Interim Report January - March, 2016

2016-05-02

Positive progress in portfolio companies

Significant events during the first quarter

  • Fouriertransform invested a total of SEK 21.9 million in five existing portfolio companies
  • Since inception, Fouriertransform has invested a total of SEK 1,609 million in 28 companies in Sweden’s automotive and manufacturing sectors
  • The market value of the existing portfolio of 23 companies including realized value on sales and amortized capital from portfolio companies, equates to a value decrease of approxi-mately 7 percent of total invested capital since Fouriertrans-form’s inception
  • Profit/loss after tax for the quarter amounted to SEK -178.9 million (-46.9), including the revaluation of portfolio companies of SEK -163.4 million (-71.7).
  • Cash flow for January – March amounted to SEK -13.9 million (4.3), of which investments in existing portfolio companies amounted to SEK -21.9 million (-50.7)
  • Cash and cash equivalents and investments in securities amounted to SEK 1,750 million (2,044) at the end of the quarter

The amounts in the table below relate to the investment company, implying that financial investments, investments in portfolio companies and investments in securities are valued at estimated fair value.

    

CEO’s comments – Continuing strong interest in our investments

2016 began with continued uncertainty about global economic progress. The risk of a signifi-cant slowdown in China remains and falling commodities prices contributed to clouding the outlook for other growth economies too. The real economy in the US and the Eurozone looks set to improve, although at a sluggish pace in Europe. The slow growth raises questions about how central banks will control monetary policy looking ahead.

For Sweden’s part, the outlook remains fairly bright, with an economic boom in sight. How-ever, the outlook for the Swedish manufacturing industry is rather mixed, both in terms of order intake and exports. Many of Fouriertransform’s portfolio companies are associated with the automotive industry, and it’s pleasing that this sector continues to make very positive progress. 

For many of the small and medium-sized companies Fouriertransform works with, it’s not enough to simply wait for economic recovery to unfold. They need competent and long-term equity to support innovation and expansion onto new markets, and to provide valuable contacts in manufacturing, in other networks and amongst co-investors.

This is how Fouriertransform operates. Our aim is to contribute to the value growth of our portfolio companies and to the renewal of Sweden’s manufacturing industry through a busi-ness-oriented approach. The very positive progress made by our portfolio companies confirms the favorable outlook for improving Sweden’s standing as a manufacturing nation, with the help of long-term, active state and private equity capital. This is also clear from the sustained significant interest in our investments.

In mid-March, the government submitted a bill to the Swedish parliament. The bill proposes a new structure for state-owned venture capital initiatives aimed at improving financing opportunities for companies at the development stage. I look forward to the proposed new structure. While awaiting the parliamentary decision, we’re continuing to pursue our existing assignments, through investments and financing of companies in the manufacturing industry and associated service providers who carry out research, development and production, and who have the potential to become competitive global operators.

Per Nordberg