MIDROC Annual Review web · ANNUAL REVIEW 2014 MIDROC EUROPE 1 MIDROC IN BRIEF Midroc Europe is the...

ANNUAL REVIEW 2014 MIDROC EUROPE 1

Midroc Europe Annual Review2014

2 MIDROC EUROPE ANNUAL REVIEW 2014

Photography: Hans Berggren, Ulf Berglund, Heliospectra, Adam Ihse, Midroc, Anette Norén, Niklas Olsson, SolarWave, Nicklas Thegerström, My Vestlund

ANNUAL REVIEW 2014

Contents

8

4 18 MIDROC EUROPE 1

Midroc in brief 12014 in brief 2Business areas 3Executive Committee Comments 4Together to get there 6

BUSINESS AREAS 10Business Area Services 10Business Area Investments 22

FINANCIAL STATEMENTS 28Midroc Europe 28Midroc Europe AB 30Granitor Invest AB 31

OWNERSHIP 32

BOARD OF DIRECTORS 33


MIDROC IN BRIEF

Midroc Europe is the shared marketing brand under which all European-based Midroc companies operate. Financial strength and sustainability combined with highly competent human resources, shared values and culture form the basis for the operations.

Midroc Europe’s business operations are organized in two major business areas: services offered to the industry, construction and infrastructure market and our own investments in property development and innovating development companies. Whilst the greater part of the operational activities are undertaken in Sweden, the group is also through its subsidiaries locally represented in France, Germany, India, Indonesia, Norway, Poland, Saudi Arabia, South Africa, the United Arab Emirates and the United Kingdom.

Legal structure Business activities are conducted through a number of companies, each offering their specific services. The Midroc Europe brand consists primarily of two groups of companies headed by Midroc Europe AB and Granitor Invest AB respectively, which account for the bulk of sales.

Our shared vision “Contributing to a better future” is part of our everyday business with our employees, clients and partners and also very evident in our investments in sustainable technologies.

Sustainability Midroc takes a broad view of sustainability, spanning from safe working environments for our employees to investments in the development of new technology based on environmental concern and social responsibility.

Our challenge We have taken on the challenge to make our employees, customers and suppliers proud of our focus on sustainability in both our daily operations and long-term vision to contribute to a better future.

MIDROC EUROPE


Key figures* (including Granitor Invest AB, SEK)

* Key figures constitute the sum of Midroc Europe AB and 100% of the Granitor Invest AB operations as well as surplus value of property.

Net sales 5.3 billion

Income before tax 128 million

Total equity 2.8 billion

Total assets 7.8 billion

Owner’s financing 4.1 billion

3,200 employees

Income before taxesMSEK

EmployeesBY REGION

SalesMSEK 5,300

AssetsMSEK 7,800

2014 IN BRIEF

80% Services

20% Investments

87,5% Sweden

12,5% Outside Sweden

35% Services

65% Investments

MIDROC EUROPE

2010 2011 2012 2013 2014


BUSINESS AREAS

In the business area Services Midroc Europe is a full-service partner providing services and solutions to cus-tomers operating in the fields of property, construction, infrastructure and industry. In business area Investment Midroc Europe invests, develops and manages commer-cial and residential properties as well as sustainable new technologies in development companies. By offering sus-tainable and innovative solutions our goal is to strengthen our customers’ competitive edge, while simultaneously contributing to a better future.

Access to the Midroc companies’ wide range of expertise enables us to offer tailor-made solutions to each customer’s specific need. Our portfolio of services offered to major industrial clients includes assistance with surveys and other material for the early stages in their decision-making process, as well as full partnerships to carry through investment and maintenance projects from start to finish. In addition, we offer project management, engineering expertise and project capability for planning and performing service maintenance. Our wide scope of services offered to the construction sector is based on our competence and vast experience of creating sustain-able urban environments. We provide services from early development to construction and property management.

Together to get thereOur best results are achieved when we have the opportu-nity to work with our customers and partners already at an early stage in a project. By making sure we understand our customers’ challenges and needs, we take on the challenge to exceed our customers expectations. This is the foundation of Midroc’s success and competitive edge. Working together with all parties involved to create a common goal and an understanding of how to reach it, is what motivates us. We constantly strive to be a positive contribution – to both our customers and society at large.

One of our key success factors is our employees’ systematic and committed approach to continuous training and culture development. Our own in-house training concept Midroc Business School, as well as our continuous dialogue with both customers and suppliers, is instrumental in maintaining our competitive edge.

MIDROC EUROPE

Midroc Europe’s business operations are organized in two major business areas: Services offered to the industry, construction and infrastructure market and our own Investments in property development and innovating development companies.

Midroc Contracting AB

Granitor Contracting AB

VästraHamnen Corporate Finance AB

Midroc AB

Granitor Fastigheter AB

Midroc Properties AB

Midroc Invest AB

Services

49,7%

Investments

Granitor Invest AB

Midroc Europe AB

Industry, building and infrastructure


Corporate finance

Group manage-ment, conference and charter

Property de-velopment and management

Property develop ment and manage-ment

Asset develop-ment and manage ment


EXECUTIVE COMMITTEE COMMENTS

A CLEAR BUSINESS FOCUS MAKES FOR A BRIGHT FUTURE

At a group level, we are continuously working to improve our support to enable each subsidiary an optimal development and growth, fully respecting each unique market requirement as well as Midroc group synergies. In 2014 we have implemented a new four-month reporting and monitoring process, allowing all profit centres to analyze their business, setting up and monitor-ing short-term actions as well as long-term strategies compiled into a business scenario covering the next coming two years of annual accounts.

Successful property developments and IPOsWithin business area Investments we take pride in a very success-ful 2014. Our philosophy of integrating sustainable, ecological and social considerations into our construction and property development has proven successful, rendering higher market values and returns.

The foundation for an even better 2015 has been laid, where we expect to double sales within property development. We are closely monitoring market conditions and conclude that the future development of residential and office buildings in the right locations looks favourable. Midroc’s property development has access to an impressive portfolio of strategic land assets and is well positioned in strategically important and attractive locations in the Malmö region. The company is also looking to expand in Stockholm during 2015.

The positive trend for our investments in development companies provides important added value for us, as this activ-ity embodies Midroc’s overall vision of contributing to a better future. Our venture capital company Midroc New Technology invests exclusively in potentially world-improving, pioneer-ing technologies. During the year, important milestones were reached when two of Midroc New Technology’s portfolio com-panies, Heliospectra (lighting solutions for plant science and hor-ticulture applications) and PowerCell (environmentally friendly power systems), were listed on the stock exchange in Stockholm.

Stable but competitive market conditionsOur companies within the business area Services, primarily providing services for the industrial, infrastructure and con-struction sectors experienced a year of stable demand but fierce

competition. This has become our new reality, which is why we have to work hard to ensure that we have the right customers, right contracts and right ability to deliver according to contract and expectations.

Our soil remediation company EkoTec has had a challenging year with diminishing markets and the postponement of a major project. BAC Corrosion Control performed well with regard to their current market situation. Midroc Alucrom faces exciting plans for expansion in Poland, and the Metalock Group is con-tinuing its expansion outside of Sweden, with a new establish-ment in the United Arab Emirates. Scaffolding experts Midroc Ställningar achieved a positive result in 2014 and is now heading in the right direction after completing a successful merger.

Midroc Electro Gruppen AB performed very well, and its business area Automation has reported its best results ever. Midroc Automation has conducted several large and very success ful projects in the Steel and Mining industry in recent years and has taken a strong position in the automation field.

In 2014 we initiated the work of separating the Installation and Automation division within Midroc Electro Gruppen AB, spinning off Automation into a separate company. We believe that a clearer distinction between our operations for electrical installation and industrial automation will further strengthen both companies in their prominent positions.

