Annual Report 2004 - HL Display

HL Display
Annual Report 2004

The year in brief 1
Statement by the Managing Director 2
Strategic direction 4
HL Display shall be a growth company with good profi tability, thus generating growth in value for our shareholders.
The wide-ranging measures initiated in 2003 and implemented in 2004 have produced good results, and the company
is now on the right track towards achieving better profi tability in the long term.
Structures and working methods 6
In 2003 and 2004 HL Display increased the effi ciency of the organisation. The aim has been by means of better utilisation
of the company’s resources to reduce costs and thus increase both competitive strength and profi tability.
Hl Displays offer 10
HL Display currently has a broad range of category solutions for whole product categories and products in the
fi elds of in-store communication and merchandising. Previously sales were aimed largely at the food retail sector
and its brand suppliers. Now HL Display has further developed its range for the non-food retail sector in order to
create opportunities for growth in new market segments.
Innovation 12
Continuously developing new products and solutions characterised by innovation in function and design is extremely
important in terms of guaranteeing HL Display’s position as a market leader that is developing the industry. This
year, for example, saw the launch of EasyShelf, the company’s most important innovation in more than ten years.
Market 14
Geographic expansion is an important growth strategy for HL Display, and the company is setting up new sales
companies as the major retail chains expand on an international scale. At present HL Display has its own sales
companies in 28 countries, with a further 15 countries being serviced by distributors.
Case 20
Belgian company Super GB and HL Display have a well-developed partnership that goes back ten years. In recent
years Super GB has made wide-ranging changes to its outlets, and HL Display is behind solutions that are improving
the presentation of a large number of product categories.
Production 22
HL Display places great emphasis on continuous improvement at the company’s production facilities. The result
is increasingly effi cient production with higher quality and shorter lead times. HL Display’s production facilities
are now among the best in the world in the most important production techniques.
Employees 24
Work on reinforcing employees’ skills has created clear, positive effects in HL Display and is an important element
of work to develop the company in accordance with its objectives. During the year HL Display has developed
new methods enabling the company to offer training courses to employees in a systematic way based on their
individual needs.
Risk- and sensitivity analysis 26
The HL Display share 28
Directors’ report 30
Income statement 31
Balance sheet 32
Changes in shareholders’ equity 34
Cash fl ow statement 35
Notes 36
Audit report 48
Nine year summary and defi nitions 49
Board of Directors 50
Board procedures 2004 51
Senior executives 52
50 years of HL Display 53
FINANCIAL INFORMATION 2005
Monthly Report 1 month 2005 14-02-2005
Annual Report 2004 week 8
Monthly Report 2 months 2005 14-03-2005
Annual General Meeting 14-03-2005
Interim Report 3 months 2005 14-04-2005
Monthly Report 4 months 2005 16-05-2005
Monthly Report 5 months 2005 14-06-2005
22
2
6
12
Interim Report 6 months 2005 15-07-2005
Monthly Report 7 months 2005 12-08-2005
Monthly Report 8 months 2005 13-09-2005
Interim Report 9 months 2005 14-10-2005
Monthly Report 10 months 2005 15-11-2005
Monthly Report 11 months 2005 13-12-2005

The year in brief
. Group net sales increased by 16 per cent to
SEK 1,311 M (1,129).
. Pre-tax profits increased to SEK 68 M (–9).
. Earnings per share after tax amounted to SEK 5.89 (-1.31).
. Equity per share amounted to SEK 42.29 (38.10) SEK as of
31 December 2004.
. New sales companies have been set up in Indonesia
and South Korea.
HL DISPLAY IN BRIEF
HL Display is Europe’s leading supplier
of products and solutions for merchandising
and in-store communication. With
50 years’ experience, the company has
expertise in displaying goods in stores
in a way that increases sales and makes
work in the store more efficient, and at the
same time gives the end consumers all
the information they need to make their
purchasing decision. HL Display has had
an annual growth rate of 18 per cent in the
last ten years. The company’s main market
is Europe, but HL Display is also currently
expanding in Asia. The company’s
1
ÅRET I KORTHET
Key ratios 2004 2003 2002
Group net sales, SEK M 1,311 1,129 1,154
Operating profit, SEK M 80 –4 76
Profit before tax, SEK M 68 –9 65
Earnings per share, SEK 5.89 –1.31 5.71
Profit margin, % 5.2 –0.8 5.7
Equity/assets, % 47.4 45.4 48.6
Equity per share, SEK 42.29 38.1 41.08
Average number of employees 967 975 925
customers include leading retail chains
and brand manufacturers all over the
world. HL Display has just under 1,000
employees in 28 countries, and since
1993 has been listed on the Stockholm
Stock Exchange’s O-List.
HL DISPLAY ANNUAL REPORT 2004

STATEMENT BY THE MANAGING DIRECTOR
Increased profitability
and growth
In 2004 we celebrated HL Display’s 50th anniversary. In 50 years
we have grown from a company operating out of a cellar in the small
town of Borlänge to a global leader in the field of in-store communication
and merchandising. At an early stage Harry Lundvall recognised
the need to display products and their prices more clearly
in shops, not least in the rapidly expanding number of self-service
stores. 1954 saw the first deliveries of display stands and price
label holders. With a constant supply of new, innovative products
and solutions, HL Display has continued in Harry Lundvall’s spirit
and set new standards for in-store communication and merchandising
in the retail sector. This has meant that we are now a leading
global company with sales companies and distributors in 43
countries and a turnover of SEK 1.3 billion.
Objectives and prospects for the future
During the year we have seen clear results from the measures initiated
in 2003 and ongoing work to generate increased profitability.
The operating profit rose to SEK 80 million. HL Display will also
continue to prioritise profitability, and the improved profit figure is
an indication that we are on the right track. In the Annual Report
for 2003 we stated that the aim was to achieve an annual rate in
line with the long-term profit margin target of 10-15 per cent by
the end of 2005. This aim is still in place, and will be achieved by
means of a continued focus on cost control and general efficiency
improvements in production. It is our belief that in 2005 HL Display
will increase its turnover by at least ten per cent.
For the seventh year in succession HL Display is also included in
the Europe’s Entrepreneurs for Growth list of the 500 most rapidly
growing companies in Europe. We are extremely proud to be one of
a total of five companies to have been on this list every year since
it started seven years ago.
Reduced operating expenses
When turnover fell in 2003, partly due to the economic downturn,
HL Display still had an organisation adapted for healthy growth,
which meant that costs were too high. We therefore decided to
limit the growth rate of operating expenses to 35 per cent of sales
growth. In 2004 the company was well below this level. Operating
expenses increased by only three per cent, while turnover increased
by 16 per cent. We have used resources far more efficiently, and
this is the main reason for the improved profit figure.
Production a success factor
In-house production is, and will remain, an important success factor
for HL Display, not least because it gives us a strong competitive
advantage. Flexible production creates short delivery times,
excellent delivery performance and the opportunity to influence
and actively compete on price, quality and service. But in-house
HL DISPLAY ANNUAL REPORT 2004
2
production requires sufficiently high volumes to be profitable.
As regards the in-store furnishing systems manufactured at the
Falkenberg factory, the conditions did not exist for profitable production,
which is why we during the year decided to outsource this
production to subcontractors. As a result of this 33 people were
made redundant in Falkenberg. We also continued work on improving
efficiency at the factories in Sundsvall and Falun, and this had
a positive effect on profitability during the year. For example, lead
times at the Falun factory were halved during 2004. More efficient
production has also enabled the company to deal with the general
price pressure in the market and raw material price increases for
plastic and metal.
The launch of EasyShelf
During 2004 we launched EasyShelf, our biggest innovation since
the Optimal shelf divider system in 1990. With EasyShelf we
can satisfy the retail sector’s requirement to be able to reorganise
their product displays in stores quickly and efficiently. The launch
is proof that HL Display can retain the organisation’s innovative
strength while still keeping a focus on cost control. It is extremely
important that we can constantly develop new, innovative solutions
that have the potential to set new standards for merchandising
and in-store communication in the retail sector. This will allow us
to retain our position as a market leader that continuously develops
the industry.
More efficient organisation
We are continuously evaluating our organisation and ways in which
the business can be made more efficient. During the year a project
was initiated to review how we can be more efficient in areas including
logistics, administration and sales, and thus improve both our
own profitability and the service we deliver to customers. We have
good experiences of the service centre set up in the Netherlands
in 2003, which combines a number of functions for the sales companies
in Belgium, the Netherlands and Germany. One clear example
of this is the way that the sales company in Germany has been
able to use the service centre to reduce its costs and to achieve
the best delivery service to customers of all sales companies in
the whole group. There is therefore good reason to consider the
possibilities of setting up more service centres that can take care
of warehouse, delivery, finance and administration for a number of
markets, which would also mean that the sales companies could
increasingly focus on sales.
Increased sales to major customers
We have enjoyed good sales to the major retail chains in wellestablished
markets such as France and the UK. One problem
in 2003 was that the major customers delayed their new invest-

ments. These customers have now instead increased their investments.
It is crucially important that we strengthen our relations
with key customers so that they become repeat buyers who work
together with us to develop new solutions tailor-made to meet their
own requirements. HL Display is therefore working globally with
Key Account Management and making plans for collaboration with
every key customer. This means, for example, that we can allocate
resources at group level when required and provide active support
to work with customers.
Developments in the sales companies in Asia continued to be
positive during the year, with an increase in sales of 61 per cent.
During the year two new sales companies were set up in the Asian
market, one in South Korea and one in Indonesia. Activities in the
Chinese sales company that was created in 2003 started up during
the year. The Chinese market continues to be extremely attractive,
bearing in mind the high rate of expansion that many of our
customers are experiencing there. We are also investigating the
possibilities of locating production for the Asian market in China,
thus reducing delivery times and freight costs in Asia.
Increased sales to the non-food sector
During the year there was increased interest in category solutions
from our non-food retail customers, and we have increased our
expertise and our range of products and services in this area. On
the basis of our long experience of merchandising and in-store
communication, we are developing solutions for entire product cat-
3
VD HAR ORDET
egories to create clear value for customers in the form of increased
sales and reduced costs. Our attempts to target the non-food retail
sector, for example sports outlets and DIY stores, have produced
good results, with a sales increase of 26 per cent. Here we can
benefit from our experiences from the food retail sector and translate
these for the needs that exist in the non-food sector. While we
invest in category solutions, it is still important to take care of product
sales, and during the year we launched a number of innovative
new products, including SkyLine for signage in ceilings.
Growth combined with profitability
The measures we initiated in 2003 and continued to work with in
2004 lay the foundation for a better level of profitability in the long
term. HL Display will continue in the future to be a company that
combines growth with good profitability. Ever since Harry Lundvall
sold his first product stand in 1954 we have developed rapidly,
and we are now a leading supplier to the global retail industry. It
is important that we, while keeping costs under control, keep up
the tempo in our sales and product development work. With these
three basic elements we create the conditions for retaining the
leading position that we have built up over a period of 50 years.
Stockholm, January 2005
Anders Remius, Managing Director
HL DISPLAY ANNUAL REPORT 2004

STRATEGIC DIRECTION
Business concept,
objectives and strategies
HL Display shall be a growth company with good profitability, thus generating growth in value for our shareholders. The wide-ranging
measures initiated in 2003 and implemented in 2004 have produced good results, and the company is now on the right track towards
achieving better profitability in the long term.
HL Display is the leading company in Europe in the field of in-store
communication and merchandising. With 50 years’ experience,
the company has expertise that is unique in the market. Growth is
achieved through innovative product development and international
expansion as our major global customers set up operations in new
markets. HL Display aims to achieve good profitability through continuous
improvements in efficiency and a focus on cost control.
Corporate objectives
HL Display’s overall objective is to be a growth company with good
profitability and an increase in shareholder value. Profitability must
be prioritised. The financial objective is a profit margin of 10-15 per
cent on average over an economic cycle.
The financial objective is complemented by the following qualitative
objectives:
– To prioritise vertical integration, i.e. in the first instance to
utilise internal resources in the chain from development,
design and production to delivery
– To be the leading player in our sector in the field of
development and design and continue to set new standards
for the industry.
– To be a natural business partner for major customers in
the field of merchandising and in-store communication
– To continue geographic expansion by establishing new
subsidiaries within and outside Europe
Strategies
To enable HL Display to achieve the business objectives in the
future, a number of strategies have been formulated. In brief, these
state that HL Display shall:
– Maintain its business concept and core activities
– Increase levels of expertise in the fields of development and
design
– Continuously adapt its organisation according to the market’s
requirements and needs
MISSION
HL Display creates an attractive, selling in-store environment
that strengthens the consumer’s shopping experience.
HL DISPLAY ANNUAL REPORT 2004
4
– Retain the business culture and its focus on growth and change
– Retain and attract key employees
– Be perceived and act as a single player in different markets
– Utilise IT support to achieve efficient processes
Measures produced results
In 2003 a number of measures were initiated to achieve increased
profitability and growth in HL Display. Work on these measures
continued in 2004. Alongside a wide-ranging project on cost control,
organisational measures were taken to create increased efficiency
and quality in sales and product development work. Five
Area Managers act as sounding boards for managers of subsidiaries
and have responsibility for co-ordinating and following up
on sales work. This has created, among other things, closer links
between the parent company and subsidiaries, and facilitated the
task of co-ordinating messages and creating a common approach
in sales. Product development has been integrated into the Marketing
Department, which has created a more clearly defined link
between customers’ requirements and new products that are
under development.
A more proactive approach in the company
The new planning process, which replaced budget work in
HL Display, has contributed to a more proactive approach in the
company through greater quality in cost and revenue planning.
Forecasts for the next one-year period are produced four times
a year, and these can be compared with the results for the same
period this year. This enables the parent company to identify opportunities
and problems at an early stage and act, for example, to
increase growth or reduce costs in a market by allocating any necessary
resources. During the year system support was also introduced
with early warnings, which enable potential problem areas
to be identified at an early stage.
In 2004 HL Display focused very definitely on the follow-up of
vertical profitability, i.e. total margins in the company. Sales com-
BUSINESS CONCEPT
HL Display shall increase customer profitability by offering the
retail sector and its suppliers cost-efficient, customised display
systems.

panies are measured on the basis of total margins for each order,
while the production facilities are measured on their cost efficiency.
This has created a totally new price model, which provides a basis
for better decision-making during price negotiations with customers
and an opportunity in some instances to compete more aggressively
on price. All in all, these measures mean that HL Display
is now on the right track towards better levels of profitability and
growth. Work on improved profitability will continue in the future to
have the same high priority.
Strategies reviewed continuously
HL Display’s strategic plan is assessed and reviewed continuously,
not least to be able to deal with and draw benefit from changes in
the world around us. Having a large proportion of its activities in
Europe, HL Display is affected by such factors as the EU’s ambitions
and measures relating to the internal market, for example
technical harmonisation, more efficient transport activities, fewer
trade barriers and the introduction of the Euro.
The retail sector is also an industry that has, like the automotive
industry, worked hard for many years to reduce its costs and
increase its margins. This in turn places increased demands on
efficiency on the part of suppliers to the retail sector, which is why
it is extremely important that HL Display works continuously to
improve its resource utilisation.
Many areas under review
This is the reason why HL Display is currently reviewing its strategies
in a number of areas. This involves organisational issues to
deal with increased centralisation among customers, restructuring
the logistics function by means of logistics centres all over the
world and increased standardisation of the product range to benefit
from the economies of scale created by centralised logistics
and warehouse operations. There is also a review of channel and
pricing strategies to create opportunities for increased sales and
an evaluation of the opportunities to establish regional “shared
service centres” that deal with back-office functions and customer
and sales support for a number of markets.
HL Display has a full range of display
hooks for goods that are displayed
hanging – here specially adapted for
electronic price labels.
STRATEGISK INRIKTNING
HL DISPLAY ANNUAL REPORT 2004

STRUCTURES AND WORKING METHODS
Efficient organisation creates
increased profitability
In 2003 and 2004 HL Display increased the efficiency of the organisation. The aim has been by means of better utilisation of the
company’s resources to reduce costs and thus increase both competitive strength and profitability.
HL Display is currently focusing on vertical profitability. This means
that the sales area is responsible for profitability throughout the
whole chain from production until the product is sold and delivered.
HL Display’s subsidiaries all over the world are sales companies
integrated into the parent company, and are pure profit centres
measured against targets for total margins. The production companies,
located mainly in Sweden, are pure cost centres measured
in terms of their efficiency.
The workflow in HL Display
The HL model is an easy-to-understand way of describing the
workflow in the company, from raw material through to delivery to
customer. HL Display’s products can be divided into three areas
of expertise – in-store communication, merchandising and shop
systems. In-store communication involves giving consumers clear
information about prices and products, and telling them where
goods are in the store. Merchandising involves presenting products
in the best possible way out in the store. It must be both attractive
to the consumer and easy for shop staff to maintain. Shop systems
are complete shop fittings with a focus on flexibility, functionality
and quick installation. This area of expertise is only available on
the Swedish market.
HL Display’s customers are the retail sector (food retail and
non-food retail) and brand manufacturers who supply goods to
the retail sector. In order to meet their needs in terms of solutions
for whole categories of goods, products are combined within instore
communication and merchandising to create total category
The HL Model shows the work process in HL Display.
HL DISPLAY ANNUAL REPORT 2004
6
solutions, such as Health & Beauty and Confectionery. As well as
category solutions, HL Display also supplies individual products
to its customers.
Focus on key accounts
HL Display is increasingly following up on its operations on the
basis of key accounts rather than by geographical market. This is
quite natural, as most companies in the retail sector and among
brand suppliers have global or regional operations. This is also
reflected in HL Display’s strategy of geographic expansion. The
company follows its customers as they expand into new markets,
and consequently does not set up any new operations in markets
where its existing customers do not have a presence.
Good relations with key accounts are a crucial success factor
for HL Display. To safeguard HL Display’s position in its collaboration
with these key accounts, there is a high degree of central
co-ordination and control. The company’s Key Account Managers
have total responsibility for the business relationship with the customer,
which means that high demands are placed on someone in
this position. HL Display provides its Key Account Managers with
support from other functions within the company, through ongoing
training and continuous further development of system support.
One important element of this work is the five Area Managers
working within HL Display. Their role is mainly a supporting role
towards the company’s sales staff, and they do not thus constitute
units by which the group is managed. They act as sounding boards
for managers of subsidiaries all over the world, conduct detailed

DEVELOPMENT OF OPERATING EXPENSES, SEK T
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
Turnover
Operating expenses
2000 2001 2002 2003 2004
HL Display has lowered operating expenses through an active work on cost
control.
follow-up on sales work and ensure that there is greater co-ordination
and greater support for sales staff.
Four important areas
Four areas and processes are of central importance for
HL Display’s competitive strength and continued success: sales,
product development, production and logistics. Product development
is described in more detail on page 12 and production on
page 22.
The importance of key accounts, combined with the fact that the
move towards category solutions is creating longer, more complex
and cost-intensive sales projects, places demands on sales work
to be of a very high quality. The right efforts must be made in the
right project for sales work to be successful and create the conditions
for an increased number of sales. HL Display works according
to a standardised process throughout the whole group.
The sales process, put simply, is based on three platforms – mar-
7
STRUKTURER & ARBETSSÄTT
To reduce delivery times HL Display is working increasingly with direct
deliveries from the factories to end customers.
ket platform, working platform and buying platform. The market
platform is about establishing a common internal view of the market,
definitions and prioritisation. As market leader, it is extremely
important for HL Display to have the five biggest retail chains and
brand suppliers as customers in all markets in which the company
is active. The market platform forms the basis of a structured
approach to sales work. The focus is then on converting the potential
customers identified into regular purchasers of solutions and
products from HL Display, on transferring them to the buying platform.
This is achieved via the working platform, which involves a
structured way of working through the whole process, from creating
relationships to signing orders.
Increased service through efficient logistics
Logistics is a high-priority area for HL Display. Efficient logistics
creates cost reductions for the company while at the same time
service to customers is improved through shorter delivery times.
The new common group sales process consists
of three stages. By means of a structured
approach, potential customers will be led from
the market platform to the buying platform – to
become regular purchasers of HL Display’s
solutions and products.
HL DISPLAY ANNUAL REPORT 2004

