. Specifications pertaining to impairment of
accounts payable for the year are found in Note 16.
Interest-rate risks
Interest-rate risks refer to the risk that changes in
market interest rates will have a negative impact
on the Group’s net interest income/expense. The
speed at which interest-rate changes will affect the
net interest income/expense depends on the period
of fixed interest for the loan. At the end of the year,
Mekonomen had a negligible amount of interestbearing loans. According to the finance policy,
Mekonomen shall maintain an average fixed interest
Financing and liquidity risks
Financing risk is seen as the risk of the cost coming
higher and financing opportunities limited when
loans are renewed and that the ability to pay cannot
be met as a result of insufficient liquidity or difficulties in securing financing. According to the finance
policy, refinancing risks shall be managed by signing
long-term and flexible credit agreements. At the end
of 2008, the Group had no long-term credit facilities.
The Group’s cash and cash equivalents are invested
short-term with the aim that any excess liquidity
shall primarily be used for amortising loans. Investments may be made in SEK, NOK and DKK with the
objective of matching future loans that mature, or
large disbursements. In cases where the company is
not aware of any large disbursements, the maturity
period for investments shall not exceed one month.
Investments may occur at or in securities issued by
the Swedish Government or Swedish and foreign
banks with not less than an A rating, according to the
definition of Standard & Poor’s (S&P).
Fair value
No financial assets or liabilities were recognised at a
value that significantly deviated from fair value.
51
Mekonomen Annual Report 2008 | Signatures and auditors’ report
The Board of Directors and President hereby certify
operations, position and results and describes signifi-
give a true and fair view of the Group’s position and
that the annual report was prepared in accordance
cant risks and uncertainties facing the company.
with the Annual Accounts Act and RFR 2.1 and pro­
The Board of Directors and President hereby
results and that the Board of Directors’ report for the
Group gives a true and fair view of the development
of the Group’s operations, position and results and
describes significant risks and uncertainties facing
the companies included in the Group.
vides a true and fair view of the company’s position
certify that the consolidated accounts were prepared
and results and that the Board of Directors’ report gives
in accordance with International Financial Report-
a true and fair view of the development of the Group’s
ing Standards (IFRS), as approved by the EU, and
Stockholm
16 March 2009
Fredrik Persson
Marcus Storch
Chairman of the Board
Vice Chairman of the Board
Antonia Ax:son Johnson
Kenny Bräck
Anders G Carlberg
Board member
Board member
Board member
Wolff Huber
Helena Skåntorp
Håkan Lundstedt
Board member
Board member
President and CEO
THE ANNUAL GENERAL MEETING OF MEKONOMEN AB (PUBL), CORPORATE REGISTRATION NUMBER 556392-1971
We have audited the annual accounts, the consoli-
examining, on a test basis, evidence supporting the
results of operations in accordance with generally
dated accounts, the accounting records and the
amounts and other disclosures in the accounts. An
accepted accounting principles in Sweden. The
administration of the Board of Directors and the
audit also includes assessing the accounting princi-
consolidated accounts have been prepared in accord-
President of Mekonomen AB for the 2008 financial
ples used and their application by the Board of Direc-
ance with international reporting standards, IFRS, as
year. The company’s annual accounts are included
tors and the President and significant estimates made
adopted by the EU and the Annual Accounts Act and
in the printed version of this document on pages
by the Board of Directors and the President when
give a true and fair view of the Group’s results and
12 – 52. The Board of Directors and the President are
preparing the annual accounts and consolidated
position. The Board of Directors’ report is consistent
responsible for these accounts and the administra-
accounts as well as evaluating the overall presenta-
with the other parts of the annual accounts and the
tion of the Company, as well as for the application
tion of information in the annual accounts and the
consolidated accounts.
of the Annual Accounts Act when preparing the an-
consolidated accounts. As a basis for our opinion
nual accounts and the application of International
concerning discharge from liability, we examined sig-
of shareholders that the income statements and
Financial Reporting Standards, IFRS, as adopted by
nificant decisions, actions taken and circumstances
balance sheets of the Parent Company and the Group
the EU and the application of the Annual Accounts
of the company in order to be able to determine the
be adopted, that the profit of the Parent Company
Act when preparing the consolidated accounts. Our
liability, if any, to the company of any Board member
be dealt with in accordance with the proposal in the
responsibility is to express an opinion on the annual
or the President. We also examined whether any
Board of Directors’ report and that the members of the
accounts, the consolidated accounts and the admi­
Board member or the President has, in any other way,
Board of Directors and the President be discharged
nistration based on our audit.
acted in contravention of the Companies Act, the An-
from liability for the financial year.
The audit was conducted in accordance with
nual Accounts Act or the Articles of Association. We
generally accepted auditing standards in Sweden.
believe that our audit provides a reasonable basis for
Stockholm, 16 March 2009
This means that we planned and performed the audit
our opinion set out below.