It is also very gratifying to see that Västra Hamnen Corporate Finance is being impressively managed to further develop its recognition on the market. Despite the relatively small size of the company, it offers top skills and high-quality financial advice.

Important lessons learnt from a year of adversity within contractingThe companies Midroc Rodoverken and Midroc Project Management had a very challenging year and reported substan-tial losses for 2014. The disappointing results can be attributed to two individual projects, both completed during the year. By their nature, the projects are completely different from each other, but the common denominator that caused the losses are similar. Both projects were acquired with very tight profit margins, while at the same time the scope and complexity of the projects were underestimated. Our intended delivery had significant gaps to

2014 will go down in Midroc history as a year in which several of our companies managed to achieve their best performance ever, while others experienced one of their worst years ever. Despite challenging market conditions, Midroc Europe has delivered satisfactory results, and as we look ahead the future is very encouraging.

MIDROC EUROPE


Roger Wikström, Christer Wikström and Thomas Mårtensson.

Christer Wikström Roger Wikström Thomas Mårtensson

the customers’ expectations and contract whereas both Midroc Rodoverken and Midroc Project Management spent too much effort and time trying to close the gap before asking for group assistance. Capitalizing on our shared group culture ”Together to get there”, massive assistance from sister companies and group management finally led to a successful completion and satisfied customers, although at a very high cost for Midroc.

As a consequence Midroc Rodoverken is now working to improve the process of contract and project management within the piping department to ensure the right delivery capabilities for future projects. Meanwhile the maintenance department and the tank and pressure vessel department continue to develop their unique and profitable range of services in Sweden and internationally.

Midroc Project Management has phased out its contracting business and will now focus solely on its historically profitable and successful consulting activities. We are happy to conclude that the company’s extensive expertise is in great demand on the market, and represents an important complement of skills to our other contracting companies’ ability to offer turnkey commitments.

In the beginning of 2015 the construction management busi-ness previously belonging to Midroc Project Management was transferred to a separate company, Midroc Construction, within the Midroc Property Development group.

Promising opportunities aheadLooking ahead, we can see an encouraging future. Many of our most important markets and clients face extensive investments programs over the coming years. There are major investment plans in place for the energy sector, as well as in the petroleum

and process industry. There are also large-scale maintenance and turnaround plans for the next coming years. In these industries we have extensive expertise and long experience from a wide range of undertakings and the unique potential of offering cus-tomized solutions. These solutions involve strategic partnerships and early stage discussions with our customers to define how we will work together to find innovative ways of supporting their business and investment plans.

We are entering 2015 with a strategy for balanced growth including a strategy of organic expansion in our domestic mar-kets as well as following our customers to other geographical markets. Also for the coming year our major investments will be dominated by property development. We are also continu-ously looking at complementary acquisitions to strengthen our local presence and services in the industrial, infrastructure and construction sectors.

Strong values form the core of the groupOne of Midroc’s key success factors is our focus on developing a value-based corporate culture. Our continuous program to develop and sharpen skills and business practices is important in the long-term development of our employees. By highlighting the value propositions within the wide range of services offered by Midroc Europe we will strengthen the understanding and customer perception of what Midroc can offer them. This work together with our “Employers Value Proposition” will also improve our ability to continuously attract the right employees.

We are constantly striving to make a difference, aiming to always be the first choice among our employees, customers and partners, or as we name it “to be best in class”.

MIDROC EUROPE


A SHARED AMBITION TO MAKE A DIFFERENCE

TOGETHER TO GET THERE

In order to achieve this, the Midroc companies have a common organizational structure that can be symbolized as an arrow. At the head of the arrow is our staff that interacts with our customers on a daily basis, and at the rear is our management in a supportive function. The inspiration is derived from team sports and our employees work together for the team, the project and the customer.

The foundation of the Midroc way of doing business is our in-depth understanding of our customers and their needs. Furthermore, we are strong believers in decentralized responsi-bility. The working environment in any of our Midroc com-panies is therefore characterized by short lead time between suggestion to decision as well as motivated employees committed to addressing and solving our customers’ challenges. That’s how we make a difference for our customers.

Mutual benefits of continuous improvementsConny Gustafsson is one of many Midroc employees that have daily contact with a client representative. He is a supervisor in the Midroc Alucrom team stationed at the Preemraff refinery in Gothenburg, which performs maintenance work such as blasting and painting of pipes and cisterns. The size of the team varies from year to year, but for 2015 there are 16 Alucrom employ-ees involved in the project. In addition to his project manager, Gustafsson is the one who works closest to the customer.

“Together with the Preemraff crew, we jointly discuss what is to be delivered, how this should be achieved and when. We have a very good dialogue and we meet every morning to agree on how

far we have come with the delivery. Frequent status meetings are incredibly important in large-scale, ongoing projects of this type where conditions often change over time,” he says.

To Conny and his colleagues, always doing the best possible job you can is a given.

“Those of us who are out working in the field have great potential to identify and work with continuous improvements. We can see what is needed and then receive assistance and sup-port from our Midroc Alucrom service department to influence the improvement process, both for the benefit of customers and our own safety and working environment.”

Conny has been working at Midroc Alucrom since 2010, and this is his third year with the Preemraff team.

“I have been working with painting and blasting since 1988. Unfortunately, based on previous experiences I know that the standard of equipment and safety levels are not always the best in this profession. But here at Midroc Alucrom, you always get the equipment you need, and safety procedures and protocols are meticulously followed up on. By always using modern and reliable equipment you improve safety and save both time and money.”

Another important aspect of the improvement process is continuous professional development.

“We employ highly trained staff. There are many and high certification requirements in the petrochemical industry and the Midroc staff is constantly undergoing new training programs,” says Gustafsson.

Midroc Europe consists of a variety of companies operating in a wide range of industries. Albeit diverse, the group companies share a distinct culture and mentality that we are proud of. Regard less of business activity, company or project, we always strive to be our customers,’ partners’ and employees’ first choice. We focus on continuous improvements in all our projects, striving to deliver beyond expectations.

MIDROC EUROPE


Conny Gustafsson, to the left, and 15 of his colleagues are part of the Alucrom team stationed at the Preemraff refinery in Gothenburg.


Ida HeggeProject managerMidroc Project Management

“Our horizontal organizational structure without hierarchies means that we can work as close as pos-sible to our customers. I think this is most evident in our everyday working lives. We are a relatively small company in the consulting industry, which means that we enjoy a high level of autonomy and freedom with responsibility. Working as close to our custom-ers as we do, I believe an open and honest commu-nication is vital. I work with HSEQ matters, where constant improvement is a core aspect as demands on all businesses continuously increase. We often follow our customers over time, and I think this is the most enjoyable part of the job, i.e. being able to meet customers and build long-term relation-ships, and to help simplify their everyday life. All

consultants enjoy challenges. Personally, I want to constantly develop my skills and enjoy performing a variety of work tasks, which you have ample oppor-tunity to do here at Midroc Project Management. When my manager went on parental leave, I applied for the position and got the opportunity to be acting manager for a year. To me, this year was an impor-tant learning experience and very beneficial. I had great support in my new work duties, including the opportunity to take a high-calibre leadership train-ing course at Midroc Business School. The course focused largely on human relationships giving me useful tools to handle my new work duties.”

MIDROC EUROPE

Working as close to our customers as we do, I believe an open and honest communication is vital.