STRUCTURES AND WORKING METHODS
HL Display is increasingly using direct deliveries from the factory.
Category solutions, which contain a number of different products,
are also pre-packaged direct from the factory as far as possible.
In the past, the sales companies had to sort an pack themselves.
HL Display is also reviewing the opportunities to set up more service
centres around the world to perform such functions as managing
stock and delivering products and solutions to customers.
Experiences from the service centre in Bergen op Zoom, the Netherlands,
are very positive. By setting up more centres, logistics in
the group can be made even more efficient.
The brand
HL Display’s brand work is based mainly on three basic documents.
The brand platform, the communication platform and the graphical
profile. The brand platform defines the fundamental values of
the HL Display brand, the communication platform defines how
the brand is to be communicated to the company’s various target
groups and the graphical profile defines how the brand’s visual
identity is to be perceived and controlled.
The aim of HL Display’s brand work is to focus on the company’s
solutions and their unique values, to clearly differentiate the company
from its competitors, to stimulate positive associations with
and expectations of the brand, and to contribute towards creating
a clear, precise focus within the company.
IT
HL Display is a growth company with broad geographical coverage,
which places high demands on efficient administrative routines. It
is HL Display’s aim to continuously improve the group’s and employees’
use of modern information technology to support both the
business process and internal processes. Total IT costs for the
year amounted to SEK 38 Million.
HL Display’s ERP system Jeeves has a flow-oriented structure,
which makes it possible to streamline the company’s business
processes. Follow-up and control of the various subsidiaries is
also made easier by the fact that they work in the same way. During
the year the ERP system was implemented in 11 new sales
companies. At present it is installed in a total of 31 of the company’s
40 companies.
HL DISPLAY’S CORE VALUES
Skills
HL Display is considered to be
the most prominent expert in its
field, with extensive knowledge
of its customers’ business. The
company has a wealth of experience
as a problem-solver and
supplier of total solutions for instore
communication, merchandising
and shop systems.
HL DISPLAY ANNUAL REPORT 2004
Innovation
HL Display foresees and utilises
changes. New solutions are continuously
applied to old and new
problems, and the research and
development work that is undertaken
is unique in the industry.
8
In 2004 HL Display worked to create clear, standardised routines
and work methods within the group, a task that will continue
in 2005. During the year the company introduced system support
for electronic suppliers’ invoice processing, a new pricing system
and wide-ranging improvements in stock management through a
new system based on handheld computers. The hardware consists
of a small handheld computer with a barcode scanner and touchscreen.
The system is set up for wireless communication with the
Jeeves business system. This means that warehouse staff can
take care of the daily routines without the old paper trail, thus creating
clear efficiency improvements.
HL Display’s technical infrastructure currently has a very high
standard of operational reliability. Work in the field of information
technology currently focuses on five areas:
Cost efficiency. Thanks to a high degree of standardisation of the
workplaces, there is potential to reduce the cost per workplace.
Safety. The volume of spam and viruses has increased significantly
in the past year, and HL Display has taken powerful steps to
minimise the risks of system crashes due to this. These include
the introduction of a spam filter that filters out junk mail and reinforced
antivirus protection. The company has also invested in software
that increases the possibilities of preventing unauthorised
Internet use, which further reduces the risks of virus attacks, for
example.
Monitoring. By continuously monitoring the systems HL Display
can identify bottlenecks and capacity shortfalls in networks and
systems at an earlier stage.
Data storage. At present a large amount of information is stored in
several different places. HL Display is working on routines and work
methods to maintain a high level of information availability while at
the same time reducing the amount of duplicate storage.
System recovery. HL Display is undertaking wide-ranging work to
review routines and systems in order to be able to achieve as quick
a restart as possible in the event of a disaster. The objective is that
business-critical systems must be restored within 48 hours.
E-commerce initiatives are continuing, and HL Display is noticing an
increased interest in this from customers and suppliers. Autumn
saw the start of preparatory work to manage increased volumes
in this area. EDI format has been used successfully internally for
Quality
HL Display is characterised by
professionalism. Every delivery
must be a recommendation for a
new order. The company strives
to achieve continuous improvements
in its range of products
and services, creating added
value for customers and building
long-term customer relationships.
The quality of HL Display’s
products and solutions must
never be questioned.
Customer focus
HL Display has a clear focus on
creating added value for customers
and increasing their profitability.
Reliability and commitment
increase customer satisfaction
and build strong, long-term
relationships.

HL Display’s new Slimline shelf-edge strip can be adapted to carry electronic
price labels from all of the major manufacturers.
many years, resulting in significant efficiency gains.
Efforts are being made within HL Display to make business intelligence
information quickly accessible as a foundation for decision-making.
During the year system support was also extended to
include a forecast module and a customer project module.
The forecast module replaces the budget model previously used
by HL Display, and the aim is to achieve increased quality in cost
and revenue planning. The system also offers support for early
warnings, i.e. potential problem areas are identified at an early
stage and can thus be rectified before they cause major problems.
The customer project module provides support for HL Display’s
sales organisation in its work on major customer projects. The
aim is to provide a simple tool that helps the sales organisation
gain better control over all activities included in large, complex
customer projects. The module is also an element of HL Display’s
work to improve the quality and secure the information in the sales
process.
The environment
HL Display has an ongoing environmental programme, based on
the company’s environmental policy. This work takes place at each
production site, under the guidance of an Environment and Quality
Manager, who is responsible for developing plans, implementing
projects and following up and reporting on action taken in the environmental
field. Only one of HL Display’s factories has activities
that involve an obligation to register, relating to the use of solvents
in screen-printing. There are no production facilities that require
permits under the Environmental Code.
Environmental certification is an important external assessment
of HL Display’s environmental work. It is the company’s objective
that all production facilities shall undergo the environmental audit
9
STRUKTURER & ARBETSSÄTT
HL Display’s segmentation strip enables stores to add information alongside
products to make life easier for the consumer.
and certification in accordance with the international standard for
environmental management systems, ISO 14001. HL Display’s
two largest production facilities, Falun and Sundsvall, are already
certified in accordance with this standard. During the year the factory
in Karlskoga also underwent an environmental audit and was
certified in accordance with ISO 14001.
Most of HL Display’s environmental impact is caused by PVC
waste from production. In 2004 HL Display generated 892 tonnes
of PVC waste in production, of which 700 tonnes were sent to
recycling. In relative terms this is an increase in recycled PVC of
7.7 per cent. The PVC used by HL Display is free of phthalates and
through a collaboration with the main supplier of raw materials,
HL Display attempts to increase the degree of recycled material in
the PVC that is purchased.
At present the company can manufacture all products in alternative
materials. This is a core element of the investments being
made in machinery, as machines must be able to manufacture
using several materials.
UV paint is increasingly being used for screen-printing at the
factory in Falun, instead of the traditional solvent-based paint. In
contrast to regular paint, UV paint does not dry through the evaporation
of solvents, but by means of UV radiation in a so-called UV
drier. 34.7 per cent of all screen-printing now uses UV paint.
During the year HL Display implemented energy-saving measures
at some of its production facilities. A closed cooling system has
been implemented in the machines in the Karlskoga factory, and
HL Display’s biggest production facility, Sundsvall, is being heated
with waste heat from the machines.
HL DISPLAY ANNUAL REPORT 2004

HL DISPLAY’S OFFER
Broad product range
for the retail sector
HL Display currently has a broad range of category solutions for whole product categories and products in the fields of in-store
communication and merchandising. Previously sales were aimed largely at the food retail sector and its brand suppliers. Now HL Display
has further developed its range for the non-food retail sector in order to create opportunities for growth in new market segments.
Down the years HL Display has grown from being a product supplier
to its current position of also being a supplier of complete
display solutions for whole product categories, so-called category
solutions. A category solution contains products that improve the
way in which products are displayed, such as shelf dividers, various
types of feeder systems that ensure that products are always displayed
at the front of the shelf and display hooks for products that
are displayed hanging. It also includes products that guarantee
that the consumer is given the relevant price and product information
where the product is displayed.
Further developments in product range
HL Display’s focus on category solutions is a natural development
of the range of products that the company offers its customers.
As category-based retail becomes increasingly prevalent among
retail food chains, they want to display the various categories in a
co-ordinated way. Among other things, retail food chains and brand
manufacturers who supply goods within a category are wanting to
HL DISPLAY ANNUAL REPORT 2004
10
display goods in a way that makes life easier for the consumer,
generates impulse purchases and increases sales of goods with
high margins. HL Display’s extensive experience as an innovative
supplier of products for in-store communication and merchandising
means that the company can help its customers to develop the
best display solution for their various product categories.
HL Display can now in principle offer complete solutions for all
categories in the retail food sector, but development and sales
work is focusing on five target categories: Fresh Products, Frozen
Products, Health & Beauty, Confectionery and Tobacco. What these
categories have in common is that, among other things, each display
solution influences sales of goods with high margins and in
some cases produces significant cost savings through a reduction
in the number of scrapped items.
Product sales still important
HL Display’s comprehensive product range forms the basis of
the company’s category solutions. While HL Display places great
HL Display’s extensive product range forms the basis of what the company offers its customers. Customers in the retail food sector are also offered complete
category solutions for entire product categories. HL Display’s range for the non-food retail sector focuses initially on four segments, and in due course
there is good potential to develop the range to also include category solutions.

emphasis on further developing its range in the field of category
solutions, individual product sales continue to be important and
account for a large proportion of the company’s turnover. The products
are divided into the specialist areas in-store communication
and merchandising (see fact box).
Initiative aimed at retail non-food
HL Display is also continuing to develop its range for the non-food
retail sector in order to create opportunities for growth in new
market segments. HL Display’s range for the non-food retail sector
is based on the company’s existing products to create a better,
more positive shopping environment for the consumer. In this work
HL Display can benefit from its experiences of working with the
food retail sector, which has on many occasions been a trend-setter
as regards in-store communication and merchandising. Initially
HL Display is focusing on four segments in the non-food retail
sector: DIY stores, sports outlets, home electronics stores and
drug stores/beauty shops. In the longer term there is also potential
within these non-food retail segments to develop the range to
include category solutions. Light bulbs, glue and paint are examples
of categories where the consumer has an information need
that could be better served by HL Display’s solutions.
HL Display supplies category
solutions for the Frozen Food
product category.
HL DISPLAYS ERBJUDANDE
HL DISPLAY ANNUAL REPORT 2004

INNOVATION
Increased innovation
and design content
Continuously developing new products and solutions characterised by innovation in function and design is extremely important in
terms of guaranteeing HL Display’s position as a market leader that is developing the industry. This year, for example, saw the launch
of EasyShelf, the company’s most important innovation in more than ten years.
HL Display’s position as market leader in the fields of merchandising
and in-store communication places high demands on the
company’s ability to continuously develop the sector with new, innovative
products that create tangible value for customers. During
2003 the product development function and the department for
product development were merged with the Marketing Department.
The aim was to create a closer link between product development
at HL Display and the market’s requirements and trends, and this
has contributed towards an increased element of innovation and
design in product development. In 2004 three per cent of turnover
was invested in research and development, including the development
of a new system for in-store ceiling display.
The launch of EasyShelf
In 2004 HL Display launched its biggest innovation since the
Optimal shelf divider system in 1990. The new EasyShelf
system enables shelf dividers to be easily released and moved
sideways. For stores this means major time gains when changing
the planogram, i.e. where various products are located in
the store, and when introducing new products onto the shelves,
which happens regularly. It has taken about 12 months to develop
EasyShelf, and it is HL Display’s aim to provide the retail sector
Concept phase
The initial concept phase focuses
on innovation and design. At
Checkpoint 1 a market specification
must be ready, containing
details of appearance, function,
etc., as well as an initial market
analysis with a target price and
estimated volumes.
HL DISPLAY ANNUAL REPORT 2004
Design phase
During the design phase the
technical product centre continues
to work on the specifications
that have been produced. At
Checkpoint 2 a technical specification
must have been produced,
containing information including
materials, dimensions, production
methodology and production
costs.
12
with a solution that guarantees the best possible presentation of
goods in the store while at the same time saving time in the daily
routines, resulting in reduced costs. With EasyShelf, HL Display
has once more produced a solution with the potential to become an
industry standard in the same way as Datastrip and Optimal.
Making use of innovative ideas
Product development at HL Display is now based around two innovation
and design centres (IDCs), one in Sweden and one in France,
as well as a technical product centre (TPC) in Sweden. At the IDCs
there is expertise in the fields of project management, industrial
design, prototype development and 3D visualisation. Five designers
and engineers are currently working at the TPC on design
and technical production aspects of product development. Ultimate
responsibility for the product development strategy lies with
HL Display’s marketing council, which consists of the concept managers
for in-store communication and merchandising and members
of senior group management.
This reorganisation, which was implemented in 2003, creates
the conditions for HL Display to capture innovative ideas. During
2004 HL Display has taken action to improve the efficiency of
resource utilisation in product development in order to make sure
The development process illustrates the work process in developing new products – from initial concept to batch production.
Production process phase
During the production process
phase all preparations are made
for production, including the
creation of production tools. At
Checkpoint 3 initial samples, produced
under normal conditions,
must be checked by the technical
product centre, to guarantee that
they correspond with the technical
specifications. Preparations are
made for the launch.
Pre-production phase
During the pre-production phase
any adjustments are made to the
production process. The products
are tested in the field by means of
samples being sent out to certain
sales companies and selected
test customers. At Checkpoint 4
the new product has been fully
tested and is ready to go into
batch production.

The new EasyShelf system makes
it easy to release shelf dividers and
move them sideways. This creates
major time savings, for example
when new products are introduced
onto the shelves, which happens
regularly.
that the best possible use is made of these ideas. Projects are now
evaluated at an early stage of the product development phase, so
that projects are prioritised on the basis of the company’s overall
strategies. HL Display is also focusing on reducing the development
time for new products. The aim is that the development time
for new products should be between 6 – 12 months, depending on
the product’s complexity.
HL Display now has a high degree of precision in its product
development as regards satisfying the market’s desires and
requirements, as well as from a cost perspective. Indeed, it is
cost that is one of the most important considerations in the production
of new products. This means that the company can guarantee
that the products developed are also competitive from a
cost perspective.
Patent and design protection
HL Display’s products and solutions have a high content of innovation,
function and design, which means that the company is a
target for plagiarism. To counteract this, HL Display works actively
on issues of patenting. The company therefore applies for patents
to all key functions of its products and solutions. As well as applying
for patents in Sweden, HL Display also applies for European
patents. When a European patent is granted, the patent is then
registered in the appropriate European countries. As far as patent
applications outside Europe are concerned, the company takes a
decision on a product-by-product basis.
To complement the protection provided by a patent, HL Display
also registers the designs to protect the appearance of its products
as far as possible. Design protection is valid throughout the
EU. Protection of the products’ design is an important tool for
HL Display in preventing plagiarism. With 38 registered designs,
HL Display is in third place in the list of Swedish companies with
most registered designs.
HL Display is currently experiencing an increase in the number
of companies whose strategy it is to copy HL Display’s products
and then offer them at a lower price. HL Display has successfully
taken action against these companies for breach of patent, and will
continue in the future to actively enforce its patent rights.
At present HL Display has 28 patents registered in Sweden.
These products are also protected in HL Display’s most important
markets. HL Display currently has seven patent applications
being processed. The cost of patent and design protection in 2004
totalled SEK 3 M.
PRODUKTUTVECKLING
HL DISPLAY ANNUAL REPORT 2004

MARKET
Position and
market trends
Geographic expansion is an important growth strategy for HL Display, and the company is setting up new sales companies as the
major retail chains expand on an international scale. At present HL Display has its own sales companies in 28 countries, with a further
15 countries being serviced by distributors.
HL Display’s customers comprise retail companies (food retail and
non-food retail) and brand manufacturers who supply goods to the
retail sector. Companies in both of these categories often operate
on a global scale. HL Display’s strategy for geographical expansion
is and has been to follow customers as they expand on an international
scale. This means that HL Display can currently offer a
high level of service to its customers in most markets through its
own sales companies in 28 countries. A further 15 countries are
serviced via distributors.
The market
The market situation for HL Display’s customers varies from region
to region. The market in Western Europe has the highest proportion
of stores and is characterised by a high degree of concentration in
terms of ownership. Ownership concentration is greatest in the food
SALES PER CUSTOMER SEGMENT, SEK M
Brand manufacturers 216
Other 49
Shop-fitters 125
Distributors 134
Retail non-food 176
SOME OF HL DiSPLAY’S LARGEST CUSTOMERS
Retail companies
Ahold
Auchan
Carrefour
Casino
Champion
Intermarché
PC World
Systeme U
Tesco
Wal-Mart (ASDA)
HL DISPLAY ANNUAL REPORT 2004
Brand manufacturers
BAT
Danone
Georgia Pacific
Kraft
L’Oreal
Masterfoods
Nestlé
Philip Morris
Procter & Gamble
Unilever
Retail food 611
14
retail sector, but is now also evident in other retail sectors where
products are more or less the same whatever the market, for example
home electronics and DIY. In the region as a whole, the five largest
retail chains have a market share of around 25 per cent, although
the degree of concentration varies considerably from one country to
another. In France, for example, the five biggest food retail chains
have a market share of more than 85 per cent, while the corresponding
figure for Italy and Greece is much lower at 35-40 per cent.
Better utilisation of retail space
Growth in the number of outlets in the last five years has been high,
especially in the biggest format, hypermarkets. The Western European
market is now beginning to become saturated, and the rate at
which new hypermarkets are opening has fallen. Traditional supermarkets
are also a format that is very well established in Western
Europe, and thus has a relatively low rate of growth in terms of new
outlets. In these stores it is more a case of the chains renovating
their outlets to improve utilisation of existing retail space.
Low-price outlets have made the breakthrough
The clearest trend in the food retail sector in the last two years has
been the focus on low-price outlets – a trend that has now made
a real breakthrough in Western Europe. Low-price outlets are a
format that is expanding in terms of both sales and newly-opened
stores. At present, for example, sales in the hypermarket segment
are falling in the face of competition from low-price outlets,
and specialist low-price chains such as Aldi and Lidl (The Schwarz
Group) have experienced very healthy growth in sales. However,
the presence and market shares of low-price chains vary greatly
between countries. Across the whole region of Western Europe it
is estimated that low-price stores have around 15 per cent of the
food retail market.
The low-price format has also started to make an impact in countries
where it has traditionally not had a high profile, such as France
and the UK. For example, French companies Carrefour and Casino
have both experienced very good growth in their low-price initiatives.
The low-price trend has also meant that price has become
more important as a competitive tool in other formats.
Large chains dominate in Eastern Europe
In recent years Western retail chains have been moving rapidly into
large parts of Eastern Europe, by means of both acquisitions and
organic growth. A rapid increase in consumers’ purchasing power
combined with relatively undeveloped retail structures has made

the region attractive to the multinational chains, and most are
now active in this area. It has also meant that the Western chains
are now dominant in the region. Foreign investments were initially
targeted towards Poland, Hungary and the Czech Republic, which
has led to these markets now starting to become saturated, with
a higher degree of owner concentration. As in Western Europe, the
popularity of the low-price chains is also increasing rapidly.
The countries where retail concentration is lower are now at the
top of the agenda for the multinational chains. Slovenia, Turkey,
Rumania and Russia are examples of countries where the retail
sector is expanding rapidly.
Revolutionary developments in Asia
The Asian retail sector has undergone a revolutionary development
in a short period of time – from traditional markets to modern
hypermarkets and supermarkets. Western influences, economic
developments, better education and an improved standard of living
have caused changes to consumers’ tastes and needs. The
retail sector nowadays is not just about price, consumers also
place great emphasis on the in-store environment, hygiene and a
broad product range.
Major differences between countries
Even though modern retail has made its presence felt in the Asian
region as a whole, there are major differences between countries.
Singapore, Hong Kong, Japan, South Korea and Taiwan have a wellestablished
retail sector, and developments are proceeding apace
15
in China, Indonesia, Malaysia and Thailand. At the same time there
are countries in the region where the retail sector is still undeveloped,
such as Laos and Vietnam.
The countries where market concentration has made most
progress are Hong Kong, Malaysia, South Korea and Thailand.
However, concentration is low by Western European standards,
with the five biggest retail chains in these countries having a total
market share of less than 40 per cent.
High retail growth in China
For many years the large western chains have been expanding rapidly
in Asia. In many cases the multinational companies have used
the hypermarket format to establish themselves in the market.
But it is not only western chains that are expanding, there are also
several regional players that are expanding their market shares,
such as Ito-Yokado and Dairy Farm Group. The growth potential
continues to be considerable, and the large multinationals are
maintaining a rapid rate of expansion especially in China, Indonesia,
Malaysia and Thailand.
Not unexpectedly, growth during the year has been highest in
China, where the number of stores has increased by around 40
per cent. The retail market in China has been valued at around
USD 240 billion, and has been dominated by local players such as
Beijing Wangfujing Group and Wumart Stores. Multinational chains
such as Carrefour, Wal-Mart, Tesco and Metro are increasing their
investments, with Carrefour, for example, already having around 50
hypermarkets in the country.
MARKNAD
HL DISPLAY ANNUAL REPORT 2004

MARKNAD
Market position
The retail sector and the brand manufacturers that supply the retail
sector with products are currently characterised by a clear concentration
in terms of ownership. The major chains and brand manufacturers
are active in most markets all over the world. HL Display’s
ability to further develop its relations with these key customers is
crucial for the company’s continued success. This also forms the
basis of HL Display’s strategy of international expansion. By following
customers when they set up businesses in new markets,
HL Display can not only benefit from the existing business partnership,
but also expand its service to these customers and further reinforce
the relationship. HL Display currently supplies approximately
95 per cent of the biggest retail companies in Europe and approximately
75 per cent of the biggest retail companies in the world.
Western Europe
In Western Europe HL Display has a strong position as a supplier
of both products and category solutions to the retail sector and
to brand manufacturers. With its extensive knowledge of the end
consumer and of the requirements and needs of the retail sector
and brand manufacturers, HL Display produces solutions that create
added value in the form of increased sales and reduced costs.
Through a large number of sales companies in Western Europe,
HL Display can give the same level of service to its customers,
whatever the market.
Eastern Europe
Just as in Western Europe, HL Display has sales companies in
the most important markets in Eastern Europe. As the retail sector
is not as well developed in Eastern Europe, HL Display’s sales
HL DISPLAY ANNUAL REPORT 2004
16
are largely based on product sales rather than sales of category
solutions. However, the amount of category sales as a proportion
of total sales is growing gradually as the market develops, and
HL Display is working actively to encourage the trend towards better
category solutions. In Eastern Europe more sales are made to
brand manufacturers compared to the West. Brand manufacturers
such as the Altria Group, Coca Cola and Unilever established a
presence in Eastern Europe at an early stage, and therefore enjoy
a strong position in the market.
Asia
In Asia there are few competitors with products of the same high
quality. This, combined with the relationships that HL Display has
already established with the major global players, means that the
company has a strong position in the market. Several markets in
Asia now have a very well developed retail sector, which is creating
demand for both HL Display’s products and category solutions. However,
the price profile in Asia is different to that in Western Europe.
This means in turn that the retail chains do not invest in their stores
on a similar scale. The challenge facing HL Display is to produce
solutions that also meet the customers’ cost requirements.
North America
HL Display’s operations in the North American market are run in the
form of a joint venture with American company Trion Industries Inc,
who take care of all sales work. In North America sales are targeted
exclusively at retail companies. The product range is also much
narrower than in the rest of the world, consisting primarily of the
HL Datastrip and the Optimal shelf divider system. However, there
is potential to extend the range to include category solutions.

