Interim report January - March, 2014

2014-04-29

Intense marketing activities and investment pace with three new investments totaling SEK 145 million during the quarter

Significant events in the first quarter

  • Fouriertransform invested a total of SEK 145 million during the quarter in three new companies: ÅAC Microtec AB in Uppsala, Pelly AB in Hillerstorp and Osstell AB in Gothenburg, as well as SEK 49 million in existing portfolio companies.
  • Since the start Fouriertransform has invested a total of SEK 1,180 million in 23 companies, and with syndication partners, a total of SEK 3.5 billion in the Swedish automotive and manufacturing industries.
  • The fair value of the existing portfolio including repaid capital from the portfolio companies is equivalent to an increase in value of around 10 percent of the total capital invested since Fouriertransform was formed.
  • For the investment in PowerCell, the Swedish Private Equity & Venture Capital Association (SVCA) awarded Fouriertransform and Volvo Group Venture Capital the award for “The Most Socially Beneficial Investment 2013.”
  • The net result for the quarter was SEK 8.0 million (10.5) including unrealized gains in investments in securities of SEK 24.3 million.
  • The total cash flow for the quarter was SEK 0.6 million (-1.4) of which investments in new and existing portfolio companies accounted for SEK -192.9 million (-244.0).
  • Cash and bank balances and investments in securities amounted to SEK 2,034 million (2,277) at the end of the quarter.

The amounts in the table below refer to the so-called investment company, and accordingly, financial investments, investments in portfolio companies and investments in securities, are measured at estimated fair value.

Investment company highlights, SEK m

Q1
2014

 

Q1
2013

 

%

Net result for the period

8.0

 

10.5

 

-23

Investments in portfolio companies

192.9

 

244.0

 

-21

Cash flow for the period

0.6

 

-1.4

 

-

Cash and bank balances and investments in securities

2,033.8

 

2,276.6

 

-11

Equity

3,290.9

 

3,162.0

 

4

Equity/assets ratio

99%

 

99%

 

-

CEO’s comments – intense activity despite serious situation

Developments during the first three months of the year indicate that a cautious economic recovery is now under way, both in Sweden and in Europe as a whole, although the pace varies among the different economies. Globally, there are also signs of improvement, and forecasts point to a moderate increase in growth for the world as a whole in 2014. Industrial production in Sweden and Europe is also slowly increasing, particularly in the automotive industry. Despite brighter forecasts, the crisis in Ukraine is a serious situation for the global economy and particularly for Germany which is highly dependent on Russia. This is also a major challenge for Swedish industry as Germany is an important export market.

For Fouriertransform the first quarter was characterized by intense activity and considerable interest in the company and three new investments implemented. We invested a total of SEK 145 million in three new companies: Osstell in Gothenburg, which has a unique method of measuring the stability of dental implants; Pelly Intressenter in Hillerstorp, which is one the Nordic region’s leading suppliers of storage systems for consumers; and ÅAC Microtec in Uppsala, which offers world leading microelectronic systems for the air and space industry.

All of the investments are the result of our new, expanded mandate and prove that there is considerable interest in partnering with Fouriertransform. They also show the breadth of small, innovative companies that exist in Sweden and how important it is to have players who can invest and support their potential to become commercial successes, especially beyond Sweden’s borders. This is how new jobs will be created in the future.

During the quarter we continued our efforts to grow value in the existing investment portfolio and overall we have made good progress. It is gratifying when these companies are recognized for their innovations and products. ArcCore, for example, was ranked in Affärsvärlden magazine’s list of “Sweden’s 33 hottest start-ups” for its open source code software for automotive developers. For the investment in PowerCell, the Swedish Private Equity & Venture Capital Association (SVCA) awarded Fouriertransform and Volvo Group Venture Capital the award for “The Most Socially Beneficial Investment 2013,” for the unique fuel cell system developed by PowerCell.

Fouriertransform now has a total of 20 companies in the portfolio. Together, they have net sales of SEK 2.2 billion, they employ around 1,500 people and they have good future growth potential.

As we look ahead we predict a continuing high rate of investment and we are now reviewing an application portfolio of five or so companies. The task of identifying and evaluating future prospects among them and matching them with the resources and networks that Fouriertransform can offer is intense. The goal is to strengthen innovation processes and the development of Swedish manufacturing industry while paving the way for future prosperous enterprise.

Per Nordberg