Jonas HallgrenElectrician/fitterMidroc Electro

“I have been working at Midroc Electro since 1999. The company offers many different types of areas of expertise and together we can take on a wide array of challenging projects. Recently, I have mostly worked on large-scale projects, involving both steering and high voltage work. Here at Midroc Electro, I have always felt that I can work freely under responsibility, based on a confidence in my skills and knowledge. As I am the one working closest to the customers, I can be responsive to their needs in my role, listening to them and understanding what they want and then make sure it can be arranged. Personally, I think it is important to be committed to your task and always do the best job possible. Our level of excellence should be so high that our customers won’t have a shadow of a doubt hiring us to do the next job as well. To me, it is vital that our customers are confident that we can deliver and always do a good job.”

Ida MannAssistant project managerMidroc Project Management

“I hold a Master of Science degree in process technol-ogy, and I am currently working on assignments for a large utility company in Uppsala. A good and safe working environment is close to my heart, and it is all about setting the bar high. Together with my colleague, I have thus worked hard to promote health and safety aspects and to lift them high on the agenda in this project. Those of us working with project management need to show right from the start that we take health and safety extremely seriously. We should lead by doing, setting our own behaviour as the standard. Among other things, this includes always having the right safety equipment with us, and showing that we never compromise on this matter. Another important task as project manager is to ensure that there is always accurate, updated and high-quality documentation for the project. There are clear advantages, for example efficient and seamless introduc-tion of new crew to the project. Furthermore, should someone identify a security risk, there are clear and con-cise documentation to ensure that important information is not overlooked.”

MIDROC EUROPE


The business area comprises 10 companies, and the vast majority of them offer services to the construction and indus-trial sectors. The companies offer contracting services as well as remedial and preventive services and maintenance to the mining industry, petrochemical industry, building construc-tion and power industries among others. The consulting busi-ness focuses on project management, engineering services and design. The business area also includes other services, such as conferencing and corporate finance services.

Regardless of type, all services offered by Midroc are based on environmental awareness and consideration as well as a strive to adopt and integrate sustainable and available new technical solutions and methods.

Performance in 2014The business area Services achieved a turnover of SEK 4.2 billion in 2014. The construction and industry operations are currently experiencing a relatively stable market but the current low Swedish inflation is holding back the market willingness to enter larger investment projects there. Hence, the Swedish market is subject to intense competition, which puts pressure on price levels and consequently margins. Despite this, many companies have performed well in 2014 and the majority have achieved satisfying results. Midroc Electro Gruppen AB gene rated its best results ever. On the other hand, two unfortunate projects undertaken during the year caused significant losses for two subsidiaries and thus a negative impact on the overall result.

The majority of the Midroc companies in the business area Services operate in the fields of contracting, maintenance and consulting. Services are offered to clients in industry, infra-structure and construction. The group’s cutting-edge expertise spans multiple disciplines, which provides opportunities for both intercompany and cross-sector strategic partnerships.

BUSINESS AREA

SERVICES

BUSINESS AREAS

ANNUAL REVIEW 2014 MIDROC EUROPE 11 ANNUAL REVIEW 2014 MIDROC EUROPE 11


BUSINESS AREAS

As of January 1st 2015, Midroc Auto-mation AB and Midroc Electro AB are two separate companies included in the holding company Midroc Electro Gruppen AB, which will ensure continuity and competi-tiveness in joint projects.

“The Installation and Automation divisions are two major operations that are so different from each other that we’ve concluded they will have more opportuni-ties for development and become more attractive for employees as two separate companies,” says Karl-Ivar Jönsson, MD of the new parent company Midroc Electro Gruppen AB.

For the group as a whole, 2014 was a very good year, and earnings significantly exceeded expectations.

“We have an excellent range of operations and a successful concept with shared services that we will continue to market in the realms of the Midroc Electro group. However, the separation will enable greater focus on each company’s respective core business, which we believe will positively impact results even further,” says Jönsson.

Midroc Automation AB2014 was Midroc Automation’s best year ever and resulted in a 0.5 MSEK profit per employee.

“This brings security and stability to the company, giving us opportunity to invest in developing our skills even further, which in turn will improve both our employees’ and clients’ achievements,” says Jonas Bergmark, MD of Midroc Automation.

Being a fully autonomous company means a lot for Midroc Automation’s inter-nal investments opportunities and potential to grow the business as well as being able to attract the right resources. The company has already made substantial investments in training, which also includes a trainee program “Midroc Automation School”, aimed at newly qualified engineers.

“The trainee program, which launched in small scale in 2011 and had tremendous increase in applicants in 2013 and 2015, is very important to us and is our way of assuming responsibility for our internal growth as well as contributing to the entire industry’s supply of skills.”

Midroc Automation has enjoyed an extremely favourable order intake in recent years with several large-scale and success ful projects in the mining industry. Together with its partners Siemens and Bombardier Transportation as well as mechanical equipment suppliers, Midroc Automation will deliver systems for process and train control for Freeport McMoRan Copper&Gold Inc’s gold and copper mine in Papua, Indonesia. A major project, extending over several years.“We hope that being established in Indonesia will be a good base for rendering further large international assignments. But we have also completed some impressive and successful projects, albeit on a smaller scale, in segments such as the automotive industry and the energy sector. Our strategy is to cover as many economic cycles as possible, and we have done well,” says Bergmark.

In 2015, Midroc Automation will equally concentrate on the important local domestic market and on ensuring the influx of new large-scale projects. As a supplier with many well-established partners,

EMPLOYEES: 1,618TURNOVER: SEK 2.2 billionOFFICES: 49

Karl-Ivar Jönsson

Midroc Electro Gruppen AB is one of Sweden’s leading electrical power and automation companies, offering services that include electrical installations, industrial automation, building automation, crane systems, lifts, security and mechanical maintenance. In 2014, Midroc Electro AB underwent a reorganization, with a separation of the Automation division into its own company.

Midroc Electro Gruppen AB


Mikael Vestlund Jonas Bergmark

in software, infrastructure and heavy mechanical equipment, Midroc Automation has the ability to identify optimal solutions for its customers’ automation needs.

“We employ less than 200 people and are therefore unable to monitor the global market on our own, but with our part-ners we can cover many aspects and find opportunities. Our main offer is our project capability, combined with technical know-how and system integration. Customers often request Midroc Automation to front the major projects as this makes us the natural partner with complete turnkey responsibility.”

Midroc Electro ABEarnings in 2014 were on an acceptable level given the market conditions.

“But we are far from satisfied. In 2015, our overall focus will be on improving earnings. We are well-positioned to succeed with regard to our order pipeline, and we will be working hard on increasing profitability of the units that are currently underperforming,” says Mikael Vestlund, MD of Midroc Electro.

The second half of 2014 was also charac-terized by the major organizational changes brought on by the demerger. The previous Installation division, now operating under the name Midroc Electro AB, underwent a major reorganization, including an increase in the number of geographical divisions from four to seven.

“This enables us to work more efficiently with improvements and development efforts. Previously, the divisions spanned

very large geographical areas, whereas now the distances are shorter – also in terms of the decision-making process,” says Vestlund.

The idea is that more and smaller divi-sions will lead to a more direct leadership, increased focus and greater profitability.

“During the year we’ve identified how to achieve optimal interaction among the new divisions and we are now well on our way on a very exciting journey,” he adds.

The core business for Midroc Electro is the local operations in 45 locations all over Sweden. In addition, a number of major projects are conducted each year. By way of example, in 2014 the company carried out a significant amount of work in the Swedish nuclear industry, with more than 150 employees onsite during the peak of the project.

“In this project we brought along employees from virtually all over the coun try, as well as external staff. This type of large-scale project is crucial for us.”

In addition to the geographical divisions, a brand new division called Major Projects Nordic Region (Stora projekt Norden) was initiated, focusing on large-scale projects throughout the Nordic region.