Developments during the year
Sales trends for HL Display were positive during 2004. The Group’s
sales totalled SEK 1.3 billion, an increase of 16 per cent compared
to the previous year. The trend has been consistently positive in all
regions where HL Display is active, not least in Asia, where sales
increased by 61 per cent. However, the increase in Asia is from a
low sales base in terms of turnover.
Western Europe
Sales in Western Europe increased during the year, largely thanks
to strong sales in HL Display’s two biggest markets, France and the
UK. Sales in France increased by 15 per cent and in the UK by 34
per cent. In both France and the UK the major customers adopted a
cautious approach in 2003, and most investments were put on ice.
These customers increased their investments instead in 2004. On
the German market the trend has been far short of the company’s
expectations for several years. A number of measures have been
instigated, including costs being reduced through the shared service
centre in Bergen op Zoom. The trend in 2004 was somewhat
better, with a sales increase of 2 per cent. This is still not satisfactory,
and work on increasing sales will continue in 2005.
Eastern Europe
The market is now starting to become well and truly mature in most
parts of Eastern Europe. This means that the market is starting to
become saturated in terms of the number of stores, and there is a
reduction in the number of new building projects. In these markets
customers are starting instead to invest in their existing stores.
Poland, the Czech Republic and Hungary are examples of mature
markets. Sales in Poland and the Czech Republic remained largely
17
HL Display’s system for automatic product
feeding guarantees that products are
always displayed at the front of the shelf.
SALES PER REGION, SEK M
Asia and Australia 65
North America 32
Western Europe 1,037
Eastern Europe 177
HL Display has increased sales in most markets during the year.
Developments in the Asian market has been especially positive and
the potential is believed to be good.
MARKNAD
HL DISPLAY ANNUAL REPORT 2004

MARKNAD
Sales companies
Austria
Belgium
China
Czech Republic
France
Germany
Great Britain
Bild
HL Display offers a complete solution for the Health & Beauty product category.
GLOBAL PRESENCE
HL DISPLAY ANNUAL REPORT 2004
Hong Kong
Hungary
Indonesia
Latvia
Malaysia
Netherlands
Norway
Poland
Romania
Russia
Singapore
Slovakia
Slovenia
Spain
South Korea
Sweden
18
unchanged in 2004 compared to the previous year. Hungary, however,
recorded a healthy increase in sales of 20 per cent, and sales
also increased by 12 per cent in Latvia. Russia is a market that
continues to record strong growth in the retail sector. HL Display
continues to enjoy sales successes on the Russian market, with
growth of 13 per cent. The trend has also been positive in Romania
and Turkey. The retail sector is expanding through the opening of
new stores in both countries, and during the year HL Display’s sales
increased by 121 per cent in Romania and by 7 per cent in Turkey.
During the year HL Display also signed a partnership agreement
with a new distributor in Kazakhstan, which enables the company
to increase its presence in the former Soviet Union.
Asia
Developments in the Asian market continue to be very positive for
HL Display. Sales for the region as a whole increased by 61 per
cent. According to Thomas Tay, MD of HL Display Singapore and
responsible for operations in Asia, HL Display continues to achieve
growth in the major retail chains. However, the company does need
to target the local chains that are growing in the region. As a result
of this HL Display has allocated resources during the year to meet
their requirements. During the year new sales companies were set
up in South Korea and Indonesia. Many of HL Display’s important
customers, such as Carrefour, Tesco and Dairy Farm Group, are in
both the South Korean and the Indonesian market. Operations in
China have started seriously during the year, and HL Display is the
supplier to major chains such as Carrefour, RT Mart and Linhua
Group. During the year HL Display launched a project with Linhua,
one of China’s leading retail chains, involving the company helping
Linhua to develop a new, modern retail concept.
North America
Sales in the North American market have increased during the
same compared to the previous year. Investment levels in the
retail sector have been low during the last three years. But there
are now signs that purchases are starting to increase. Market
surveys conducted by HL Display’s American partner Trion Industries
reveal that faith in and awareness of Trion/HL’s products has
increased significantly in recent times. This, combined with a more
favourable market climate, creates opportunities for increased
sales in 2005.
Switzerland
Taiwan
Thailand
Turkey
Ukraine
Distributors
Australia
Canada
Denmark
Estonia
Finland
Greece
Iceland
Ireland
Israel
Italy
Kazakhstan
Lithuania
New Zealand
Portugal
USA

Competitors
The competitive situation facing HL Display is a very fragmented
one, in terms of both market and products. The company has no
competitor with the same global presence or with as wide a range
of products. This means that HL Display has different competitors
in different markets and different competitors for different products.
No competitor has category solutions that are as well developed.
This means that the number of competitors is very large,
between 130 and 150 companies. It is therefore impossible to
produce a relevant breakdown in terms of market shares.
The competitors can be broadly divided into three groups:
1. International players with operations in more than
five markets
These companies compete with HL Display in individual product
areas, e.g. frame systems. The competitors in this group are usually
large companies with a broad range of activities, which means
that they only compete with HL Display in some of their niche areas.
Checkpoint Systems (USA) and Oechsle (Germany) are two examples
of companies in this group.
Strengths:
– Well-developed product range within their niche
– Efficient production process for each product
– Low prices
HL Display’s competitive advantages:
– HL Display’s complete range creates added value as it can
satisfy the customer’s total needs.
– HL Display offers complete category solutions.
– HL Display’s major initiatives in product development give the
company a leading position.
– HL Display’s good relations with the end customer provide a
benefit compared to competitors in this group, who in many
cases target the end customers via distributors and resellers.
2. Regional players with operations in two to four markets
Companies in this group compete with HL Display in individual product
areas. AL-Display (Germany), Visioplast (France) and Wilson &
Brown (Poland) are examples of companies in this group.
Strengths:
– Often family companies with a low cost base.
– Flexible production process for small batches.
– Good contacts with customers in their own region.
HL Display’s competitive advantages:
– HL Display’s complete range creates added value as it can
satisfy the customer’s total needs.
– HL Display offers complete category solutions.
– Through its global presence, HL Display can follow its major
customers when they expand into new markets and become a
preferred supplier.
3. Local players
Companies in this group compete with HL Display on total solutions.
This group contains most of the 130-150 competitors.
Kleerex (Ireland) is an example of a company in this group.
Strengths:
– Very good contacts with local customers
– High degree of customer specific solutions in their offer
HL Display’s competitive advantages:
– Customers nowadays largely consist of global retail
companies and brand suppliers who value a supplier
who can help them in several markets.
– HL Display’s major initiatives in product development give the
company a leading position.
MARKET
19
HL DISPLAY ANNUAL REPORT 2004

CASE
Attractive stores an
important competitive tool
Belgian company Super GB and HL Display have a well-developed partnership that goes back ten years. In recent years Super GB has
made wide-ranging changes to its outlets, and HL Display is behind solutions that are improving the presentation of a large number of
product categories.
Super GB is one of the two biggest supermarket chains in Belgium
and is owned by French company Carrefour, the second largest
retail group in the world. Super GB currently has more than 400
supermarkets (of which 3/4 are independent stores) all over Belgium,
with a retail area of between 200 and 3000 square metres.
Super GB offers a complete range of products (Food & Non-Food)
and specialises in lines including high-quality fresh products.
Wide-ranging changes
In recent years Super GB has made wide-ranging changes to the
appearance of its stores. Super GB wanted improvements that
would give its outlets a new, fresh appearance with plenty of light
and colour, to create an appealing environment for consumers. The
aim was also to be able to display products in a better way and to
make it easy for consumers to find their way around the stores and
find the goods that they are looking for.
More than ten years’ collaboration
HL Display’s collaboration with Super GB goes back more than ten
years. Super GB appreciates such factors as the high quality of
HL Display’s products and the company’s ability to be a problemsolver
in terms of displaying various categories in the best possible
way – especially categories that are difficult to work with and that
demand a high degree of innovative thinking. The unique breadth
of HL Display’s product range in the field of category solutions and
products also means that the customer can find help within all
product categories from one single supplier.
– The cooperation with HL Display is always constructive, professional
and sociable and we very much appreciate their aim to
always improve consumers’ shopping experience, said Hubert Vercauteren,
Pilot New Concepts Food, at Carrefour/Super GB.
In 2003 Super GB conducted a pilot project to improve the
company’s supermarket in Namur, Belgium. In conjunction with
this, HL Display produced solutions to improve the presentation of
most product categories in the store.
The pilot project was a success, and after evaluations and
adjustments these solutions formed the basis of the renovation
of a large number of Super GB’s outlets. During 2003 and 2004
HL Display delivered solutions and products to 20 stores, with 17
or so planned for next year.
Continuous evaluation
The solutions that HL Display supplies to Super GB’s various stores
are adapted to suit each store’s size and the breadth of its
HL DISPLAY ANNUAL REPORT 2004
20
product range. These installations are also the subject of continuous
evaluation through close collaboration between Super GB
and HL Display, meaning that the solutions are continuously being
further improved.
Solutions for several product categories
HL Display currently supplies solutions for most product categories
in Super GB’s supermarkets, for example Confectionery, Health &
Beauty, Baby food, Bread and Tobacco. The company also supplies
solutions for parts of the product range other than food products,
such as sporting articles and photographic items, films and cassettes.
Super GB has chosen to use colour codes in the store to make it
quick and easy for consumers to find the items they are looking for.
HL Display is therefore supplying the Slimline shelf-edge strip in
nine different colours that match the structure of the stores. The
broad range of Slimline strips means that they can be used for
all of the various shelf models that Super GB uses, regardless of
manufacturer. Slimline is also combined with the HeLec label
holder, which is adapted to hold the electronic price labels that
Super GB uses in all of its stores.
Clear product presentation
The Optimal shelf divider system is an important element of the
category solutions for Super GB. Optimal guarantees that shelves
are well organised and that products are displayed in a clear,
attractive way. This is combined with various kinds of automatic
feeder systems, depending on which products are to be displayed.
The feeder systems make sure that products are always displayed
at the very front of the shelf, which therefore always appears full.
Attractive, clear product displays are crucial in creating sales
growth in categories that are driven to a large extent by impulse
purchases, such as confectionery. The Confectionery product category
at Super GB is also recording good sales growth with the
new solutions. Some stores are seeing double-digit sales growth,
according to many of the brand manufacturer that supply goods
to this category.
Attractive stores
With these changes, Super GB has created stores that consumers
find extremely attractive. It’s easy to find your way around, as the
various departments are clearly colour-coded. This, combined with
a light, pleasant atmosphere, makes the stores’ appearance a
great asset for Super GB in its efforts to achieve increased customer
satisfaction and customer loyalty.

21
Super GB uses colour
codes to help consumers
find their way around the
store quickly. HL Display
therefore supplied the
Slimline shelf-edge strip
in nine different colours.
CASE
HL DISPLAY ANNUAL REPORT 2004

PRODUCTION
Increased productivity
and profitability
HL Display places great emphasis on continuous improvement at the company’s production facilities. The result is increasingly efficient
production with higher quality and shorter lead times. HL Display’s production facilities are now among the best in the world in the most
important production techniques.
In recent years HL Display has undertaken extensive work to
increase productivity and thus improve profitability in the company’s
production plants, which are mainly located in Sweden. This
means that the company can now run a more efficient production
process with higher quality and shorter lead times. In the most
important production techniques, such as extrusion and injection
moulding, HL Display’s production facilities are among the best
in the world.
Measures undertaken in recent years to increase productivity
have produced good results, and mean that the company can deal
with the price pressure on the market by means of more efficient
production. HL Display will continue in the future to place great
emphasis on the process of continuous improvement.
Continued improvements in profitability
The measures implemented 2003, when production was transferred
from Lesjöfors to Falkenberg and production capacity in
Sundsvall was adapted to suit the prevailing market situation,
have produced clear improvements in profitability. Work on further
improving profitability continued during 2004. In September
HL Display decided to outsource all production of shop systems
from the factory in Falkenberg to subcontractors. This led to 33
HL DISPLAY ANNUAL REPORT 2004
Every year more than
50,000 kilometres of
datastrips are manufactured
at the factory in
Sundsvall.
people being made redundant in Falkenberg. The remaining activities
in Falkenberg at present are the production of Pictoria poster
frames and a logistical centre for shop systems.
HL Display has also decided to outsource all additional production
at the HL Trion factory in Lesjöfors – a joint venture with American
company Trion Industries – to a subcontractor.
Purchasing function in China
During the year HL Display set up a purchasing function in connection
with the sales company in Shanghai, China. This means that
the company can benefit from a more favourable cost situation
for new investments, above all in machinery and tools, but also in
certain traded goods.
Among other things, HL Display invested in a new injection
moulding machine, an investment that was partly processed by the
newly-created purchasing function in China. Total investments in production
equipment for the Group amounted to SEK 44 M in 2004.
Improved lead times
The ability to offer short lead times is an important competitive
tool for HL Display, and the company also feels that it is one of the
major impediments to increased sales. In general HL Display has
short lead times at most of its production facilities.
However, during the year a need was identified to further reduce
lead times at the Falun factory, and the company implemented a
wide-ranging project to deal with the issue. Production planning
was overhauled, one of the effects being the development of a new
factory layout, and a four-shift system was introduced at certain
stations where there used to be bottlenecks.
The project has been extremely successful, and in six months
lead times had been cut by half from 19 days to nine days. As well
as quicker production, the project has also succeeded in reducing
fixed costs by around six per cent and capital tied up in stock by
approximately 12 per cent.
A staff training programme entitled “Lean Manufacturing” was
conducted at the factory in Shipley, UK, also with the aim of reducing
lead times and increasing productivity.
New materials
HL Display works actively on material development, in order to
develop alternative materials for several of the company’s products,
which leads to cost reductions.
In 2004 HL Display worked to modify the thickness of some of

the company’s products. This means that these products can be
produced at higher speeds which creates cost reductions.
Quality and reliability
HL Display operates an ambitious quality programme at all production
facilities. Detailed quality targets are set for each factory,
production process and product, and these are followed up on an
ongoing basis. All production facilities now maintain a high level
of quality, and work focuses mainly on continuously implementing
further improvements.
At present there are quality assurance systems at all production
facilities, structured in accordance with the international quality
standard ISO 9001. In due course all production facilities will also
be certified in accordance with this standard. The plants in Sundsvall
and Falun were already certified in accordance with ISO 9001.
In 2004 the Karlskoga factory was also ISO 9001-certified.
Delivery performance, lead times and the percentage of claimed
items are important quality yardsticks for HL Display. The average
delivery performance in 2004 for HL Display’s two largest production
plants, Sundsvall and Falun, was 97.6 and 92.8 respectively.
This is in line with the company’s targets of 98 per cent in Sundsvall
and 93 in Falun. The target for Falun is lower, due to the fact
that the production process there is more complex. The average
lead time for the Sundsvall plant was 9.75 days in 2004, which is
slightly above the target of 9 days. The average lead time for the
Falun plant was 14 days. Falun now also has a lead time target
of 9 days. The successful lead time project conducted in Falun
during the year enabled the company to meet its target of 9 days
in September.
The number of claimed items in proportion to total orders was
on average 0.7 per cent in Sundsvall and 0.9 per cent in Falun.
HL Display believes that there is potential for improvement in this
area, and initiatives are underway to reduce the number of claimed
items in 2005.
HL DISPLAY’S PRODUCTION FACILITIES
Sundsvall, Sweden HL Display’s biggest production facility, specialising in
the extrusion and injection-moulding of medium-sized products such as
the HL Datastrip and components for the Optimal shelf divider system.
Karlskoga, Sweden Specialises in the injection-moulding of HL Display’s
biggest and smallest products, such as floor stands and coupon spears.
Falun, Sweden Specialises in cold-bending and hot-bending of plastic as
well as screen-printing. Shelf talkers are one example of products manufactured
in Falun.
Falkenberg, Sweden Specialises in panel-bending and wire-bending,
punching and the assembly of aluminium profiles. Poster frames are one
example of a product manufactured in Falkenberg.
Shipley, UK Specialises in cold-bending and hot-bending of plastic.
Lesjöfors, Sweden and Wilkes Barre, Pennsylvania, USA Factories owned
jointly with Trion Industries. The Lesjöfors factory specialises in wire-bending,
while the one in Wilkes Barre specialises in the extrusion of products
intended for the North American market.
23
Nozzle used for extrusion of datastrips.
Yield per machine is an important measure of operational reliability
for HL Display. This means the time a machine is effectively
in production. The remaining time includes time when production
results in scrap, changeover times between batches and when
the machine is not running for other reasons. The average yield in
the two most important production techniques, injection moulding
and extrusion, was 90 per cent and 89 per cent respectively. HL
Display’s objective is to increase the yield in injection moulding to
93 per cent and in extrusion to 91 per cent.
PRODUCTION TECHNIQUE FACTS
Extrusion A production technique that involves molten plastic being forced
through a nozzle. The nozzle’s profile determines the form of the product’s
cross-section. Products are manufactured in strips that are cooled in a
water bath and then cut to the required length. The Datastrip is one example
of a product that is manufactured using this production technique.
Injection-moulding A production technique that involves molten plastic
being injected into a hollow mould. The form of the hollow determines
the product’s shape. Frames and shelf dividers are examples of products
manufactured using this production technique.
Cold-bending and hot-bending A production technique that involves a sheet
of plastic being bent into the desired shape with the aid of a bending tool.
Shelf talkers are one of the products manufactured in this way. In hot-bending
a hot bending tool is used, and a cold one for cold-bending.
Vacuum forming A production technique that involves a sheet of plastic
being heated and moulded around a tool by means of a vacuum process.
Shelf trays are examples of products manufactured using this production
technique.
Screen printing A flexible printing method for printing on surfaces made of
various materials, formats and thicknesses. This method combines high
capacity, high quality and strong colours in both four-colour printing and
PMS printing. Shelf talkers and dividers for open freezers are examples of
products for which screen-printing is used.
PRODUKTION
HL DISPLAY ANNUAL REPORT 2004

