Ferd Capital entered into an agreement with the Swedish company Ratos to become partners as owners of Aibel

Summary 2012

• Ferd Capital entered into an agreement with the Swedish company Ratos to become partners as owners of Aibel, and this reduced Ferd's total exposure to the oil services company while maintaining a direct ownership interest of almost 49%.
• Ferd Capital sold its ownership interests in Affitech and Nanoradio
• Ferd Capital made one new investment (Aspiro/Wimp) and three "add-on" investments in portfolio companies.

Ferd Capital sold its ownership interests in Affitech and Nanoradio

The portfolio companies reported good results and a good return for Ferd.

Market
The global macroeconomic climate in 2012 was turbulent, with high volatility driven principally by the situation in the USA and in southern and central Europe. Norwegian business and industry benefited from continuing high oil prices. 2012 was a good year for oil and gas related companies, but the picture was somewhat more mixed for other sectors.

Ferd Capital again experienced competition for new investment opportunities in 2012 from Norwegian and international private equity firms. The level of activity among private equity funds increased somewhat from 2011, but is still far below the level seen in the years before 2008. The increase in activity was mainly driven by strong growth in transactions involving oil and gas related businesses.

The portfolio companies reported good results and a good return for Ferd.

Portfolio companies
2012 was an eventful year for many of our portfolio companies:

• Aibel continued to build on its strong performance in 2011 by winning a number of major and strategically important contracts in 2012. The company started 2013 with an order backlog of over NOK 20 billion.
• Elopak restructured its factory structure in Europe over the course of 2012. A new coating line was brought into production in Aarhus, and the new factory in St. Petersburg is performing as planned.
• TeleComputing was successful in securing renewals of many important customer contracts, while at the same time attracting many new customers. This resulted in a larger order backlog at the end of 2012 than at any time in the company's history.
• Mestergruppen has a comprehensive agenda of growth and improvement initiatives, and during the course of the year focused on strengthening its organisation with appointments including new EVPs for Building Materials and for Site Development & Residential, as well as a new CFO.
• Interwell reported strong organic growth in revenue (29%), principally driven by the company's success and international expansion.
• Swix was very successful in its focus on generating a high proportion of its revenue from international markets with greater emphasis on the spring and summer seasons. In 2012, around 50% of the company's revenue was generated outside Norway (compared to 44% in 2011).

Transactions
Ferd Capital committed a great deal of effort in 2012 to restructuring the ownership of Aibel. This work was crowned with success in December when Ferd announced that it had reached agreement with the highly respected Swedish investment company Ratos to become joint owners of the oil service company. The agreement provides for Ferd Capital to maintain a direct ownership interest of approximately 49%, while Ferd’s overall exposure is significantly reduced.

Ferd Capital’s ownership interest in Affitech was sold in April to Trans Nova Investments, and the electronic giant Samsung purchased Nanoradio in June.

Through its participation in Streaming Media AS, and in partnership with Schibsted and Platekompaniet, Ferd Capital invested in April 2012 in Aspiro AB. Aspiro’s activities include owning and operating the music streaming service Wimp. This was Ferd Capital’s only new investment in 2012.

Ferd Capital actively seeks "add-on" investments for existing portfolio companies. In February, Swix acquired Lundhags, a Swedish producer of footwear and clothing, and in March Swix acquired all the remaining shares in Original Teamwear AS, which is a leading player in Scandinavia for team sports clothing and special design. In June, Mestergruppen acquired and integrated Alf Valde AS.

Organisation
Ferd adopted a new management model in 2012, and in accordance with this Ferd Capital introduced a new organisational structure in the autumn. The business area had 10 employees at the end of the year, who represent a broad range of experience from Ferd and previous employment. The members of the Ferd Capital team are all able to take on a range of roles in evaluating investments and carrying out projects. Ferd Capital currently provides one employee on loan to Aspiro/Wimp.

Future prospects
Ferd Capital has a portfolio of strong companies that are well-placed to continue to create value in 2013 and the following years.

Ferd also has a sizeable unused investment capacity, and will focus on working proactively with new investment opportunities, both in the form of “add-ons" to existing portfolio companies and potential new portfolio companies.