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Annual report 2016
Text: Holta InvestDesign/layout: David HöökPhotos: Holta Invest, ShutterstockFront page: Drawing by Wilma Holta - “By the Gothenburg fishmarket”
Contents
4 Holta Invest at a glance
8 Key financials
10 Chairman’s corner
12 Financial investments
16 Active Brands - a successful growth story
20 Ole Holta & Tunga gård
22 Board of directors’ report
26 Presentation of the board of directors
27 Presentation of key management
28 Annual accounts 2016
4 2016
Holta Invest at a glance
Focusing on the future and with roots back to the 1890s, the Norwegian privately held investment company Holta Invest is rigged for growth powered by its highly skilled and dedicated people.
Holta Investat a glance
52016Holta Invest is headquartered in Oslo and has eight employees. The company is wholly owned by Mr Kjetil Holta, who plays an active role as Chairman. Holta Invest has a strong financial position, with a total equity of NOK 2,5 billion and no interest bearing debt. The Holta Invest Group has about 400 employees and a turnover of about NOK 7,3 billionin 2016.
Selected industries and regionsThe operational activities are organised in two business areas:
y Financial investments y Industrial investments
The two business areas have separate investment strategies and mandates, however, a basic principal is that investments are to be limited to well-known markets and industries. Thus, investments are concentrated on selected industries and regions where Holta Invest has a significant level of expertise.
The assets are managed with a long-term perspective. At the same time, Holta Invest has the flexibility and the ability to make quick decisions in order to act upon opportunities that may arise. We also have the ability to be a patient owner – but never at the expense of expected performance or return on capital.
Financial investments:The strategy for financial investments focuses on Norwegian and selected inter-national markets, mainly publicly listed equities and bonds. The risk profile and the allocation strategy are continuously reflecting the company’s perception of the macroeconomic environment.
Life Sciences is a dedicated area for Holta Invest. A portfolio of investments within this industry is organized in the wholly owned subsidiary Holta Life Sciences AS.
Investment strategy: y High liquidity requirement y Long-term investment horizon y No financial gearing y Active portfolio management and
absolute return
Industrial investments:Holta Invest takes on an active role in developing our portfolio companies and their strategies.
The company’s objective is to create additional value by contributing with experience, expertise, network and capital.
Investment strategy: y Long-term investments y Our expertise must be relevant for
the company y We must understand the business,
the market, the challenges and the opportunities
y Our ownership must yield strategic control; alone or together with partners
y Our equity investments will normally range from NOK 50 million to NOK 250 million
y Our main focus is the Nordic region
The industrial investments are con-centrated in three areas:
y Sports and leisure y Metals y Other opportunities
Sports and leisure: Active Brands
Active Brands manages several attrac-tive brands in the Sporting Goods Indus-try. The products ranges from technical underwear to high performance protec-tion equipment. The company has 188 employees located in the Nordic coun-tries, China and the US. The headquarter is located in Oslo.
Active Brands is now organised in three business units.
The Nordic division, which operates the following brands:
y Bjørn Dæhlie y Åsnes y Johaug
The Skigutane division, which operates the following brands:
y Kari Traa y Bula y Vossatassar
Sweet Protection – which is a brand for protection equipment and apparel.
These operational units are focused on product development, sales and market-ing, while functions like supply chain, operations, accounting and finance offer services across the divisions and brands.
“Holta Life Sciences provides more than just capital to the
companies they invest in. Significant experience and
extensive network in the life sciences sector gives the
company the ability to be an active owner.”
6 2016
Metals:Nizi Group
The Nizi Group is a global player within the metal industry, offering a wide range of services to its business partners.
Nizi International has roots back to 1898 and has been owned by Holta Invest since 2010. The group has 197 employees located at ten offices in Europe, North and South America and China. The group is headquartered in Luxembourg.
The Nizi Group engages in sourcing, trading, marketing and distribution of raw materials to foundries, steel works and other metal industries. The business model entails a producer-based sourcing philosophy with long-term sales and dis-tribution agreements with selected pro-ducers, supplemented with shorter term sourcing of related products. Next to physical products, Nizi’s offering includes a wide range of services in logistics, sup-ply chain optimization, risk manage-ment, compliance and financing.
Other opportunities:Holta Invest also invests in early phase companies. The philosophy is to have a small portfolio of minor investments which may lead to attractive opportunities.
y Det Norske Brenneri Holta Invest owns 59 per cent of Det Norske Brenneri AS, a spirits brand company which has developed the aquavits “Arvesølvet”, “Helt Klar”, “Høvding” and also the gin “Harahorn”. The company owns the distillery Puntervold in Grimstad, which is a well known company within Norwegian spirits and premium apple juice. The business employs eight persons full time and has annual sales of around NOK 26 million. The company will continue to develop spirits produced in Norway, for both the Norwegian market and for exports.
y
y Investment in Africa Holta Invest has taken the role as lead investor in the investment fund Spear Africa Holdings Ltd. The fund will invest in businesses that are positioned to benefit from the continued economic growth and accelerating foreign direct investment in Sub-Saharan African countries. The fund has concluded three investments so far. The first investment was concluded on October 2013 with the acquisition of the 49 per cent stake in Metro Commodities Ltd. Metro Commodities is a Zimbabwean based retail chain with 16 branches. In October 2014 the second investment was concluded; Dendairy in Zimbabwe which produces milk and milk based products. In late 2016, the third investment was closed which is a South African Ink producing company, supplying to the African packaging and marketing industry. In 2016, a combined sale of USD 250 million was reported in the African investments.
y Optime Subsea Holta Invest owns 39 % of Optime Subsea AS. The company is an industry expert on subsea well access systems technology and services. The product offering are services within subsea engineering and analysis, specific products such as subsea hydraulic pump and modular hyperbaric testing vessels & systems. In addition, the company has workshop testing and maintenance services.
y Holta Real Estate The property investments were demerged from Holta Invest in 2016 and are no longer part of the Holta Invest Group.
Det Norske Brenneri develops premium Norwegian aquavits, gin, whisky and other alcoholic beverages.
Nizi International distributes and markets metal products to a worldwide steel and
foundry industry.
72016
Holta Investis based on solid roots
2016
1800 1894 Ole H. Holta (b.1851) purchases shares in Tinfos Papirfabrik AS
1899 Notodden Calcium-Carbidfabrik AS is founded
1900 1908 Ownership of the mountain areas in Telemark is organised by Rupa AS
1910 Tinfos Jernverk AS is founded
1927 Tinfos Jernverk focuses on manganese alloys
1957 Ole Holta (grandson) takes over
1974 Production starts at Øye Smelteverk (smelting factory)
1982 Øye Havbruk, a fish farming company, is established
1983 Holta Invest AS is established
1988 Tinfos acquires the titanium smelting plant in Tyssedal, Norway
1995 Tinfos acquires Compagnie des Mines et Métaux S.A. (Nizi)
1999 Expansion of smelting capacity at Øye by 50 per cent
2000 2002 Tennant Insurance Group AB founded
2003 Holta Invest AS becomes principal shareholder in Tinfos AS
2005 Takeover of Nor Reg, which becomes Nor Reg Systems
2007 Nor Reg Systems sold to KK Sunde, Tennant sold to Gjensidige Forsikring. Acquisition of Hydroparken and ØTA Bygg, Notodden
2008 Holta Invest completes new football stadium in Notodden, sale of the Tinfos companies to Eramet, Calignum Technologies was acquired
2009 New headquarters at Drammensveien 35, Oslo
2010 Buyback of Nizi International. Establishment of Active Brands AS through acquisition of Skigutane AS
2011 Active Brands AS continues its growth with the acquisition of Bj Sport AS and Nanok of Norway AS. Decision to discontinue Calignum Technologies AB
2012 Nizi International acquires Miller and Company in the US. Holta Invest acquires Minion Capital Management from Kjetil Holta
2013Holta Invest acquires Norchip AS and facilitates the start up of Spear Capital Africa as founding investor. . Holta Invest acquires the majority of the Norwegian companies Ny Vri AS and Det Norske Brenneri AS.
2014Active Brands acquires Sweet Protection AS. Holta Invest establishes Holta Life Sciences as a separate business entity. Holta Invest acquires 35 per cent of Telemark Technologies and 70 per cent of Telemark Kjøtt.
2015 Nizi International SA acquires Chemalloy LLC in the US and Keyvest in Belgium. Active Brands acquires the sports brand Johaug.
Holta Eiendom (real estate) was demerged from the Holta Invest Group.Active Brands acquired the Bula brand in Europe. Telemark Technologies merges with Optime Subsea.