EMPLOYEES
Skills development creates
positive effects
Work on reinforcing employees’ skills has created clear, positive effects in HL Display and is an important element of work to develop
the company in accordance with its objectives. During the year HL Display has developed new methods enabling the company to offer
training courses to employees in a systematic way based on their individual needs.
HL Display’s vision, to be the leading supplier of merchandising
systems and the most cost-efficient supplier of in-store communication
systems, places high demands on employees’ skills at
all levels in the company. To develop the company in line with this
vision, HL Display must not only continuously improve the skills
and productivity of its employees, but also recruit new employees
with the right skills and capacity.
Higher quality in sales work
Improving employees’ skills generates clear, positive effects within
the company. One good example of this is the wide-ranging training
initiative that started last year for the company’s Key Account Managers.
The training programme focuses on the sales process and
how the company can create the conditions for a greater number
of successful projects through higher quality in sales projects. As
well as a new sales process, a new customer project module has
been developed to manage the largest projects. In 2004 work to
reinforce skills in the sales organisation has continued region by
region according to the long-term plan that was drawn up.
During the year HL Display developed methods of measuring
productivity and profitability in the sales force. The result of the
measurements then forms the basis of action taken within the
various sales companies, for example the allocation of direct and
indirect sales staff.
Interactive training
HL Plus is a central element of HL Display’s work on skills development.
HL Plus is a modern tool for employee review meetings and
performance assessments, developed in 2002 and now imple-
HL DISPLAY’S FUNDAMENTAL VALUES
Target fulfilment
HL Display’s ambitious
aims create a result-oriented
corporate culture.
Targets are set high, and
create positive challenges
for the company and its
employees. Day-to-day
activities are characterised
by an insistent striving
towards target fulfilment.
HL DISPLAY ANNUAL REPORT 2004
Trust and respect
HL Display also emphasises
the importance of
open, honest dialogue
within the company. Showing
trust in all employees
and an attitude that everyone
is doing their best for
the company combined with
a stated policy of maintaining
and developing a good,
honest business ethic.
Drive
Problems must be solved
where and when they arise.
Personal drive is encouraged.
The basic idea is that
everyone must have the
competence and the ability
to deal independently with
their daily tasks. This is
in line with the company’s
entrepreneurial heritage.
24
mented throughout the entire group. During the year HL Display
conducted follow-up and an assessment of HL Plus in one part of
the company, and the response was very good. The employees
thought that HL Plus was a good tool to develop themselves and
the departments in which they work.
During the year a function known as the Job Navigator Review
was also connected to HL Plus. A Job Navigator is essentially a
chart of jobs, skills requirements and development paths within
the group. At present there is a Job Navigator for all sales roles
within the company and for roles within finance and economy. By
linking together HL Plus with a Job Navigator Review, employees
get a clear picture of where they stand, what authority they have
and how they can develop within the company.
During the year HL Display also started work on a more structured
system of offering training to employees based on the results of the
HL Plus assessment. This will take place, among other things, in the
form of interactive training via the company’s intranet.
Cultivating the company culture
Through the years HL Display has worked actively to cultivate the
company culture (see fact box) and guarantee that it is accepted
throughout the whole organisation. The questionnaire-based
survey conducted last year to assess the company culture was
extended in 2004 to include how HL Display is perceived as an
employer, and this is now available via the company’s intranet.
Both anonymity and representativity are guaranteed in the survey,
by means of such measures as randomly issued passwords and
a requirement for an 80 per cent response rate. The survey is an
important basis for local improvement work, in which the group’s
Commitment
Successful managers lead
by example by showing
commitment in day-to-day
activities, while at the same
time retaining an overall
view of the business. The
ability to set a good example
is an important element
of daily management.
Non-prestigious
The company’s employees
are non-prestigious.
Results are more important
that job titles, and the
company’s heroes are
those involved in day-to-day
activities.

EMPLOYEE FACTS
Employee categories
Sales and
marketing
348
Product
development
45
Stock
66
Age distribution
390
Number of employees average Value added per employee
SEK T
925
975
967
467 463
438
855
406
399
773
-00 -01 -02 -03 -04
Production
365
Administration
and management
109
-00 -01 -02 -03 -04
HR Director reviews the results with the head of each subsidiary,
who in turn draws up an action plan for any areas of improvement
that are identified.
Preventing long-term absence through illness
During the year HL Display initiated preventive work focusing on
absence through illness. An action plan is currently being drawn
up at one of HL Display’s production sites to prevent long-term
absence through illness. This work is taking place in close collaboration
with trade unions and the employer’s health care.
HL Display was already conducting regular health checks for
employees in Sweden. These are then followed up with advice and
individual action plans. This makes it possible to identify and deal
in good time with, for instance, stress-related problems that might
otherwise lead to long-term absence.
Employees in figures
As of 31 December 2004 the total number of employees in the
12
-20
296
21-30
31-40
157
41-50
67
51-60
11
60-
25
MEDARBETARE
group was 933 (987) people. The average number of employees
during the year was 967 (975). 35 per cent of employees are
female, 65 per cent male.
37 per cent of the company’s employees work in sales and marketing,
46 per cent in production and warehouse, and others in
management, administration and product development. 55 per
cent of employees work in Sweden. 30 per cent of employees are
university graduates, 58 per cent have secondary school education
and 12 per cent elementary school education.
Added value per employee totalled SEK 438 T (399) in 2004.
Investments in staff training totalled SEK 1.8 M (1.8) in 2004, corresponding
to SEK 1,848 (1,893) per employee.
The health risks in HL Display are very small, and relate mainly
to production. Preventive work takes place to ensure safe workplaces
with a good working environment. A total of 26 incidents
were reported in 2004, all of a minor nature.
In the history of HL Display there have been no deaths due to
accidents in the workplace.
HL DISPLAY ANNUAL REPORT 2004

RISK AND SENSITIVITY ANALYSIS
Risk and sensitivity analysis
Financial risks
For a more detailed description of financial risks, please refer to
note 2 on page 38.
The economy
Historically HL Display has experienced very little vulnerability to
changes in the economy. A large number of small orders from
customers in different markets creates stable income flows.
The transition to selling more category solutions means greater
sensitivity to the state of the economy. During 2002 and 2003,
HL Display was negatively affected by the weaker economy but
during the past year, the improved economic climate in Europe has
had a positive effect on HL Display. Several of the projects which
HL Display’s customers postponed in 2003 have been implemented
in 2004. HL Display is affected negatively by seasonal variations
in December and January, as client companies are mainly
retailers who do not plan for any renovation work during the Christmas
shopping period.
Demand
HL Display’s customer structure, with many customers in different
markets, means that the market risk is well spread. HL Display
produces and delivers directly in response to customer orders.
Production changeovers have been improved, and the company
now has very short lead times, mostly less than two weeks. Historically
HL Display has experienced a very low level of bad debt.
The company’s customers are large, well-established companies
that are financially sound. The biggest single customer accounts
for five per cent of turnover. HL Display’s trend towards a larger
proportion of customer-specific total solutions will create bigger
HL DISPLAY ANNUAL REPORT 2004
26
and bigger orders. It is therefore to be expected that there will be
an increasing degree of fluctuation in income flows.
Competition
HL Display encounters global competition at product level, with a
number of international suppliers able to provide individual products
to several markets. In the field of solutions for merchandising
and in-store communication the company encounters competition
at local level, i.e. in a country or a region. HL Display currently has
no direct competitor as a global supplier of total solutions. Retail
companies’ needs for uniform, joint solutions across several markets
mean that the risk for HL Display is low in mature markets
and among large client companies. As HL Display follows its established
customers into new markets, it is felt that the risk is also
relatively low in new markets. For a detailed description of the
competitors, see page 19.
Raw materials sensitivity
Plastic raw materials accounted for 44 per cent of the group’s raw
material purchases. The major raw material, PVC, accounted for 24
per cent of the cost of goods sold by the group in 2004. The price
of PVC, and all other plastics, spiralled during 2004. The upswing
exceeded 30 per cent and an all-time high price level is expected
to continue at least during the first two to three months of 2005.
The price of polycarbonate, which is HL Display’s second largest
raw material, has increased by more than 50 per cent. The prices
of other plastics have risen by between 10 and 70 per cent. The
price of steel has also increased by more than 50 per cent. Prices
will presumably fall a little during 2005, but will in relative terms
still be high.
PRICE OF CRUDE PVC, EURO/TON EXCHANGE RATE, EURO/SEK
RAW MATERIALS 2004, %
1,000
800
600
400
200
10.000
9.500
9.000
8.500
8.000
0
7.500
1999 2000 2001 2002 2003 2004 1999 2000 2001 2002 2003 2004
Source: Platt’s Polymerscan European Polymer Prices Source: The Swedish Central Bank
Other 15
Electricity 3
Tape 5
Other plastic raw
materials 7
PVC 24
Aluminium,
steel and wire 7
Packaging 7
Semimanufactured
articles 20
Polycarbonate
(PC) 12

Customer agreements are normally renegotiated once a year,
and price change clauses for fluctuations in raw material prices are
rare in the industry. An increase of one per cent in the purchase
price for PVC during 2003 would have caused the profit before
taxes to fall by SEK 0.8 M. There is also a risk of limited supply
with subsequent price increases for other important plastic raw
materials. HL Display purchases raw materials under long-term
agreements, often with currency clauses. To reduce the company’s
vulnerability to raw material prices, HL Display is working successfully
on developing methods to use alternative materials.
Exchange rate risk
HL Display’s main markets are in the Euro zone. HL Display is vulnerable
to exchange rate fluctuations, as production takes place
mainly in Sweden, while most invoicing takes place abroad. Invoicing
to subsidiaries is made in local currencies in order to concentrate
the Group’s currency exposure to Sweden. External distributors
are invoiced in SEK. Currency effects that have an impact on the
company’s profits are transaction flows in different currencies (flow
exposure) and the conversion of foreign subsidiaries’ income statements
and balance sheets (conversion exposure).
Flow exposure
Flow exposure is caused partly by invoicing in foreign currency and
partly by purchases in foreign currency or purchases in which the
prices is regulated by a currency clause. The Swedish Krona was
weakened during 2003 by inflow currencies, the most important
of which are the Euro, the British Pound and the Norwegian Krona.
40 per cent of sales are invoiced in Euro-related currencies, 17
per cent in British Pounds and 4 per cent in Norwegian Kronor. In
HL Display purchases that affect exposure comprise above all
costs incurred by foreign sales companies and material purchases,
the price of which is regulated by a currency clause. It is the
group’s policy not to use currency positions to guarantee this flow
exposure. Since the beginning of 2003 the value of the Swedish
Krona, compared to HL Display’s export currencies, has had a
positive effect on the operating profit to the order of SEK 9 M, as
shown in the table below.
Currency effects on the operating profit
(compared with exchange rate at the start of the year, SEK M)
Net sales 17
Cost of products/services sold -3
Cost of sales -3
Administrative expenses -1
Development expenses 0
Other operating income/expenses
Total effect of exchange rate fluctuations
-1
on operating profit/loss 9
Conversion exposure
The net value of assets in currencies (equity in subsidiaries) other
than the currency used for the company’s accounts (SEK) will fluctuate
according to exchange rate fluctuations. This risk is known as
conversion exposure. HL Display is one of the few listed Swedish
companies to use the monetary method, in accordance with the
Swedish Financial Accounting Standards Council’s recommendation
RR 8 The Effects of Changes in Foreign Exchange Rates. The
27
RISK AND SENSITIVITY ANALYSIS
translation difference generated when converting foreign subsidiaries’
income statements and balance sheets is thus contained in
the income statement’s net financial items rather than being posted
directly to equity. It is the policy of the group to minimise this effect
by hedging the currencies that constitute the greatest exposure.
Sensitivity analysis
Factor Change Effect on operating
profit, SEK M
Net sales 1% volume 5.8
Price of PVC 1% 0.8
Price of polycarbonate 1% 0.4
Price of electricity 1% 0.1
Personnel costs 1% 3.5
Interest net 1 percentage point 0.4
Depreciation 1% 0.5
Euro exchange rate 10 öre 2.9
Manufacturing, products and patents
HL Display is a world leader in the production methods that are
most important to the company. Forward-thinking and innovative
design have contributed towards HL Display setting new standards
in large parts of the retail sector. It is therefore quite natural that
several instances of the company’s products being copied have
been reported. HL Display today protects all significant innovations
through patents in the markets where this is relevant.
Political risk
Political risk constitutes factors such as legislation, taxation issues
and trade policy. HL Display is not exposed to any considerable
political risk.
Employees
HL Display has a large number of key employees with a high level of
expertise and well developed customer relations. As the expertise
within the company is transferred further out in the organisation,
closer to the customer, it is becoming increasingly important to
document customer work in databases. The largest projects are
managed in the customer project module. Customer work takes
place in teams, which means that the financial effect of the loss of
any individual key employee is limited.
RAW MATERIAL FACTS
PC
Polycarbonate. Plastic that is suitable for such purposes as injection moulding.
PC can be recycled.
PETG
Polyethyleneterepthalate. Amorphous thermoplastic well suited for, among
others, extrusion and injection moulding. PETG can be recycled.
PVC
Polyvinyl chloride. Plastic that is suitable for extrusion, injection moulding
and vacuum moulding. PVC can be welded, glued, embossed and processed
in other ways. PVC can be recycled.
HL DISPLAY ANNUAL REPORT 2004

THE HL DISPLAY SHARE
The HL Display share
The HL Display share
The HL Display share has been listed on the OM Stockholm Stock
Exchange since 1993. On 31 December 2004 the share capital
in HL Display amounted to SEK 38,444,360, divided among
7,688,872 shares, each with a nominal value of SEK 5. Class A
shares carry one vote and class B shares 1/10 of a vote. All shares
provide equal entitlement to a share of the company’s assets and
profits. A block of shares amounts to 100 shares.
Share price development
Since its Stock Exchange launch, the share’s value has increased
by 853 per cent from SEK 14.37 (corrected for bonus issues)
to SEK 137 on 31 December 2004. During the same period
Affärsvärlden’s General Index increased by 180 per cent. In 2004
the price rose by 23 per cent, with a corresponding increase in
Affärsvärlden’s General Index of 17 per cent. The highest price
paid during the year for the HL Display share was SEK 137, and the
lowest SEK 90. At the end of 2004 HL Display’s market capitalisation
totalled SEK 1,053 M.
Trade volumes
During the year 496,312 shares were traded at a value of SEK
58 M, corresponding to 6.5 per cent of the total number of
HL Display shares.
Shareholders
As of 31 December 2003 the number of shareholders was 2,330
(2,553). The proportion of institutional shareholders is estimated
HL DISPLAY ANNUAL REPORT 2004
28
at 56 (54) per cent of capital and the proportion of foreign shareholders
is 1 (1) per cent.
Option scheme
There are in total three option schemes aimed at senior executives
in Sweden and abroad. The option schemes involve a total of
147,100 warrants which correspond to 1.9 per cent of the share
capital in HL Display and 0.9 per cent of votes if fully subscribed.
If the warrants are fully subscribed, the number of shares will
amount to 7,835,972. The warrants have been issued on commercial
terms, defined in accordance with the so-called Black & Scholes
model, and the purchase price was paid in cash. Utilisation of
subscription rights is not subject to continued employment.
Dividend policy
During HL Display’s phase of strong growth up to 2002, the board
opted to apply a cautious dividend policy. As HL Display is now
prioritising profitability and as the underlying cash flow is positive,
even after financing continuing strong growth, a more aggressive
dividend policy will be applied in the future. It is the board’s longterm
aim to pay a dividend corresponding to 30 to 50 per cent of
earnings per share after tax.
Dividend
For the financial year 2004 the Board proposes to the AGM a
dividend of SEK 2.50 (1.65) per share, which corresponds to an
increase in dividend of 52 per cent.
SHARE PRICE TRENDS SHAREHOLDER STRUCTURE, %
250
200
150
100
50
20
B-share
Afv General Index Number of shares traded, thousands (incl. after-hours)
1000
0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
© Six
800
600
400
200
Swedish
Private Owners 44.5
Foreign Owners 1.4
Swedish
Unit-Trusts 14.0
Swedish
Institutions 40.1

29
THE HL DISPLAY SHARE
Options schemes implemented
Year implemented Number of Proportion of share Proportion of votes Subscription price Subscription period
warrants capital if fully subscribed if fully subscribed
2003 49,200 0.6 0.3 86 2005-06-01 – 2007-06-29
2002 48,700 0.6 0.3 175 2004-07-01 – 2006-06-30
2001 49,200 0.7 0.3 134 2004-03-01 – 2006-02-28
Total 147,100 1.9 0.9 – –
Ownership structure on 31 December 2004
No. of shares No. of shareholders No. of shares % of shares
1 – 500 1,901 269,457 3.5
501 – 2 000 349 362,143 4.7
2 001 – 10 000 52 223,477 2.9
10 001 – 50 000 10 226,350 2.9
50 001 – 100 000 8 584,932 7.6
>100 000 10 6,022,513 78.4
Total 2,330 7,688,872 100.0
Data per share 1,2)
2004 2003 2002 2001 2000 1999 1998 1997 1996 1995
Earnings per share
after tax, SEK
Earnings per share after
5.89 –1.31 5.71 7.22 3.48 4.20 5.81 5.65 4.20 1.37
dilution and tax, SEK
Earnings per share
5.88 –1.31 5.71 7.22 3.48 4.20 5.81 5.65 4.20 1.37
after standard tax, SEK 6.41 –0.86 6.12 7.66 4.13 4.41 6.65 5.96 4.32 1.80
Dividend per share SEK 2.50 3) 1.65 1.65 1.55 1.40 1.30 1.30 1.20 1.00 0.63
Dividend per share
after tax 42.4 –125.5 28.9 21.5 40.2 31.0 22.4 21.2 23.8 46.0
Share price end
of period, SEK 137.00 111.00 91.00 128.00 73.00 161.00 205.50 187.00 70.00 36.50
Equity per share, SEK 42.29 38.10 41.08 36.89 31.07 28.89 26.00 21.39 16.74 13.16
Equity per share,
after dilution, SEK 42.19 38.10 41.06 36.89 31.07 28.89 26.00 21.39 16.74 13.16
Direct yield, % 1.8 1.5 1.8 1.2 1.9 0.8 0.6 0.6 1.4 1.7
P/E ratio, 31 December 23.26 neg 15.94 17.73 20.96 38.35 35.37 33.08 16.67 26.64
Operational cash flow
per share, SEK 8.70 4.12 8.62 5.54 1.28 3.99 – 1.11 5.02 5.67 – 1.20
No. of shares 7,688,872 7,688,872 7,688,872 7,688,872 7,688,872 7,688,872 7,688,872 7,688,872 7,688,872 7,688,872
No. of shares
after dilution 7,707,139 7,688,872 7,692,389 7,688,872 7,688,872 7,688,872 7,688,872 7,688,872 7,688,872 7,688,872
1) For definitions of key ratios see page 49.
2) Data per share corrected for bonus issues in 1994 and 1997.
3) According to the Board’s proposal.
Largest shareholders, 31 December 2004
No. of No. of Total no. Share of No. of Share of
A shares B shares of shares capital, % votes votes, %
The Remius family 803,808 1,608,188 2,411,996 31.4 964,627 60.6
Ratos AB 109,216 2,115,854 2,225,070 28.9 320,801 20.2
Lannebo funds - 764,185 764,185 9.9 76,419 4.8
Skandia - 506,712 506,712 6.6 50,671 3.2
Didner & Gerge mutual fund - 197,300 197,300 2.6 19,730 1.2
Lars Jonsson and family - 126,532 126,532 1.6 12,653 0.8
SIF - 117,100 117,100 1.5 11,710 0.7
Invus Investment AB - 82,800 82,800 1.1 8,280 0.5
Göran Källebo - 81,600 81,600 1.1 8,160 0.5
Richard Moser - 74,000 74,000 1.0 7,400 0.5
Robur small cap fund, Sweden - 48,700 48,700 0.6 4,870 0.3
Others - 1,052,877 1,052,877 13.7 105,288 6.7
Total 913,024 6,775,848 7,688,872 100.0 1,590,609 100.0
HL DISPLAY ANNUAL REPORT 2004

