Equity increases by 65% year to date due to good profits and new equity issue.
Eyrir Invest's profit for the period ending June 30, 2007 amounts to ISK 2,219
m (EUR 25m) after taxes that equals 39% annualized return on equity. Average
annualized return on equity from Eyrirs foundation in mid-year 2000 is 59%
compared to average annualized return of MSCI world-index of 2.6% for the same
period. Operating result so far in the second half of the year is slightly
positive and has no material effect on total equity despite turbulence on the
financial markets.
Eyrir Invest has issued new shares during the year for ISK 5,627 million and
financially sound investors have joined the company. Equity August 13 is
close to ISK 19,800 m (EUR 222 m) compared to ISK 11,995 m at the beginning of
the year. Thordur Magnússon (Chairman) and Arni Oddur Thordarson (CEO) remain
principal shareholders with 51% of total outstanding shares.
Stork N.V. has been added, through LME consortium, as a core asset in Eyrir
Invest's portfolio together with Marel Food Systems and Össur. Eyrir Invest
owns LME in partnership with Landsbanki Íslands and Marel Food Systems, Eyrir
Invest holds 40% of shares in LME.
Arni Oddur Thordarson, CEO:
“Eyrir Invest's result in H1 2007 is good. This has been a year of great
transitions in our active holdings, Marel Food Systems and Össur, and was
characterized by acquisitions and integration of operations. The integration
work that is already in process within the companies will enhance their real
value considerably in years to come.
Last year we founded LME Holding Company with Landsbanki Íslands and Marel Food
Systems. Today LME is the single largest shareholder in Stork N.V. We see
room for great value creation by supporting underlying businesses of Stork in
their next phase of growth and globalization in line with our investment
strategy.
During this year we have further broadened our strong shareholder base. Our
shareholders consist of successful entrepreneurs with background in various
industries such as shipping, banking, insurance, fishing, pharmaceuticals and
retailing. We highly appreciate the great support existing and new investors
are showing towards the company and it's strategy.
Turbulences in financial markets and less demanding equity prices can create
opportunities to financially sound investors with a long term view. The
outlook in Eyrir Invest's operations is good and 20% average annual targeted
return on equity remains unchanged.”
Good result in H1 2007
Eyrir Invest's profit for the period ending June 30, 2007 amounts to ISK 2,219
m after taxes, absolute return on equity is 18.0% for the period and annualized
return 39.2%. Capital markets in the Nordic countries were favorable and Eyrir
Invest's trading portfolio yielded good return. Real value of Eyris Invest's
active holdings; Marel Food Systems and Össur, has increased by profitable
growth in accordance with their strategy.
• Eyrir Invest's total assets at end of H1 2007 amount to ISK 34,873 m and the
Balance Sheet has grown in excess of 30% from the beginning of the year.
Stockholders' equity June 30, 2007 amounted to ISK 15,312 m compared to ISK
11,994 m at year-end 2006.
• Eyrir Invest is strongly capitalized and its equity ratio at the end of H1
2007 is 44%, deferred tax liability 6% and interest-bearing debts 50%. All
assets are financed within the balance sheet, the company has no forward
equity contracts.
• Eyrir Invest increased its equity by ISK 1,177 m in the first half of 2007
and has further increased its share capital in Q3 2007 by total of ISK 4,450
m the increase will be fully paid by 1 September 2007. New, financially
sound shareholders have joined the company and existing owners increased
their share.
• Eyrir Invest finances all equity holdings long-term. Average maturity of
debt is over three years at the end of June 2007. In Q3 Eyrir Invest has
secured new long-term financing through international banks and thus extened
the average maturity of debt to close to four years.
• Listed bonds on the Iceland Stock Exchange amount to 4,600 m ISK, thereof ISK
2,000 m bonds issued in 2007 with final maturity in January 2009 and ISK
2,600 million listed in 2005 with final maturity in year 2012.
• Fundamental value of Marel Food Systems and Össur, Eyrir Invest's active
holdings, have grown profitably and in accordance with the companies
strategies.
• Stork N.V. is now classified as a core asset in Eyrir Invest's portfolio
together with Marel Food Systems and Össur. Eyrir Invest sees room for great
value creation by taking the undirlying business of Stork N.V. to the next
phase of growth and globalization in line with Eyrir Invest's investment
strategy.
• In 2007 Eyrir Invest adopts IFRS in its Financial accounts. The effect of
IFRS adoption on the Balance Sheet 1.1.2007 is an increase of ISK 14 million
on Equity, a decrease in Deferred tax liability of ISK 20 million and an
increase in Trade and other payables of ISK 6 million.