8 2016
Holta Invest AS* Consolidated
2013 2014 2015 2016 NOK million 2016 2015 2014 2013
Profit and loss account
239,2 287,7 103,2 380,2 Net revenues 7 296,8 9 068,5 7 585,9 7 029,1
196,1 246,9 65,2 326,7 EBITDA 489,0 27,2 341,6 284,6
18,2 (11,7) 56,8 (7,9) Net finance (77,1) (64,6) (80,1) (39,9)
214,2 234,6 122,1 324,8 Profit before tax 388,9 (68,5) 257,6 229,6
184,9 198,9 96,4 316,0 Profit after tax 341,0 (64,3) 216,0 195,5
Solidity
2 312,3 2 431,3 2 691,5 2 769,7 Equity 2 661,6 2 530,3 2 599,6 2 41 2 ,2
94,0 % 91,0 % 95,1 % 92,8 % Equity ratio (%) book value 51,1 % 48,0 % 52,5 % 60,4 %
Liquidity
1 782,8 1 943,4 1 948,7 2 078,9 Cash and securities 2 144,0 1 926,5 1 820,2 1 690,5
Return on capital
9,6 % 10,3 % 4,8 % 11,9 %Return on equity before tax (%) book value 15,0 % (2,7 %) 10,3 % 10,0 %
)* Including Holta Life Sciences AS
Key financials
92016
Industrial investments 2016 2015 2014 2013 2012
Active Brands
Ownership 68,9 % 69,7 % 71,8 % 67,9 % 67,9 %
Employees 188 181 139 110 108
Revenue NOK million 878,2 653,2 502,7 336,2 327,7
EBITDA NOK million 118,5 33,9 33,0 7,5 11,2
Nizi Group
Ownership 95,1 % 95,0 % 94,8 % 94,8 % 94,8 %
Employees 197 213 123 130 135
Revenue NOK million 6 007 8 265 6 727 6 419 6 964
Result before tax NOK million (22,1) (140,5) 9,6 18,5 (4,9)
0
100
200
300
400
500
600
700
800
900
20152014 201620132012
Net revenue – Active Brands groupNOK million
0
1 500
3 000
4 500
6 000
7 500
9 000
20152014 201620132012
Net revenue – Nizi groupNOK million
Revenue split
Active Brands 878 12%
Nizi Group 6 007 82%
Other 412 6%
Total 7 297
10 2016
2016 was one of those years where I felt it would be difficult to achieve
a good result from both industrial and financial investments. I must
also admit that, after the US election and the UK referendum and
their respective outcomes, I did foresee in my crystal ball a disaster
scenario approaching. However, the markets took it quite nicely and
Mr Trump turned out to be well-received by Wall Street. We will see
how it goes, but the outcome for 2016 was extremely good in the end.
Chairman’s corner
112016
On 28 January, we enter the year of the rooster according to the Chinese calendar. From a purely statistical/financial perspective, rooster years tend to be somewhat variable with high peaks, but they do tend to be mostly in positive territory - so buckle up, it’s going to be a bumpy ride. Well, however bumpy it turns out to be, we are ready for it and some bumps also have nice peaks too. The last rooster year was in 2005, the year in which YouTube was launched. The Hang Seng posted strong performance and the index ended 12.4% up for the year. Dow Jones was up 16.3% during the same period. The Dow Jones rose 2.1% back in 1993 and the Hong Kong stock market almost doubled, rising by 94%. Going even further back in time, the US market had just got its own Trump in Reagan in 1981. The Dow rose 19.5%. The Dow average for the last three rooster years is 12.5%. These fun facts are not part of our analysis, but for someone who has spent most of his life as the owner of cyclical businesses, it is hard not to at least take a sneaky peek at the numbers.
Life as an expatriate is not so different from living in Norway. And in 2016 even more so since I relocated to Sweden from Bel-gium. There are some differences though. The cost of living is lower, healthcare is poorer and taxes are lower. However, prop-erty prices are just as crazy as in Oslo, even in a country with a lot of cheap land and no natural resources. This makes you won-der whether the oil revenues that have been pouring into the Norwegian economy for some decades now have had anything to do with the booming property prices in Oslo. It helps, but of course it is not the main factor. It is the low interest rates and the fact that banks are throwing money at borrowers. I believe we will see the end of this soon. Interest rates are rising and banks will become more cautious.
The biggest event for our family in 2016 was my marriage to Lena in June. Another major change was that our lovely daughter Wilma decided to move out and live by herself. It was a big step for all of us. She is an excellent dancer and gave a memorable performance at the wedding in Spain. She is also an avid reader of books and her goal for 2017 is to read 100 books. One book she is not going to read in 2017 is Benjamin Graham’s “The intelligent investor”. Graham’s book is quite interesting, even though it was written a long time ago. He does not give the reader a formula for good results, but simply says that over time good results stem from (1) a thorough analysis of companies and markets, (2) pro-tection against heavy losses, and (3) an aspiration to achieve ade-quate, not extraordinary, performance.
KJETIL HOLTA
GOTHENBURG, MARCH 24, 2017
Last year, our financial portfolio gener-ated a 20% return and there is reason to believe that the industrial investments generated at least that. Is this what Gra-ham defines as adequate, or is it extraor-dinary? We had a low-risk portfolio last year and it gave us an extremely high return. Over time, this will probably stick out as one for the history books. We also share Graham’s view of thorough analy-sis of course and we will therefore seek to boost our resources in this area in 2017. Other investors with outstanding performance turn out to characterised by a lack of heavy losses; it is more important to avoid the losers than to find the winners.
Holta Invest as a company and a group is developing as planned and delivering results I could not have dreamt of a few years ago. There are now eight of us at the head office in Oslo and a total of 406 within the group. We will seek to grow and continue to be an interesting place to work and meet good colleagues. Once again, a huge thanks to you all for your efforts and your contribution to making this possible.
12 2016
It is the best year so far with a solid positive excess return. This has in fact meant that our investments on the Oslo Stock Exchange over the last five years have seen a return that is almost treble the average.
The principal focus was once again on aquaculture. Although we realised a number of gains, our remaining exposure was so great that the seafood industry again made the strongest contribution to the bottom line. Much of the super-profit has therefore been extracted in the short term, but the industry still offers a wealth of exciting investment opportunities which are becoming increas-ingly popular. Last year, we also saw solid contributions from com-panies within house building, finance, agriculture and telecom. A specific initiative in the biotech and health sector is an important supplement, and this complementary activity was demerged in 2014 into the wholly owned company Life Sciences (see page 15), which still represents part of the overall reporting for financial management. With regard to this, it is worth noting that Biolink and Gentian collectively contributed over NOK 100 million to the return in 2016.
OSEBX ended 12.1 % up in 2016. This makes 2016 the best year since 2013. By comparison, it was also a good year measured against Morgan Stanley’s world index, which rose 8.4 %, while the world’s best-known index, the Dow Jones, jumped more than the Norwegian domestic market with a leap of +13.4 %. However, S&P500 and Nasdaq were content with rises of +9.5 % and +7.5 %. In this perspective, our return of 20 % is satisfying. This occurred despite a very modest start to the year, with Norwe-gian and international stock exchanges down almost 10 % in Janu-ary and further falls into February. An oil price down in the 20s (USD) in February and fears of weaker growth in China resulted in a sluggish start to the year. We also had the surprising BREXIT result in the summer, which has resulted in uncertainty in the short
Financial investments
“The best year ever”
term. Most figures then began to recover with an oil price which, partly due to OPEC’s cut in production, found a foothold in the 50s towards the end of the year, a US election which created optimism stemming from expectations of an expansive financial policy and improved company earnings both home and away. This resulted in many new histori-cally high listings both in the USA and in Nor-way, and OSEBX ended the year close to 700. On 1. December, we passed the old all time high dating from 2015, and we were to see five more price records on Oslo Stock Exchange before the year was through.
Amongst the largest sectors, our results clearly show that the seafood sector was a genuine winner in relative terms on Oslo Stock Exchange. In addition, oil and oil ser-vice recovered strongly during the second half of the year, with rising oil prices and greater faith in OPEC’s cartel activity as a counterbalance to US shale production. Finance, particularly equity certificates, also contributed strongly to the index. On the neg-ative side, telecom and the consumer sector suffered the most. As in the previous year, we saw greater volatility within certain sectors, not surprisingly given the fluctuations in some raw material prices. Heading into 2017, it is the usual cocktail of hope and fear walk-ing hand-in-hand, but the market will proba-bly require a certain level of growth in earn-ings if it is to continue the trend we saw in the second half of 2016.
We continue to believe in the choices we make in the portfolio allocation, and these choices have once again resulted in an amazingly good year within asset management.
132016
Holta Invest has an investment strategy for financial assets, which focuses on Norwegian and international market-based securities, including equities, bonds, and other interest-bearing products. The risk profile and the allocation strategy continually reflect our perception of the macroeconomic environment. In the last few years, we have achieved considerable success by holding a large and increasing proportion of our stock portfolio in consumer goods, such as seafood, thereby also almost completely staying away from oil and oil-related companies.
Our total financial assets at the end of 2016 were close to NOK 2.2 billion. The return from our financial investments in 2016 was 20.0 %. We are once again par-ticularly pleased with the stock portfolio, which ended the year with a total return of + 45.6 %. Out return on the Oslo Stock exchange was 53,1 %, which was a great achievement given the abovementioned OSEBX of 12,1%. Adding in the bond port-folio which returned + 3.8 %, the return of NOK 379.2 million represents a consider-able achievement.Our investment strategy is characterised by;
y High liquidity requirement y Long term investment horizon y No financial gearing y Active portfolio management and absolute return
0 5% 10% 15% 20% 25% 30% 35% 40% 45% 55% 60%50%
Cash
Bonds
Equity 58%
23%
19%
0 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
EnergyOther
Technology
Transportation
Industry
Health
Finance
Consumables
8%
9%
11%
3%
3%
15%
36%
16%
Sector allocation at 31 December 2016In percent of total assets
Asset allocation at 31 December 2016In percent of total assets
10 largest share holdings at 31 December 2016
1 Marine Harvest2 Bakkafrost3 Gentian4 Yara International5 Ainmt6 Lerøy Seafood7 Norway Royal Salmon8 Salmar9 Gjensidige Forsikring10 Selvaag Bolig
14 2016
Early in 2012 Holta Invest changed its investment strategy for financial assets. The risk profile reflects our perception of the macroeconomic environment. In the last few years, Holta Invest has had great success by holding a large and increasing part of our stock portfolio in consumer goods such as aquaculture, thereby also almost completely staying away from oil and oil related companies. As the graph shows, the long term change in strategy has been a success.