DIRECTORS’ REPORT
Directors’ report
HL Display AB (publ), corporate registration number 556286-9957, is a Swedish, publicly owned limited company.
The company’s registered office is in Stockholm, at Horisontvägen 26, 128 34 Skarpnäck.
HL Display’s net sales for 2004 increased by 16 per cent to SEK 1,311 M,
compared with SEK 1,129 M in 2003. Changes in the value of the Swedish
krona compared with HL Display’s export currencies at the beginning of the
year have had a positive effect on net sales to the order of SEK 17 M. The
consolidated operating profit amounted to SEK 80 M (-4). Changes in the
value of the Swedish krona compared with HL Display’s export currencies
at the beginning of the year affected operating profit positively by SEK 9 M.
This relates to the mathematical effect of conversion at exchange rates
which applied at the beginning of the year, without taking into account
business decisions, such as pricing or purchasing issues which may have
had an effect on exchange rate movements. Net interest income/expense
for the period amounted to SEK -6 M (-4), while translation differences
and other currency effects amounted to SEK -6 M (-1). Profit/loss after
financial items was SEK 68 M (-9). The profit margin was 5 (-1) per cent.
The Board of Directors proposes a dividend payment of SEK 2.50 (1.65)
per share.
Market overview
Sales in the major markets in Europe have been good during the year, with
a noticeable increase in activity among major customers. However, sales
in Scandinavia have not been in line with expectations. The Asian markets
continue to develop positively. At the end of 2003, HL Display established
a sales company in China, in cooperation with China’s leading shelf
manufacturer Shanghai Yongguan. Operations and sales in the Chinese
company started during 2004. Sales companies were also established
in South Korea and Indonesia during the year. In the longer term, production
for the Asian market should take place in Asia, and the possibility of
setting up production there is currently being investigated. The concentration
on category solutions has made increased volumes in mature markets
possible. Increased sales efforts and concentration on the non-food
sector have delivered sound results during the year.
Research and development
Product development is an important part of HL Display’s growth strategy.
One step taken to ensure future growth, along with customer-generated
development, has been to increase the focus on general development.
In the latter part of 2004, this effort has resulted in the introduction of
an increasing number of innovations. One such example is EasyShelf.
With the new EasyShelf system, the shelf dividers can easily be released
and moved sideways, which means substantial time-saving for the
stores and hence lower costs. With this innovation, HL Display can meet
the demands of the retail trade for a quick and effective way to reorganise
the merchandising within the store. Development costs in 2004 amounted
to SEK 42 M (37).
Organisational changes
During 2004, HL Display established new sales companies in South Korea
and Indonesia. The Chinese sales company which HL Display set up with a
partner in 2003 became operational during the year. To boost production
efficiency, some of HL Display Falkenberg AB’s production has been outsourced
to sub-contractors. Production of the Pictoria product group will
continue as before, but in a wholly-owned company in Falkenberg. Thirty
three jobs were cut at the factory in Falkenberg.
The environment
Intensive environmental protection programmes have been in place at all
HL Display’s production facilities for several years, see page 9.
The powder coating plants in use during the year in Lesjöfors and Falkenberg
have to be registered under Swedish environmental legislation.
HL Display does not have any operations which require a permit.
HL DISPLAY ANNUAL REPORT 2004
30
IFRS
The changeover to IFRS (International Financial Reporting Standards) will
only have a minimal effect on HL Display’s accounts. For more information,
see note 38.
Risk
For a description of the risks to which HL Display is exposed, see note 2
and the Risk and sensitivity analysis on page 26.
Employees
Average no. of employees 2004 2003
Total 967 975
Sweden 535 562
Rest of the world 432 413
Female 337 318
Male 630 657
The average number of employees in HL Display fell by 8 (+50) during
2004. The number of employees at year-end was 933 (987). The proportion
of employees in Sweden was 55 (58) per cent. The number of persons
employed at the production factories has decreased overall, while
sales employees, particularly in Asia, have risen.
Parent Company
The parent company has its registered office in Stockholm, and its activities
include Group services and Group management functions. The parent
company’s profit after financial items was SEK 51 M (52).
Option scheme
No decisions on warrant schemes were made during the year. Three option
schemes are already in force. If all three schemes are fully converted, the
new shares will correspond to 1.9 per cent of total share capital and 0.9
per cent of votes. For more information, see pages 28-29.
Outlook for 2005
Sales growth in 2005 is estimated to be at least 10 per cent. Raw material
prices are expected to stay on historically high levels. The effect of these
will primarily be counteracted by ongoing actions to improve efficiency, but
also by price increases. Level of expenses will continue to be held back
in the future. Continued measures to increase efficiency in production are
estimated to lead to one off costs during the first quarter. The objective
remains to reach an annual profit margin rate of 10 per cent during the
second half of 2005.
Proposed appropriation of profit
The following profits in the parent company are at the disposal of the
Annual General Meeting.
Retained profit, SEK 134,658,386
Net profit, SEK 43,778,518
SEK 178,436,904
The Board of Directors proposes that the profits be distributed as follows:
dividend to shareholders, SEK 19,222,180
to be carried forward, SEK 159,214,724
SEK 178,436,904
The Group’s undistributed earnings as of 31 December 2004 amount to
SEK 234,082 T (199,018).
The balance sheets, income statements and the proposed appropriation
of profit is proposed for adoption at the Annual General Meeting of
Shareholders March 14, 2005.
A description of the board’s work in 2004 can be found on page 51.

Income statement
Comments on the consolidated income statement
For definitions, see page 49
The Group’s sales increased by 16 per cent
compared with 2003. Changes in the value of
the Swedish krona compared with HL Display’s
export currencies at the beginning of the year
affected net sales positively to the order of
SEK 17 M. The gross margin has suffered from
an increasing incidence of high prices of raw
materials, while restraint and stricter control
of expenses has meant a lower level in relative
terms. Expenses has only increased by 3 per
cent. Operating profit/loss for the year rose to
SEK 80 M (-4). Changes in the value of the Swedish
krona compared with HL Display’s export
currencies at the beginning of the year affected
operating profit positively by SEK 9 M. Net interest
income/expense for the period amounted
31
INCOME STATEMENT
Group Parent Company
SEK T Note 2004 2003 2004 2003
Net sales 3, 4 1,311,003 1,129,005 76,344 79,130
Costs of goods/services sold –726,914 –622,122 –44,943 –56,126
Gross profit/loss 584,089 506,883 31,401 23,004
Selling expenses –346,402 –329,366 –11,583 –8,140
Administrative expenses –119,140 –127,075 –41,728 –34,801
Research & Development expenses –42,142 –36,958 –15,383 –12,593
Other operating income 5 9,796 5,658 3,734 2,178
Other operating expenses 5 –5,867 –23,030 –301 –817
Operating profit/loss 6, 7, 8, 9 80,334 –3,888 –33,860 –31,169
Income from shares in Group undertakings
Income from other securities and receivables
10 — — 79,839 79,059
accounted for as fixed assets 11 574 –277 4,908 4,886
Other interest income and similar items 12 1,886 2,606 830 1,179
Other interest expense and similar items 13 –14,385 –7,653 –1,046 –1,594
Profit/loss after financial items 68,409 –9,212 50,671 52,361
Appropriations 14 — — 5,679 5,183
Profit/loss before tax 68,409 –9,212 56,350 57,544
Tax on profit for the year 15 –23,729 –897 –12,571 –10,772
Minority shares in profit for the year 635 — — —
NET PROFIT/LOSS FOR THE YEAR 45,315 –10,109 43,779 46,772
Net profit/loss per share 16 5.89 –1.31 5.69 6.08
Profit/loss per share after dilution 16 5.88 –1.31 5.68 6.07
to SEK -6 M (-4), while translation differences
and other currency effects amounted to
SEK -6 M (-1). Profit/loss after financial items
increased to SEK 68 M (-9), corresponding to
a profit margin of 5 (-1) per cent. Profit/loss for
the year increased to SEK 45 M (-10).
HL DISPLAY ANNUAL REPORT 2004

BALANCE SHEET
Balance sheet
HL DISPLAY ANNUAL REPORT 2004
32
Group Parent Company
SEK T per 31 December Note 2004 2003 2004 2003
ASSETS 17
Fixed assets
Intangible fixed assets 18
Computer systems 3,470 6,188 1,210 2,173
Goodwill — 1,216 — —
Total intangible fixed assets 3,470 7,404 1,210 2,173
Tangible fixed assets 19
Land and buildings 0 0 — —
Plant and machinery 130,789 131,397 470 600
Capital expenditure on leasehold property 6,557 5,986 — —
Total tangible fixed assets 137,346 137,383 470 600
Financial fixed assets 20
Shares in Group undertakings 21 — — 50,947 49,155
Participating interests 22 10,000 10,000 16,751 16,051
Deferred tax assets 15 12,586 15,705 — 1,221
Other long-term receivables 978 964 — —
Total financial fixed assets 23,564 26,669 67,698 66,427
Total fixed assets 164,380 171,456 69,378 69,200
Current assets
Inventories 23 115,873 128,528 — —
Current receivables
Accounts receivable trade 241,728 197,939 — —
Receivables from Group companies — — 155,891 159,995
Other receivables 24 27,932 34,424 11,441 13,908
Prepaid expenses and accrued income 25 24,187 18,357 10,629 4,970
Total current receivables 293,847 250,720 177,961 178,873
Cash and bank 112,013 94,840 56,402 47,711
Total current assets 521,733 474,088 234,363 226,584
TOTAL ASSETS 3 686,113 645,544 303,741 295,784
Comments on the consolidated balance sheet
For definitions, see page 49
Total assets increased by SEK 41 M or 6 per
cent. Working capital increased by SEK 19 M
and there was an improvement in liquidity.
Fixed assets decreased, due to the fact that
investments were below depreciation for the
year. The capital turnover rate increased to
1.97 (1.74) times.
Investments
During the period, net investments in fixed
assets amounted to SEK 42 M (39) and mainly
relate to production equipment. Depreciation
according to plan amounted to SEK 46 M (48)
for the period.
Inventories and accounts receivable
Inventories fell by SEK 13 M as of 31 December,
and represent 9 (11) per cent of net
sales. Accounts receivable as of 31 December
increased by SEK 44 M. Accounts receivable
increased by 18 (17) per cent in relation to net
sales. The average credit period increased to
56 (53) days.

33
Group Parent Company
BALANCE SHEET
SEK T per 31 December Note 2004 2003 2004 2003
SHAREHOLDERS’ EQUITY AND LIABILITIES
Shareholders’ equity
Restricted equity
Share capital (7,688,872 shares, nominal SEK 5) 38,444 38,444 38,444 38,444
Restricted reserves 52,615 55,517 8,010 8,010
Total restricted equity 91,059 93,961 46,454 46,454
Unrestricted equity
Unrestricted reserves 188,767 209,127 134,658 123,705
Net profit/loss for the year 45,315 –10,109 43,779 46,772
Total unrestricted equity 234,082 199,018 178,437 170,477
Total shareholders’ equity 325,141 292,979 224,891 216,931
Minority interests 97 — — —
Untaxed reserves 26 — — 20,033 25,712
Provisions
Deferred tax liabilities 15 13,260 13,876 — —
Other provisions 27 1,023 — — —
Provisions 14,283 13,876 — —
Long-term liabilities 28
Liabilities to credit institutions 55,730 65,581 — 1,699
Other liabilities 1,173 840 — —
Total long-term liabilities 56,903 66,421 — 1,699
Short-term liabilities
Accounts payable trade 77,996 81,818 8,443 8,491
Bank overdraft facilities 29 73,140 76,657 — —
Liabilities to Group companies — — 34,120 33,165
Liabilities to associated companies — — 700 —
Income tax liabilities 6,105 1,262 — —
Other liabilities 40,652 30,546 2,989 2,395
Accrued expenses and pre-paid income 30 91,796 81,985 12,565 7,391
Total current liabilities 289,689 272,268 58,817 51,442
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES 686,113 645,544 303,741 295,784
Assets pledged 31 215,237 201,692 50,947 49,155
Contingent liabilities 32 — 5,058 234,313 204,797
Shareholders’ equity
As of 31 December 2004, HL Display’s equity
amounted to SEK 325 M (293). Equity per
share amounted to SEK 42.29 (38.10). The
equity/assets ratio was 47 (45) per cent.
Liabilities
Long-term liabilities fell by SEK 10 M. Current
liabilities rose by SEK 17 M. The debt/equity
ratio fell to 0.40 (0.49) times. As of 31 December,
interest-bearing liabilities amounted to
SEK 130 M (145), of which current liabilities
accounted for SEK 73 M (78).
HL DISPLAY ANNUAL REPORT 2004

CHANGES IN SHAREHOLDERS’ EQUITY
Changes in shareholders’ equity
Group Parent Company
Total Total
share- share-
Share- Restricted Unrestricted holders Share- Restricted Unrestricted holders’
SEK T capital reserves equity equity capital reserves equity equity
Shareholders’ equity, 31 December 2002 38,444 56,507 220,870 315,821 38,444 8,010 166,297 212,751
Transfers between unrestricted and restricted equity — –990 990 — — — — —
Group contributions paid — — — — — — –40,944 –40,944
Tax on Group contributions paid — — — — — — 11,464 11,464
Net profit/loss for the year — — –10,109 –10,109 — — 46,772 46,772
Dividend paid — — –12,687 –12,687 — — –12,687 –12,687
Issue of warrants — — 379 379 — — — —
Cost of issuing warrants — — –425 –425 — — –425 –425
Shareholders’ equity, 31 December 2003 38,444 55,517 199,018 292,979 38,444 8,010 170,477 216,931
Effect of change in accounting principle — — –466 –466 — — — —
Adjusted opening balance, 1 January 2004 38,444 55,517 198,552 292,513 38,444 8,010 170,477 216,931
Transfers between unrestricted and restricted equity — –2,902 2,902 — — — — —
Group contributions paid — — — — — — –32,128 –32,128
Tax on Group contributions paid — — — — — — 8,996 8,996
Net profit/loss for the year — — 45,315 45,315 — — 43,779 43,779
Dividend paid — — –12,687 –12,687 — — –12,687 –12,687
Shareholders’ equity, 31 December 2004 38,444 52,615 234,082 325,141 38,444 8,010 178,437 224,891
Comments on Change in shareholders’ equity
For definitions, see page 49
Change in equity consists largely of profit/loss SEK 466 T. Existing option schemes will not
for the year and the dividend for the year paid to cause any further changes in shareholders’
shareholders. The dividend for 2004 was SEK equity until the warrants are converted into
1.65 per share, i.e. SEK 12.7 M. During 2004, shares (see note 16). Change in shareholders’
HL Display adapted the Swedish Financial equity does not contain a line for translation
Accounting Standards Council’s recommenda- differences, as HL Display uses the monetary
tion RR 29 Employee benefits, which has led to method, in accordance with Swedish Financial
a change in shareholders’ equity by
Accounting Standards Council’s recommenda-
HL DISPLAY ANNUAL REPORT 2004
34
tion RR 8 The Effects of Changes in Foreign
Exchange Rates, to translate the income
statements and balance sheets of foreign
subsidiaries. This method means that the
translation difference arising when currency is
converted is included in the income statement
rather than being posted directly
to equity.

Cash flow statement
35
CASH FLOW STATEMENT
Group Parent Company
SEK T Note 2004 2003 2004 2003
OPERATING ACTIVITIES
Operating profit/loss 80,334 –3,888 –33,860 –31,169
Depreciation 46,460 47,556 1,437 2,197
Other items not effecting the cash flow 4,112 20,010 — 10
Dividends and Group contribution received — — 90,579 83,058
Interest received 2,339 3,130 5,710 6,136
Interest paid –8,487 – 6,839 –1,073 –1,224
Income tax paid –11,195 – 24,151 — –10,655
Cash flow before change in working capital 113,563 35,818 62,793 48,353
Increase (–) / decrease (+) inventories 12,655 – 14,343 — —
Increase (–) / decrease (+) in accounts receivables –43,789 – 310 — 4
Increase (–) / decrease (+) in other short-term receivables –4,498 564 –5,732 –8,193
Increase (+) / decrease (–) accounts payable –3,822 13,480 –48 1,539
Increase (+) / decrease (–) other current operating liabilities 20,833 9,261 –32,800 7,199
Total cash flow from operating activities 94,942 44,470 24,213 48,902
INVESTING ACTIVITIES
Net investments in intangible fixed assets –558 – 1,404 –163 –314
Net investments in tangible fixed assets –44,804 – 39,282 –181 –406
Investments in Group companies — — –792 –7,944
Investments in other financial assets –14 – 526 — —
Cash flow from investment activities –45,376 – 41,212 –1,136 –8,664
FINANCING ACTIVITIES
New share issue 732 – 46 — –425
Loans raised 5,089 9,484 — —
Amortisation –23,798 – 3,149 –1,699 –29,615
Dividend paid –12,687 – 12,687 –12,687 –12,687
Cash flow from financing activities –30,664 – 6,398 –14,386 –42,727
THE YEAR’S CASH FLOW 18,902 –3,140 8,691 –2,489
Liquid assets at the beginning of the year 94,840 100,388 47,711 50,200
Exchange rate difference on liquid assets –1,729 –2,408 — —
Liquid assets at the end of the year 37 112,013 94,840 56,402 47,711
Comments on the consolidated cash flow analysis
For definitions, see page 49
Cash flow from operating activities improved cash flow to the order of SEK 64 M. Cash flow
to SEK 95 M (44), mainly due to the higher from investing activities fell to SEK –45 M (–41),
operating profit. Other items not having an due to an increase in investments. Neverthe-
effect on liquidity include write-downs/scrapless investments fell short of depreciation for
ping of fixed assets to the order of SEK 1 M net. the year. Investments relate mainly to tangible
A low level of income tax as a result of lower fixed assets, such as production equipment
taxable profits in 2003 than in 2004 has had including tools for new products. New share
a positive effect on cash flow. Tied-up working issue 2004 concerns minority capital contribu-
capital fell and this had a positive effect on the tion in the Chinese subsidiary. Operating cash
flow amounted to SEK 8.70 (4.12) per share.
Cash flow from financing activities amounted to
SEK –31 M (–6). The interest bearing net debt
fell to SEK 18 M (50). The cash flow analysis
was drawn up according to the indirect method.
The cash flow reported only includes transactions
that involved receipts or payments.
HL DISPLAY ANNUAL REPORT 2004

NOTES
Notes
Note 1
ACCOUNTING AND VALUATION PRINCIPLES
The annual accounts and consolidated accounts have been drawn up in accordance
with the Annual Accounts Act, the Swedish Financial Accounting Standards
Council’s recommendations and the Swedish Emerging Issues Task
Force statements. As from 1 January 2004 RR 29 Employee benefits has
been applied. This has had the effect that defined benefit plans in the Group
are reported and calculated in accordance with principles that are different to
those previously applied. The change in the net pension liability reported in
the accounts as a result of this change of principle has been posted to equity.
In accordance with the recommendation there has been no conversion of the
comparative year.
Valuation
Assets and liabilities have been valued at their acquisition value unless otherwise
stated.
Classification
Fixed assets, long-term liabilities and provisions essentially consist of amounts
that are expected to be recovered or settled after more than twelve months
from the balance sheet date. Current assets and current liabilities essentially
consist of amounts that are expected to be recovered or settled within twelve
months of the balance sheet date.
Consolidated financial statements
The consolidated financial statements have been prepared in accordance with
the Swedish Financial Accounting Standards Council’s recommendation on
consolidated financial statements, RR 1:00. Acquisitions of companies are
reported according to the purchase method of accounting. The Group’s closing
accounts include companies in which the parent company, either directly or
indirectly, holds more than 50 per cent of voting rights, or has a controlling interest
in any other way. Subsidiaries are considered to be integrated, and foreign
subsidiaries are translated in accordance with the monetary method. Monetary
items in the subsidiaries’ balance sheets are converted at the exchange
rate on the balance sheet date, while non-monetary items are converted at the
exchange rate on the investment date. In the income statement, depreciation
is reported at the historical exchange rate and other items at the average rate
for the year. Cost of goods sold is translated at the average exchange rate, as
the turnover rate is high. Translation differences are reported under financial
items in the income statement.
Associated Companies and Joint Ventures
Associated companies refers to companies which are not subsidiaries but in
which the parent company, directly or indirectly, owns more than 20 per cent of
the votes or has a controlling interest in some other way. The joint ventures in
the Group are jointly owned companies run by HL Display and one or more other
party. The proportional method is used for consolidation of joint ventures.
Revenue recognition
Revenue recognition follows the Swedish Financial Accounting Standards
Council’s recommendation RR 11 Revenues. The Group’s net sales consist
almost entirely of sale of goods. Revenues are reported in the income statement
at the time when the future financial benefits are expected to fall to the
company and when these benefits can be calculated in a reliable way. Sales are
reported excluding VAT and discounts.
Reporting of segments – lines of business and geographical areas
HL Display is applying RR 25 Reporting of segments – lines of business and
geographical areas. HL Display is a typical niche company with production and
sales of a homogeneous product range. The products have somewhat different
functions, but are intended for the same areas of application (merchandising
HL DISPLAY ANNUAL REPORT 2004
36
and in-store communication). The company’s opportunities and risks are in a
global market where the determining success factor is to become a supplier to
the leading national and multinational retail chains and brand manufacturers
(key accounts). HL Display achieves this through global key account management,
by being a leader with regards to cost efficient production, logistics and
sales, through innovative product development and design, and by offering a
broad range of products. As the primary basis of division, HL Display accounts
for a single, vertically integrated, line of business and as a secondary basis
of division geographical areas. These bases of division are in-line with the
company’s internal reporting.
Leasing
The Swedish Financial Accounting Standards Council’s recommendation RR
6:99 Leasing agreements is applied for the reporting of leasing. Leasing agreements
are classified as either financial or operating leasing in the consolidated
financial statements. A lease is considered financial if the economic risks
and benefits associated with ownership of the asset have, to a material degree,
been transferred to the leasee. If this is not the case, the leasing is reported
as operating leasing. Assets leased under leasing agreements which are to
be classified as financial are reported as plant and machinery and are written
off in accordance with the depreciation principles. Future leasing agreements
are reported as liabilities, and the reported liability is reduced by the leasing
charges paid during the year, after interest has been deducted. The annual
leasing charge for leasing agreements classified as operating is reported as an
operating expense in the income statement.
Research and development
Costs of research and development that are posted in the income statement
comprise costs of research into production, materials and products, as well as
product development costs until a decision is made to complete development
of the product. After a development decision has been made, the development
costs are capitalised in accordance with the Swedish Financial Accounting
Standards Council’s recommendation RR 15 Intangible assets. However, as
the subsequent product development work almost exclusively involves constructing
the production equipment needed to manufacture the product, the
costs are capitalised as tangible fixed assets.
Employee benefits
Employee benefits are reported in the consolidated accounts in accordance
with the Swedish Financial Accounting Standards Council’s recommendation
RR 29 Employee benefits, which has been applied as from 1 January 2004.
Defined benefit plans have been reported in the consolidated accounts up to
and including 2003 in accordance with local rules and regulations, with no conversion
to common principles. As from 2004, defined benefit plans have been
reported in the consolidated accounts in accordance with common principles
and calculation methods. The difference compared with the previous year has
affected opening balance of equity 2004.
Income taxes
Deferred tax is recognised for loss-carry forwards and temporary differences
between reported and fiscal values of assets and liabilities. Deferred tax assets
are recognised only to the extent that it is likely that they will be utilised.
Receivables
Receivables are entered in the amounts which are expected to be paid, based
on an individual assessment.
Receivables and liabilities in foreign currencies
Receivables and liabilities in foreign currencies are valued at the closing rate
of exchange.