Financial strength
Eyrir Invest is financially strong. Eyrir Invest's equity ratio is 44%,
deferred tax liability 6% and interest bearing debt 50%. All assets are
financed within the Balance Sheet, the company has no off-balance sheet forward
equity contracts. Average maturity of debt is now close to 4 years, the bulk
of which are due in 2009 and 2012. New equity in 2007 totaling ISK 5,627
million gives the Company the strength to support further the growth strategy
pursued by its core holdings as well as maintaining a healthy and liquid
Balance Sheet.
Eyrir Invests' shareholders
Eyrir Invest has a strong shareholder base. The Company's shareholders consist
of successful entrepreneurs with background in various industries such as
shipping, banking, insurance, fishing, pharmaceuticals and retailing.
Shareholders holding in excess of 10% of total shares today are:
Þórður Magnússon 204,139,200 27.7%
Árni Oddur Þórðarson 174,348,600 23.7%
Landsbanki Lux Custody 145,800,000 19.8%
Straumborg ehf 87,566,667 11.9%
Sigurjón Jónsson 83,468,867 11.3%
Others 40,981,666 5.6%
Total Shares 736,305,000 100.0%
Assets and liabilities denominated in foreign currencies
Over 95% of revenues of companies in the Eyrir Invest portfolio are generated
outside Iceland. Assets in foreign currencies in excess of liabilities in
foreign currencies amounted to ISK 1.1 billion at the end of June 2007. If
however shares in Össur (USD) and Marel Food Systems (EUR) are classified as
foreign assets the picture changes significantly and assets become ISK 20
billion larger than liabilities in foreign currencies or ISK 5 billion higher
than Eyrir Invest's equity.
General Meeting
Annual General Meeting was held on February 1 2007. At the meeting the
following board members were elected; Þórður Magnússon (chairman), Jón Helgi
Guðmundsson and Sigurjón Jónsson. Steinunn Jónsdóttir was elected substitute
board member. Dividends of 10% of net earnings was paid to shareholders.
Outlook The outlook for Eyrir Invest is positive. Fundamental values of active
holdings are solid and will yield good return in the future. Eyrir Invest's
average annual return on equity target is 20% for the period 2006-2010,
compared to over 60% actual annual average return for the period 2000-2007.
Major holdings
Marel Food Systems
Marel Food Systems is a leading developer of advanced food-processing systems
for the world market. The Company has always maintained its vision of
leadership in the design and manufacture of weighting and grading equipment,
computer vision systems, intelligent portioning machines, and turnkey
processing solutions with full traceability.
Marel Food Systems objectives for the next 3-5 years are to achieve 15-20%
market share and increase the turnover from 130 m EUR in the year 2005 to
400-500 m EUR in 2009-2011 with internal and external growth, including mergers
and acquisitions of strategic companies with good growth potential and strong
synergies with Marel Food Systems.
Marel Food Systems acquired AEW Delford Systems on April 7 2006 and Scanvægt DK
on August 7 2006. These acquisitions support the Comapnys' external growth
policy and powerful integration work is in process within the Marel Food
Systems.
Eyrir Invest is the largest shareholder in Marel Food Systems, holding close to
33% of total shares following equity purchases and a very successful public
offering in 2006. In the wake of the public share offering, financial strength
of Marel Food Systems has multiplied and the company gained a series of new
shareholders.
Össur
Össur is a leading company in the design and manufacture of prosthetics and
orthopedics. Össur has decisive technical advantage as a world-wide leader in
prosthetics and is becoming a top-tier player within the bracing and support
field of orthopedics. Össur made four substantial acquisitions into the
bracing and support business in 2005 and 2006 by acquiring two US companies,
one UK based company and a French company.
Össur's objectives are to achieve 8-12% annual internal growth and operating
revenue of at least 750 m USD by year-end 2010 and EBITDA contribution margin
of 23% for the same year. Average annual growth from 2001 has been 28% of
which internal growth accounts for 13%.
Eyrir Invest is the second largest shareholder in Össur and holds close to 22%
of total shares.
LME Holding Company
Eyrir Invest, Marel Food Systems and Landsbanki Íslands founded LME Holdings in
February 2006 for the purpose of purchasing shares in the Dutch company Stork
N.V. (www,stork,nl). Eyrir Invest's share in Stork N.V. as well as shares in
other companies is booked at market value.
LME is now the single largest shareholder in Stork N.V. Eyrir Invest and its
co-investors in Stork N.V. though LME believe that there is substantial room
for value creation by supporting the underlying businesses in Stork N.V. in
their next growth phase and globalization in line with Eyrir Invest's
investment strategy.
Other holdings
Eyrir Invest other holdings are primarily in large financial institutions
listed in the Nordic countries with fast growing businesses in Central and East
Europe.
Further information
For further information please contact Arni Oddur Thordarson, CEO, at +354 525
0200.
Reykjavik, August 14 2007
Information on Eyrir Invest ehf, is available at www.eyrir.is
