The photo of Dan Sten Olsson is taken on Valö, outside Göteborg. The photo is taken from the film ‘Take Care’ on Stena’s corporate culture.

CEO COMMENTS

CARE AT EVERY LEVEL TRANSLATES INTO HIGHER EARNINGS

Higher revenue, earnings, equity, liquidity and values create confidence in our future. There is an old Swedish saying that revenue serves our vanity, earnings serve our common sense, liquidity serves reality and values last forever. For us at Stena, this confidence comes from a combination of all of them.

Growing activity and revenue

Our business continues to expand. Through acquisitions and a growing fleet, Stena Line now operates 23 ferry lines. The freight operations are expanding thanks to this extensive network of attractive lines. Stena Bulk controls around 100 tankers, including 10 newbuildings that are on their way. Stena LNG tankers are operating at better rates. With its reputation for safety and reliability, Stena Drilling has signed long-term contracts for practically every unit and has ordered two new semisubmersible drilling rigs. With its Relationship Management programme as a foundation, Stena Property is acquiring and building new residential properties in Sweden and commercial properties in London and Houston. Stena Adactum’s portfolio of companies is expanding. Stena Renewable, for example, now has around 100 wind turbines in operation. Our total revenue increased last year by 10%.

Sustainable earnings

Despite a sluggish global economy with Europe in recession for much of the year, our financial results improved in every business area except Stena Drilling, where two drilling units underwent their Special Periodic Surveys (SPS), which are time-consuming and costly. Stena’s total profit before tax increased by MSEK 200 in internal accounting terms and by MSEK 400 in IFRS terms. Stena Line’s improved results in the Irish Sea and North Sea is certainly worthy of note.

“Our operations continue to expand”

Due to tight competition from low-cost crews, our business units are continuing to focus on shrinking their cost base. This challenge will continue for the foreseeable future. Offsetting lower prices with cost cuts puts pressure on everyone, especially when we also have to maintain flawless operations to keep customers satisfied. Trying at the same time to find new revenue sources is tough, but doable.

Shareholders’ equity, net value and liquidity

Our shareholders’ equity including deferred tax based on IFRS is currently about SEK 40 billion. In addition, our fleet of vessels has significant unrecognised surplus values, which serve as a buffer if vessel values were to decline suddenly.

Our guiding principle with respect to risk is to maintain sufficient liquidity to handle three years in a worst-case scenario without having to resort to drastic, unproductive measures to rescue the company. In early 2014, we refinanced USD 1.6 billion in the bond and debt markets, extending the maturity dates on our loans by four years to seven years. Our liquidity in the form of available credit facilities, cash reserves, readily sellable financial investments and instruments amounts to a healthy SEK 12 billion as of 31 December 2013. With most of our drilling units on long-term contracts, the financial risks facing Stena in the next five years have been reduced significantly, even in a worst-case scenario.

“Caring creates a commitment to service”

Values

Care, innovation and performance are the guiding principles of our organisation. Our performance is measured in reliability, safety, our customers’ praise, repeat business, costs and profit. Innovation is measured in the number of suggestions from employees and the percentage that are put into action. The meaning of care is something we are still struggling with. In essence care transforms mindfulness into action and performance.

We have to be our best as measured by our financial success, our customers’ success, our employees’ success, our partners’ success and our communities’ success. This is what our employees are saying:

  • A caring attitude leads to sharing – and in the long run sustainable development and mutually beneficial collaborations – between engaged employees and suppliers.
  • Care creates a commitment to service and satisfying customers with the right technical solutions.
  • Care leads to excellence – Excellence isn’t an action, it’s a habit.
  • Care about financial results means caring about profit, liquidity and protecting our assets.
  • Care means maintaining skills through courses and training.
  • Care is much more than four letters on a sheet of paper.

So… Take Care!

I would like to thank everyone for their support and engagement in 2013. Since 2014 seems like a better year, we have good reason to be hopeful.

Göteborg, 9 March 2014
Dan Sten Olsson
CEO, Stena AB

Next in Annual Review

SHIPPING, OFFSHORE DRILLING AND FERRIES

EVERYDAY PERFORMANCE EXCELLENCE AND ASSET-PLAY