• Capital employed amounted to SEK 26,653 M (23,461).
  • Net debt rose to SEK 12,240 M (12,208).
  • Net debt / equity ratio was 0.85 (1.09).
  • SEK M 2005 2004
    Capital employed 26,653 23,461
    - of which, goodwill 15,716 13,917
    Net debt 12,240 12,208
    Minority interests 71 27
    Shareholders' equity 14,342 11,226
    Capital employed
    Capital employed in the Group – defined as total assets less interest-bearing assets and non-interest-bearing liabilities including deferred tax liabilities – amounted to SEK 26,653 M (23,461). The return on capital employed was 15.9 percent (15.3).
    Intangible assets amounted to SEK 16,078 M (14,138). The change is explained mainly by changes in exchange rates. During the year goodwill of SEK 249 M arose from acquisitions. A valuation model based on discounted future cash flow is used for impairment testing of goodwill and other intangible assets with indefinite life. No write-down took place this year. Tangible assets amounted to SEK 5,702 M (5,279). Investments in tangible and intan-gible assets, less sales of tangible and intangible assets, totaled SEK 667 M (650). Depreciation according
    to plan amounted to SEK 882 M (923).
    Deferred tax receivables amounted to SEK 1,349 M (1,488). The reduction is due principally to increased payments into pension funds and claimed deductions for tax-deductible goodwill.
    Accounts receivable totaled SEK 4,818 M (4,146) and inventories totaled SEK 3,679 M (3,135). The average collection period for accounts receivable was 56 days (53). Material throughput time averaged 108 days (109). The Group has been making long-term systematic efforts to reduce capital tied up in inventory.
    Net debt
    Net debt amounted to SEK 12,240 M (12,208), of which pension obligations accounted for SEK 1,634 M (1,677). Net debt was reduced by the strong operating cash flow but increased to a comparable extent by changed exchange rates, dividends to shareholders and acquisitions.
    External financing
    The Group's long-term loan financing consists mainly of a Private Placement program in the USA amounting to USD 330 M (–). The Group's short-term loan financing consists mainly of an EMTN program for a maximum of EUR 1,500 M (1,500), a global Commercial Paper program for a maximum of USD 1,000 M (1,000) and a Swedish Commercial Paper program for SEK 5,000 M (5,000).
    There are also substantial credit facilities, chiefly in the form of a Multi-Currency Revolving Credit (MCRF) agreement for a maximum of EUR 1,000 M (1,000), which at year-end was not being utilized at all.
    At year-end the Private Placement was being utilized
    for SEK 2,625 M, the EMTN program for SEK 2,829 M, the global Commercial Paper program for SEK 1,302 M, and the Swedish Commercial Paper program for SEK 399 M. The interest coverage ratio, defined as income before tax, plus net interest, divided by net interest, amounted to 8.2 (7.6).
    Periods for fixed-interest-rate borrowings are generally short, averaging 16 months at the end of the year. This is partly because Group revenues largely follow economic trends in each country, and partly due to a strong cash flow.
    Cash and cash equivalents amounted to SEK 958 M (1,017). Cash and cash equivalents are invested in banks with high credit ratings.
    Equity
    Equity in the Group totaled SEK 14,413 M (11,253) at year-end. The return on shareholders' equity amounted to 18.1 percent (20.0). The equity ratio was 42.8 percent (37.4). The net debt / equity ratio, defined as net debt divided by shareholders' equity, was 0.85 (1.09).
      GROUP   PARENT COMPANY  
        EUR M1 SEK M SEK M     EUR M1 SEK M SEK M
      Note 2005 2005 2004   Note 2005 2005 2004
    ASSETS
    Non-current assets
    Intangible assets 15 1,705 16,078 14,138   15 4 36 7
    Tangible assets 16 605 5,702 5,279   16 1 10 8
    Shares in subsidiaries   - - -   17 1,294 12,202 25,497
    Shares in associates 18 4 37 36     - - -
    Receivables from subsidiaries   - - -     235 2,216 2,216
    Other long-term financial assets 20 18 171 130   20 7 67 67
    Deferred tax receivables 19 143 1,349 1,488     - - -
    Total non-current assets   2,475 23,337 21,071     1,541 14,531 27,795
     
    Current assets
    Inventories 21 390 3,679 3,135     - - -
    Accounts receivable 22 511 4,818 4,146     - - -
    Receivables from subsidiaries   - - -     1,989 18,758 5,105
    Current tax receivables   13 129 172     - - -
    Other short-term receivables   36 344 266     2 15 45
    Prepaid expenses and accrued income   39 365 266     4 41 53
    Derivative financial instruments 23 5 43 -     - - -
    Short-term investments   2 19 44     - - -
    Cash and cash equivalents 24 102 958 1,017   24 88 833 4
    Total current assets   1,098 10,355 9,046     2,083 19,647 5,207
    TOTAL ASSETS   3,573 33,692 30,117     3,624 34,178 33,002
     
    Assets pledged 25 7 70 43     None None None
     
    EQUITY AND LIABILITIES
    Equity (Group / Parent company) 2           26      
    Parent company's shareholders
    Share capital 27 39 366 366   27 39 366 366
    Other contributed capital / Reserve fund   942 8,887 8,887     944 8,905 645
    Reserves / Premium reserve 28 113 1,061 -479     - - 8,260
    Retained earnings incl. / excl. net income   427 4,028 2,452     519 4,892 2,014
    Net income in Parent company   - - -     76 715 3 869
        1,521 14,342 11,226     1,578 14,878 15,154
    Minority interests   7 71 27     - - -
    Total equity   1,528 14,413 11,253     1,578 14,878 15,154
     
    Non-current liabilities
    Long-term loans 25 295 2,783 4,225     - - 3,104
    Convertible debenture loans 25 100 943 1,804   25 100 943 1,804
    Long-term loans to subsidiaries   - - -     235 2,216 2,216
    Deferred tax liabilities 19 16 153 245     - - -
    Pension obligations 29 173 1,634 1,677   29 - - -
    Other long-term provisions 30 9 88 93     - - -
    Other long-term liabilities   17 156 68     - - -
    Total non-current liabilities   610 5,757 8,112     335 3,159 7,124
     
    Current liabilities
    Short-term loans 25 739 6,966 5,594   25 407 3,842 507
    Convertible debenture loans 25 100 943 -   25 100 943 -
    Derivative financial instruments 23 6 54 -     - - -
    Accounts payable   207 1,949 1,521     2 19 22
    Short-term liabilities to subsidiaries   - - -     1,192 11,241 10,108
    Current tax liabilities   21 196 304     1 13 12
    Short-term provisions 30 36 344 586     - - -
    Other short-term liabilities 31 70 657 677     1 5 11
    Accrued expenses and prepaid income 32 256 2,413 2,070   32 8 78 64
    Total current liabilities   1,435 13,522 10,752     1,711 16,141 10,724
    TOTAL EQUITY AND LIABILITIES   3,573 33,692 30,117     3,624 34,178 33,002
     
    Contingent liabilities 33 111 1,050 817   33 1,070 10,088 7,393
    1 Closing-day EUR/SEK rate used for conversion from SEK to EUR above = 9.43.
    2 Restricted equity: share capital, reserve fund and premium reserve. Unrestricted equity: retained earnings and net income.