“We are now gearing up investments in Norway, where we are already established thanks to a large-scale project.”

In terms of prioritized business seg-ments, the company will focus its efforts on the Security and the Maintenance & Service sectors, where there is great poten-tial for growth. Internal investments will be directed towards customer care training for all staff.

“It is of strategic importance to us to be an attractive employer and we are actively working on HSEQ matters throughout the company. The safety aspect is particular ly important, and we always conduct risk analyses for each individual project,” Vestlund concludes.

BUSINESS AREAS


During 2014, the industry contracting business was phased out, and at the beginning of 2015 the construction contracting business was moved to a separate subsidiary to Midroc Property Development. This means that Midroc Project Management’s focus will continue to be on developing its successful consult-ing business.

In recent years, Midroc Project Management has invested heavily in devel-oping both its consulting and contracting operations.

“We have continuously developed and trimmed our systems, staff and organiza-tion,” says Stefan Kronman, MD.

At the same time, the company has executed several large-scale projects. On the construction side, Midroc Project Management has undertaken projects of a total of 450 apartments that will be com-pleted during 2015. In 2014, the company also delivered two wind power stations to one of Sweden’s largest onshore wind farms in northern Sweden, which is being built by Nordisk Vindkraft. All that now remains is the commissioning of the plant.

Another important project in 2014 was the utility company E.ON’s invest-ment in a new district heating plant in Åkersberga, a suburb of Stockholm. Midroc Project Management was involved already at the planning stage as well as

in the procurement of construction and machinery contracts. During the year, a major maintenance shutdown project was also completed at the Preemraff Gothenburg refinery, where Midroc Project Management played a key role in the planning and implementation phases.

In terms of earnings, 2014 was a very challenging year. A straining economy along with the cost burden adhering to the development of the contracting operations has led to the decision to sell this business to Midroc Property Development.

“We have developed the contracting business to the limit of our of our capacity, and it is now appropriate for Midroc’s property development company to take over. The contracting business is so vast that it now requires a clear and dedicated core focus on development in order to further evolve. In Midroc Property Development, the contracting business will be a natural and inherent part of its core business.”

The division will be finalized during the second quarter of 2015. Midroc Project Management will then focus solely on con-sulting, and the company will continue to invest in the construction, infrastructure, industrial and energy markets.

“Our consulting business has shown very good profitability in recent years, and we have secured several new contracts

during 2014,” Kronman explains.2015 looks promising as well. Several

A-framework agreements have been signed with large energy market companies such as Fortum Värme, Vattenfall and E.ON. The company also has an A-framework agreement in place with Preem’s refineries.

“We will also invest in an exciting concept for maintenance shutdown pro-jects. We have extensive experience from shutdown projects at refineries, which is applicable to other heavy industry as well. We have developed a unique approach to planning and implementation of com-plete maintenance shutdowns of refinery operations and steel and mining industries, where we can assume full responsibility in collaboration with our Midroc sister companies. We believe that this concept has very high potential.”

During 2014, the company´s department for Operations development changed its name to HSEQ. The HSEQ team com-prises nine members of staff working with business support, health and safety, the environment and quality issues.

“We see HSEQ as an integral part of not only our own development, but also our customers’. We are pioneers in the area and sell specialized services, but we are also dedicated to our own HSEQ work,” says Kronman.

Midroc Project Management ABMidroc Project Management develops and undertakes projects for the construction and industrial sectors, specializing in environmental issues and new technical solutions, both in Sweden and internationally.

EMPLOYEES: 158SALES: SEK 700 millionOFFICES: 4

Stefan Kronman

BUSINESS AREAS

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Metalock Engineering is a mechanical equipment repair group with expertise in maintenance, bespoke modifications and equipment upgrades, with head-quarters in Coventry, England. The group provides qualified mechanical installation and maintenance in process and manufacturing industries, as well as on-site machining, repair and thermal spraying. The group is represented in Sweden, England, Germany, France, Saudi Arabia, South Africa, India and the United Arab Emirates.

During 2014 the Metalock Engineering Group has been working strategically to boost co-operation between the group companies. Last year companies across the group successfully shared a lot of contracts, leading to an all-time high level of intercompany collaboration.

”2014 kick-started for Metalock UK with a huge steel mill project, which was a major triumph for our intercompany

working policy,” says Martyn Green, MD Metalock Engineering Group.

The project, at Tata Steel’s plant in Port Talbot in South Wales, was worth in excess of GBP 1.4 million.

”With the assistance of engineers from Metalock companies in Sweden and South Africa we managed to complete the job ahead of schedule, while colleagues from Saudi Arabia, the United Arab Emirates and India supported us on other ongoing jobs.”

Despite tough competition the financial results for the year came in at the expected level for the group as a whole. Green can see a trend where customers are investing in their own on-site machining equipment, looking to manage repair work themselves. Furthermore, a number of smaller com-petitors have appeared on the market.

Metalock Germany and South Africa had a good year in terms of turnover and profitability, which is a strong achievement

in the current market. The turnover for both Metalock UK and India was the best ever achieved, with a good profit level. Metalock Sweden made several organiza-tional changes during the year, resulting in a financial loss despite a much improved turnover.

“These structural organizational changes in Sweden over the past few years have made us more competitive, and moving into 2015 we can start to reap the benefits of that work.”

2014 also saw new premises in Saudi Arabia and a new office in the United Arab Emirates.

”The Dubai company was set up in early 2015 and is now ready to start doing busi-ness after a five month trade stop due to administrational holdbacks in conjunction to the takeover of the joint venture. Overall, these are quite exciting times. The structure of the group is very strong and the outlook for 2015 is very good,” Green concludes.

EMPLOYEES: 650TURNOVER: EUR 63 millionESTABLISHMENTS: 8

MARTYN GREEN

BUSINESS AREAS

Metalock Engineering GroupThe Metalock Engineering Group provides on-site maintenance and engineering service solutions to a diverse range of industries. With companies present in several countries around the world, Metalock has the ability to respond to both planned and emergency repairs 24/7 all over the world.


BUSINESS AREAS

Following a few years of recovery from the long recession Alucrom appears headed for good growth, with volumes increasing by 15% in 2014.

“We have enjoyed a high volume of orders and our forecast shows that we will continue to grow by 10% in 2015, which is entirely in line with our strategy, ” says Ralph Halldin, MD.

Over the year, Alucrom has initiated a process that will divide the company’s operations into two distinct business areas (contracts and station painting), thereby abandoning the previous regional division.

“We have now a resource available that will be working exclusively with busi-ness development and ensuring that we work in an optimal way in relation to our customers and their specific needs, known as “Key Account Management.”

In 2014, Alucrom also invested heavily in leadership development for project

managers and executives. Moreover, the company continuously puts a lot of effort into internal training regarding health and safety issues.

“This is extremely important work for us – particularly when we work on-site, where our staff is often subject to hazard-ous environments,” says Halldin.

Alucrom in Poland has had an extremely good year and is in an expansive phase. Two new facilities were opened in 2014. At Janów Lubelski, Alucrom has moved from its previous premises and built a brand new paint shop. During the year, the company also opened a brand new fully automated robotic facility with a high capacity for surface treatment of smaller components in Bykow, Wroclaw, in south-ern Poland.

“This is where we surface treat smaller components for the automotive industry, which is a completely new business area

that we will continue to focus on. It is an important market segment for us as many of our competitors in Poland do not have the size and capacity required for this type of advanced painting,” says Tomasz Gajek, MD Alucrom Poland.

“2015 is a year of great opportunities for us, and the plan is to grow sales by an addi-tional 20-30%. We need to fully utilize the capacity of our new paint shops and thus focus on filling our order books. We must also adapt our organizational struc-ture as we move from a small company to a medium-sized one,” says Gajek.