Financial instruments
An explanation of the accounting principles in respect of financial instruments
is provided in note 2.
Hedging
Most of the foreign subsidiaries’ net values of monetary assets and monetary
liabilities are hedged, as are most of the parent company’s loan receivables
from foreign subsidiaries. Currency effects of the hedging instruments are
offset against the translation difference that arises on conversion of the foreign
subsidiary’s income statements and balance sheet, and against exchange rate
differences in the parent company’s loan portfolio.
Inventories
Inventories are valued at the lower of acquisition value and market value.
Balanced average prices are applied to calculate the acquisition value. Products
manufactured by the company and products in progress are valued at the
manufacturing cost including a reasonable proportion of indirect manufacturing
overheads.
Fixed assets
Depreciation according to plan is based on the original acquisition value and
the estimated utilisation period as follows:
– IT systems 4 years
– Goodwill 5 years
– Buildings 33 years
– Plant and machinery 5 - 12 years
– Inventory, tools, fixtures and fittings 3 - 7 years
– Renovation of other parties’ property 20 years
Write-downs
In accordance with the Swedish Financial Accounting Standards Council’s
recommendation RR 17 Impairment of Assets, the reported values of the
Group’s intangible and tangible fixed assets are tested on the balance sheet
date to determine whether there is any indication of a write-down requirement.
If such an indication is identified, the recoverable value of the asset is calculated
as the higher of value in use and net realisable value. A write-down
is carried out if the recoverable value is less than the reported value. When
calculating the value in use, the future cash flows are discounted at a rate
of interest which before tax takes into account the market’s assessment of
risk-free interest and risk associated with the specific asset. An asset which is
dependent on other assets is included with the smallest cash-generating unit
which generates independent cash flows.
A write-down is reversed if there has been a change in the estimates used to
determine the recoverable value. However, a reversal is made only to the extent
that the asset’s carrying value does not exceed the carrying value that would
have been determined, net of depreciation, had there been no write-down.
Provisions
Provisions are reported in the balance sheet in accordance with the Swedish
Financial Accounting Standards Council’s recommendation RR 16 Provisions,
Contingent Liabilities and Contingent Assets, when the company has a legal
or informal undertaking arising from contingent events in which it is likely that
payments will be required to fulfil the commitment and where it is possible to
make a reliable estimate of the amount to be paid.
37
Earnings per share
Earnings per share is calculated, in accordance with RR 18 Earnings per share,
as the Group’s profit after tax divided by the number of shares. In earnings per
share after dilution the number of shares has been increased by the number of
shares involved in the three option schemes. Dilution only arises if certain conditions
are fulfilled. Dilution does not occur if, for example, the present value is
less than the average share price during the period, or in the case of a negative
result.
Group contributions and shareholders’ contributions
Shareholders’ contributions are posted directly to equity at the recipient and
are capitalised as shares and interests at the issuer, if no write-down is required.
Group contributions are reported according to their financial nature. This
means that group contributions issued or received for the purpose of reducing
the group’s total tax are posted directly to retained profits with a deduction for
its current tax effect.
A group contribution that is equivalent to a dividend is posted as such, i.e.
group contribution received, and its current tax effect is posted in the profit and
loss account. Group contribution issued is posted directly to retained profits
with a deduction for its current tax effect.
A group contribution that is equivalent to a shareholder contribution is for
the recipient posted, with due consideration of its current tax effect, directly to
retained profits. The issuer reports the group contribution and its current tax
effect as shares in group undertakings, if no write-down is required.
Events after the year-end
If any significant events occur after the year-end but before the date on which
the financial reports are signed, and they are not of such a nature that the
balance sheet and profit and loss account have to be changed, the information
is included in the directors’ report or a separate note.
NOTES
HL DISPLAY ANNUAL REPORT 2004

NOTES
Note 2
FINANCIAL INSTRUMENTS
Financial risks
Financial risks are defined in RR 27: 37 (IAS 32:43), and the description below
is based on these definitions.
A financial risk involves not only a risk of losses, but also an opportunity for
profit. HL Display’s policy for dealing with financial risks is based on profits being
generated by the operational business and not through investments in financial
instruments. This means that only investments with a low risk are permitted.
HL Display’s financing and financial risks are managed under the control and
auspices of the board. Financing activities are centralised within the HL Financial
Services AB unit, which acts as an internal bank, with responsibility for financing
and managing financial risks.
Exchange rate risk
Flow exposure
The lead times for HL Display’s orders are very short, in most cases less than
two weeks. Order stock at any time consists of more than one thousand order,
most of a low value, from customers in different geographic markets and in different
currencies.
It is HL Display’s policy not to hedge future order flows in foreign currencies.
Because of the short lead times and fragmented order structure, hedging would
only create a degree of delay in exchange rate changes. Over a period of time,
therefore, hedging would not have any real effect. This means that changes in
exchange rates have a relatively quick impact on HL Display’s financial results.
EUR M GBP M USD M
The group’s net flow, 2004 29 10 3
The effect on the operating profit of a 5%
change in the value of the SEK, SEK M based on
average exchange rates in 2003 13 6 1
USD also includes other currencies linked to the dollar.
Conversion exposure
HL Display applies the monetary method for converting the income statements
and balance sheets of foreign subsidiaries. This means that exchange rate changes
in the net value of subsidiaries’ monetary assets and liabilities are posted in
the consolidated income statement as translation differences. It is HL Display’s
policy to hedge most of the net monetary value in subsidiaries. Put simply, this
means that equity in foreign subsidiaries is hedged, as the foreign companies
have almost exclusively monetary assets and liabilities. Hedging instruments are
posted at the exchange rate at the year-end, and unrealised exchange rate differences
are posted as net income. The effects on profits of the hedging contracts
are posted in net financial items and offset against the translation difference in
the income statement when converting foreign subsidiaries. In 2004 exchange
rate effects of SEK 1 M were offset against the translation difference.
To reduce currency risks, the assets in the foreign subsidiaries are financed
locally, in the local currency, where this is commercially viable. However, there
is a degree of financing via the subsidiary HL Financial Services AB in Sweden.
It is HL Display’s policy to hedge most of the loan portfolio against foreign subsidiaries.
Hedging instruments are posted at the exchange rate at the year-end,
and unrealised exchange rate differences are posted as net income. The effects
on profits of the hedging contracts are posted in net financial items and offset
against exchange rate difference in the loan portfolio. In 2004 SEK 0 M was offset
against exchange rate losses in the loan portfolio.
At the year-end the group had hedged policies totalling a nominal value of EUR
-6 M and USD -1 M. The remaining term is one month. Unrealised exchange rate
losses totalled SEK -1 M, and have been posted as accrued expenses.
EUR M GBP M USD M
The group’s monetary net assets 5,9 -0,6 -0.3
USD also includes other currencies linked to the dollar.
Interest rate risk
The interest rate risk in HL Display is low, as there is a high degree of selffinancing.
The equity/assets ratio was 47 per cent at the year-end, and the
interest-bearing net liability was only SEK 18 M. Net interest was SEK -6 M. All
interest-bearing assets and liabilities are subject to floating interest rates. A
change of one per cent in the market interest rate would cause a change in the
net interest figure of SEK 0.4 M.
HL DISPLAY ANNUAL REPORT 2004
38
Short-term interest-bearing liabilities total SEK 74 M, and consist almost
exclusively of utilised cheque account credit. The effective interest rate on utilised
cheque credit is 3.2 per cent.
Interest-bearing long-term liabilities total SEK 56 M, and consist of bank
loans. The bank loans have an average effective interest rate of 5.3 per cent,
and the due dates are as shown in the table.
SEK M Due within 1 year Due within 1-5 years Due after 5 years
36 17 4
Market risk
HL Display has no significant financial instruments that represent a market risk
according to the definition in RR 27 (IAS 32).
Credit risk
The credit risk within HL Display comprises almost exclusively accounts receivable.
HL Display has very few bad debts. The company’s customers are large, wellestablished
companies that are financially sound and distributed over several
geographic markets. The biggest single customer accounts for five per cent of
turnover. Most orders are low in value. HL Display checks the risk of bad debt by
means of defined routines for credit control, handling demands and invoicing of
interest on overdue payments. Credit insurance policies have been considered,
but have not been felt to be justified. The amount that best represents the maximum
exposure to bad debt, without taking into account any security provided, is
the outstanding figure for accounts receivable according to the balance sheet at
the year-end, SEK 242 M.
Liquidity risk
HL Display has no significant financial instruments that represent a liquidity risk
according to the definition in RR 27 (IAS 32).
Cashflow risk
The risk that future cashflows, which are related to financial instruments, may
vary in value is described in the sections on currency risk and interest rate risk.
Financial instruments within HL Display
HL Display’s financial assets and liabilities comprise almost exclusively primary
instruments. An inventory has been undertaken of the financial assets and liabilities
of companies in the Group, and the only derivative instruments during 2004
are hedging contracts, which are described in the section on currency risks.
The nature and scope of the financial instruments is best viewed through the
consolidated balance sheet with associated notes. The items entitled other
long-term receivables, accounts receivable trade, cash and bank, long-term liabilities
and accounts payable consist exclusively of financial assets and liabilities.
The items entitled prepaid expenses, other current receivables, other current
liabilities and accruals and prepaid income contain some financial assets and
liabilities. These items contain primary assets and liabilities relating to the operational
business, and a more detailed specification of these was not considered
to provide significant information.
Accounts receivable are included in the balance sheet when an invoice has
been issued. Accounts payable are included when an invoice has been received.
A financial asset is removed from the balance sheet when the rights in the
agreement have been realised, fall due or the company loses control over it. A
financial liability is removed from the balance sheet when the obligation in the
agreement is honoured or redeemed in any other way.
Accounts receivable are reported at the amount that is expected to be received
after deductions for unsafe receivables, which are assessed individually. The
expected term of accounts receivable is short, which is why the value is posted
at a nominal value with no discount. Accounts payable have a short expected
term, and are valued at a nominal value with no discount. Liquid funds include
cash and immediately available bank balances. Loans are reported initially at
the amount received after a deduction for transaction costs. After the acquisition
date the loan is valued at the accrued acquisition value in accordance with
the effective interest method.
The items are not affected by conditions that may be significant in assessing
the size, date and degree of security relating to future cashflows.
No reported financial assets and liabilities values vary significantly from actual
values.

Note 3
BREAKDOWN OF NET SALES BY GEOGRAPHIC MARKET
Sales divided by geographical markets
Group Parent Company
SEK T 2004 2003 2004 2003
Nordic region 222,735 225,801 39,045 38,726
Western Europe 814,180 677,403 29,614 33,746
Eastern Europe 176,606 158,061 6,007 6,135
Asia/Australia 65,275 45,160 1,678 523
North America 32,207 22,580 — —
Total 1,311,003 1,129,005 76,344 79,130
Assets divided by geographical markets
Group Parent Company
SEK T 2004 2003 2004 2003
Nordic region 279,028 294,154 303,741 295,784
Western Europe 276,145 257,484 — —
Eastern Europe 60,190 47,815 — —
Asia/Australia 46,631 26,994 — —
North America 24,119 19,097 — —
Total 686,113 645,544 303,741 295,784
Investments divided by geographical markets
Group Parent Company
SEK T 2004 2003 2004 2003
Nordic region 35,609 26,055 344 720
Western Europe 1,328 5,203 — —
Eastern Europe 748 2,848 — —
Asia/Australia 830 445 — —
North America 6,847 4,793 — —
Total 45,362 39,344 344 720
Note 4
INTRA-GROUP PURCHASING AND SALES
Of the parent company’s net sales SEK 76,296 T (78,711) refers to services
sold to Group companies.
Note 5
SPECIFICATION OF OTHER OPERATING INCOME/EXPENSES
SEK T
Other operating income
Group 2004 Group 2003
Exchange rate differences 750 1,413
Royalty income 2,186 1,025
Rental income 1,505 1,059
Reversal Write-down 2,850 —
Other 2,505 2,161
Total 9,796 5,658
Other operating expenses
Exchange rate differences –1,590 –3,708
Write-downs/disposals of fixed assets –4,000
–17,692
Other –277 –1,630
Total –5,867 –23,030
Write-downs/disposals for 2004 refers to production machinery at the factory
in Falkenberg, and for 2003 mainly property and production machinery at the
factory in Lesjöfors.
39
Note 6
WAGES, SALARIES OTHER REMUNERATION AND SOCIAL SECURITY COSTS
2004 2004 2003 2003
Wages, Wages,
salaries Social salaries Social
and other security and other security
SEK T remuneration costs remuneration costs
Parent Company 26,876 15,729 24,878 16,027
(of which pension costs) (5,095) (5,525)
Subsidiaries 265,443 80,902 249,937 79,761
(of which pension costs) (12,269) (12,599)
Total 292,319 96,631 274,815 95,788
Note 7
BREAKDOWN OF WAGES AND OTHER REMUNERATION
2004 2004 2003 2003
Board Other Board Other
SEK T and MD employees and MD employees
Parent Company 1,991 24,885 1,924 22,954
Subsidiaries in Sweden 4,289 134,803 4,477 134,387
Subsidiaries abroad 17,875 108,476 18,012 93,061
Total 24,155 268,164 24,413 250,402
Note 8
DEPRECIATION
Group Parent Company
SEK T 2004 2003 2004 2003
Computer systems –3,276 –4,504 –1,126 –1,882
Goodwill –1,216 –2,065 — —
Land and buildings — –440 — —
Plant and machinery
Capital expenditure on
–41,351 –39,883 –311 –315
leasehold properties –617 –664 — —
Total –46,460 –47,556 –1,437 –2,197
NOTES
HL DISPLAY ANNUAL REPORT 2004

NOTES
Note 9
LEASING CONTRACTS
Equipment hired by the company under financial leasing contracts is reported
for as plant and machinery. Accumulated acquisition values amount to SEK
13,266 T and accumulated depreciation to SEK 8,188 T. An amount of SEK
455 T is reported as long-term liability and SEK 819 T as current liability.
Parent
Group Company
Financial Operational Operational
SEK T leasing leasing leasing
Paid leasing fees 2004 1,445 23,211 5,067
Future payment obligations
Due for payment:
2005 803 19,813 3,931
2006 – 2009 283 21,841 3,173
2010 or later — 218 —
Total 1,086 41,872 7,104
Parent
Group Company
Leasing of properties Operational Operational
SEK T leasing leasing
Paid leasing fees 2004 23,672 1,185
Future payment obligations
Due for payment:
2005 26,331 1,209
2006 – 2009 76,283 3,773
2010 or later 40,581 —
Total 143,195 4,982
The Group’s factory premises in Sundsvall and Falkenberg are rented from
the associated company Optimus KB. The variable rents vary according to the
market interest, and rents charged in 2004 totalled SEK 5,884 T. Optimus KB
appears in the accounts according to the acquisition value method, as there
are limited opportunities to transfer profits. The company agreement includes
a priority offer clause.
Note 10
INCOME FROM SHARES IN GROUP UNDERTAKINGS
Parent Company
SEK T 2004 2003
Dividends and Group contribution 87,839 79,059
Write-downs of shareholders contribution to subsidiaries –8,000 —
Total 79,839 79,059
HL DISPLAY ANNUAL REPORT 2004
40
Note 11
INCOME FROM OTHER SECURITIES AND RECEIVABLES THAT ARE
ACCOUNTED FOR AS FIXED ASSETS
Group Parent Company
SEK T 2004 2003 2004 2003
Translation difference 93* –729 — —
Interest from Group companies
Interest income from
long-term receivables
— — 4,427 4,434
from associated companies 481 452 481 452
Total 574 –277 4,908 4,886
*Excluding the hedging of currencies, the translation difference would amount
to SEK –524 T. For further information, see note 2.
Note 12
OTHER INTEREST INCOME AND SIMILAR ITEMS
Group Parent Company
SEK T 2004 2003 2004 2003
Interest income 1,779 2,606 830 1,179
Currency exchange differences 107 — — —
Total 1,886 2,606 830 1,179
Note 13
OTHER INTEREST EXPENSES AND SIMILAR ITEMS
Group Parent Company
SEK T 2004 2003 2004 2003
Interest expenses
Interest expenses
–8,477 –7,237 –285 –397
Group companies
Currency exchange
— — –524 –756
differences –5,908 –416 –237 –441
Total –14,385 –7,653 –1,046 –1,594
Note 14
APPROPRIATIONS
Parent Company
SEK T 2004 2003
Differences between book depreciation
and depreciation according to plan 207 40
Change in tax allocation reserve 5,472 5,143
Total 5,679 5,183

