Selection of transactions over the ten past years
2020 was a year marked by Covid-19 and its impact on health and the world economy in largely closed national borders, meeting restrictions and teleworking. In addition, extremely large monetary policy and fiscal support packages that contributed to continued asset inflation on equities and real estate. The Stockholm Stock Exchange plummeted in March followed by a gradually recovery during the year, which summed up to an increase of 13 percent. Traction showed a loss of MSEK 19 for the full year, derived from a weak development for other listed shares, which largely consisted of investments in the energy sector and capital-intensive sectors such as banks and basic industry. Traction’s active listed holdings contributed positively, as did the unlisted holdings. Overall, the development was stable for the active holdings despite the ongoing pandemic. Krister Magnusson was appointed as the CEO of Nilörngruppen. Strong volume increase for the wholly owned household appliance Ankarsrum Assistant Original™. The holding in Ankarsrum Motors was discontinued. The holding in Duroc was reclassified as a financial investment as Traction is no longer involved in the board and the ownership since 2017 is less than ten percent of the votes. Traction’s view of Duroc is not affected by this reclassification, which is only a consequence of the accounting principles that Traction applies. Minor new investments were conducted in the unlisted companies Tengai and Medino. Increased ownership in Driver Group and Nilörngruppen to 17 percent and 26 percent of capital, respectively. Acquired just above four percent of the capital in the British AIM-listed company Portmeirion in connection with a private placement and approximately five percent in the Irish solar park company Alternus Energy prior to an unofficial listing of the company’s shares.
In terms of profit a record year where Traction showed a profit of MSEK 416, equivalent to a net asset value increase adjusted for dividend paid of 16 percent. The return on the active listed holdings amounted to approximately 21 percent and for other listed shares 42 percent, in a generally strong stock market where the Stockholm Stock Exchange rose by about 35 percent. Yet another year with negative interest rates in Sweden and several other countries. This contributed to a continued asset inflation and generally challenging conditions for Traction to find new, attractive investment objects to get involved in as active owner. The holding in WYG Plc was brief and was sold with a good profit in connection with a bid (bid premium of 244 percent) from the American consultancy TetraTech. Proceeds amounted to MSEK 91. Mönsterås Metall filed for bankruptcy, but this did not have negative effect on Traction. Record results in several of the active holdings, such as Drillcon, OEM International and Softronic. Weak development on Hifab, where costs such as recruitment costs burdened the result. Softronics’ founder, principal owner and CEO handed over CEO role to Per Adolfsson in January. Peter Andersson was appointed new CEO i BE Group in September. Acquired a major lot of shares (14.2 percent) in the British AIM listed company Driver Group Plc for approximately MSEK 52. Marginal increase in ownership of Nilörngruppen and a small reduction in Duroc. Strong financial position with more than SEK 1.2 billion in the form of cash and interest-bearing investments.
The holding in Eitech Holding was formally sold in January after approval by the Swedish competition authority. Proceeds, including repayment of receivables, approximately MSEK 50 in all, was received during 2018. The transaction was negotiated at the end of 2017 and contributed to Traction’s result for that year. In February, Traction became a major owner of Mönsterås Metall (49 percent), which simultaneously acquired Ankarsrum Diecasting from Traction. The British technology consultancy WYG became a new active holding when Traction in several transactions acquired 15 percent of the shares outstanding for a total of approximately MSEK 48. The development of Traction’s active holdings (−5 percent) as well as overall for the Stockholm stock market. The earnings and operational development for several of the active holdings, among them BE Group, Nilörngruppen, OEM International, Sigicom and Softronic, with the latter four recording record results. BE Group came in with its best result since 2008. Ownership in BE Group increased slightly to 22 percent of capital through purchases in the amount of MSEK 15. Ownership in Nilörngruppen decreased slightly in connection with a sale of shares in the amount of MSEK 25. The financial position is strong with just shy of SEK 1.2 billion in the form cash, cash equivalents and interest-bearing investments. Ankarsrum Industries, with operating companies Ankarsrum Motors and Ankarsrum Kitchen were revalued by MSEK −29 against a background of low capacity utilisation in the group’s production lines for electric motors. The proprietary kitchen appliance Ankarsrum Original showed a stable development, however. There is also a positive development plan for coming years. A new CEO, Carl Sigfridsson, took office in February 2019.