To fully realize the opportunities in the market segment for the automotive industry, there are already plans to open another paint shop in 2015 that can offer powder coating.

Alucrom is Sweden’s largest contractor in blasting, anti-corrosion painting and indus-trial coatings. Operations are conducted from the company’s own paint shops in Sweden and Poland, as well as on-site all over Sweden and abroad.

Alucrom ABEMPLOYEES: 220TURNOVER: SEK 280 millionPAINT SHOPS: 19

In January 2014, Midroc Ställningar was formed after a merger of the contracting company Olofson & Hansson AB and the Midroc company GP Ställningar AB.

“We had a challenging spring, where the integration of the companies, the reor-ganization and new recruitments required a lot of time and effort. Furthermore, the merger entailed high non-recurring costs, and the focus on internal affairs resulted in lost sales opportunities. Hence, our mid-year performance was far below our expectations,” says Lembit Laks, MD.

The scarcity of large industrial projects on the market in 2014 also led to fierce

price pressure. However, with the new organization finally in place in the fall, the company managed to reverse the trajec-tory and turn a profit for the year.

“We now have a good cost control system in place, and with the new organi-zation fully operational we are well placed to meet 2015. “

The company has two major main-tenance projects under way and several large-scale projects in the pipeline.

“The fact that we are backed by a strong owner and are a trusted partner is critical when it comes to major industrial projects, where it is often difficult to

assess the amount of resources required for scaffolding.”

Health and safety, environmental and quality (HSEQ) issues are high on the agenda for Midroc Ställningar. To further emphasize the company’s commitment to these issues, experts have been engaged from Midroc Project Management.

“We are also looking to recruit a person that will work with HSEQ matters full time for us.”

Midroc Ställningar ABScaffolding contractors Midroc Ställningar had a tough start to 2014, but managed to buck the trend and turn a profit. After a comprehensive reorganization program, the company is now equipped to face an exciting 2015 with several major projects under way.

EMPLOYEES: 88TURNOVER: SEK 74 millionOFFICES: 3

LEMBIT LAKS

RALPH HALLDIN/TOMASZ GAJEK


A tough market combined with an exten-sive project that required major costs to bring to completion has resulted in a heavy loss for Midroc Rodoverken as a whole in 2014.

“This has affected the entire company, and we have appointed a strategy group that is working hard to prevent similar situations from occurring again. We do have a solid base structure in place to build on,” says Pär Hedendahl, Acting MD.

Despite the challenging market and sub-stantial development costs, 2014 produced good results on the tank side. During the year the company has proceeded with its international expansion, deliver-ing a number of tanks around Europe. Furthermore, the construction of the Skangass LNG (Liquefied Natural Gas) tank in Lysekil was completed.

“We see major potential in the LNG tanks segment, which is a very interest-ing market to which our spiral method is extremely well suited.”

Over the year, Midroc Rodoverken contin-ued to develop its unique spiral method and has now succeeded in doubling its lifting capacity.

“This means that we can now con struct tanks of basically any size, enabling us to realize opportunities in the growing market for storage tanks,” says Hedendahl.

2014 also saw the startup of the new subsidiary Midroc Rodoverken AS, based in Tonsberg, Norway. On the piping side Rodoverken delivered a successful main-tenance shutdown project at the Preemraff facility in Gothenburg.

“This was a collaborative venture between the Midroc companies Midroc Rodoverken, Midroc Electro, Midroc Alucrom and Midroc Project Management, in which we all worked together as one company,” says Glenn Karlsson, Midroc Rodoverken’s maintenance shutdown manager.

The company has developed a shutdown concept where the work undertaken by

Midroc companies has been integrated into the client Preem’s own shutdown organiza-tion, with staff on-site already a year ahead of the shutdown to work on preparation and planning. Over a few weeks time, a total of 1,200 work orders were then com-pleted and Midroc Rodoverken had up to 300 employees on-site.

“We have assumed far greater responsi-bility for the whole concept, and have been involved from the outset in the budget pro-cess for a range of project work, enabling us to make our own decisions concerning limits for time and resources. This is an excellent way of working, as it makes a sig-nificant difference if we are involved right from the beginning,” says Karlsson.

Midroc Rodoverken specializes in the design, manu-facture and installation of industrial plants, and is the market leader in site-built structures of atmospheric tanks and pressure vessels. The proprietary spiral method is used to build tanks.

Midroc Rodoverken ABEMPLOYEES: 224TURNOVER: SEK 387 millionOFFICES: 6

BUSINESS AREAS

PÄR HEDENDAHL



BAC specializes in projects within the oil, gas and utilities pipeline sectors, as well as steel in concrete, buried structures and other industrial plant protection. During 2014 RCSL was merged with BAC, and is now a profit center within BAC, although RCSL will maintain its separate identity with its own distinct market and products.

One of BAC’s core products, pin brazing, which is an electrical bonding system for attaching cables to pipelines and rails, had a record year in 2014 helped by the USA market being up by 40% on 2013 sales. On the other hand, the Libyan market, which had begun to pick up during 2013, regressed back to zero during 2014 due to the political situation deterio-rating in the spring.

“In 2015 we will be looking at entering new markets such as Algeria and other parts of Africa and the Middle East,” says Steve Goring, MD.

“Furthermore, our objective is to increase and develop our engineering department, in order to take on more project based sales covering all our market segments from oil and gas to utili-ties, marine and civil. We have already employed two graduate engineers and will be looking to strengthen this department with corrosion experts.”

To ensure compliance with statutory legal regulations BAC employs an exter-nal consultant for HSEQ matters, and is accredited according to ISO 9001, ISO14001 and OHSAS 18001.

“All external engineering projects have a risk assessment and method statement prepared prior to execution with all site staff being fully HSE trained.”

The market for remediation of soil decon - ta minated with oil has decreased signifi-cantly in Sweden over recent years. The SPIMFAB (SPI Miljösaneringsfond AB) program that investigated and, where nec-essary, decontaminated soil from closed down petrol stations was phased out over the year. This contributed to a lower turnover for EkoTec.

“We have never had as few inquir-ies as we had in the first half of 2014. The postponement of a major project

also contributed to the low turnover and disappointing result. By the end of the year, however, we started to wit-ness a recovery in the market,” says Erik Bäcklund, MD.

2015 looks much more promising than last year, and EkoTec is planning to employ more staff over the year. Another area of focus will be health, safety, environ mental and quality (HSEQ) issues. Several projects require very strict safety specifications.

“For us, HSEQ matters are a top priority as they are an integral part of our business and the type of operations we run,” says Bäcklund.

UK based BAC Corrosion Control Ltd (BAC) is a market leader in cathodic protection, corrosion control and pin brazing. The recently acquired company RCSL Corrosion Monitoring Ltd (RCSL), specializing in chemical injection as well as corrosion monitoring and inhibition in the oil, gas and refining industries, is now fully merged into BAC.

Midroc Environment Group

BAC Corrosion Control Ltd

Midroc Environment Group is a leading provider of environmental remedial services. The subsidiary EkoTec executes advanced soil remediation, cavern decontami-nation and biological treatment of contaminated soil. The company Airgrinder develops technologies for defrag-menting and energy saving drying of materials by means of artificial tornadoes.

EMPLOYEES: 12SALES: SEK 30 millionOFFICES: 3

BUSINESS AREAS

ERIK BÄCKLUND

STEVE GORING


The conference industry has been sub-ject to a long period of challenging market conditions. 2014 was no exception, for which industry associations had predicted a large drop in conference activities. Hackholmssund, however, bucked the trend and grew by 22% year on year.

“This is a massive gain for us. We have had a very busy year, especially in the final quarter,” says Lotta Svensson, MD.

