Lemnhult Wind Farm

Stena Adactum

CONTINUED INDUSTRIAL GROWTH

Stena Adactum is Stena’s wholly owned investment company which invests in both listed and unlisted companies with a long-term ownership perspective. Through active ownership and financial strength, Stena Adactum builds strong and profitable companies.

Stena Adactum consists of six subsidiaries and two publicly listed associated companies. The subsidiaries’ aggregate revenue amounts to SEK 6.5 billion, of which the operations in Europe account for about SEK 6.0 billion.

Stena Adactum’s companies are well-positioned to take advantage of organic growth opportunities as well as acquisitions. Stena Adactum’s international expansion is achieved through the portfolio companies, since product expertise and cost efficiency are critical to success in the face of growing global competition. The sales trend in emerging economies has been positive in recent years, and several portfolio companies continue to expand, primarily in Asia and the Middle East, but also to some extent in South America and Africa. In addition to its geographical expansion, Stena Adactum capitalises on growth opportunities that major market trends offer. The focus is primarily on investments in product development, renewable energy, infrastructure solutions and demographic development.

Ballingslöv International

Ballingslöv International is a leading supplier of kitchen, bathroom and storage systems, represented by ten brands in eleven countries.

In 2013, Manhattan Furniture was acquired and merged with Paola Rosa and is now a leading kitchen supplier for newbuilt homes in the UK.

Kvik continued its expansion in Thailand and now has twelve stores with more planned in 2014.

Envac

Envac is a leading global environmental technology company, supplying automatic waste collection systems for multi-family housing, hospitals and airports as well as optical sorting systems for household waste.

The global construction sector, which is still affected by the financial crisis, is slowing the pace of growth in major ­residential areas. Despite a slightly lower order intake, Envac has increased its global market share and its order backlog amounted to SEK 2.4 billion at year-end 2013. The company has operations in 20 countries with offices in 38 major cities around the world.

During the year, Envac reported further success in Asia and the Middle East, while the market in a number of European countries remains sluggish. Envac’s automated waste management systems are being installed in ­Singapore, among other places, where the world’s most modern major city is being built.

S-Invest (Blomsterlandet)

The S-Invest Group consists of Blomsterlandet, a chain the 49 Swedish garden centres offering plants and supplies for the home and garden, and S-Blommor, a retailer with a ­shop-in-shop flower concept.

New units in Eskilstuna, Enköping and Stockholm contributed to a revenue increase in 2013. During the year, the company also acquired Växtriket in Strömstad and Växthuset in Kristianstad. A new Blomsterlandet store opens in Göteborg in early 2014.

Blomsterlandet’s customer loyalty club, Green Room, has over 300,000 members.

Stena Adactum’s subsidiary Mediatec is an important technology provider for major events. When the Eurovision Song Contest was held in Malmö in 2013, Mediatec supplied most of the broadcasting and display technology, creating one of the world’s most widely viewed events.

Stena Renewable

Stena Renewable has developed from a wind power project business to an established energy company and Sweden’s largest wind power producer. In 2013, 52 wind turbines were commissioned in Uddared, Grytsjö and Lemnhult, increasing the number of turbines to 86, with a combined capacity of 223 MW and total production capacity of 0.7 TWh. An additional ten turbines with a capacity of 17 MW are under construction and scheduled for commissioning in 2014.

Production in 2013 was slightly lower than normal due to weaker winds during the second and third quarters. On an annual basis, production was 3% below normal yearly production.

Sweden has had historically low electricity futures prices, and Stena Renewable expects prices to remain low. Despite the current price picture, economic conditions are favourable for Stena Renewable, since the majority of its investments have been made at competitive levels.

Stena Renewable builds wind power to own and strives for long-term relationships with municipalities, local contractors, associations and the public.

Wind power expansion is often greatly important to the local economy. The construction of the Lemnhult wind farm, for example, created over 500 jobs during a one-year period in Vetlanda, with municipal tax revenue in the range of SEK 55 million. The construction has also brought a fibre network to communities adjacent to the wind power farm; see the fact box on the previous page.