152016
Investment approach
Holta Life Sciences is a young, but ambitious specialist investor in the life sciences sector. We focus entirely on investments in the life sciences industry as we believe this sector has very favourable fundamentals. In our view, the pace of innovation and success rates in development are set to rise based on a better understanding of molecular- and human biology and improved research tools.
Cost pressures in the healthcare system will, how-ever, increase accordingly and hence we seek to iden-tify companies that are developing products with:
y Potential to address clear unmet medical needs y Significant market opportunities y Strong IP- or orphan drug protection y Substantial health economic benefits
We know the value of people, and hence we are actively contributing to identifying the right manage-ment team and board members in the companies in which we invest.
Holta Life Sciences is not dependent on external financing and consequently we have a longer-term perspective than most other investors. We invest in product companies at all stages of development. Our main focus areas are therapeutics, diagnostics and medical equipment.
Main investments:
Biolink Group is a life science drug discovery company, doing R&D on synthesized, small anthocyanin molecules, their metabolites and other anthocyanin related molecules. Biolink Group has also developed a clini-cal documented, professional dietary supplement called Medox®, which was sold in 2016.
Weifa is Norway’s leading fully-integrated pharmaceutical company. Weifa was established in 1940 and employs approximately 180 people. The company has a strong position in Norway, and is the market leader in pain relief with established products such as Paracet and Ibux. Weifa is also present in other areas like dietary supplements, treatment for colds and respiratory problems. In addition the company has a consider-able international business as a leading producer of metformin and opi-ates. Weifa is listed on the Oslo Stock Exchange with the ticker “WEIFA”
Gentian Diagnostics designs, develops and markets in vitro diagnostic reagents (IVD) based on its proprietary Nanosense technology. The goal is to offer efficient and accurate reagents for major clinical chemistry platforms with a focus within the areas of kidney disease, cardiac dis-ease, inflammation and veterinary medicine. The Nanosense technology will enable users to move assays from low volume immunology plat-forms to fully automated, high throughput instruments with shorter turnaround times, better workflow and improved cost efficiency. Gen-tian Diagnostics AS is a medical diagnostics company listed on Merkur Market, Oslo Stock Exchange with the ticker “GENT-ME”.
16 2016
Active Brands – a successful growth story
Active Brands is a leading supplier of premium sports and leisure goods in the Nordic Region. At the end of 2016, Active
Brands owns and manages seven brands, has 188 employees at eight locations and annual revenues of close to NOK 900
million. The company’s strategy has been to develop existing brands combined with growth through acquisitions.
In 2010, already with some experience from the sporting goods industry, Holta Invest took the initiative to establish Active Brands. The objective was to take leadership in the consolidation of the Nordic sporting goods industry through acquisitions of strong brands with growth potential.The vision back then was to make “Active Brands one of the lead-ing suppliers of sporting goods in the Nordics”. The first step was to build a highly competent organization and a cost efficient busi-ness platform - to cultivate strong brands to prosper while syner-gies and efficiencies were explored in all parts of the value chain.
Since then, five acquisitions have been made:
Historical M&A’s – Active Brands Group (group sales in NOK millions)
172016
Based on a talented and dedicated workforce, Active Brands has consistently outperformed the Nordic market for sporting goods by generating organic annual growth of more than 30% since 2013. From a strong Norwegian base, the company has gradually expanded into new geographies, and in 2016 approximately 30% of net sales were generated outside of Norway. Whereas the period from 2010 to 2013 was characterized with consolidation, the com-pany has been successfully growing the business into new markets and categories from 2014 and onwards. Not only has the topline shown great development but also the profitability has reached satisfying levels at an EBITDA margin above 13 %.
The two key brands of Active Brands are Kari Traa and Dæhlie.
The female brand Kari Traa has so far been the most successful brand in the port-folio. Up to 2012, Kari Traa was mainly a Nor-wegian brand. However, after a break-through in markets as Sweden and Den-mark, the brand is now the fastest growing female sports brand in Europe. Kari Traa was launched in the USA in 2016 and the brand has been very well received. The core category of Kari Traa is base layers, but the brand has over the last few years success-fully entered the training and outerwear cat-egories in certain markets.
The Dæhlie brand reached an important milestone in 2016 as sales exceeded NOK 200 million. The brand is the global market leader for cross country skiing apparel. In early 2016, the brand was revitalized with an adjusted positioning, a new profile, logo and collection. The changes were very well received in the market place. The brand has a close partnership with the national cross country ski team of the Norwegian Ski Fed-eration.
Active Brands
2016 2015 2014 2013 2012
Ownership: 68,9 % 69,7 % 71,8 % 67,9 % 67,9 %
Employees: 188 181 139 110 108
Revenue MNOK: 878,2 653,2 502,7 336,2 327,7
EBITDA MNOK: 118,5 33,9 33,0 7,5 11,2
Key figures Active Brands Group
18 2016
The female brand Kari Traa has so far been the most
successful brand in the portfolio.
192016
”We established Active Brands in 2010 with the objective of taking a leading role in the consolidation of the Nordic sporting goods industry. Since then, Active Brands has developed into a great business with a talented team, strong brands and a scalable platform. The company has a strong position in the Nordics and has successfully entered large international markets. We are proud of the development of Active Brands and we are honored to get FSN Capital on board as a new majority owner. We believe in a promising futurefor the company and we are excited to continue ourownership of Active Brands together with FSN Capital”
In April 2017, Holta Invest sold a majority stake in Active Brands to FSN Capital. Holta Invest, existing management and founders have re-invest alongside FSN Capital and continue to own a material stake in the company.
Dag Teigland,Chairman Active Brands
20 2016
Ole Holta is a third-generation industrial entrepreneur and the sixth generation on the farm. He has recently invested in solar panels to gen-erate electricity for the farm. On a good day, these panels can generate 1,000 kWh. A couple of years ago, he more than doubled the size of the barn. His animals are now free to move in and out of the barn, and they are milked and fed by robots, while Ole monitors the statistics on the PC in the control room. Hallgeir Bakkalia and Lars Tveitan take care of the day-to-day running of the farm, but Ole closely monitors the business reports. There is no doubt that the farm reflects its engineer and indus-trial entrepreneur owner and manager.
Ole Holta& Tunga Gård His youngest son often refers to him as the “Viking Chieftain”, and not without good reason either. We meet him out in one of his fields standing by the farm’s John Deere tractor. Our first impressions are of an impressive industrial entrepreneur with both an aura and professional gravitas.
Facts about Ole
y Date of birth 11.8.1924 y Educated at NTH (NTNU) in Trondheim as a metallurgist (MSc) y Partner: Ingebjørg y Most recent project: Construction of a new house for himself and Ingebjørg at the farm. y He ran the family business Tinfos until 1990, when he handed over the reins to his nephew Gabriel Smith. y He sat on the board of Tinfos AS until 2000. y Ole Holta is also the founder of Holta Invest AS and was the CEO of Tinfos (1957-1990) and chairman (1978-2000).
Following the investments in the new barn and new technology, the farm is now doing much better, and the cows are milking much better too. This is due not only to the investments that have been made, but also expert man-agement on the part of Hallgeir. “He has really lifted the business to a com-pletely new level,” concludes Holta.
212016
Tunga Gård has been in the Holta family for six generations, the first generation represented by Halvor Bjørnsen Tonga. It was ini-tially part of the neighbouring farm, Ramberg. Ramberg was split in two farms, namely Tunga and Ramberg, in 1792.
Tunga Gård is the second-largest producer of milk and meat in eastern Telemark and there is still scope for further growth. Pro-ductivity is still growing as a result of increased output from each cow, rather than an increase in the size of the herd. Ole is also the proud producer of huge blueberries and delicious honey. This is a low-volume operation for his own use, although some is sold locally.
Tunga Gård is the second-largest producer of milk and meat in eastern Telemark and there is still scope for further growth.
The farm has had celebrated visitors over the years. These include two reigning kings of Norway and the Swedish King Oscar II during the 1890s. The first Norwegian king to visit was King Haakon VII in 1954, while the sec-ond, King Olav V, followed in 1973. King Harald V also visited Notodden in Octo-ber 2013 to meet Ole Holta and see his “Sansehagen” project during Notod-den’s centenary year. Unfortunately, he failed to visit Tunga, making him the first King of Norway not to visit since King Karl XV.
Facts Tunga gård
y 100 acres of agricultural land y 100 cattle y 400,000 litres of milk produced per year y 12,000 kg meat y Two employees y One large beautiful park y Six generations of the Holta family
22 2016
Profit mainly comes from the return on the management of current financial assets of NOK 253.5 million before tax. Including return at Holta Life Sciences, the return amounts to NOK 377.8 million.