The rise in activity was in part due to Midroc Business School sourcing many of its training programmes to Hackholms-sund, and a result of several Midroc com-panies focusing on internal development

activities conducted at the venue. Hack-holms sund is also becoming increasingly attractive to clients outside of the Midroc group. Svensson expects continued growth in 2015, but at a slower pace.

“We are an exclusive facility and our customers have high expectations. Our major challenge for 2015 will be to continue reinventing ourselves by always having something extraordinary to offer.“

Among other things, Hackholmssund will put further emphasis on environmen-tally friendly activities, nature experiences and organic, sustainable and, preferably, locally produced food.

“We have a consistently strong environ-mental profile and manage to combine luxury with a high level of environmental awareness,” says Svensson.

“2014 was a year of change and refocus for us. We previously offered services such as securities trading and fund management, but have now chosen to focus solely on cor-porate finance,” says Oscar Ahlgren, MD.

The vast amount of regulation surround-ing the financial industry is constantly growing, and for a small organization, it is difficult to stay fully updated.

“We are subject to the same rules as banks. If you want to be the best in all areas it will be very costly. We have there fore decided to limit our services to our area of expertise, which is providing qualified business advice.”

The strategy has proved successful, and the conditions for refocusing the business have proven favourable over the year.

“Corporate finance has been a hot topic in 2014, the stock market has performed well and there has been great interest in doing business.”

In 2014, Västra Hamnen Corporate Finance has secured more and more advanced assignments and executed increasingly bigger transactions.

“We have been working with more listed companies than before. They are demand-ing clients, which to us is very satisfying.”

In terms of earnings the company reached its goals for 2014 and the outlook for 2015 looks bright.

Hackholmssund is an exclusive conference venue for both Swedish and international business guests. The concept includes servicing one group exclusively in order for guests to be able to focus fully on the conference.

Hackholmssund Konferens AB

Västra Hamnen Corporate Finance ABVästra Hamnen Corporate Finance is a finance company that in 2014 has refined its business and now focuses entirely on qualified advisory services and financial transactions for small and medium-sized companies. The ambition is to work selectively and long-term with a limited number of clients in order to ensure the highest quality in all assignments.

EMPLOYEES: 19TURNOVER: SEK 48 million


BUSINESS AREAS

LISE-LOTTE SVENSSON

OSCAR AHLGREN


Business Areas

The Group’s head office, with about 100 workplaces, is positioned next to the highway between Stockholm and Arlanda Airport. It acts as a unifying meeting place for Midroc’s widespread companies with conference rooms for both internal and external meetings.


Within Property Investments, Midroc develops, owns and manages residential and commercial properties, while Develop-ing Company Investments includes financial investments with ownership in a number of development companies.

The Property Investments project portfolio includes a number of ongoing projects for both residential and com-mercial properties in different project stages ranging from construction-ready land to completed buildings in attractive locations.

BUSINESS AREA

INVESTMENTS

Business area Investments comprises Midroc companies operating in two distinctly different business fields: firstly investment in development and con-struction of property with focus on economically, ecologically and socially sustainable construction, and secondly, investments in young, developing companies with innovative technologies with a broad diversification of risks.

BUSINESS AREAS

The venture capital company Midroc New Technology invests exclusively in companies with cutting-edge concepts and great potential. Investments are concentrated to technological inno-vations that can offer a combination of profitable returns with enhanced environmental benefits on a global scale.

During the year, ownership and representations in the more mature development companies that were wholly-owned by Mohammed Al-Amoudi have been incorporated into Midroc Finans AB, which concentrates on low-risk investments and mature businesses.

Performance in 2014 Business area Investments achieves a very impressive result for the year. Due to a favourable business climate for property sales in combination with low interest rates, Midroc’s property operations show a strong result after several successful sales.

The availability of venture capital for high-risk investments, as represented by the Midroc New Technology’s portfolio companies, has remained low during 2014. However, the stock market has once again proven to be a useful source to raise venture capital. Two of the companies, Heliospectra and PowerCell, were successfully listed on the Nasdaq OMX First North stock market.

AssetsMSEK 5,026

Properties

Property overvalues

Development companies

Financial holdings

The Hermod office building is designed with social and environmental sustainability in mind. It features a shared roof terrace, a Green Room on each floor and a storage for all bicycle commuters.


BUSINESS AREAS

In collaboration with SolarWave, Midroc is engaged in the Good Water project in Tanzania. By using SolarWave´s solar powered water purifi-cation and desalination systems, up to 10,000 citizens get access to safe drinking water.


“2015 looks even better. We have several long-term projects, both residential and premises, which will be completed this year.”

When it comes to new construction, Midroc also hopes to get the go-ahead to start building on the attractive Ångfärjetomten site in Helsingborg, as the detailed development plan has been subject to appeal over the past couple of years and thereby held back the development of the project. The plans include a hotel and conference facility as well as approximately 130 residential homes.

Despite the significant shortage of housing, the price trend in the housing market in Skåne remains weak.

“We have had a sluggish sales pace in the housing sector. What we see now is that the most in-demand objects are rental units, and we will thus adapt our property developments accordingly,” Skiöld explains.

However, the rental of new office projects has broken records in 2014. In the Hermod office property in Hyllie, which cur-rently is Malmö’s most attractive area only six minutes from Malmö Central Station and 12 minutes from Copenhagen Airport, 80% of the units have been allocated already a year before initial occupation.

New concepts for the future workplaceThe market for office space is generally characterised by stability, but there is fierce competition. This is especially true for large premises, according to Peter Syrén, MD of Midroc Real Estate.

“On the other hand there is a great need for smaller premises that are flexible and adaptable allowing room for tenants to grow. We have actively extended existing properties in line with this concept. This provides a high occupancy rate and our tenants have the opportunity to stay long term in the property, even if their needs change over time.”

During the year, Midroc has continued to develop its office product “Activity-based workplace”.

Midroc Property Development and Midroc Real Estate develop and manage commercial and residential properties in Skåne and Stockholm. The strategy is to act as a community builder through complex property deals mixing housing, offices and retail units in the same project. The concept is to create ecologically, socially and economically sustainable urban environments and properties where both people and businesses can develop.

For Midroc’s property investments, 2014 proved to be the best year since its inception.

“We are now starting to see the results of our consciously long-term focus on acquiring high-quality land and early project development. Several projects that we have been working on for several years are now starting to come out on the market as really attractive properties,” says Magnus Skiöld, MD of Midroc Property Development.

The financial results for 2014 are very satisfactory and long-term objectives linked to occupancy rates and profit margins in commercial properties rose during the year.

“When it comes to our financial goals, we have managed to refinance a large portfolio and renegotiate at good terms. We also have a comprehensive amount of new leases in both management and project properties, totalling over SEK 50 million in annual rental value. In addition we have had a very busy year in terms of transactions, with several project properties sold,” says Skiöld.

These include the police station in Kävlinge, an office building in Hyllie, the exhibition hall MalmöMässan including a car park in the same area as well as a hotel in Helsingborg. Additionally, the Park Inn by Radisson hotel at the World Trade Center in Lund has been handed over to new property owners.

Magnus Skiöld and Peter Syrén

PROPERTY INVESTMENTS

BUSINESS AREAS


“We not only offer premises, but also a well-designed workplace with a rich array of services and ancillary activities. We envisage a future in which the workplace will be based more around the tasks you need to perform on the job, with premises designed to suit these activities.”

This may come to mean, for example, that not everyone has a stationary desk. Employees can instead use different types of meeting places and workstations.