Note 15
TAX ON PROFIT FOR THE YEAR
Group Parent Company
SEK T
Details of tax expenses for the year
2004 2003 2004 2003
Current tax –21,226 –12,817 –11,350 –11,993
Deferred tax –2,503 11,920 –1,221 1,221
Tax on profit for the year –23,729 –897 –12,571 –10,772
Current tax on items reported in shareholders’ equity (Group contributions) — — 8 996 11,464
SEK T
Reconciliation of pre-tax profits and tax expenses
Pre-tax profits 68,409 –9,212 56,350 57,544
Tax according to Swedish tax rate, 28% –19,155 2,579 –15,778 –16,112
Adjusted for other tax rates outside Sweden –3,621 –988 –122 –529
Adjustment of last year’s current tax –10 558 — —
The tax effect of reviewing incoming deficit deductions due to changed evaluations, tax rates and exchange rates 950 –1,534 — —
Tax effects of deficits for which deferred tax assets have not been considered –197 –412 — —
Tax effects of non-deductable depreciations of goodwill –340 –612 — —
Tax effects of non-taxable share dividends — — 5,879 5,918
Tax effect of write-down of subsidiary’s shares — — –2,240 —
Tax effects of other non-taxable, non-deductable items –1,356 –488 –310 –49
Tax on profit for the year –23,729 –897 –12,571 –10,772
Group Parent Company
SEK T 2004 2003 2004 2003
Details of deferred tax assets and tax liabilities
Deductable deficiency 6,122 7,962 — 1,221
Internal inventory profit 5,253 6,629 — —
Other temporarily deductable differences 5,010 6,261 — —
Deferred tax assets 16,385 20,852 — 1,221
Untaxed machinery and inventory reserves –9,405 –10,172 — —
Untaxed reserves, tax allocation reserve –6,513 –7,725 — —
Other temporarily taxable differences –1,141 –1,126 — —
Deferred tax liability –17,059 –19,023 — —
Net deferred tax assets in the balance sheet 12,586 15,705 — 1,221
Net deferred tax liability in the balance sheet –13,260 –13,876 — —
In the consolidated statement, deferred tax assets of SEK 4,415 T (4,825) is reported based on deductible deficit in companies which have posted losses over the
last financial years. This regards recently set-up companies and companies where a growth in turnover in a market build-up phase is deliberately prioritised instead
of profitability.
In the consolidated statement, deferred tax assets have not been reported for deficits amounting to SEK 6,552 T (10,211). These non activated deficits and the
deficits which caused activated income tax recoverable may be utilized without time limits or legal restrictions.
Differences between the group and the parent company in the book value of subsidiaries and joint ventures totals SEK 72,308 T (83,627). Due to changes in tax
legislation, this value can now be realised without tax consequences, although this is only done through tax-free dividends.
Not 16
EARNINGS PER SHARE
HL Display AB (publ) has through a wholly-owned subsidiary, HL Financial Services
AB, on three occasions issued debentures with separable rights of option
(warrants), which were sold on to senior executives within the Group. The purpose
of offering warrants is to promote long-term commitment to the company
and to encourage senior executives to become future shareholders in the company.
The term of the warrants is around four years, which the Board wishes to
be acknowledged as an aim to gain warrant holders’ long-term commitment to
the company’s future.
The 2001 warrant scheme was implemented in December 2001 and comprised
49,200 warrants. If all options are converted, the number of shares
will increase by 49,200, corresponding to 0.7 per cent of share capital. The
subscription price is set at SEK 134, the subscription period is 01-03-2004
- 28-02-2006 and the warrants expire on 28-02-2006.
The 2002 warrant scheme was implemented in March 2002 and comprised
48,700 warrants. If all options are converted, the number of shares will
increase by 48,700, corresponding to 0.6 per cent of share capital. The subscription
price is set at SEK 175, the subscription period is 01-07-2004 - 30-06-
2006 and the warrants expire on 30-06-2006
The 2003 warrant scheme was implemented in March 2003 and comprised
49,200 warrants. If all options are converted, the number of shares will
41
increase by 49,200, corresponding to 0.6 per cent of share capital. The
subscription price has been set at SEK 86, the subscription period is 01-06-
2005–29-06-2007, and the options to subscribe become due on 29-06-2007.
No warrants were converted or became due during 2004.
The profit per share before and after dilution has been calculated as follows:
Group Parent Company
2004 2003 2004 2003
Earnings per share, 45,315 –10,109 43,779 46,772
SEK T 7,688,872 7,688,872 7,688,872 7,688,872
Earnings per share 45,315 –10,109 43,779 46,772
after dilution, SEK T 7,707,139 7,688,872 7,707,139 7,688,872
The outstanding warrant scheme has no future effect on the profit. In calculating
the number of shares after dilution, we have applied an average share price
for the period of SEK 116 (89) and a discount interest rate of 7 (7) per cent.
Dilution only arises if certain conditions are fulfilled. Dilution does not occur if,
for example, the present value of the subscription price is less than the average
share price during the period, or in case of a negative result
NOTES
HL DISPLAY ANNUAL REPORT 2004

NOTES
Note 17
JOINT VENTURES
SEK 16,980 T of the Group’s fixed assets and SEK 13,715 T of current assets
relate to the owned share of the Group’s two joint ventures. The proportion of
net sales is SEK 41,885 T and of net income before tax SEK 1,282 T. The proportion
of equity totals SEK 13,618 T. The average number of employees was
43, 25 of whom were male.
Note 19
TANGIBLE FIXED ASSETS
Group Parent Company
Land and Plant and Capital expenditure on Plant and
SEK T buildings* machinery leasehold properties machinery
Acquisition value, opening balance 15,207 363,997 9,949 2,916
The year’s purchases — 43,616 1,188 181
Sales and disposals — –29,288 — —
Accumulated acquisition values, closing balance 15,207 378,325 11 137 3,097
Depreciation, opening balance –2,621 –229,750 –3,963 –2,316
Sales and disposals — 23,565 — —
This year’s depreciation — –41,351 –617 –311
Accumulated depreciation, closing balance –2,621 –247,536 –4,580 –2,627
Write-downs, opening balance –12,586 –2,850 — —
Reversal of previously made write-downs — 2,850 — —
Accumulated write-downs, closing balance –12,586 — — —
Planned residual value, closing balance 0 130,789 6,557 470
*Book value of properties in Sweden SEK 0 T. Taxable value of properties in Sweden SEK 4,570 T, of which buildings SEK 4,233 T and land SEK 337 T.
Because a decision was made to outsource large parts of production to subcontractors, production machinery has been diposed of at the factory in Falkenberg by SEK 4 M.
A write-down of SEK 3 M made in 2003 at the Lesjöfors factory has been reversed in 2004, as outsourcing of the production line is no longer a consideration.
Note 20
FINANCIAL FIXED ASSETS
Group Parent Company
Participating Other long-term Shares in Group Participating
SEK T interests receivables undertakings interests
Opening balance 10,000 964 49,155 16,051
Shareholder contributions — — 9,692 700
New investments — 367 — —
New started companies — — 100 —
Write-down/amortisation — –353 –8,000 —
Planned residual value, closing balance 10,000 978 50,947 16,751
HL DISPLAY ANNUAL REPORT 2004
42
Note 18
INTANGIBLE FIXED ASSETS
Group Parent Company
Computer Computer
SEK T systems Goodwill systems
Acquisition value, opening balance 26,353 21,725 10,994
The year’s purchases 558 — 163
Sales and disposals
Accumulated acquisition value,
–66 — —
closing balance 26,845 21,725 11,157
Depreciation, opening balance –20,165 –20,509 –8,821
Sales and disposals 66 —
This year’s depreciation –3,276 –1,216 –1,126
Accumulated depreciation,
closing balance –23,375 –21,725 –9,947
Planned residual value,
closing balance 3,470 — 1,210

Note 21
SHARES IN GROUP UNDERTAKINGS
Corporate Capital Number Book
Directly owned Reg. office identity number share, % Votes, % of shares value
HL Display Belgium N.V. Stabroek 298984 100 100 1,000 283
HL Display ˘Ceská republika s.r.o Prague 65410394 100 100 1 26
HL Display Deutschland GmbH Langenfeld HRB2713 100 100 1 2,614
HL Display Espagna S.L Madrid B843488213 100 100 100 32
HL Display Falkenberg AB Falkenberg 556446 - 0557 100 100 1,500 12,983
HL Display Falun AB Falun 556545 - 6976 100 100 1,000 100
HL Display France S.A. Tours RCSB377988 100 100 250 268
HL Display Hungaria Budapest 0112073189 / 7 100 100 1 487
HL Display Inc. Wilkes-Barre 23 - 2869204 100 100 — 1
HL Display Latvia SIA Riga 000330382 100 100 100 1,522
HL Display Nederland BV Bergen op Zoom 30152867 100 100 200 572
HL Display Lesjöfors AB Filipstad 556439 - 7429 100 100 5,000 2,513
HL Display Ltd Sti Istanbul 428930 - 376512 100 100 461 1,707
HL Display Norge A/S Asker 955437071 100 100 1,000 5,598
HL Display OOO Moscow 7701211771 100 100 1 832
HL Display Pictoria AB Filipstad 556654-4952 100 100 1,000 100
HL Display Polska Sp.z o.o Warszaw 521 - 04 - 17 - 996 100 100 1 236
HL Display Regional Service Center Bergen op Zoom 20085397 100 100 1,671 6,912
HL Display Schweiz AG Aarau 422069 100 100 100 543
HL Display Singapore Pte Ltd. Singapore 200004486H 100 100 1 576
HL Display Slovensko s.r.o. Levice 36547662 100 100 1 44
HL Display d.o.o. Celje 47556722 100 100 1 93
HL Display Sundsvall AB Sundsvall 556124 - 0481 100 100 1,500 11,125
HL Display Sverige AB Stockholm 556351 - 9528 100 100 100 50
HL Display (UK) Ltd Kirmington 2187037 100 100 10,000 935
HL Display Ukraine Kiev 09867 100 100 100 223
HL Display Österreich GmbH Vienna FN140307i 100 100 1 327
HL Financial Services AB Stockholm 556435 - 0832 100 100 500 128
SCI L’Eclipse Tours D 414 745 026 100 100 100 14
HL Display Romania SRL Bukarest 14633525 100 100 2,500 103
Total 50,947
Indirectly owned
Envoy Display Ltd Buckingham 02928820 100 100 100
HL Display Karlskoga AB Karlskoga 556457 - 7202 100 100 500
HL Display Shipley Ltd Shipley 256682 100 100 1,000
HL Display Hong Kong Ltd Hong Kong 783 663 100 100 2
HL Display Malaysia Sdn Bhd Subang Jaya 569116-0 100 100 2
HL Display Taiwan Ltd Taipei 70795306 100 100 1
HL Display Thailand Ltd Bangkok 817/2001 100 100 1
HL Display (Shanghai) Co Ltd Shanghai PRC 310230757570910 50 50 2
HL Display Korea Co Ltd Seoul 110111-3042176 100 100 16,800
PT. HL Display Indonesia Jakarta 0904.1.51.20945 100 100 100
Note 22
PARTICIPATING INTERESTS
Corporate Capital Number Book
Directly owned Reg. office identity number share, % Votes, % of shares value
HL Trion AB, (joint venture) Filipstad 556539 - 1637 50 50 500 6,751
Optimus KB Stockholm 916620 - 1450 30 30 1 10,000
Total 16,751
Indirectly owned
Trion HL LLC. (joint venture) Wilkes - Barre 23 - 23841295 50 50 — —
43
NOTES
HL DISPLAY ANNUAL REPORT 2004

NOTES
Note 23
INVENTORIES
Group Parent Company
SEK T
Raw materials and
2004 2003 2004 2003
consumables 29,354 28,785 — —
Products in progress 5,450 6,151 — —
Finished goods 80,546 91,650 — —
Work in progress 523 1,942 — —
Total 115,873 128,528 — —
Note 24
OTHER RECEIVABLES
The Group’s other receivables include income taxes recoverable SEK 8,726 T
(13,914) and SEK 5,666 T (7,872) in the parent company.
Note 27
PENSION PLANS
The group has contribution-based and benefit-based pension plans.
In contribution-based plans the company pays fixed contributions to a separate
legal entity and has no obligation to pay any further contributions. The
group’s net income is charged with costs in line with earnings.
In benefit-based plans payment is made to employees and former employees
based on salary at retirement and the number of years worked. The group bears
the risk for ensuring that the promised payments are made. The balance sheet
contains the net value of calculated current value of obligations and actual
value of management assets as either an allocation or a long-term receivable.
Commitments for retirement pensions and family pensions for 222 salaried
employees in Sweden are secured through an insurance policy with Alecta.
According to a statement issued by the Financial Accounting Standards
Council’s Emergency Group, this is a benefit-based plan involving several
employers. For the financial year 2004 the company did not have access to
information that enabled it to report this plan as a benefit-based plan. Nor is
it evident how a surplus or a shortfall in the plan might affect the size of future
contributions by HL Display. The ITP Pension plan that is secured through an
insurance policy with Alecta is therefore reported as a contribution-based plan.
Employees in HL Display’s subsidiaries in France, Norway and Austria are provided
with benefit-based plans. Employees in other countries have contributionbased
plans.
SEK T
Fully or partly funded commitments: 2004
Present value of defined-benefit commitments 1,404
Actual value of administrative assets -913
Accumulated unrealised actuarial gains (+) and losses (-) -53
Total fully or partly funded commitments 438
Unfunded commitments:
Present value of unfunded defined-benefit commitments 738
Accumulated unrealised actuarial gains (+) and losses (-) -153
Total unfunded commitments 585
Net amount in the balance sheet (commitment+, asset -) 1,023
The net amount is broken down into the following countries:
Norway 438
Austria 266
France 319
1,023
HL DISPLAY ANNUAL REPORT 2004
44
Note 25
PREPAID EXPENSES AND ACCRUED INCOME
Group Parent Company
SEK T
Prepaid:
2004 2003 2004 2003
rents 4,539 4,800 310 292
leasing costs 2,792 2,311 1,202 691
insurance costs
costs for IT support
1,393 1,300 214 51
and communication 3,295 2,250 3,295 2,250
Accrued interest income 480 452 480 452
Other items 11,688 7,244 5,128 1,234
Total 24,187 18,357 10,629 4,970
Note 26
UNTAXED RESERVES
Parent Company
SEK T 2004 2003
Additional depreciation, plant and machinery 53 260
Tax allocation reserve 19,980 25,452
Total 20,033 25,712
Pension expenses 2004
Cost of pensions accrued during the year 555
Administrative expenses 172
Interest expenses 65
Expected return on administrative assets -57
Actuarial gains (-) and losses (+) reported during the year -2
Cost of defined-benefit plans 733
Cost of defined-contribution plans 16,631
Total cost of remuneration following termination of employment 17,364
The cost is reported under the following income statement items
Selling expenses 14,586
Administrative expenses 1,910
Research and development expenses 868
Total cost of remuneration following termination of employment 17,364
Net balance-sheet amounts
Net amounts as of 31 December 2003 336
Effect of change in accounting principle 1 January 2004 466
Net amounts as of 1 January 2004 802
Cost of defined-benefit plans 733
Payment of remuneration -206
Payment of fees by the company -306
Net amount as of 31 December 2004 1,023
Return on administrative assets
Actual return on administrative assets 473
Expected return on administrative assets 269
Actuarial result of administrative assets for the period -204
Actuarial assumptions
Discount rate 4.8%
Expected return on administrative assets 7.0%
Future salary increases 2.6%
Future pension increases 2.5%
Expected remaining service, years 22.9

Note 28
LONG-TERM LIABILITIES
Of long-term liabilities in the Group SEK 3,691 T (7,919) comprises liabilities
to credit institutions due for payment more than five years after closing day. The
corresponding figure for the parent company is SEK – T (849).
Note 29
BANK OVERDRAFT FACILITIES
Approved bank overdraft facilities amounted for the Group SEK 156,171 T
(161,976) and SEK 80,000 T (80,000) for the Parent Company.
Note 30
ACCRUED EXPENSES AND PREPAID INCOME
Group Parent Company
SEK T 2004 2003 2004 2003
Accrued social security fees 18,439 17,052 2,744 2,543
Accrued holiday pay liability 23,886 23,264 4,516 4,066
Accrued wages/salary 10,308 11,850 — —
Other items 39,163 29,819 5,305 782
Total 91,796 81,985 12,565 7,391
Note 33
AVERAGE NUMBER OF EMPLOYEES
2004 2003
Of which Of which
Average number Employees men Employees men
Parent company, Sweden 51 38 49 35
Subsidiaries, Sweden 484 352 513 383
Total 535 390 562 418
Subsidiaries abroad
Belgium 13 8 12 8
France 90 48 84 46
Hong Kong 2 1 2 1
Indonesia 2 1 — —
China 6 2 — —
South Korea 2 1 — —
Latvia 10 6 11 7
Malaysia 4 3 3 2
The Netherlands 27 15 31 18
Norway 21 15 20 14
Poland 33 16 37 18
Romania 3 — 4 2
Russia 21 13 16 11
Switzerland 12 7 9 6
Singapore 14 7 14 7
Slovakia 5 4 4 2
Slovenia 4 2 3 1
Spain 6 3 6 3
Great Britain 83 48 79 50
Taiwan 4 2 2 1
Thailand 5 2 3 –
Czech Republic 10 5 12 6
Turkey 5 4 5 4
Germany 18 10 24 16
Hungary 9 4 9 3
Ukraine 7 3 6 3
Austria 16 10 17 10
Total 432 240 413 239
Group total 967 630 975 657
45
Note 31
ASSETS PLEDGED
Assets pledged to secure liabilities to credit institutions.
Group Parent Company
SEK T 2004 2003 2004 2003
Floating charges 81,740 81,740 — —
Property mortgages 13,000 13,000 — —
Shares in Group undertakings 120,497 106,952 50,947 49,155
Total 215,237 201,692 50,947 49,155
Note 32
CONTINGENT LIABILITIES
Group Parent Company
SEK T
Guarantees on behalf of
2004 2003 2004 2003
other Group companies — — 234,313 204,759
Other guarantees — 38 — 38
Discounted bills — 5,020 — —
Total — 5,058 234,313 204,797
Absence through illness as a percentage of normal working hours,
employees in the Parent Company
2004 2003
Men 1.9 0.7
Women 6.1 1.7
-29 2.0 0.5
30-49 3.8 1.2
50- 0.9 0.1
Long-term absentees 1.2 0.1
Total 3.1 1.0
The total number of board members in the Group’s companies amounts to 61,
of which 2 are women. The total number of employees that are Managing Directors
or other senior executives amounted to 81 on closing day. 12 of these are
women.
NOTES
HL DISPLAY ANNUAL REPORT 2004

NOTES
Note 34
BENEFITS TO SENIOR EXECUTIVES
Principles
The Chairman of the Board and board members are paid a fee in accordance with the decision of the AGM. There is no special fee for committee work. Employees’
representatives and those working in the company do not receive a Board fee. Benefits to the MD and other senior executives consist of a basic salary, other benefits,
pension and option schemes. There is no flexible remuneration or bonus. The other senior executives are the seven people who, together with the MD, constitute
Group management. For composition of Group management, see page 52.
Remuneration and other benefits during the year
Basic salary/ Other Pension
SEK T Board fee benefits cost Total
Chairman of the Board 140 — — 140
Other board members 320 — — 320
Managing Director 1,531 88 264 1,883
Other senior executives (7 people) 7,160 470 1,489 9,119
Total 9,151 558 1,753 11,462
Comments on the table
Other benefits include company car and allowances. The senior executives only has contribution-based pension plans. The pension cost relates to the cost that affected
the profit for the year. For further information about pensions, see below. The Chairman of the Board has not received any remuneration other than the Board fee.
Financial instruments
HL DISPLAY ANNUAL REPORT 2004
Schemes from previous years Schemes from previous years Schemes from previous years
Warrants 2001/2006 Warrants 2002/2006 Warrants 2003/2007
SEK T Number Number Number
Managing Director 6,600 6,600 6,600
Other senior executives 17,500 12,400 16,200
Total 24,100 19,000 22,800
Comments on the table
As of December 31 2004 senior executives held warrants from the 2001, 2002 and 2003 schemes.
Pensions
The retirement age for the MD is 65. For other senior executives the retirement age varies between 60 and 65. Pension agreements follow the ITP Plan for Swedish
people in Group management, including the MD, and corresponding principles for others.
Severance payment
There is a mutual period of notice of 6 months in force between the company and the MD. There is a mutual period of notice of 4-6 months in force between the
company and other senior executives.
Preparation and decision-making process
Remuneration to the MD and the deputy MD for the financial year 2004 has been decided by the Remuneration Committee. Remuneration to the other senior executives
has been decided by the MD in consultation with the Remuneration Committee. See page 51 for information about the Remuneration Committees composition
and procedures.
46

Note 35
TRANSACTIONS WITH RELATED PARTIES
Board member Anders Remius and deputy MD Kent Hertzell own through a
company shares in DataVis AB. During 2003 DataVis invoiced the Group companies
an amount of SEK 10,770 T (10,240). The invoices relates to work
carried out for operating, developing and supporting the Group’s IT network and
business systems.
Note 36
FEES TO AUDITORS
At the AGM 2004, KPMG was elected audit firm. The Group’s cost for audit
fees in 2004 amounted to SEK 1,550 T (164), of which SEK 71 T (–) for the
parent company. Fees for other audit firms totalled SEK 125 T (1,588). Costs
for other assignments to KPMG amounted to SEK 181 T (–), of which SEK 181
T (–) relates to the parent company. Fees for other audit firms concerning other
assignments totalled SEK 1,088 T (656), of which SEK 481 T (431) relates to
the parent company.
Note 37
DIVISION OF LIQUID ASSETS
The item liquid assets consists only of the items cash and bank.
The income statement and balance sheet will be placed before the annual general meeting 14-03-2005 for adoption.
Stockholm, 1 February 2005
Åke Wester
Chairman
Arne Karlsson Lis Remius Stefan Elving Kent Mossberg Magnus Jonsson Stig Karlsson
Anders Remius
Managing Director
47
Note 38
IFRS
As from 1 January 2005 HL Display will produce its consolidated accounts in
accordance with IFRS (International Financing Reporting Standards).
The transition to IFRS will only have a limited impact on HL Display’s accounts.
The adaptation to IFRS means that the rental agreements for two properties
will be classified as financial leasing. A review of leasing agreements for production
machinery has also involved reclassifications. Had these reclassifications
been implemented as of the year-end, this would have meant an increase
in the balance sheet total of approx. 3 per cent, SEK 36 M, and an increase in
equity of approx. 1 per cent, SEK 3 M. The profit after tax would have increased
by SEK 1 M. Opening equity for 2004 would have been increased by approx.
SEK 2 M.
According to IFRS 3, Business Combinations, it is not permitted to depreciate
goodwill. Instead an impairment test of goodwill will be carried out on an
annual basis and in the event of a reduction in value. HL Display has come to
the conclusion that the outstanding goodwill item of approx. SEK 1 M as at 31
December 2003 will be written down in connection with the opening balance
sheet, and that the depreciation implemented during 2004 according to Swedish
accounting rules will be reversed in the comparative figures according to
IFRS.
According to IAS 1, Presentation of Financial Statements, minority interests
in the balance sheet are classified as a part of equity. This means an increase
in equity on the balance sheet date of SEK 0.1 M and a negative impact on the
net profit for 2004 of SEK -0.6 M.
IAS 39 Financial Instruments: Recognition and measurement will not have
any discernable impact on the valuation of HL Display’s financial instruments.
The group’s total cashflow for 2004 is not affected by accounting according
to IFRS. However, there would have been certain minor reclassifications in the
cashflow statement within current operations and between current operations
and investment activities.
Reservation is made for changes being possible in the current IFRS during
2005.
NOTES
HL DISPLAY ANNUAL REPORT 2004

AUDIT REPORT
Audit report
To the annual general meeting of the shareholders of HL Display AB (publ).
Company registration number 556286 - 9957.
We have audited the annual accounts, the consolidated accounts,
the accounting records and the administration of the board of
directors and the managing director of HL Display AB (publ) for the
year 2004. These accounts and the administration of the company
and the application of the Annual Accounts Act when preparing
the annual accounts and the consolidated accounts are the
responsibility of the board of directors and the managing director.
Our responsibility is to express an opinion on the annual accounts,
the consolidated accounts and the administration based on our
audit.
We conducted our audit in accordance with generally accepted
auditing standards in Sweden. Those standards require that we
plan and perform the audit to obtain reasonable assurance that the
annual accounts and the consolidated accounts are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the accounts.
An audit also includes assessing the accounting principles used
and their application by the board of directors and the managing
director and significant estimates made by the board of directors
and the managing director when preparing the annual accounts and
consolidated accounts as well as evaluating the overall presentation
of information in the annual accounts and the consolidated
Stockholm, 4 February 2005
KPMG Bohlins AB
Bo Ribers Åsa Wirén Linder
Authorised Public Accountant Authorised Public Accountant
HL DISPLAY ANNUAL REPORT 2004
48
accounts. As a basis for our opinion concerning discharge from
liability, we examined significant decisions, actions taken and circumstances
of the company in order to be able to determine the
liability, if any, to the company of any board member or the managing
director. We also examined whether any board member or the
managing director has, in any other way, acted in contravention of
the Companies Act, the Annual Accounts Act or the Articles of Association.
We believe that our audit provides a reasonable basis for
our opinion set out below.
The annual accounts and the consolidated accounts have been
prepared in accordance with the Annual Accounts Act and, thereby,
give a true and fair view of the company’s and the group’s financial
position and results of operations in accordance with generally
accepted accounting principles in Sweden. The statutory administration
report is consistent with the other parts of the annual
accounts and the consolidated accounts.
We recommend to the general meeting of shareholders that the
income statements and balance sheets of the parent company and
the group be adopted, that the profit of the parent company be dealt
with in accordance with the proposal in the administration report
and that the members of the board of directors and the managing
director be discharged from liability for the financial year.