The group’s profit before tax was NOK 388.9 million, compared with NOK -68.6 million in 2015. Profit for the year amounted to NOK 341.0 million, com-pared with NOK -64.3 million in 2015. The increase in profit is due to an improved return on financial invest-ments along with the improvement in results of the industrial investments delivered by Active Brands and Nizi in 2016. Turnover in the group amounted to NOK 7,296.9 million, compared with NOK 9,068.5 million in 2015. The decrease in turnover is largely due to a revised portfolio of distributed metals in Nizi International.
The group’s financial position at the end of 2016 is strong. Total assets amounted to NOK 5,206.7 million at the year-end,
Board of directors’ reportHOLTA INVEST AS - ANNUAL REPORT 2016
Holta Invest AS is an investment com-pany, so it is the parent company’s accounts that provide the most relevant information concerning the development of the business. The consolidated accounts give more detailed information about activities within the group. The consolidated accounts are however affected by the purchase and selling of companies, which means that compari-son of consolidated accounts between periods may give an incomplete picture of developments.
Holta Invest AS had a profit before tax of NOK 202.8 million, compared with NOK 125.2 million in 2015. In 2014, the health portfolio was demerged to the wholly owned subsidiary Holta Life Sciences AS. The health portfolio delivered a pre-tax profit of NOK 122.0 million, compared with a loss of NOK -3.1 million in 2015. Collectively, Holta Invest AS and Holta Life Sciences AS reported a profit before tax of NOK 324.8 million in 2016. Profit for the year was NOK 191.7 million, compared with NOK 99.2 million in 2015. The parent company has insignificant operating revenues, apart from income from the asset management. The shares in the subsidiaries are recognised at his-torical cost price or fair value, whichever is lower. The company had no inter-est-bearing external liabilities at the year-end. The equity ratio amounted to 92 % at the year-end, compared with 95 % in the year before. The downturn is the result of the demerger of Holta Eiendom.
Holta Invest is engaged in asset management and industry development. The asset management involves a wide range of asset classes. The industry development involves active ownership of portfolio companies. What all activities have in common is a long-term perspective, while attempting to exploit the opportunities that arise in the markets at any given time. The company’s registered office is in Oslo.
compared with NOK 5,275.3 million the previous year. Book equity was NOK 2,661.6 million. The equity ratio ended at 51 %. The previous year, equity was NOK 2,530.3 million, with an equity ratio of 48 %. The group’s total net interest-bearing liabilities amounted to NOK 1,364.8 mil-lion, compared with NOK 1,519.3 million at the end of 2015. The group’s liquidity is good.
In the opinion of the board, the annual accounts presented for Holta Invest and for the group provide a true picture of the company’s assets and liabilities, financial position and financial results for 2016. No circumstances have occurred after the end of the financial year that are of significance for the assessment of the company’s position.
Pursuant to Section 3-3 of the Account-ing Act, the board confirms that the basis for continued operation as a going con-cern is in place and the annual financial report has been presented on this assumption.
Review of the financial statements
Holta Invest AS is an investment company with roots back to the industrialisation of Norway in the late 19th
century. The present legal entity was established in 1983. It is owned by Kjetil Holta, who is chair of the board and
actively involved in its development.
232016
RiskFinancial riskThe company is exposed to changes in EUR and USD, since certain investments are in these currencies. Forward hedg-ing is used to attempt to reduce this exposure. The company has limited credit risk and liquidity risk.
Other companies within the group are exposed in varying degrees to currency risk through the sale and purchase of goods. Each company seeks to reduce currency risk by means of its own hedg-ing strategy.
In its scope, business model and finan-cial gearing, Nizi International repre-sents a considerable financial exposure. This exposure is an inherent part of the business and the company has an active approach to managing it. The company seeks to reduce financial risk by hedging wherever possible.
The sports industry is still subject to strong competition at retail level. Devel-opments are closely followed and credit risk is reduced wherever possible by close monitoring and credit insurance. The company is also exposed to cur-rency risk through its purchasing of goods in USD with sales in NOK, SEK and EUR. Forward hedging is used to attempt to reduce this exposure.
Operational riskThe company is extensively involved in financial management, with invest-ments in shares and bonds. This activity is by its nature exposed to general mar-ket risk and specific company risk. Thor-ough analyses and ongoing portfolio val-uations are used to attempt to manage the risk elements.
The group’s activities are exposed to vari-ous operational risks.
Nizi International operates globally. This involves activity in a number of less-de-veloped geographical areas and areas with political uncertainty. The company seeks to reduce operational risk by means of thorough analyses and knowl-edge of customers and suppliers, the extensive use of recognised independent inspectors and sales contracts that reflect the conditions of purchase agree-ments. Insurance cover, commercial credit and other instruments are used to reduce operational risk. Nizi Interna-tional is also exposed to price risk on some products. This risk is measured and closely monitored.
Active Brands is exposed to market risk to a certain extent. However the major part of the sales turnover comes from pre-orders from customers before goods are purchased. This reduces the risk of being left with large inventory.
Organisation, equal opportunity, HSEAs at 31/12/2016, the company had eight permanent employees. On the same date, there were 406 employees in the group.
It is the group’s goal to be a workplace offering equal opportunities to women and men. At the end of 2016, 53 % of employees were men and 47 % women. The board consists of four men.
“The group’s financial position at the end of 2016 is strong. Total assets
amounted to NOK 5,206.7 million at the year-end, compared with NOK
5,275.3 million the previous year.“
Importantevents in 2016
y The financial investments business area delivered a return of 20.0 % in 2016. This return is considered to be satisfactory, particularly in the light of a relatively low risk profile and a demanding capital market. The cash percentage of the financial portfolio fell during the year and amounted to 19 % at the year-end 2016.
y Holta Eiendom AS was demerged from Holta Invest AS to Semestre AS with effect from 1 January 2016. The percentage of demerged activity accounted for 6.5 % of the group’s estimated values.
y The Active Brands business area was strengthened by the acquisition of the rights to the Bula brand in Europe. During 2016, Active Brands increased its sales outside Norway, and Sweden and the USA in particular saw higher levels of activity.
y The financial results of Nizi International during the past two years have been strongly negatively affected by an open metal position. This position was closed in 2016 and the effect of this has been taken into account in the 2016 accounts.
24 2016
The group works in an active, planned and targeted manner to promote equal-ity, ensure equal opportunities and rights and prevent discrimination.
Absence due to illness in the company was less than 1.0 %, while total absence due to illness in the group was 2.5 %. The work situation for the group’s employees is considered to be satisfactory. For this reason, no initiatives have been taken to improve the work situation.
Neither the company nor other compa-nies in the group have any activities that significantly pollute the environment.
Holta Invest AS does not perform its own research and development. Neither is there any research and development within the group.
The business areasFinancial investmentsAt the end of the year, including the health portfolio at Holta Life Sciences, the company had current financial assets under management amounting to approximately NOK 2.2 billion. During the course of the year, the percentage of shares was increased, while bonds were reduced, so that by the year-end shares stood at 58 % and bonds at 23 %. As a result of this, the cash proportion has decreased from 25 % to 19 %. Risk in the portfolio at year end is assessed as being relatively conservative.
In 2014, the health-related investments were demerged to Holta Life Sciences AS, a wholly-owned company. The health portfolio consists of unlisted and listed shares and liquid assets. The portfolio had a market value of NOK 350 million at the end of 2016.
Financial investments delivered a return of 20.0 % for the year. Return on shares ended at 45.6 % and return on bonds 3.8 %. Industrial investmentsActive Brands AS, 68.9 % holding
Active Brands represents Holta Invest’s activity in the sports and leisure seg-ment. The aim is to develop Active Brands into a leading supplier in its field. This is being achieved by both develop-ing own brands and purchasing new brands. The company develops, markets and sells clothing and equipment to the sports and leisure market. As at 31 December 2016, the group had 188 employees and operations in six loca-tions across the Nordic region in addition to Denver and Shanghai. The head office is in Oslo.
The Active Brands group had a turnover in 2016 of NOK 878 million, compared with NOK 653 million in 2015. This growth is distributed over all brands and a number of categories. The biggest brand, Kari Traa, continued its strong growth in 2016 and has strengthened its position outside Norway. The Dæhlie brand completed a successful reposition-ing of the brand with a new logo and col-lection.
Active Brands acquired the rights to the Bula brand in Europe in 2016. Through Bula, the company will strengthen sales of small items and leisure wear in Europe.
In recent years, there has been a strong focus on improving the group’s capital employed, product supply and online trading. The aim is that Active Brands will be perceived as the most professional and efficient supplier in the industry.
Nizi International, 95.1 % holding
Nizi International represents Holta Invest’s activities in the trading and distri-bution of metals. The group is a signifi-cant supplier of ferro alloys to the steel and foundry industry and physically trades selected industrial metals. Activi-ties are global and the group has offices in Europe, Brazil, the USA and China. The head office is in Luxembourg.
The metal markets have been challenging in recent years. Reduced demand has resulted in declining volumes and falls in prices for most metals which Nizi distrib-utes. The downturn has been most marked in Europe.
