PDF Document 2.46 MB - Geveko

Report of the directorsProfit/Loss after tax andbefore minority interestsSKr million200150100500-50-100-1502003 2004 2005 2006 2007Operating profit/loss,Industrial OperationsCentral costsand net interestTaxProfit/loss, Managementof SecuritiesCapital gains on divestmentof subsidiariesProfit/loss beforeminority interestsEquity ratio%7060504030201002003 2004 2005 2006 2007Report of the directorsThe Board and managing director ofAB Geveko (publ), company reg. no.556024-6844, herewith submit theirreport on the operations of the parentcompany and the Group during thefinancial year 2007.Nature of businessAB Geveko has been an investmenttrust since 1998. In 2007 Geveko’sbusiness consisted of the managementof a portfolio of securities anda predominantly wholly ownedIndustrial Operations division. TheSecurities Portfolio consisted mainlyof Swedish listed shares with highliquidity. Industrial Operations conductsits business through the RoadMarking business area and theChemTech business area, with RoadMarking accounting for more than90% of the turnover.Significant events inthe Geveko Group in 2007In 2007 Geveko decided that thedevelopment and expansion of thewholly owned, unlisted IndustrialOperations division should havepriority over the company’s Man age -ment of Securities. One consequenceof this is that Geveko’s tax status willchange from that of investment trustto operative industrial enterprise. Thefirst step was taken in the spring of2007 when Geveko’s capital structurewas altered by means of an extrapayment of SKr 316 million to itsshareholders. The divestment of theEquities Portfolio began during thesecond half of 2007, when also severalcompany acquisitions were madewithin Industrial Operations. By theend of 2007 net sales of sharesamounted to SKr 323 million, andthe consequent reduction in theSecurities Portfolio meant that itwas not longer considered that thecompany satisfied the criteria forinvestment trust status. The taxauthority has notified that it considersthat Geveko ceased to have investmenttrust status as of 30 November2007.Changes in theGeveko Group in 2007During the second half of 2007 theGroup acquired the Polish contractingcompanies Dartom, GiK andTechnom as well as the contractingcompany Osfer in Slovakia. Theacquired companies have been consolidatedinto Geveko’s subsidiaryCleanosol. The acquisitions havestrengthened Geveko’s position onthe fast-growing road-markingmarkets in Central and EasternEurope.Geveko’s interest in the Hun -garian company Magyar Plastiroute,was raised from 50% to 78% inDecember 2007 via the acquisitionof the Hungarian road authority’sshares. Magyar Plasti route has beenconsolidated in the Geveko Groupwith effect from 31 December 2007.Geveko is Europe’s largestcompany in horizontal road markingsand a major user of glass beads.In 2007, Geveko acquired 50% of theshares in Allglass Reprocessors Ltd,which is based in Glasgow, Scotland.The acquisition will secure access toone of the most important rawmaterials used in the manufacture ofroad-marking materials.OrganisationIn 2007, the Geveko Group’s businessconsisted of two operative units:Industrial Operations and Manage -ment of Securities. IndustrialOperations conducts its businessthrough Geveko Industri HoldingAB. Operatively, the IndustrialOperations division is divided intothe Road Marking business area andthe ChemTech business area. Thesecurities portfolio was managedduring the year by the parent company,AB Geveko. The subsidiaryGeveko Kapital AB manages theGroup’s holdings in the InnKap 3and InnKap 4 private equity funds.Result and financial positionGroupThe consolidated operating profitamounted to SKr 15.2 million(133.7), of which SKr 43.0 million48