Nine year summary
49
NINE-YEAR SUMMARY AND DEFINITIONS
Income statement (SEK T) 2004 2003 2002 2001 2000 1999 1998 1997 1996
Net sales 1,311,003 1,129,005 1,154,407 1,071,934 873,921 768,451 646,646 481,057 356,118
Operating income 80,334 –3,888 75,967 83,031 47,731 55,401 69,042 63,615 46,895
Depreciation 46,460 47,556 49,231 46,572 40,197 31,255 25,660 21,311 18,151
Profit after financial items 68,409 –9,212 65,353 81,831 44,095 47,125 70,969 63,603 46,166
Net profit for the year 45,315 –10,109 43,900 55,513 26,747 32,277 44,644 43,461 32,290
Balance sheet (SEK T) 2004 2003 2002 2001 2000 1999 1998 1997 1996
Fixed assets 164,380 171,456 193,697 197,742 186,099 168,241 131,584 94,118 63,662
Current assets 521,733 474,088 456,711 436,897 315,701 262,131 253,053 204,371 149,282
Total assets 686,113 645,544 650,408 634,639 501,800 430,372 384,637 298,489 212,944
Shareholders’ equity 325,141 292,979 315,821 283,667 238,919 222,168 199,887 164,469 128,697
Minority interests 97 — — — — 33 — — 109
Provisions 14,283 13,876 23,478 26,121 16,997 14,051 18,167 11,784 6,442
Long-term liabilities 56,903 66,421 66,444 107,037 84,949 53,461 47,055 22,830 12,551
Current liabilities 289,689 272,268 244,665 217,814 160,935 140,659 119,528 99,406 65,145
Shareholders’ equity and liabilities 686,113 645,544 650,408 634,639 501,800 430,372 384,637 298,489 212,944
Key ratios 2004 2003 2002 2001 2000 1999 1998 1997 1996
Average number of employees 967 975 925 855 773 706 582 464 347
Net sales per employee, SEK T 1,356 1,158 1,248 1,254 1,131 1,088 1,111 1,037 1,026
Net sales increase, % 16.1 –2.2 7.7 22.7 13.7 18.8 34.4 35.1 18.5
Profit margin, % 5.2 –0.8 5.7 7.6 5.0 6.1 11.0 13.2 13.0
Equity/assets ratio, % 47.4 45.4 48.6 44.7 47.6 51.6 52.0 55.1 60.5
Debt/equity ratio 0.40 0.49 0.44 0.45 0.42 0.32 0.31 0.21 0.14
Return on total capital, % 12.4 –0.2 12.0 16.0 11.0 12.9 21.9 26.2 25.7
Return on equity after tax, % 14.7 –3.3 14.6 21.2 11.6 15.3 24.5 29.6 28.1
Return on capital employed, % 17.9 –0.3 16.8 23.3 15.5 18.6 32.5 38.7 35.9
Interest coverage ratio 5.8 –0.2 6.6 10.2 7.0 9.3 19.6 20.0 20.1
Net investments incl.
acquisitions, SEK T 42,489 39,344 44,401 47,517 58,099 67,913 63,756 41,340 24,496
Liquid assets, SEK T 112,013 94,840 100,388 65,201 31,328 22,935 38,701 59,951 44,211
Development costs, SEK T 42,142 36,958 32,897 30,589 26,902 24,581 21,197 16,654 13,12
Definitions
Direct yield
Dividend as percentage of share
price on 31 December.
Equity per share
Reported equity divided by number of
shares at year-end.
Equity per share after dilution
Reported equity divided by number of
shares after dilution.
Value added per employee
Operating profit plus cost of salaries
and social security payments divided
by the average number of employees.
Average collection period
Accounts receivables on 31 December
divided by net sales increased by
20 per cent VAT (average VAT in the
Group) multiplied by 365 days.
Capital turnover rate
Net sales in relation to average
balance sheet total.
Cash flow
In and out flow of liquid funds.
Operational cash flow per share
Changes in liquid assets in any given
year from operational activities after
deduction of interests and tax payments,
plus investments in intangible
and tangible operational fixed
assets, divided by number of shares
at year-end.
P/E ratio
Share price on 31 December divided
by earnings per share after tax.
Return on equity after tax
Profit after tax in relation to average
equity.
Return on capital employed
Profit after financial items plus financial
expenses in relation to average
capital employed. Capital employed
is the balance sheet total less noninterest
bearing liabilities.
Return on total capital
Profit after financial items plus financial
expenses in relation to average
balance sheet total.
Interest-bearing net liability
Interest-bearing liabilities minus interest-bearing
assets.
Interest coverage ratio
Profit after financial items plus financial
expenses in relation to financial
expenses.
Debt/equity ratio
Interest bearing liabilities in relation
to equity.
Equity/assets ratio
Equity including minority share in
relation to balance sheet total.
Development expenses
Development expenses are expenses
for production, materials and
product development.
Earnings per share after tax
Earnings after tax divided by the
number of shares at year-end.
Earnings per share after
standard tax
Earnings before financial items, less
28 per cent standard tax divided by
the number of shares at year-end.
Earnings per share after dilution
Earnings after tax divided by the
number of shares after dilution.
Profit margin
Profit after financial items in relation
to net sales.
HL DISPLAY ANNUAL REPORT 2004

BOARD OF DIRECTORS
Board of directors
Åke Wester Anders Remius
Lis Remius Stefan Elving
Arne Karlsson Stig Karlsson
Magnus Jonsson Kent Mossberg
Åke Wester
Born: 1939.
Chairman of the Board.
Member and Chairman of the
board since 1993.
Education: Engineering
qualification.
Holding: 4,000 shares (family and
company).
Anders Remius
Born: 1947.
Member of the Board since 1982.
Position: MD HL Display AB.
Education: Financial qualification.
Holding: 873,724 shares, of which
401,904 A shares. Through company
74,950 B shares. 19,800
options.
Lis Remius
Born: 1945.
Member of the Board since 2004
(member 1982-2001).
Education: Sales and marketing
qualification.
Holding: 873,622 shares, of which
HL DISPLAY ANNUAL REPORT 2004
401,904 A shares.
Through company 74,950 B
shares.
Stefan Elving
Born: 1941.
Member of the Board since 2001.
Education: Master of Political
Science.
Other appointments: Board
member in Bio Gaia AB, Findus
AB, Haendig AB, Plantasjen ASA,
Brämhults Juice AB.
Holding: 0 shares.
Arne Karlsson
Born: 1958.
Member of the Board since 1997.
Position: MD Ratos AB.
Education: Master of Science in
Economics and Business administration.
Other appointments: Board
member in Haglöfs AB, Aktiemarknadsnämnden,
Camfil AB.
Holding: 0 shares.
50
Stig Karlsson
Born: 1952.
Member of the Board since 2001.
Position: Investment Manager
Ratos AB.
Education: Master of Science in
Economics and Business administration.
Other appointments: Chairman of
the board in Haendig AB, Haglöfs
AB. Member of the board in Gadelius
K.K., Arcorus AB,
Martinsson AB, Lagerstedt &
Krantz AB, DIAB AB, Lindab AB.
Holding: 0 shares.
Magnus Jonsson
Born: 1969.
Employee representative.
Member of the Board since 1998.
Position: Machine operator.
Education: Structural engineering
qualification.
Holding: 0 shares.
Kent Mossberg
Born: 1957.
Employee representative.
Member of the Board since 1995.
Position: Property Manager.
Education: Engineering qualification.
Holding: 1,330 shares.
Deputy member
Stefan Eriksson
Born: 1973.
Employee representative.
Member of the Board since 2001.
Position: Screen printer.
Education: Mechanical engineering
qualification.
Holding: 0 shares.

Board procedures 2004
HL Display’s Board of Directors consists of six members elected
by the AGM, as well as two representatives and a deputy elected
by the employees. The Chairman of the Board is appointed by the
Board. Among the Board members there are persons with connections
to HL Display’s largest shareholders, and persons independent
of the owners. The Board normally meets six times a year
and additionally when required. During the 2004 financial year, the
Board convened seven times. Board meeting days are set in conjunction
with the statutory board meeting. Some board meetings
coincide with financial information dates. These are the quarterly,
half-yearly and annual closing days.
The work of the Board follows an annual plan with special topics
and pre-determined items on which decisions have to be made. A
normal agenda for a Board meeting is as follows:
– Meeting opened
– Election of minutes-verifiers
– Review of minutes of previous meeting
– Finances
– Board’s basis of appraisal
– Internal control
– Other questions
– Meeting closed
The Group’s deputy MD and CFO, Kent Hertzell, serves as secretary
of the Board. All Board members have been present at all Board
meetings during the year.
Rules of procedure
The work of the Board is regulated by special rules of procedure.
In brief, the rules of procedure state that the Board is responsible
for the company’s organisation and the administration of the
company’s affairs. The Board must ensure that the company’s
organisation is such that accounting, funds administration and
the company’s financial affairs are checked and managed in a
secure manner.
The Board must continuously monitor the financial situation of
the company and Group. This is reported monthly so that the Board
can carry out its appraisal duties as required by law, listing rules
and good board practice. Generally, the Board deals with matters
of essential importance to the Group, such as:
– Strategic plans
– Marketing plans
– Production planning
– Acquisition and sale of companies or businesses
– Acquisition and sale of other significant assets
51
Important issues during 2004
– Decision on investments
– Drawing up a pan European strategy
– Outsourcing of production in Lesjöfors and Falkenberg
– Plans for production in China
– Follow-up on cost control and investments
– Action plan for production in Falun
– Review of long-term objectives
BOARD PROCEDURES 2004
Instructions
The Board has issued special instructions on the responsibilities
and authority of the Managing Director of HL Display. The Board has
further issued special reporting instructions to the management.
Fees
Total fees to the Board of HL Display amounted to SEK 460,000,
of which SEK 140,000 to the Chairman. No payments, other than
those approved by the AGM, have been made.
Committees
The Board of Directors has appointed a special Nomination Committee,
charged with the task of proposing board members and
fee to the board of directors in close collaboration with the largest
shareholders. The Nomination Committee consists of three
representatives of the largest shareholders – Anders Remius, MD
of HL Display AB, Johan Lannebo, Fund Manager, Lannebo Fonder,
and Arne Karlsson, MD of Ratos AB – and an independent member,
Åke Wester, Chairman of HL Display AB. The committee met
once during 2004.
A Remuneration Committee was set up during 2002, consisting
of two board members who do not represent the major shareholders:
Åke Wester, Chairman of HL Display AB, and Stefan Elving,
whose job it was to decide on remuneration to the CEO, deputy CEO
and the rest of the management group. The Remuneration Committee
met once during 2004.
An Audit Committee has been set up, charged with proposing
auditors, proposing fees, as well as having an ongoing dialogue
with the auditors concerning the audit. The audit committee
consists of the five board members that are not employed by
HL Display: Åke Wester, Stig Karlsson, Arne Karlsson, Stefan Elving
and Lis Remius. The audit committee met once during 2004. KPMG
was elected for four years at the shareholders’ meeting in 2004.
Proposals from individual shareholders can be made to the committees
by post via HL Display’s head office in Skarpnäck.
HL DISPLAY ANNUAL REPORT 2004

SENIOR EXECUTIVES
Senior executives
Anders Remius
Anders Remius
Managing Director
Born: 1947.
Employed since: 1978.
Education: Financial qualification.
Holding: 873,724 shares, of which
401,904 A shares. Through company
74,950 B shares. 19,800
options.
Kent Hertzell
Deputy MD and Financial Director
Born: 1950.
Employed since: 1995.
Education: Engineering
qualification, Master of Science in
Economics and Business administration,
Master of Science
in Management from MIT
Holding: 3,500 shares.
19,800 options.
HL DISPLAY ANNUAL REPORT 2004
Kent Hertzell Staffan Forslund Håkan Eriksson
Gérard Dubuy Kenneth Löfgren Jan Sigurdh Alistair Burke
Staffan Forslund
Human Resources Director
Born: 1949.
Employed since: 2000.
Education: Bachelor of Science.
Holding: 0 shares. 0 options.
Håkan Eriksson
Marketing Director
Born: 1966.
Employed since: 1992.
Education: Master of Science
in Industrial Engineering
and Management
Holding: 0 shares. 3,000 options.
52
Gérard Dubuy
MD HL Display France
Born: 1961
Employed since: 1995
Education: Master of Science in
Economics and Business administration
Holding: 4,300 shares. 9,900
options.
Kenneth Löfgren
IT Director
Born: 1960.
Employed since: 1993.
Education: Diploma in Marketing
Economics, Engineering qualification.
Holding: 500 shares.
4,300 options.
Jan Sigurdh
Production Director
Born: 1965.
Employed since: 1999.
Education: Master of Science
in Industrial Engineering
and Management
Holding: 1,000 shares.
9,100 options.
Alistair Burke
Business Development Director
Born: 1952.
Consultant
Education: B.A. (Hons.), Queens
University.
Holding: 900 shares. 0 options.

50 years of HL Display
It was 50 years ago this year that Harry Lundvall started the company
H. Lundvall in Borlänge. In his work as a salesman in the meat
industry he had noticed a need among traders to display both their
goods and the price of them more clearly. He set up a little workshop
in his cellar at home and started to make stands for displaying
goods and simple plastic label holders for price information
– products that he then sold to shops, petrol stations and the selfservice
stores that were starting to become popular.
Further developed the plastic holder
In 1969 Harry’s son Åke Westberg took over the business, which
was at the time turning over about SEK two million and had fi ve
employees. Genuine entrepreneur that he was – he had previously
run a number of companies in Sundsvall – he recognised the potential
in his father’s company. Åke further developed his father’s
plastic holder to create a strip that ran along the full edge of the
shelf, where traders could easily insert price information without
having to move the actual plastic holder.
Breakthrough for the datastrip
In 1975 Åke Westberg obtained a patent for his shelf-edge strip.
An old mission house outside Sundsvall was bought, and this was
where he started to produce the strips. The HL Datastrip is the
product for which HL Display is still best known, and it remains
an important part of the product range. The patent was the breakthrough
for HL, as the company was then called. The major Swedish
retail chains recognised the benefi ts of Åke’s solution, and
they soon became major customers.
In 1977 Åke Westberg’s daughter Lis Remius and her husband
Anders Remius started a sales company, Flexi System, which
mainly sold products from HL’s product range. In 1982 HL and
Flexi System were acquired by the investment company Parcon.
Lis and Anders Remius continued to work at HL, and when the
new owner Parcon experienced fi nancial concerns Lis and Anders
bought back the company in 1986, naming it HL Display. At this
point HL Display’s net sales were SEK 28 million.
International expansion
International expansion began in 1987. Export sales had previously
been channelled through direct sales and distributors. Now
for the fi rst time HL Display set up its own sales companies, one
in Belgium and one in the UK. In 1989 new companies appeared
in Sweden and Germany, followed by Norway and France in 1990.
At the turn of the year 92/93 HL Display completed its fi rst acquisition,
with the purchase of Jegab Display. Since then the company
has acquired a number of smaller companies, which have
strengthened the product range or added expertise within a specifi
c fi eld of production technology.
Listing on the Stockholm Stock Exchange
In 1993 HL Display was listed as planned on the OTC list at the
Produced by Kind PR & Information and HL Display
Design: Mats W Nilsson
Photography: Magnus Fond and Hans-Erik Nygren
(Board of Directors and senior executives)
Printing: Wassberg+Skotte Tryckeri
53
Stockholm Stock Exchange. There was tremendous interest and
the launch was oversubscribed several times. The company received
much attention in conjunction with the stock market launch,
as the company was nominated for the “Green Branch”, a competition
for growth companies with good, sustainable profi tability,
which was organised by a TV4 programme called Big Money
and the business newspaper Dagens Industri, and
HL Display actually won it.
New operations in the former Eastern
Block
In 1994 HL Display set up its fi rst branch
in the former eastern block, when the company
in Poland was founded. International
expansion continued with new sales offi -
ces in Austria and the Czech Republic, and
a partnership was set up with Trion Industries
as a means of entry into the American market. In
1997 HL Display added shop fi ttings to its product range, with the
acquisition of Pefab’s factory in Falkenberg. Envoy Display in the
UK was acquired in 1998, and in the same year sales offi ces were
also set up in Hungary and Switzerland.
International expansion continued in line with the rapid growth
of the retail trade in Eastern Europe, with offi ces being set up in
Latvia, Russia and Turkey in 1999, and in the Ukraine in 2002.
Production capacity in the UK was also increased with the acquisition
of RIM Fabrications Ltd in 1999.
Looking even further to the east
During 2000 HL Display also began to look further to the east,
towards Southeast Asia. Many of the company’s customers, such
as Carrefour and Tesco, already had a presence in several major
Asian markets. It was therefore natural for HL Display to have its
own presence in these markets. The fi rst Asian company was launched
in 2000 in Singapore, and it now serves as the hub of HL
Display’s activities in the region. In 2001 another milestone was
passed in the company’s development, as sales broke the billion
kronor barrier for the fi rst time. In the years that followed HL Display
has opened new sales companies at a rapid pace, mainly in
Eastern Europe and in Asia. The company now has its own sales
companies in 28 countries, with more than 950 employees all
over the world.
The story continues
This rapid international expansion combined with continuous, innovative
product development has meant that HL Display has enjoyed
very healthy growth since the mid-1990s. Turnover has increased
from SEK 183 million in 1993 to SEK 1.3 billion in 2004. And the
story of HL Display is not over. Today, 50 years after Harry Lundvall
delivered his fi rst products, HL Display continues its business with
the same objective as it had in 1954 – to set new standards for instore
communication and merchandising in the retail sector.

HL DISPLAY AB • HORISONTVÄGEN 26 • SE-128 34 SKARPNÄCK • SWEDEN • TEL +46 8 683 73 00 • FAX +46 8 683 73 01
www.hl-display.com