At the start of the year, comprehensive measures were carried out to boost the competitiveness of the business through restructuring, substantial cost reductions and the discontinuation of certain prod-uct areas. As a result of this, turnover fell by almost EUR 280 million during the year. The accounts have been strongly affected by provisions for the realisation of an open position which the company has struggled with over the past two years.
The Nizi International group had a turno-ver in 2016 of NOK 6,007 million, com-pared with NOK 8,264 million in 2015. At at 31/12/2016, the group had 197 employ-ees.
“Realisation of the stake in Active Brands further boosts Holta Invest’s liquidity and
financial capacity. This opens up a number of interesting opportunities within both
listed and unlisted companies.“
252016
OtherHolta Invest exercises ownership of ear-ly-phase investments through its whol-ly-owned subsidiary Sandbox AS. The largest individual investments are Det Norske Brenneri AS and Telemark Kjøtt AS. Det Norske Brenneri achieved solid profitability in 2016. Telemark Kjøtt needs to increase its turnover in order to break even financially.
Holta Invest was an active participant in setting up the Spear Capital fund in 2013. The purpose of the fund is to invest in sub-Saharan Africa. The fund carried out a further investment in South Africa in 2016. The fund is involved in two invest-ments in Zimbabwe from previous years.
Holta Invest owns 39 % of Optime Subsea AS, an innovative oil service company. The company has developed a number of interesting technologies for cost-effec-tive subsea operations.
Events after the date of balanceOn 16 March 2017, Active Brands Holding AS signed an agreement concerning the sale of Active Brands AS to an invest-ment fund. The transaction is expected to be completed in April, and Holta Invest will continue with a 20 % stake in Active Brands.
Future prospectsAt the beginning of 2017, the macro eco-nomic picture is still marked by uncer-tainty. Interest rate levels are low all over the world and one of the most important issues for the Norwegian equity market is the future development of the price of oil. Holta Invest anticipates that it will take time for the price of oil to become stabi-lised at a higher level and therefore has a low exposure to the oil and offshore industry. On the other hand, Holta Invest is still positive about consumer-related investments such as aquaculture.
Realisation of the stake in Active Brands further boosts Holta Invest’s liquidity and financial capacity. This opens up a num-ber of interesting opportunities within both listed and unlisted companies. Holta Invest has good experience of exer-cising active ownership and wants to develop this further going forward.
Given its significant financial capacity, good liquidity and competent organisa-tion, the board is of the opinion that Holta Invest is well positioned to exploit the opportunities that may occur in the future.
Annual profit and allocationThe parent company’s accounts show a surplus of NOK 191.7 million.
It is proposed to allocate this as follows:
NOK million
Profit for the year 191.7
Allocated to dividend 60.0
Transferred to other equity 131.7
Total allocation of annual surplus 191.7
Oslo, March 24, 2017The Board of Holta Invest AS
Kjetil HoltaChairman of the Board
Bjørn FlatgårdVice Chairman of the Board
Tomas SettevikBoard Member
Jonas ArlebäckBoard Member
Dag TeiglandChief Executive Officer
26 2016
Kjetil Holta (1965)
Chair
Kjetil Holta is the owner and chairman of Holta Invest AS. Mr Holta holds a MSc of business and economics from Norwegian Business School (BI), and has previously worked as investment director for Høegh. Kjetil Holta has served on several boards including Tinfos AS and Tennant Insurance Group AB.
Bjørn Flatgård (1949) Deputy chair
Bjørn Flatgård runs his own business, the principal activities of which are participation on board of directors and investments. Mr. Flatgård is a graduate from the Norwegian University of Science and Technology and from the Norwegian Business School. His previous experience includes top management positions such as CEO of Elopak and of Nycomed Pharma. He has also been part of the executive management of Hafslund Nycomed. He also serves on the board of Aker Bio Marine ASA and chairs the boards of Salmar ASA and Handelsbanken Norge.
Tomas Settevik (1960) Board member
Tomas Settevik has his MSc of business and economics from Copenhagen Handelshøjskole. He has held several board memberships in Norway and in UK. He is currently working as an independent investor and advisor. His previous position was CEO of Stokke AS which was divested to Koran PE company in 2015. He has had responsibility for global strategy expansion strategies and sale of companies such as Stokke and Pronova BioPharma ASA(2008) where he served as CFO.
Jonas Arlebäck (1970)
Board member
Jonas Arlebäck was until March 2017 a member of the management team of the Handicare Group, where he mainly served as CFO. He has mostly in his career been a management consultant at McKinsey & Co and Accenture - the final six years as a partner. Mr Arlebäck holds an MSc in Industrial Engineering and Management from Chalmers University of Technology as well as an MSc in International Business from Gothenburg School of Economics & Commercial Law. His only other board assignment is for EME Partners, a hedge fund manager certified by the Swedish Financial Supervisory Authority.
Board of directors
272016
Dag Teigland (1966)
CEO
Dag Teigland holds a Bachelor of Business Administration from the US and an MBA from IESE in Barcelona. He has broad international experience among others from managing positions in Winder, Elkem, Arkwright and Sunmar Shipping. Teigland came to Holta Invest from the position as CEO in Tinfos.
Leif Ove Rørnes (1968)
CFO
Leif Ove Rørnes holds a MSc in Business and Economics from the Norwegian Business School (BI). He has substantial experience from international business and finance, as well as from successful PE owned enterprises, from his positions in among others REC Solar, Arcus Group and Dyno Nobel.
Terje Nyborg (1962)
Portfolio manager
Terje Nyborg holds a MSc in Business and Economics from the Norwegian School of Economics and Business Administration (NHH). He has broad experience from the stock market and has among others held positions as Chief analyst of Kapital, Stock strategist of Terra Securities and Equity strategist of Landsbanki.
Espen Tiedemann Jørgensen (1975)
Portfolio manager
Espen Tidemann Jørgensen holds a Bachelor of Economics/Exam Oecon and has completed a 3-year study in preclinical medicine and human biology at the University of Oslo. He has 12 years of experience from financial markets as analyst/head of defensive equity research at DNB Markets and chief analystat Terra Securities.
Reidar M-K Tveiten (1982) Investment manager
Reidar M-K Tveiten holds a MSc in Business and Economics from the Norwegian School of Economics and Business Administration (NHH). He has experience as financial analyst from Statkraft and as a consultant in the Strategy Department of the law firm Selmer.
Key Management
28 2016 Consolidated financial statments
Group Holta Invest AS
2015 2016 Note Amounts in NOK 1 000 Note 2016 2015
8 958 207 6 918 421 Revenues 2 495 3 651
96 233 376 063 Net income from Financial Investments 253 531 94 602
14 081 2 387 Other operating income 0 -
9 068 522 7 296 873 1 Operating income 1 256 026 98 253
8 446 286 6 245 733 Cost of goods sold
287 219 295 572 2 Payroll expenses 2 23 762 17 683
31 1 2 1 22 980 7 Depreciation of fixed assets and goodwill/badwill 5 23 26
307 972 266 597 4 Other operating expenses 2 23 741 20 241
9 072 599 6 830 882 Operating expenses 47 526 37 949
(4 076) 465 991 Operating profit 208 500 60 304
(45 540) (45 607) 3 Interest income/ - expenses 3 5 001 8 202
(19 019) (31 514) 3 Other financial items 3 (10 731) 11 629
(64 559) (77 121) Net finance (5 730) 64 945
(68 635) 388 870 Ordinary result before tax 202 770 125 249
(4 322) 47 901 5 Tax on ordinary result 4 11 087 26 014
(64 313) 340 969 Ordinary result 191 683 99 235
- - 16 Disposals of operations
(64 314) 340 968 Net profit for the year 191 683 99 235
Of which:(6 414) 20 040 13 Minority of interests
Allocations to:Dividends 10 60 000 50 000
Other equity 10 131 683 49 235
Total allocations 191 683 99 235
Income statement 1.1 – 31.12
292016Consolidated financial statments
Group Holta Invest AS
2015 2016 Note Amounts in NOK 1 000 Note 2016 2015
ASSETS 149 765 188 950 6, 7 Intangible fixed assets - - 181 361 141 319 7 Other fixed assets 5 621 593
93 247 98 653 8 Financial fixed assets 6 888 933 797 107
424 372 428 923 Fixed assets 889 554 797 700
1 944 908 1 628 505 9 Inventories
979 551 1 005 313 10 Accounts receivables 8 15 658 57 827
1 415 292 1 747 586 11 Investments 7 1 491 876 1 295 405
5 1 1 156 396 397 12 Cash and bank deposits 9 225 079 444 087
4 850 907 4 777 801 Current assets 1 732 613 1 797 319
5 275 280 5 206 725 Assets 2 622 167 2 595 019
EQUITY AND LIABILITIES 522 488 13 Share capital 10 488 522
91 91 13 Share premium capital 91 91
2 442 349 2 557 417 13 Retained earnings 10 2 407 164 2 455 624
87 382 103 558 13 Minority interests
2 530 344 2 661 555 13 Equity 2 407 743 2 456 237
67 332 49 222 14 Provisions 2 - -
201 272 231 267 15 Long-term liabilities 9 598 69 675
17 849 26 088 5 Deffered tax 4 13 184 10 890
286 453 306 578 Long-term liabilities 22 782 80 566
1 829 212 1 529 932 15Short term interest bearing debt, bank overdraft. Etc.