Mediatec

During the year, Mediatec was divided into two companies: Mediatec Broadcast and Mediatec Solutions. These two operating areas have different customer structures, technologies and business models, why a separation creates greater efficiencies.

Mediatec Broadcast is a partner to major television networks. In 2013, the company was responsible for broadcasting technology used for the UEFA European Women’s Championship, the men’s world ice hockey championship and the Euro­vision Song Contest.

Mediatec Solutions is a project manager that provides display technology for athletic events and large corporate events. It also supplies large LED screens for arenas.

Gunnebo

Gunnebo is an international group that provides integrated security solutions.

Gunnebo has seen positive development in Asia, including the Asia Pacific region, as well as North and South America. The Group’s emphasis is shifting to emerging areas, which now accounts for 41% of consolidated revenue, compared to 10% in 2009.

Gunnebo acquired the company Entrance Control in Korea during the year, in addition to opening sales offices in Thailand, Malaysia and Myanmar. The need for greater security, partly due to increased global cash handling, is benefiting Gunnebo.

Midsona

Midsona is a health product company with a prominent position in the Nordic countries.

Midsona has successfully streamlined its business and owns a number of strong healthcare brands, and has made a number of acquisitions, for example Dalblads in Sweden and Supernature in Norway. Strong profits have led to a strong stock price performance.

Subsidiaries

A leading kitchen manufacturer in Scandinavia and the UK.

Revenue: MSEK 2,911
CEO: Anders Wassberg
Number of employees: 1,395
Stena’s holding: 100%

www.ballingslovinternational.se

Sweden’s leading garden centres.

Revenue: MSEK 1,332
CEO: Jan Larsson
Number of employees: 600
Stena’s holding: 100%

www.blomsterlandet.se

World leader in the development and sale of automated waste collection systems.

Revenue: MSEK 1,046
CEO: Christer Öjdemark
Number of employees: 625
Stena’s holding: 100%

www.envacgroup.com

Develops, owns and manages large wind power farms in Sweden.

Revenue: MSEK 298
CEO: Peter Zachrisson
Number of employees: 12
Stena’s holding: 100%

www.stenarenewable.com

Mediatec Broadcast
A European leader in media technology such as live broadcast TV production.

Revenue: MSEK 505
CEO: Paul Henriksen
Number of employees: 153
Stena’s holding: 62.5%

www.mediatecgroup.com

Mediatec Solutions
Displays and technological solutions for trade shows and events.

Revenue: MSEK 373
CEO: Kenneth Paterson
Number of employees: 171
Stena’s holding: 63.5%

www.mediatecgroup.com

Associated companies

An international group that provides integrated security solutions.

Revenue: MSEK 5,271
CEO: Per Borgvall
Number of employees: 5,656
Stena’s holding: 26%

www.gunnebo.com

A leader in health and well-being in the Nordic region.

Revenue: MSEK 916
CEO: Peter Åsberg
Number of employees: 156
Stena’s holding: 25.1% (23.5% of capital)

www.midsona.com

CEO Comment

In the years ahead, Stena Adactum’s development will be affected primarily by the Nordic electricity market, the recovery in global construction, consumption in the Nordic region and the European economic recovery. Stena Adactum is expanding through subsidiaries in emerging countries, while its operations in Europe are developing through a deeper and broader customer offering. There are still good growth opportunities in the portfolio companies. Potential investments in new businesses are continuously evaluated, and we have the financial capacity to take advantage of them. The main focus in recent years has been on expanding and strengthening profitability in existing operations, since this has produced the greatest value. The aim is to maintain the strength of our balance sheet, so that we can continue to develop and support the expansion of our businesses.

History has proven the importance of being a strong, active and long-term owner. The stability we are now experiencing creates flexibility for product development and sound investments. Stena Adactum’s main focus is on working with long-term industrial development to build strong companies.

Martin Svalstedt

CEO Stena Adactum

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