Deloitte AB
to obtain reasonable, but not absolute, assurance that
52
We recommend to the Annual General Meeting
The annual accounts have been prepared in accord-­
the annual accounts and the consolidated accounts
ance with the Annual Accounts Act and give a true
Lars Svantemark
are free of material misstatement. An audit includes
and fair view of the company’s financial position and
Authorised Public Accountant
Information to shareholders | Mekonomen Annual Report 2008
INFORMATION TO SHAREHOLDERS
Annual General Meeting
their own name with VPC, to be able to participate at
Dividend
The Annual General Meeting will be held on 22 April
the Annual General Meeting.
The Board proposes that the Annual General Meeting
2009, at 2:00 p.m. at the National Museum of Science
and Technology, Museivägen 7 in Stockholm.
This means that shareholders wishing such rereg-
approve a dividend of SEK 6.00 (6.00) per share. In
istration must inform the nominee in adequate time
the preceding year, an extraordinary dividend of SEK
before 16 April 2009.
5.00 per share was paid. The Board has proposed 27
Who is entitled to participate in the
April 2009 as the record day for the dividend. If the
Annual General Meeting?
How do you register?
Annual General Meeting approves the proposal, the
Shareholders registered in the shareholders’ register
Shareholders wishing to participate at the Annual
dividend will be paid on 30 April 2009.
on the record day and who have informed Mekono­
General Meeting should register in ample time prior
men of their intention to attend in advance are entit­
to 4:00 p.m. on Thursday, 16 April at:
Reporting dates for 2009
led to participate in the Annual General Meeting.
Mekonomen AB
Interim report January – March: Box 6077,
Interim report April – June: How do you register as an owner?
SE-141 06 Kungens Kurva
Interim report July – September: Shareholders must be registered in the sharehold-
Sweden
Year-end report for the entire
ers’ register maintained by Euroclear Sweden AB,
or
financial year 2009: not later than Thursday, 16 April 2009. Shareholders
Phone: +46 (0)8-464 00 00
whose shares are registered in the name of a nomi-
Fax: +46 (0)8-464 00 67
nee must have temporarily registered their shares in
E-mail: [email protected]
14 May
26 August
10 November
18 February 2010
DEFINITIONS
Gross margin
Gross profit, meaning net sales less expenses for goods for
resale, as a percentage of net sales.
Return on shareholders’ equity
Profit for the year as a percentage of average shareholders’
equity.
Average number of shares
The average of the number of shares adjusted for splits, bonus
issues and full dilution of the convertible loans, taking into account the date on which the changes occurred during the year.
Interest coverage ratio
Profit after net financial income increased by interest expenses
divided by interest expenses.
Return on total capital
Profit for the year as a percentage of the average total assets.
Capital employed
Total assets reduced by non interest-bearing provisions and
liabilities, including deferred tax liability.
Net debt/equity ratio
Net indebtedness divided by shareholders’ equity including
minority shares.
Cash flow per share
Cash flow from operating activities, adjusted for interest on
convertibles, in relation to the average number of shares.
Net indebtedness
Interest-bearing liabilities less cash and cash equivalents and
short-term investments.
Dividend ratio
Dividend per share in relation to earnings per share attributable
to the Parent Company’s shareholders.
Operating capital
Capital employed reduced by cash and cash equivalents and
short-term investments.
EBIT margin
EBIT as a percentage of total revenues.
Return on capital employed
Profit after net financial income increased by interest expenses
as a percentage of average capital employed.
Average number of employees
Average full-year employees during the year.
Equity/assets ratio
Shareholders’ equity including minority shares as a percentage
of total assets.
Sales growth
Increase in total revenues as a percentage of the preceding
year’s total revenues.
Sales per employee
Sales in relation to the average number of employees.
Shareholders’ equity per share
Shareholders’ equity excluding minority shares, adjusted for
convertible debentures, in relation to the number of shares at
the end of the year.
Underlying sales
Sales adjusted for the number of comparable workdays and
currency effects.
Return on operating capital
EBIT as a percentage of average operating capital.
53
Mekonomen Annual Report 2008 | Board of directors
BOARD OF DIRECTORS
Fredrik Persson
Marcus Storch
Antonia Ax:son Johnson
Chairman of the Board. Born 1968.
Vice Chairman of the Board. Born 1942.
Born 1943. B.Sc. in Psychology and Economy,
Graduate in Business Administration, the
Graduate Engineer, Royal Swedish Institute of
University of Stockholm.
Stockholm School of Economics and studies
Technology, Stockholm, Medicine Dr h.c.
Other assignments: Chairman of the Board of
at Wharton School in the US.
Other assignments: Chairman of the Board of
Axel Johnson AB, Axel Johnson Inc., and Axel
Other assignments: President of Axel Johnson
the Nobel Foundation. Executive Vice Chair-
and Margaret Ax:son Johnson Foundation.
International AB, Axfood AB, Novax AB,
man of Axel Johnson AB and Axfood AB. Board
Executive Vice Chairman of Nordstjernan AB.