357 799 330 192 Trade creditors 1 185 622
11 314 34 645 5 Tax payable 4 1 386 -
29 625 20 811 Public duties payable 1 941 1 844
50 001 60 001 13 Dividends 10 60 000 50 000
180 532 263 012 Other short-term liabilities 127 130 5 750
2 458 483 2 238 592 Total short-term liabilities 191 642 58 216
2 744 936 2 545 170 Total liabilities 214 424 138 782
5 275 280 5 206 725 Total equity and liabilitites 2 622 166 2 595 019
7 843 5 544 Guarantees
Statement of financial position at 31 December
Oslo, March 24, 2017The board of directors of Holta Invest AS
Kjetil Holta Bjørn Flatgård Tomas Settevik Jonas Arlebäck Dag TeiglandChair Deputy chair Director Director CEO
30 2016 Consolidated financial statments
Group Parent company
2015 2016 1000 NOK 2016 2015
Cashflow from operational activities:(68 635) 388 870 Profit before tax 202 770 125 249
9 433 (11 314) Taxes paid - -
- 0 Profit / Loss sale of assets - -
(161 763) (34 924) Profit / Loss sale of securities (34 924) (161 763)
31 121 22 980 Depreciations / write-downs 23 26
- 0 Profit / Loss disposal of subsidiaries - -
31 553 (22 851) Changes in receivables 1 584 1 522
(237 208) 316 403 Changes in inventory - -
(81 441) (27 607) Changes in trade payables 564 (1 599)
212 621 (135 017) Changes in other accruals (194 727) 82 579
(264 320) 496 541 A Net cashflow from operational activities: A (24 710) 46 014
Cashflow from Investments:- 0 Proceeds from sales of fixed assets - -
(41 746) (22 367) Purchase of tangible fixed assets (52) -
1 318 661 411 470 Proceeds from sale of securities and financial investments 302 379 528 885
(941 344) (505 354) Purchase of securities and financial investments (323 291) (128 483)
335 572 (116 250) B Net cashflow from investments B (20 964) 400 403
Cashflow from financing activities:
359 114 29 995 Change in short term interest bearing debt (63 257) (54 552)
(36 858) (475 045) Change in long term interest bearing debt (60 077) (31 646)
(42 500) (50 000) Dividend paid (50 000) (42 500)
- 0 Payment from minoritites - -
279 755 (495 050) C Net cashflow from financing activities C (173 334) (128 698)
351 007 (114 759) Total change in current financial assets (A+B+C) (219 008) 317 719
160 150 511 156 Cash and bank deposit as of 01.01 444 087 126 368
- 0 Cash inflow from purchase of companies - -
511 156 396 395 Cash and bank deposit as of 31.12 225 079 444 087
2 409 619 2 691 083 Available liquid assetsOf which:
506 545 391 685 Bank deposits less funds employed
1 415 292 1 747 586 Investments - market value 31.12
487 783 551 812 Net cash / drawdown facilities
Working Capital4 850 907 4 777 801 Current assets 1 732 613 1 797 319
2 458 483 2 238 592 Current liabilites 191 642 58 216
2 392 424 2 539 209 Working capital as of 31.12 1 540 971 1 739 103
Cashflow statement 1.1 - 31.12
312016Notes to the consolidated financial statments
The financial statements and the group accounts have been prepared in accordance with the Norwegian Accounting Act and gener-ally accepted accounting principles in Norway.
Holta Eiendom was demerged as of 01. January 2016. Ny Vri AS was sold as of 01. October 2016.
Classifications Principles:
Balance sheet classification: Current assets and short term liabilities consist of receivables and payables due within one year, and items related to the inventory cycle. Other balance sheet items are classified as fixed assets / long term liabilities.
Current assets are valued at the lower of cost and fair value. Short term liabilities are recog-nized at nominal value.
Fixed assets are valued at cost, less deprecia-tion and impairment losses. Long term liabili-ties are recognized at nominal value.
Inventories:Inventories are recognized at the lowest of cost and net selling price. The net selling price is the estimated selling price in the case of ordinary operations minus the estimated completion, marketing and distribution costs.
Accounts receivables and other receivables:Accounts receivables and other current receiv-ables are recorded in the balance sheet at nomi-nal value less provisions for doubtful accounts.
Short term investments:Short term investments, stocks and shares - listed investments - seen as current assets, are valued at fair value at the balance sheet date.
Revenue recognition:Revenues from the sale of goods are recognized in the income statement once delivery has taken place and most of the risk and return has been transferred. Revenues from the sale of services are recognized in the income state-ment accordingto the project’s level of completion provided the outcome of the transaction can be esti-mated reliably.
Net income from Financial Investments is shown as a separate line under total operation income.
Shares and ownership in subsidiaries:Shares in subsidiaries and other companies in the Group are recorded at cost in the company accounts. The shares are valued at the lower of historical cost and estimated fair value. Divi-dends, and other distributions from subsidiar-ies is recognized in the same year as accrued in the subsidiary’s accounts. Exceeds dividend / group contribution share of retained profits after time of acquisition, the excess represents repayment of invested capital and the distribu-tion is deducted from the investment value in the balance sheet of the parent.
Research and development:Development costs are capitalized providing that a future economic benefit associated with development of the intangible asset can be established and costs can be measured reliably. Otherwise, the costs are expensed as incurred. Property, plant and equipment:Property, plant and equipment is capitalized and depreciated linearly over the estimated useful life. Costs for maintenance are expensed as incurred, whereas costs for improving and upgrading property plant and equipment are added to the acquisition cost and depreciated with the related asset.
The booked values are tested yearly. If the booked value is higher than the estimated mar-ket price, the booked value is depreciated to the lower of booked value and estimated market value.
Income tax:The tax expense consists of the tax payable and the change to deferred tax. Deferred tax / tax assets are calculated on all differences between the book value and tax value of assets and liabil-ities. Deferred tax assets are booked after deferred tax and booked net to the balance sheet for intangible assets or accrual for liabili-ties.
Basis of consolidation:The Group’s consolidated financial statements comprise companies in which Holta Invest AS has a controlling interest. A controlling interest is normally obtained when the Group owns more than 50% of the shares in the company and can exercise control over the company. Minority interests are included in the Group’s equity. Transactions between group companies have been eliminated in the consolidated finan-cial statement. The consolidated financial state-ment has been prepared in accordance with the same accounting principles for both parent and subsidiary.
Companies which have been bought or sold during the year are included in the consolidated financial statements from the date when con-trol is achieved and until the date when control ceases.
Acquisitions of subsidiaries are accounted for using the purchase method of accounting. The cost of shares are eliminated against the equity in the subsidiaries on the date of acquisition. Amounts that exceed the fair value of the net assets of the subsidiary acquired, is recorded as goodwill or branded goods. Time period for depreciation of goodwill are 5-25 years. Branded goods are depreciated over 25 years.
Conversion of subsidiaries abroad:The profit and loss accounts are converted according to the average exchange rate of the year. Assets and liabilities are converted according to the exchange rate of the bal-ance-sheet date. Currency conversion vari-ances are booked directly against the equity.
Pensions:Defined benefit plans are valued at the present value of accrued future pension benefits at the balance sheet date. Pension plans assets are valued at their fair value.
Minority interests:The minority shares of profit and equity is shown as separate items in the income state-ment and in the balance sheet.
