Interim Report January – March, 2015
Strategic divestment strengthens Swedish industry
Significant events in the first quarter
- In February 2015 ÅF AB (publ), a company listed on NASDAQ Stockholm, acquired all of the shares in Fouriertransform’s portfolio company LeanNova Engineering in Trollhättan. Fouriertransform initially invested in the company in January 2012 and the divestment provided a capital gain of SEK 190.4 million for Fouriertransform
- During the quarter Fouriertransform invested SEK 50.7 million in eight existing portfolio companies
- Since inception Fouriertransform has invested a total of SEK 1,417 million in 25 companies in the Swedish automotive and manufacturing industries
- The fair value of the existing portfolio, including the realized value from divestments and repaid capital from the portfolio companies, represents a decrease in value of around 2 percent of the total capital invested since Fouriertransform was established
- The net result for the quarter was SEK -46.9 million (8.0) including revaluation of investments in securities of SEK 15.9 million (24.3)
- The total cash flow for January – March was SEK 4.3 million (0.6), of which investments in new and existing portfolio companies accounted for SEK -50.8 million ( 137.8 million)
- Cash and bank balances and investments in securities amounted to SEK 2,044 million (2,034) 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 have been assigned an estimated fair value.
CEO’s comments – Interest in our portfolio companies is high
Industrial production in Sweden did not match the high expectations. The pace of both the order inflow and sales slowed during the latter part of the quarter and sales levels were significantly lower than in the previous year.
Unfortunately, growth remained weak for small and medium-sized enterprises and their sales levels have not yet returned to those prior to the 2008 crisis. The factor determining this weak trend is that a significant portion of the customers are in Sweden, which means that these companies are unable to tap into the growth happening outside Sweden. The goal must be to reinvest in Sweden in the form of expertise and capital to ensure that these companies can grow internationally. This will give Sweden a solid foundation from which to invest sustainably in innovation and new enterprise, and form effective connections between academia and industry. This will enable the regeneration of small businesses, growth and employment in Sweden.
Fouriertransform maintained its focus during the quarter on sustainable companies in early growth phases with a clear environmental profile, and also sought strong syndication partners. Complementing the market and generating interest among co-investors is a challenge, but with the right business focus and a long-term approach, Fouriertransform can create attractive investment platforms for co-investors. It is very difficult for early-stage companies in need of SEK 10–50 million to obtain capital, but Fouriertransform can also help improve the ability of these companies to survive.
We are still seeing cautious optimism in our portfolio companies’ operations and particularly in our IT companies, such as Pelagicore and ArcCore in Gothenburg, which have now advanced their market positions in the important European market.
The divestment of LeanNova Engineering to ÅF AB has generated a lot of interest. During the quarter the majority ownership of Vicura AB in Trollhättan was transferred to the Austrian consulting firm AVL. It is gratifying to see that Fouriertransform’s investments during the crisis in the automotive industry have made it possible to safeguard important technical expertise and jobs in West Sweden and in Trollhättan in particular.