In the beginning of 2017 Duroc International acquired Fibres Group with payment on newly issued stock in Duroc. The holding in Waterman Group was sold after a public offer, which as far as Traction is concerned meant a bid value of just short of MSEK 85 and an earnings effect in 2017 of MSEK 40. Shares in Nilörngruppen were sold for MSEK 67, which reduced ownership to 24 percent of capital and 57 percent of votes. The holding in Banking Automation Ltd was sold towards the end of 2017. Traction has been a part owner of Banking Automation Ltd since 1986. Strong stock price performance in Drillcon (82 percent) and Softronic (71 percent) made a positive contribution to earnings. A weak development in the Ankarsrum companies burdened results with a total of MSEK 60 during 2017. The financial position remains strong with almost SEK 1.2 billion in the form of cash, cash equivalents and interest- bearing investments. The return on listed active holdings was 29 percent and the return on other listed shares was 13 percent.
Traction reported its best result ever in the amount of MSEK 401, equivalent to a return of 19 percent. MSEK 30 was invested in Eitech Holding AB in the form of shares and loans, equivalent to 10 percent of the capital and 4 percent of the votes. New chief executives were appointed in Duroc and in Drillcon. All shares in Nordic Camping & Resort were sold after a tender offer from Norwegian venture capital firm Norvestor Equity AS. Gradually increased ownership in Waterman Group during the year brought our stake from 11 percent to about 16 percent. Shares in Nilorn were sold for MSEK 79, reducing ownership to 31 percent of capital and 61 percent of the votes. Acquired 8 percent of the capital and 4 percent of the votes in Poolia thus becoming the company’s second largest owner, also gaining representation on the company’s election committee. Strong share price performance in Nilorn (99%), BE Group (40%) and Hifab Group (36%) contributed positively to results. Nilorn and OEM International recorded record results. Ankarsrum Motors was revalued by MSEK –25 due to weaker performance. The return on other shareholdings amounted to 45 percent. Negative deposit interest rates prompted us to invest most of Traction’s liquid funds in short-term interest-bearing investments with a marginally positive return. Strong financial position with more than SEK one billion in the form of cash and cash equivalents and interest-bearing investments. Just after the end of the year 2016, Duroc acquired International Fibres Group with payment in newly issued stock in Duroc.
The holding in PartnerTech was sold for just over MSEK 100 in connection with a bid from industry colleague Scanfil. Nordic Camping & Resort, which continued its positive development, floated a new issue to strengthen the balance sheet and broaden the shareholder base. BE Group floated a rights issue, which to a considerable extent was underwritten by Traction. A new CEO was appointed in the BE Group and Traction’s CEO assumed the role of Chairman of the Board. Nilorn was listed in June on First North at the same time as Traction sold shares for just over MSEK 180, equivalent to half of the holding. This constituted a major contribution to the year’s profit. In late autumn Traction acquired all outstanding class A shares in Nilorn, whereby Traction’s ownership increased to 66 percent of the votes. Nilorn’s share price showed a weak development, whereas the company’s operations again delivered record earnings. Hifab Group suffered an unexpected legal loss which compelled the company to float a new issue, which also was underwritten by Traction. Banking Automation had a record year. Shares in OEM International, Softronic and Waterman showed a strong development, while BE Group and Hifab Group were a drag on earnings. A major holding in staffing company Proffice was revalued following a public offer from an international player. The holding in Modular Streams was sold. Significant sales of active holdings and a sceptical view of the stock market’s valuation levels had the effect that Traction’s cash and cash equivalents rose to more than MSEK 900.