Consolidated companies;The Group’s consolidated financial statements comprise companies in which Holta Invest AS has a controlling interest. A controlling interest is normally obtained when the Group owns more than 50% of the shares in the company and can exercise control over the company. The following companies, together with Holta Invest AS, makes the Group accounts;
Consolidated companies:
EL Holding AS 100,0 %
Forbruker Finans AS 100,0 %
Jageren AS 100,0 %
Nizi Invest SA 84,3 %
Nizi Holding AS (konsern) 70,0 %
Nizi Luxembourg SA 100,0 %
Nizi International SA 100,0 %
Keyvest Belgium SA 100,0 %
Nizi International (SP) 100,0 %
Nizi Met. Trading Co Ltd (CN) 100,0 %
Tianjin Nizi Golden Ever (CN) 50,0 %
NMZ Holding 100,0 %
Miller & Co LLC (US) 100,0 %
Chemalloy Company LLC 100,0 %
Conshohocken Real Property LLC 100,0 %
Nizi International (DE) Gmbh 100,0 %
Nizi International (IB) SA 100,0 %
Nizi International (PL) 100,0 %
Nizi International (CH) SA 100,0 %
Active Brands Invest AS 78,6 %
Active Brands Holding AS 53,5 %
Active Brands (konsern) 100,0 %
Active Brands Nordic AB (SE) 100,0 %
Active Brands Shanghai Ltd 100,0 %
Active Brands Butikkdrift AS 100,0 %
Active Brands Danmark AS 100,0 %
Active Brands North America (US) 100,0 %
Active Brands Finland Oy 100,0 %
Lillesetra AS 51,0 %
Sandbox Capital AS (konsern) 100,0 %
Det Norske Brenneri AS 59,3 %
KG Puntervold AS 59,3 %
Telemark Kjøtt AS 70,0 %
Holta Life Sciences AS 100,0 %
Seesaw AS 90,1 %
Notes to the consolidated financial statementsHolta Invest group
Ownership:
32 2016 Notes to the consolidated financial statments
Note 1 Revenues
In NOK 1 000 2016 2015
Revenues 6 918 421 8 958 207
Net income from Financial Investments 376 063 96 233
Other operational revenue 2 387 14 081
Total operational revenue 7 296 873 9 068 522
Operational revenues by geographical areaEU / EEC 2 728 904 3 031 660
Rest of Europe 657 734 1 236 953
America 2 141 585 2 725 878
Asia 1 454 835 1 696 626
Africa / Australia 313 813 377 403
Total operational revenues 7 296 872 9 068 521
Note 2 Personnel cost
In NOK 1 000 2016 2015
Wages and salaries paid to employees 249 433 229 327
Fees to board/corporate assembly 2 557 2 237
Social security payments 23 123 26 721
Pension costs 6 680 7 706
Other personnel costs 13 779 21 229
Total personnel costs 295 572 287 219
Break down of net pension costs for Norwegian companies in the Group: Present value of net pension
including. AFP-scheme and employee contributions - -
Interest costs on obligations - -
Expected return on funds - -
Variation between actual and expected return - -
Net expected pension cost/(return) - -
Number of employees at year end 406 422
Breakdown of net pension obligations and pension funds by guaranteed and non-guaranteed performance:
Guaranteed obligationsNon-guaranteed
obligations 2016 2015
31.12.16 31.12.15 31.12.16 31.12.15 31.12 31.12
Gross pension obligations (PBO) incl. employer contributions - - 38 015 47 103 38 015 47 103
Net pension obligations - - 38 015 47 103 38 015 47 103
Note 3 Financial profit/loss
In NOK 1 000 2016 2015
Interest income/costsInterest income 5 121 11 369
Interest cost (50 728) (56 909)
Total interest income/costs (45 607) (45 540)
Other financial itemsProfit/- loss from foreign exchange (2 302) (885)
Other financial profits / - losses (29 212) (18 134)
Total other financial items (31 514) (19 019)
Total Net finance (77 121) (64 559)
332016Notes to the consolidated financial statments
Note 4 Audit fees
In NOK 1 000 2016 2015
Audit fees in Norway 1 677 2 301
Audit fees abroad 2 389 2 118
Consulting fees in Norway 811 403
Consulting fees abroad - -
Total expenses for auditing 4 877 4 822
Note 5 Tax expenses / deferred taxes
In NOK 1 000 2016 2015
Basis for deferred tax/tax benefits:
Current assets/current liabilities (4 032) (3 825)
Fixed assets/long-term debt 138 019 141 346
Other differences/pension obligations (10 503) 15 740
Differences not included in deferred taxes (17 095) (81 865)
Basis for deferred tax/tax benefits 106 389 71 396
Net deferred tax asset/deferred taxes (see note 6) 26 596 17 849
Tax payable in Norway 27 132 1 082
Tax payable abroad 17 737 10 232
Change in deferred tax/tax assets 3 031 (15 636)
Tax result for the year 47 900 (4 322)
Tax liabilities in the balance sheet:
Tax payable on income for the year 17 488 1 082
Tax payable abroad 17 157 10 232
Total payable tax 34 645 11 314
Note 6 Intangible assets
In NOK 1 000 2016 2015
Intangible assets
Intangible assets, cf. note 7 188 950 149 765
Deferred tax assets cf. note 5 - -
Total intangible assets 188 950 149 765
Note 7 Intangible assets
In NOK 1 000
Research/develop-
ment,capitalized
costs Brands Goodwill Patents Total
Costs at 1 January 23 079 113 488 24 793 150 161 360 Additons during year - 34 101 18 310 - 52 411 Disposals during year (2 510) - - - (2 510)
Costs at 31 December 20 569 147 589 43 103 150 211 261 Accum. Ordinary depreciation and write downs at 31 December 13 967 6 334 2 009 150 22 310
Book value at 31 December 6 602 141 255 41 094 - 188 952
Annual write downs - - - - - Annual ordinary depreciation 2 736 6 526 (5 347) - 3 914
Annual depreciations and write downs 2 736 6 526 (5 347) - 3 914
Time period for ordinary depreciationStraight line depreciation schedule. 5 years 25 years 25 years 7 years
The subsidiary Active Brands acquired the Bula and Johaug sports brand in 2016, and purchase value exceeding book value has been allocated to Brands.
34 2016 Notes to the consolidated financial statments
Fixed assets
Buildings Property Machinery Equipment
Underconst-
ruction
Non. depr.
assets TotalIn NOK 1 000
Costs at 1 January 224 478 51 794 53 953 42 442 149 578 373 394 Additons during year - - 16 858 - - - 16 858 Disposals during year (182 044) - - (1 066) - - (183 110)
Costs at 31 December 42 434 51 794 70 811 41 376 149 578 207 142 Accum. ordinary depreciation and write downs at 31 Decem-ber 8 365 772 37 857 18 680 149 - 65 823
Book value at 31 December 34 069 51 022 32 954 22 696 - 578 141 319
Annual write downs - - 565 - - - 565 Annual ordinary depreciation 1 069 203 4 420 12 807 - - 18 500
Annual depreciations and write downs 1 069 203 4 985 12 807 - - 19 065
Time period for ordinary depreciation 20-40 years
10-15 years
5-15 years
Straight line depreciation schedule.
There has been no change in the depreciation schedule
Depreciation intangible assets 3 914 Depreciation fixed assets 19 065
Annual ordinary depreciation 22 980
Note 8 Financial fixed assets
In NOK 1 000Historical cost price
Value in balance sheet
Shares 94 883 94 883
Other receivable with maturity > 1 year 3 770 3 770
Total financial fixed assets 98 653 98 653
Note 9 Inventory
In NOK 1 000 31.12.2016 31.12.2015
Raw material/products 139 229 178 277
Finished products/work in progress 42 278 35 579
Purchased goods 1 446 998 1 731 053
Total inventory 1 628 505 1 944 908
Note 10 Receivables
In NOK 1 000 31.12.2016 31.12.2015
Accounts receivables 956 892 934 041
Other receivables 48 421 45 510
Total receivables 1 005 313 979 551
Note 11 InvestmentThe company’s portfolio of securities are booked at NOK 1 747 586’. The portfolio is composed of investments in listed companies,mutual funds and bonds. The portfolio is adjusted to fair value as of 31.12.2016.
Market-based stocks and securities
In NOK 1 000 Cost price Value at 31.12
Norwegian stocks 675 018 1 083 934
Foreign stocks 145 608 156 531
Bonds 523 639 502 871
Norwegian and foreign funds 31 610 4 250
Total portfolio 1 375 875 1 747 586
352016Notes to the consolidated financial statments
Note 12 Liquid assets
In NOK 1 000 31.12.2016 31.12.2015
Fixed bank assets, including funds employed 4 712 4 611
Note 13 Equity
In NOK 1 000
Share capitalparent
company
Share premiumparent
companyOther equity
Minortyinterests
Totalequity
At 1 January 522 91 2 442 349 87 382 2 530 344 Annual net income (34) - (179 304) - (179 338) Provision for Dividends - - 320 930 20 040 340 969 Currency conversion variances and other changes - - (60 000) - (60 000)
At 31 December 488 91 2 557 417 103 558 2 661 553
Note 14 Provisions for liabilities
In NOK 1 000 31.12.2016 31.12.2015
Pension liabilities* Norwegian companies - -
* Companies abroad 38 015 47 103
Other liabilities 37 295 20 229
Total provisions for liabilities 75 310 67 332
Note 15 Interest bearing long-term debt
In NOK 1 000 2016
Debt to credit institutions, date of payment after 5 years -
Interest bearing debtInterest bearing debt financial institustions 231 267 Bank overdraft eliminated against bank deposit in the group accounts 1 529 932 Bank overdraft eliminated against bank deposit in the group accounts (396 397)
Pledged debt 1 364 802
Booked value of assests pledged as security:Shares 30 626 Fixed assets 115 941 Bank accounts 31 557 Accounts receivables 853 870 Inventories 1 435 681
Note 16 Companies under disposalsCompanies under disposals are presented net.
Note 17 Financial risksInterest rate risk arises in the short and medium term because part of debt in the subsidiaries have a floating rate.
Currency exchange riskSubsidiaries abroad cause financial risk on consolidated level. There are no agreements entered to reduce this risk.The company has invested in securities in foreign exchange. Hedging strategies to reduce this risk are established.Currency futures are entered into on rolling three-months basis.Active Brands hedges the currency exposure when sourcing of goods through futures.Nizi hedges fluctuations in currency and commodity prices on a running basis.
LeasesEl Holding AS has signed miscellanous lease agreements. Annual rent amounts to Tnok 780.
36 2016 Notes to the consolidated financial statments - Holta Invest AS
Note 1 Revenues from operations
In NOK 1 000 2016 2015
Sale of management services 2 495 3 651
Net income from Financial Investment 253 531 94 602
Other revenues - -
Total revenues from operations 256 026 98 253
Sale of managment services is to group companies based on arms length principles.
