Yearly reports, 2010

2011-03-22

In the past year Fouriertransform has established itself as a long-term industrial and financial partner of companies in the Swedish automotive industry. To date the investments have mainly been made at an early stage, but looking ahead we anticipate increased participation in restructurings and spin-offs of businesses in a growth phase and mature businesses.

2010 was the first complete financial year in Fouriertransform's history. The year was characterized by intensive work on getting a complete organization in place, on marketing the business externally and on developing our own ownership model and strategic orientation. At the same time, we have dealt with and analyzed a large number of investment proposals and overall the Board has approved ten investments, totaling SEK 356 million, since fall 2009.

Fouriertransform has been built up in circumstances in which many Swedish companies developed more positively that we had dared hope, particularly compared with what we saw in 2009. Growth in Sweden was better than expected and for subcontractors to the automotive industry the changes in the ownership of Saab Automobile and Volvo Cars were good news, resulting in parts of the purchasing platforms being moved back to Sweden.

At the same time, Fouriertransform's seminars around the country showed that financing remains a central issue for both small and medium-sized enterprises, particularly since the banks have been unable to offer financing to the same extent as previously.

For vehicle manufacturers the year was also characterized by increased focus on the growth markets in Asia. Cautious signs of a gradual recovery – although at a slower pace – could also be discerned in both Europe and the US. However, as we move into 2011 there remain many uncertainties that could curb growth and profitability.

Following a thorough market analysis of the global macro trends in the automotive sector we have identified a number of particularly attractive segments, and specifically those for which Swedish industry is well placed.

The main trends within the automotive industry are the developments that are currently taking place within the areas of Sustainable Vehicles, Smart Vehicles and More Efficient Production. What makes these particularly attractive to Sweden is that Sweden already has top-level expertise in these areas, and consequently there is the potential for Swedish industry to continue to assert itself well internationally in the future. The investments made by Fouriertransform to date are all within the categories of Sustainable Vehicles and More Efficient Production, including advanced energy solutions, battery and fuel cell technology, reduced friction losses and transmission efficiency.

Naturally Fouriertransform will also continue to be open to investment proposals within other areas that we have identified in our strategic analysis work.

The year's rapid build-up of the company's organization and processes has enabled Fouriertransform's deal flow to be processed efficiently. Around 250 applications have been processed since the establishment of the company and a number of meetings with entrepreneurs have been held during the year. Our applications portfolio now contains 50 applications, 20 of which are being investigated with a view to investment.

From an investment perspective a further positive sign is that towards the end of the year Swedish vehicle manufacturers appeared more willing to make investments. Fouriertransform has received proposals from a number of companies requesting participation in the restructuring or spin-off of growth phase and mature operations. Fouriertransform's decision to form a company, Vicura AB, with the management of Saab Automobile's transmissions development department is an example of this. This investment, which took place in January 2011, means unique know-how in this area will be retained in Sweden.

After just over a year as CEO of Fouriertransform I have great confidence that we have an effective company that is able to meet the needs for financing of investments and restructuring in the Swedish automotive industry in a satisfactory way. An important element in this is the extensive industrial and financial expertise that the company has been privileged to recruit.

In addition, we have a strong external network of experienced industry professionals with sound expertise who – particularly in their positions on the boards of the portfolio companies – will make a valuable contribution to good shareholder governance and to making all our investments more commercially viable.

After some initial hesitation concerning our role, Fouriertransform is today seen as a respected player in the Swedish market. We now regard ourselves as being part of the Swedish automotive cluster and will be able to play a long-term industrial role that will help enhance its competitiveness.

Stockholm, February 8, 2011

Per Nordberg