“This may also mean that we, with the help of our partners, are able to offer useful services such as training, education and legal services. This is a strong trend still gaining momentum, not least noticeable in the great interest in the World Trade Center concept in Lund and Malmö,” Syrén explains.

From January 1st 2015, contracting operations for the con-struction sector formerly run by Midroc Project Management was incorporated into Midroc Properties.

“For us it is a great benefit to be able to supplement property development with a contracting business, even though we will also continue to procure external contractors,” says Skiöld.

Another new development in 2015 is Midroc’s expansion in the Stockholm market.

“We already manage an attractive property portfolio in Stockholm, and we are now looking to expand the business with property development. We have obtained municipal land alloca-tion for residential and commercial premises in Stockholm and Uppsala, and we expect further land allocations in the Stockholm area. We have also been working in parallel with the development of residential and commercial properties on private land. With our award-winning approach that is built on the basic concept of creating sustainable urban environments and premises that inspire development, we know we can provide unique products and services to the market,” Skiöld concludes.

Property managementTOTAL AREA 90,000 M2

Development portfolioTOTAL AREA 733,000 M2

Offices

Residential

Industrial/storage

Hotel

Other

BUSINESS AREAS

Midroc is planning a brand new devel-opment project in central Helsingborg, Skåne. Plans include a hotel and confer-ence facility as well as 130 residential homes. The project will increase the city´s attractiveness and strengthen its com-petitive edge as a hub for meetings and events in the region.

62% Residential

28% Non-residential


In 2014, the shares in the Swedish companies owned privately by Mohammed Al-Amoudi were incorporated as direct holdings into Midroc Invest’s portfolio, in addition to the wholly owned subsidiaries Midroc New Technology and Midroc Finans. Common to all investments in Midroc Invest is that the basic concept must be consistent with Midroc ‘s corporate values.

Midroc New Technology invests in potentially world-improving technologies and cutting-edge concepts with global potential in the fields of environmental technology, biomedicine and sustainable development.

“The year was largely characterised by the work undertaken to coordinate the new structure in order to achieve a sound balance of risks and opportunities among Midroc’s invest-ments,” says Göran Linder, MD of Midroc New Technology and Midroc Invest. “At an aggregate level, this first year of operations achieved satisfactory progress and several portfolio companies in Midroc New Technology have experienced very exciting developments during the year.”

In addition to capital, Midroc offers its portfolio companies assistance with management, business strategies and access to cutting-edge expertise.

“These companies have innovative, pioneering technologies with excellent prospects to be highly profitable in the long term, but the initial risk is high which makes it challenging to obtain external capital from institutional investor and venture capitalists in Sweden today,” says Linder.

However, the stock market has made a comeback as a source for venture capital after the acute financial crisis abated.

“We are now seeing a trend of increased risk appetite, where trad-ers are more willing to invest in companies with both greater risk and yield potential,” Linder explains.

During the year, two of Midroc New Technology’s portfolio com-panies have been listed on the stock exchange; Heliospectra, which develops energy-efficient lighting systems using LED technology for greenhouse cultivation that allows plants to grow faster and taste better, and the green tech company PowerCell , which has developed a technology for fuel cells that transforms diesel fuel into electricity.

“Achieving these milestones is a proof of our ability to make sound investments already from the embryonic stage of a company and that we have succeeded in our aim to prepare companies for stock market introduction and further expansion.

Linder does not exclude further listings of mature companies during 2015.

Midroc Europe’s investments in development companies are grouped in Midroc Invest AB. Various types of investments are made to ensure good balance and risk diversification. Through the venture capital company Midroc New Technology AB, investments are made in new technology at an early stage, in which both potential and risks are significant, while Midroc Finans AB focuses on less risky investments such as government bonds and corporate bonds.

Göran Linder och Oscar Ahlgren

DEVELOPING COMPANYINVESTMENTS

BUSINESS AREAS


“Furthermore, there are also opportunities for one or more industrial exits. We are now in advanced discussions concerning major industrial partnerships at a global level in several of Midroc New Technology’s portfolio companies. These discussions have not reached conclusion concerning an exit, but the prospects for transactions have improved somewhat.”

In 2014, Midroc New Technology opted not to make any new investments but focused instead on securing value growth in the existing portfolio companies.

“This is because we already have an impressive portfolio of companies with almost unbeatable technologies that we want to concentrate on.”

It is likely that the company will start to consider new inqui-ries during 2015, but there will be no active sourcing of new investments.

“I can also see increasing synergies between several of our portfolio companies and the accumulated skills that other Midroc companies possess. Perhaps 2015 will be the year when we see a matured portfolio company be incorporated into Midroc Europe. That would surely take our world-improving investments to another dimension,” Linder concludes.

CompanyType of business

Midroc share

Air to Air Sweden AB Cleantech 49%

Allenex AB Life Science 41%

CrossBoarder Technologies AB Cleantech 50%

Crunchfish AB IT 30%

EffRx Pharmaceuticals S.A. Pharmaceutical 13%

Glycorex Transplantation AB Life Science 1%

HCCI Technology AB Cleantech 43%

Heliospectra AB Cleantech 14%

Lamera AB Cleantech 40%

Minesto AB Cleantech 30%

Nilsson Special Vehicles AB Automotive 79%

Pergamum AB Biomedicine 19%

Powercell Sweden AB Cleantech 23%

QCG Sweden AB IT 1%

SolarWave AB Cleantech 36%

Tigran Technologies AB Medtech 58%

BUSINESS AREAS

Heliospectra’s LED grow light system offers many advantages, such as significantly reduced energy costs and light that adapts to the plants’ needs.


The marketing concept “Midroc Europe” com-prises the two sister groups Midroc Europe AB and Granitor Invest AB. The individual subsidiar-ies forming this concept are active in one of the two key business areas; “Services”, particularly contracting and consulting services in the civil, industrial and environmental fields, but also financial services. The second business area is “Investments”, mainly real estate and financial investments and investments in development companies.

With operations principally in Sweden, Midroc Europe is also locally established in several other European countries, the Middle East, South Africa, India and Indonesia.

Midroc Europe AB holds a 49,7 % stake in Granitor Invest AB and therefore reports the operations of that company as an associated company in line with the adopted equity method in its Annual Report. To provide the reader a better understanding of the turnover, result, assets and equity structure derived from the joint efforts of the business operations carried out under the brand “Midroc Europe”, the adjoining tables have been prepared. They show the consolidated but ficti-tious statements assuming that Granitor Invest AB would have been consolidated as a subsidiary of Midroc Europe AB.

MIDROC EUROPE

FINANCIAL STATEMENTS

Midroc Contracting AB

Granitor Contracting AB

VästraHamnen Corporate Finance AB

Midroc AB

Granitor Fastigheter AB

Midroc Properties AB

Midroc Invest AB

Services

49,7%

Investments

Granitor Invest AB

Midroc Europe AB



Corporate finance

Group manage-ment, conference and charter

Property development and management

Property develop ment and management

Asset develop-ment and manage ment


CONSOLIDATED INCOME STATEMENT

MSEK 2014 2013

Net sales 5,308 4,316Operating expenses -5,112 -4,035

Operating income 196 281

Financial items -68 -124

Income before appropriations and taxes 128 157

Taxes -13 -40

Net income 115 117

CONSOLIDATED BALANCE SHEETAssets

MSEK 2014-12-31 2013-12-31

FIXED ASSETSIntangible assets 42 42Tangible assets 3,087 3,195Financial assets 709 139

Total fixed assets 3,838 3,376

CURRENT ASSETSInventories 75 43Property for resale 891 878Accounts receivable, etc 1,083 1,031Liquid assets 864 516