Traction turned 40. Traction switched to Investment Entity Accounting, which means that the subsidiaries in Ankarsrum and Nilörngruppen are valued at market rather than being consolidated in the Traction Group. Sold 50 percent of the holding in OEM International after a rising price trend for a long period. As a company, OEM has shown a very positive development since Traction became a part owner in 2009, as has its share price. BE Group floated a new issue, largely underwritten by Traction. The issue was oversubscribed and Traction sold parts of its holding during the year, reducing the stake to 17 percent. BE Group’s development was very weak, which weighed on Traction’s profit. The holding in Catella was sold. Participated in the underwriting of real estate company Amasten in connection with a preferred share issue. A new chief executive was appointed in Duroc. An action program was initiated immediately. Ownership in Drillcon and Hifab passed the 50-percent-mark for capital and votes. Ownership in PartnerTech increased to just over 23 percent. Nordic Camping & Resort grew and the share price advanced by 59 percent. Nilörngruppen recorded a revenue increase of 20 percent and delivered all-time-high earnings. In addition to net sales of active holdings and other listed shares, dividends from unlisted holdings contributed an increase in Traction’s cash and cash equivalents, and interest-bearing investments to approximately MSEK 600.
Increased ownership in BE Group to 21.7 percent and in Catella to 11.6 percent by acquiring major blocks of shares in the beginning of the year. Fastpartner acquired Bricad’s holding in Vallentuna Centrum after several years of active refinement of its real estate holdings. We became represented on the Board of Directors of Catella, which also appointed a new chief executive who took office in January 2014. Made a mandatory offer for Drillcon, thereby increasing our stake to just short of 50 percent. The real estate project in Djursholms Ösby was virtually completed and all units were sold during the year. The share price of PA Resources fell. This burdened our earnings performance when the company made another rights issue without Traction’s participation. Generally strong market performance, where the holdings in OEM, Hifab, SCA and Swedbank made the greatest contributions to our earnings, at the same time as the holding in BE Group weighed on our result with a significant amount. The holdings in G5 Entertainment and Alphahelix were sold with good results. Ankarsrum Motors posted all-time high earnings thanks to greater capacity utilisation on its universal motor line. Nilörngruppen also recorded continued stable earnings, with particularly positive results in England and Germany. Zitiz and internet news site Sourze were phased out after several years of development without achieving commercial success. The holdings in Signtrace and Saguru were wound up. Acquired a just over 10 percent stake in the English consultancy Waterman Group plc. JRS Securities agreed to sell the business to Remium, who took possession in January 2014.
Increased our holding in BE Group (to 16.3 percent), Catella (to 7.9 percent) and PartnerTech (to 18.6 percent). We became represented on the board of directors of BE Group and a new chief executive was also appointed. Hifab recorded a strong improvement in earnings and the market price of its shares advanced by 63 percent. Strong stock market performance by SCA (+37 percent) and Swedbank (+39 percent) contributed to Traction’s stable result despite the fact that parts of the capital was invested in low-yield assets. Ankarsrum Motors, which again in 2012 recorded stable earnings, began the development of a new DC motor. Construction began on Traction’s partially-owned real estate project at Djursholms Ösby, with planned occupancy in the autumn of 2013. Sold the holding in Traction Fonder, which was originally planned for 2011. The holding in EwaLie was sold. Participated in the underwriting consortia for Formpipe, Nordic Mines, Cybercom and Crown Energy. PA Resources was reconstructed when the holders of convertible debentures (among them Traction) converted their debentures to shares and the company floated a large rights issue, for which Traction was an underwriter. The issue was completed in the beginning of 2013.
Became a major owner of game development company G5 Entertainment with 7 percent of the shares by participating in a private placement. Ownership in Drillcon was increased from 13 percent to 30 percent, making T-raction the company’s largest shareholder. Gradually bought, especially during the third quarter, a large number of shares in BE Group and by the end of the year Traction was the company’s largest shareholder with about 12.7 percent of the shares outstanding. Participated in a start-up, JRS Securities, a securities broker focusing on institutional customers. Became engaged in Saguru. Bought just over 5 percent of the shares in Catella, making T-raction the company’s second largest shareholder by year’s end. Good profitability in subsidiaries Nilörngruppen and Ankarsrum Motors. Nilörngruppen declared a large dividend. Weak stock market overall as well as in some of Traction’s larger holdings. The holding in Sigicom was revalued after a very positive development during 2011.