Servera R&S AB, Svensk BevakningsTjänst AB
member of NCC AB, AB Hannells Industrier,
Board member of Axfood AB, Axfast AB, NCC
andÅhléns AB. Board member of AxFast AB,
Nordstjernan AB, the Royal Swedish Academy
AB, Axel and Margaret Ax:son Johnson Founda-
Lancelot Holding AB, Svenska Handelsbanken
of Sciences, the Royal Swedish Academy of
tion for Societal Purposes and World Childhood
Region Stockholm and Svensk Handel.
Engineering Sciences (IVA), and the Listing
Foundation.
Shares in Mekonomen: 1,000.
Committee.
Shares in Mekonomen: 8,951,958 through
Board member since 2006.
Shares in Mekonomen: 0.
companies.
Board member since 2006.
Board member since 2006.
Kenny Bräck
Anders G Carlberg
Wolff Huber
Born 1966.
Born 1943. MBA Economics, Lund.
Born 1942.
Upper Secondary School Education.
Other assignments: Board member of Axel
Other assignments: Previously President of Bil
Other assignments: Own company and
Johnson International AB, Axel Johnson Inc.,
Sweden, Volvo Car Europe and IBM Svenska AB.
previously professional racing car driver.
Axfast AB, Bejer Alma AB, Svenskt Stål AB
Shares in Mekonomen: 0.
Shares in Mekonomen: 1,000.
(SSAB), Säkl AB and Sapa AB.
Board member since 2006.
Board member since 2007.
Shares in Mekonomen: 0
Board member since 2006.
Helena Skåntorp
Born 1960. Graduate in Business
Administration, University of Stockholm.
Other assignments: President and CEO
of Sveriges BostadsrättsCentrum AB
andmember of the Board of Ångpanne­
föreningen AB.
Shares in Mekonomen: 2,000.
Board member since 2004.
54
Management Group | Mekonomen Annual Report 2008
MANAGEMENT GROUP
Håkan Lundstedt
Göran Berglind
Lena Borg
President and CEO.
IT Manager.
HR Manager.
Born 1966.
Born 1944.
Born 1961.
Shares in Mekonomen: 41,600.
Shares in Mekonomen: 19,000.
Shares in Mekonomen: 100.
Employed in 2007.
Employed in 2006.
Employed in 2005.
Nils-Erik Brattlund
Lars From
Marcus Larsson
Head of Retail Operations.
Head of Operations in Denmark
Head of Business Development.
Born 1951.
from 1 April, 2009
Born 1970.
Shares in Mekonomen: 1,300.
Born 1965.
Shares in Mekonomen: 1,000.
Employed in 2005.
Shares in Mekonomen: 0.
Employed in 2003.
Employed in 2009.
Gunnar Rantzow
Gunilla Spongh
Boel Sundvall
Head of Retail operations in Sweden
CFO.
Head of Corporate Communications.
Born 1952.
Born 1966.
Born 1959.
Shares in Mekonomen: 10,000*.
Shares in Mekonomen: 6,000.
Shares in Mekonomen: 1,500.
Employed in 2007.
Employed in 2007.
Employed in 2007.
Michael Thorburn
Klavs Thulstrup Pedersen
Petter Torp
Head of Wholesale Operations.
Head of Operations in Denmark.
Head of Operations in Norway.
Born 1954.
Born 1965.
Born 1955.
Shares in Mekonomen: 33,000*.
Shares in Mekonomen: 600.
Shares in Mekonomen: 300.
Employed in 1997.
Employed in 2007.
Employed in 1997.
*) including holdings from family
55
Mekonomen Annual Report 2008
Addresses
Sweden
Mekonomen AB
Box 6077
SE-141 06 Kungens Kurva
Tel +46 8-464 00 00
Fax +46 8-464 00 66
56
Mekonomen Grossist AB
Box 542
SE-645 25 Strängnäs
Sweden
Tel +46 152-229 00
Fax +46 152-229 41
Visiting address:
Smista allé 11
SE-141 70 Kungens Kurva
www.mekonomen.se
Visiting address:
Fjädervägen 20
SE-645 47 Strängnäs
Norway
Denmark
Mekonomen Norge AS
Postboks 524 Bedriftssenteret
NO-1411 Kolbotn
Tel +47 66-81 76 90
Fax +47 66-99 11 51
Mekonomen Danmark A/S
Næsbyvej 6
DK-5000 Odense C
Tel +45 66-13 67 00
Fax +45 66-14 76 71
Visiting address:
Rosenholmveien 25
NO-1414 Trollåsen
www.mekonomen.no
Visiting address:
Wichmansgade/Næsbyvej
DK-5000 Odense S
www.mekonomen.dk
Mekonomen Fleet AB
Box 6077
SE-141 06 Kungens Kurva
Tel +46 8-464 00 00
Fax +46 8-464 00 66
Visiting address:
Smista allé 11
SE-141 70 Kungens Kurva
Mekonomen Direkt
Tel +46 771-72 00 00
Mekonomen Annual Report 2008
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