Total current assets 2,913 2,468

TOTAL ASSETS 6,751 5,844

CONSOLIDATED BALANCE SHEET Equity and liabilities

MSEK 2014-12-31 2013-12-31

EQUITYRestricted equity 0 0Unrestricted equity 1,993 1,883Minority interest 28 12

Total equity 2,021 1,895

LIABILITIESShareholder’s loan 1,318 806Interest bearing liabilities 2,134 2,089Non-interest bearing liabilities 1,278 1,054

Total liabilities 4,730 3,949

TOTAL EQUITY AND LIABILITIES 6,751 5,844

YEAR-END STATEMENT 2014




MIDROC EUROPE ABYEAR-END STATEMENT 2014


MSEK 2014 2013

Net sales 2,906 2,270Operating expenses -2,908 -2,116Income from associated companies 73 47




Taxes 22 -16

Net income 35 69


MSEK 2014-12-31 2013-12-31

FIXED ASSETSIntangible assets 10 4Tangible assets 3,024 2,925Financial assets 896 278

Total fixed assets 3,930 3,207

CURRENT ASSETSInventories 68 36Property for resale 891 878Accounts receivable, etc 699 573Liquid assets 429 299

Total current assets 2,087 1,786

TOTAL ASSETS 6,017 4,993

CONSOLIDATED BALANCE SHEETEquity and liabilities

MSEK 2014-12-31 2013-12-31

EQUITYRestricted equity 0 0Unrestricted equity 1,753 1,692Minority interest 16 6

Total equity 1,769 1,698

LIABILITIESShareholder's loan 1,247 735Interest bearing liabilities 2,134 1,942Non-interest bearing liabilities 867 618

Total liabilities 4,248 3,295

TOTAL EQUITY AND LIABILITIES 6,017 4,993

Already in 2013, work began to reorganize Midroc Europe AB (registration number 556622-8838) to create a new group structure with the intent to provide a simplified and more workable organizational structure. This work continued during 2014 and at the beginning of 2015 it is now completed.

Some of the subgroups have thus been stripped away while some Swedish companies, previously under direct control by the owner and therefore not formally belonging to the Midroc Europe group, have now been incorporated into Midroc Europe AB with other directly owned assets. As a result, the owner can now control all Midrc operations in Europe via one proprietary company.

The financial statement of Midroc Europe AB does not consolidate the statement of Granitor Invest AB.

CONSOLIDATED GROUP FIGURES



YEAR-END STATEMENT 2014

GRANITOR INVEST AB


MSEK 2014 2013

Net sales 2,502 2,146Operating expenses -2,304 -2,019




Taxes -35 -24

Net income 153 95


MSEK 2014-12-31 2013-12-31

FIXED ASSETSIntangible assets 32 38Tangible assets 63 270Financial assets 50 50

Total fixed assets 145 358

CURRENT ASSETSInventories 7 7Accounts receivable, etc 384 458Liquid assets 435 217

Total current assets 826 682

TOTAL ASSETS 971 1,040

CONSOLIDATED BALANCE SHEET Equity and liabilities

MSEK 2014-12-31 2013-12-31

EQUITYRestricted equity 0 0Unrestricted equity 477 380Minority interest 12 6

Total equity 489 386

LIABILITIESShareholder’s loan 71 71Interest bearing liabilities - 147Non-interest bearing liabilities 411 436

Total liabilities 482 654

TOTAL EQUITY AND LIABILITIES 971 1,040

Midroc Europe AB holds a 49,7 % stake in Granitor Invest AB (registration number 556615-2491). Although the financial reporting of Granitor Invest AB is separated from Midroc Europe AB, the daily business of the group is seamlessly integrated with Midroc Europe AB and operations are carried out under the Midroc brand.

As Granitor Invest contributes significantly to the overall Midroc Europe concept but is not reported in the Midroc Europe AB financial statement, the reporting of Granitor Invest AB is presented separately.

The subgroup Granitor Contracting AB (registra-tion number 555620-6768) and its subsidiaries (Midroc Electro Gruppen AB and Midroc Environment AB) are primarily active in contracting work in business areas such as electrical installations and servicing, industrial automation and environmental services. The subgroup WP International AB (registration number 556355-2628) and its subsidiaries are mainly active in consulting ser-vices and property management.

CONSOLIDATED GROUP FIGURES


Al-Amoudi is a Saudi business man and investor. As one of the largest foreign investors in Sweden, he has been honored twice with the Swedish Royal Order of the Polar Star in recognition of his investments in Swedish trade and industry.

Midroc Europe is part of Mohammed H. Al-Amoudi’s global business operations, which employ more than 70,000 people of various nationalities in the Middle East, Europe and Africa, and cover a wide spectrum of activities, including engi-neering and construction, petroleum, mining, manufacturing, tourism, real estate, industrial services and trade.

Petroleum operationsActivities include upstream exploration, development and production in numerous countries. In addition to his inte-rests in Midroc Europe, Al-Amoudi owns Preem AB, the largest oil company in Sweden. Its two refineries account for 80% of the country’s oil-refining capacity and have a significant focus on producing effective, environmentally adapted oil products. The distribution network comprises almost 600 filling stations for private and commercial vehicles throughout Sweden.

In addition to the Swedish oil operations, the Moroccan subsidiaries own a majority stake and operate 100% of the country’s refining capacity. On the distribution side, the group operates filling stations throughout Sweden, Lebanon, Ethiopia and Saudi Arabia.

Middle East operationsThe group operates in several countries in the Middle East, with the emphasis on Saudi Arabia. Its investments span numerous sectors, including engineering and construction, manufacturing, trade, consumer commodities, services, transport and real estate. Midroc has been involved in complex projects such as the underground hydrocarbon storage project in Saudi Arabia. Other engineering and construction projects include hospitals, manufacturing plants, offices and residential complexes.

African operationsThe number of Al-Amoudi undertakings and investments in Africa is growing and projects are in various stages of development. Midroc has selected Ethiopia as its base on the continent and is involved in several economic sectors with the ambition of contributing to the social and economic develop-ment of the country. Al-Amoudi is considered to be the single largest investor in Ethiopia, where he is also engaged in exten-sive philanthropic activities. The main areas of business invest-ment include mining, agriculture, agro industry, construction, light and heavy industry, tourism and real estate.

Mohammed H. Al-Amoudi is the owner of Midroc Europe AB, which in turn holds a 49.7% share in Granitor Invest AB, the remainder being held by the Swedish Wikström family.

OWNERSHIP

OWNERSHIP


Thomas MårtenssonActive director of the boards of most companies within Midroc Europe. Working chairman in several of the companies. Responsible for short- and long-term group development, financing and strategy. Member of Group Management and the Executive Committee of Midroc Europe.

Waddah Al-AlemDr. Al-Alem, based in Jeddah, Saudi Arabia, has held the position of Deputy Director General at the Midroc international holding company since 1998.

Abdullah Al-AmoudiBased in Jeddah, Saudi Arabia, and Director General of the Midroc inter-national holding company since 1998, Al-Amoudi is responsible for the global strategies of Midroc.

Christer WikströmActive director of the boards of most companies within Midroc Europe. Working chairman in several of the companies. Responsible for short- and long-term group development, financing and strategy. Member of Group Manage-ment and the Executive Committee of Midroc Europe.

Roger WikströmActive director of the boards of most companies within Midroc Europe. Work-ing chairman in several of the companies. Responsible for short- and long-term group development, financing and strategy. Member of Group Manage-ment and the Executive Committee of Midroc Europe.

BOARD OF DIRECTORS

BOARD OF DIRECTORS

www.midroc.se [email protected] +46 (0)10 470 70 00

MIDROC Annual Review web · ANNUAL REVIEW 2014 MIDROC EUROPE 1 MIDROC IN BRIEF Midroc Europe is the...

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