Note 2 Personnel cost
In NOK 1 000 2016 2015
Wages and salaries paid to employees 18 277 11 914
Fees to board 1 600 1 000
Social security payments 2 385 2 862
Pension costs 1 318 1 722
Other personnel costs 182 185
Total personnel costs 23 762 17 683
Number of employees 8 8
Fees to board, exclusive sosial security payments in 2014
Expensed auditing fees
In NOK 1 000 2016 2015
Fees paid to auditors; ordinary audit and accounting technical assistance 525 312
Fees to auditors, consulting services 303 309
Payments to management
In NOK 1 000 CEO
Wages and salaries 3 234 Pension cost 176 Other payment 168
CEO may on certain conditions earn a bonus up to 6 months of base salary.
Pension costs and liabilitiesThe liability includes 1 person, it is unsecured and will be paid out of operational revenues
In NOK 1 000 2016 2015
Present value of pension liabilities incl. employer contribution, unsecured - -
Net pension costs - -
The company comes under the requirements for mandatory occupational pensions for their employees. The company has a defined contribution plan that meets the requirements of the Act. In 2016 tnok 1 318 is expensed as the pension costs for this scheme.
Notes to the financial statementsHolta Invest AS
372016Notes to the consolidated financial statments - Holta Invest AS
Note 3 Financial profit/loss
In NOK 1 000 2016 2015
Share of profit / dividends:Dividends / group contribution from subsidiaries - 45 114
Total share of profit / dividends - 45 114
Interest receivable/expensesInterest income from group comp. 5 855 8 288
Interest income from others 100 2 713
Interest costs (-) to group comp. (324) (2 267)
Interest costs (-) to others (630) (531)
Total interest receivable/expenses 5 001 8 202
Other financial profit/lossProfit/- loss from foreign exchange (5 844) 8 485
Other financial profits/- losses group comp. (2 863) 0
Other financial profits / - losses (2 024) 3 144
Total (10 731) 11 629
Total financial profit/loss (5 730) 64 945
Note 4 Tax costs
In NOK 1 000 2016 2015
Taxes payable 5 959 48 566
Change in deferred tax 2 293 (22 551)
Adjusted tax previous years 2 835 -
Tax costs on profit for the year 11 087 26 014
Reconciliation of taxesTax on ordinary result 11 087 Tax estimated with 27% of profit before tax 50 692
Difference (39 606)
Tax on permanent differences (46 466) Adjusted tax previous years 6 860
Explained difference (39 606)
Tax payable:Profit before taxes 202 770 125 249
Permanent difference (185 866) 70 122
Change in temporary differences 6 930 (15 498)
Losses carried forward - -
Tax base for year 23 834 179 872
Tax rate 25% 27%
Calculated tax 5 959 48 566
Tax on contribution to group companies (4 572) (48 566)
Tax payable in the balance sheet 1 386 -
Deferred tax / tax assetOther differences related to:
Fixed assets (255) (334)
Long-term receivables and debt foreign curr. 3 618 6 898
Receivables (540) (1 947)
Pension liabilities, secured net (15 598) -
Shares and bonds 67 544 38 740
Tax profit and loss acoounts 164 205
Differences not included in calculating deferred tax assets 0 0
Basis for calculation of deferred tax 54 932 43 562
Tax rate 24% 25%
Deferred tax 13 184 10 890
Change in deferred tax 2 293 (22 551)
Deferred tax assets is not listed in the accounts.
38 2016 Notes to the consolidated financial statments - Holta Invest AS
Note 5 Fixed assets
In NOK 1 000 Building InventoryNon-depr. inventory Total
Acquisition costs at 1 January - 2 312 578 2 890Additions during year - 51,55 - 52Disposals during year - - - -
Acquisition costs at 31 December - 2 364 578 2 942Ordinary depreciation at 31 December - 2 320 - 2 320
Book value as of 31.12 - 43 578 621
Ordinary depreciation - 23 - 23
Time period for ordinary depreciation 3-5 years
Straight line depreciation schedule.
There has been no change in the depreciation schedule.
Note 6 Financial Assets
In NOK 1 000Business office
Number of shares Ownership Cost price
Booked value Net Income Equity
Group companies:EL Holding AS Oslo 500 1 65 65 (1584) 328
Forbruker Finans AS Oslo 1000 1 120 161 (21) 79
Jageren AS Notodden 1000 1 155 226 (31) 79
Nizi Invest SA Luxembourg 572300 0,843 39782 39782 (127) 51105
Nizi Holding AS (konsern) Oslo 65000 0,7 108508 108508 (39375) 169633
Nizi Luxembourg SA 0 1 0 0 (821) 250432
Nizi International SA Luxembourg 0 1 0 0 (62685) 153646
Keyvest Belgium SA Liege 0 1 0 0 530 9450
Nizi International (SP) Madrid 0 1 0 0 158 1771
Nizi Met. Trading Co Ltd (CN) Beijing 0 1 0 0 94 2890
Tianjin Nizi Golden Ever (CN) 0 0,5 0 0 (2169) 2771
NMZ Holding 0 1 0 0 (1960) (32022)
Miller & Co LLC (US) Chicago 0 1 0 0 11290 143704
Chemalloy Company LLC Philadelfia 0 1 0 0 12679 309660
Conshohocken Real Property LLC Philadelfia 0 1 0 0 841 23222
Nizi International (DE) Gmbh Ratingen 0 1 0 0 389 12021
Nizi International (IB) SA Barcelona 0 1 0 0 0 5481
Nizi International Spain SA Madrid 0 1 0 0 158 1771
Nizi International (PL) Warsawa 0 1 0 0 91 788
Active Brands Invest AS Oslo 1288684 0,786 35050 35050 (37) 44464
Active Brands Holding AS Oslo 1312377 0,5346 121087 121087 (585) 219416
Active Brands (konsern) Oslo 1 0 0 71062 265065
Active Brands Butikkdrift AS Oslo 0 1 0 0 1961 3799
Active Brands Danmark AS København 0 1 0 0 2 (565)
Active Brands North America (US) USA 0 1 0 0 (3534) (6073)
Active Brands Finland Oy Helsinki 0 1 0 0 (371) (340)
Lillesetra AS Oslo 0 0,51 0 0 1482 1512
Sandbox Capital AS (konsern) Oslo 100 1 10691 18766 (620) 18510
KG Puntervold AS Grimstad 0 0,593 0 0 1920 12699
Telemark Kjøtt AS Notodden 0 0,7 0 0 (2950) 1041
Holta Life Sciences AS Oslo 1000 1 212349 215204 124292 362346
Seesaw AS Oslo 901 0,901 1892 1892 (33) 345
Holta Invest Sverige AB Gøteborg 0 1 0 0 (1833) 0
Shares in subsidiaries, total 540 741
Share in subsidiaries 540 741
Shares in other companies 94 686
Loans to other companies 1 142
Loans to group companies 252 364
Total financial assets 888 933
392016Notes to the consolidated financial statments - Holta Invest AS
Share in associated companies.Optime Subsea Telemark 40% 21157
Figg AS Oslo 22% 1500
In NOK 1 000 31.12.2016 31.12.2015
Long term receivables exceeding 1 year 1 142 1090
Note 7 InvestmentsThe company's portfolio of shares and securities are booked at NOK 1 491 875'. The portfolio is composed of positions
in listed companies, mutual funds and bonds. The portfolio is adjusted to fair value as of 31.12.16.
Market-based shares and securities
In NOK 1 000 Cost price Value at 31.12
Norwegian shares 556 596 918 530
Forreign shares 62 753 66 224
Bonds 523 639 502 871
Norwegian and forreign funds 31 610 4 250
Total portfolio 1 174 598 1 491 875
Note 8 Receivables
In NOK 1 000 31.12.2016 31.12.2015
Other short-term receivables group 9 661 53 021
Other short-term receivables 5 996 4 806
Total short-term receivables 15 658 57 828
Other short term debt group 120 630 1 415
Other short term debt 6 500 4 335
Total other short term debt 127 130 5 750
Note 9 Liquid Assets
In NOK 1 000 31.12.2016 31.12.2015
Cash, bank and postgiro deposits 224 158 443 401
Employee tax assets 921 686
Bank account as security for pension liabilities (see note 2)
Total liquid assets 225 079 444 087
Note 10 EquityPaid up equityEquity composed of 1 share of 487 621,14 NOK. Shares in Holta Invest AS as of 31.12 are owned by:
No. Shares Ownership
Kjetil Holta - Company Chairman 1 100.0%
Retained earnings
In NOK 1 000 Share capital Share premium Other equity Total
Equity 01.01 522 91 2 455 625 2 456 238 Demerger Holta Eiendom (34) - (179 304) (179 338) Other change - - (840) (840) Net income - - 191 683 191 683 Provisions for dividends - - (60 000) (60 000)
At 31 December 488 91 2 407 164 2 407 742
40 2016 Auditors report 2016
412016Auditors report 2016
42 2016 Auditors report 2016
Text: Holta InvestDesign/layout: David HöökPhotos: Holta Invest, ShutterstockForside: “Gothenburg fishmarket” by Wilma Holta
44 2016 Notes to the consolidated financial statments
HOLTA INVEST AS
Drammensveien 35NO-0271 Oslo
P.O. Box 2501, SolliNO-0202 Oslo
Telephone: (+47) 22 55 03 00 Telefax: (+47) 22 55 71 00