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Midroc EuropeAnnual Review 2006

M I D R O C E U R O P E2

Midroc Europe is the marketing concept that

binds European Midroc companies and services

together, offering the market undertakings with

financial and technical strength combined with

highly competent human resources along a broad

line of services.

Midroc Europe offers a wide range of mana-

gement and contracting services to the civil con-

struction and industrial market. Services can be

delivered individually, or seamlessly integrated as

multi-discipline packages for new build, refur-

bishment projects, repair or maintenance con-

tracts. Midroc also develops land and properties

and also manages commercial properties and

housing.

Having its operations basis in Sweden,

Midroc Europe is also represented in Germany,

United Kingdom, France and Poland.

The relevant Annual Reports 2006 can be downloaded from our website www.midroc.se or ordered from: Midroc Support AB, P.O. Box 2053, SE-174 02 Sundbyberg,Sweden. Telephone orders: +46 8 706 74 50, Fax orders: +46 8 733 19 45, e-mail orders: [email protected]

3M I D R O C E U R O P E

MIDROC EUROPE 4

REVIEW 2006 6

CONTRACTING 8

CONSULTING 12

PROPERTY DEVELOPMENT 14

MIDROC AB 18

GRANITOR INVEST AB 20

MIDROC REAL ESTATE AB 22

OWNER & BOARD OF DIRECTORS 24

MIDROC NEW TECHNOLOGY AB 26

CONTACTS 27

M I D R O C E U R O P E4

Midroc Europe

Midroc Europe is a development group, promoting a marketing

concept that binds the Europe-based Midroc companies and

services together, offering the market undertakings and services

with financial and technical strength combined with highly com-

petent human resources along a broad line of services. Although

having the bulk of operational activities in Sweden, the business

expansion into Europe is progressing with branches and busi-

ness operations in Germany, the UK, France and Poland. In 2006

the marketing concept “Midroc Group in Scandinavia” was repla-

ced by “Midroc Europe” to better reflect our current presence

and planned development and expansion on the European scene.

The European business operations are grouped into four

major Business Areas as depicted below. Each Business Area is

further subdivided into the field of expertise to which the individu-

al Midroc-subsidiary is related.

Group Structure

The business development activities of Midroc Europe is based

on a variety of subsidiaries and legal groups, each providing their

specialised service - contracting, consulting, development or

managerial service. The Midroc Europe concept comprises,

firstly, three legal groups:

• Midroc AB (ex. Midroc Holding AB)

• Granitor Invest AB

• Midroc Real Estate AB

These groups represent the majority of our turnover and

each contains subsidiaries busy in our major groups of opera-

tions. In addition, Midroc Europe also includes the business acti-

vities of Midroc New Technology AB. These parent companies

and units are all registered in Sweden.

Regardless the legal belonging, the Midroc Europe compani-

es offer a dynamic and customer driven approach to service pro-

vision either as an individual Midroc subsidiary or when selective-

ly, on a case-by-case basis, combined with sister subsidiaries.

Among our companies, the approach is to provide an inte-

grated, single-point relationship for our clients and work with

them in long-term relationships!

Midroc Europe – a contracting, consultingand property development group

Contracting

MIDROC EUROPE

Property Development New MarketsConsulting

PAINTING & COATINGAlucrom AB

MECHANICALGP Ställningar ABRodoverken ABBAC Corrosion Control LtdMetalock Engineering AB

ELECTRICALMidroc Electro AB

REMEDIATION AND CLEANINGMidroc Enviroment AB

CONSTRUCTION MANAGEMENTMidroc Projects CM AB

PROJECT MANAGEMENTMidroc Engineering ABABV Rock Group ABMidroc Management AB

PROPERTY DEVELOPMENTMidroc Property Development AB

PROPERTY MANAGEMENTMidroc Real Estate ABM3W Invest AB

NEW TECHNOLOGYMidroc New Technology AB

M I D R O C E U R O P E 5

Sheik Mohammed H. Al-Amoudi

Global Outlook

The Midroc Global group, owned by Sheikh Mohammed H. Al-

Amoudi, also undertakes business operations in other regions

than Europe. The diversity of undertaken work covers a wide

spectrum of business areas, including engineering and construc-

tion, operation and maintenance, petroleum, manufacturing, tou-

rism, communications and trade. Operations have a global reach

across continents with 24,000 employees from varied nationali-

ties and the annual turnover exceeds nine billion dollars.

In the Kingdom of Saudi Arabia full engineering and con-

struction services are offered to large scale projects. In the indus-

trial sector the group owns and operates factories producing a

variety of products. In addition, the group is involved in the ser-

vice sector and in trade activities of properties and various con-

sumer commodities.

Operations in Africa are based in Ethiopia where Midroc Ethiopia

has been vigorously engaged through its companies in several

economic sectors with the ambition to positively participate in the

social and economic development of the country. The main

investment fields include agriculture, agro industry, construction,

mining, light and heavy industry, tourism and properties.

The group’s petroleum operations are extensive: Preem

Petroleum is a significant actor on the market, conducting exten-

sive trading and refining of crude oil. Preem operates two refineri-

es in Sweden and they are two of the most modern in Europe.

The group’s Moroccan subsidiaries own the majority of the coun-

tries petroleum refining capacity through two refineries. Petro

Swede undertakes via its subsidiaries exploration and production

of oil and gas, at present being carried out in the North Sea,

Baltic area and offshore the West Coast of Africa.

Midroc Europe

Project ManagementEngineeringBuilding ServicesIndustrial ServicesEnvironmental ServicesProperty DevelopmentTechnology Investments

Engineering and ConstructionManufacturingTrade, Consumer CommoditiesServicesAir, Land & Ocean FreightReal Estate Investments

AgricultureAgro-IndustriesConstruction and Real EstateMiningHeavy & Light IndustryTourismHealtcare

ExplorationRefiningDistribution

Various business fields

Midroc Middle East Midroc Ethiopia Petroleum Others

Project Management & Engineering

The best year for Midroc Europe ever! The favorable business

conditions during 2006 for Europe in general and for Sweden in

particular enabled several of the Midroc subsidiaries to achieve

their strongest individual year –end result ever. The summarized

result for Midroc Europe is subsequently record breaking and the

best achievement ever!

The total income before taxes was SEK 385 million (SEK

129.9 million in 2005). In total the legal groups had a turnover

of about SEK 3.0 billion (3.8 billion) and employed more than

2,000 people.

The Midroc companies supporting the

industrial and petrochemical sector have been

very successful and performed an all-time high

result this year. The services rendered, typically

comprising installation, repair, maintenance and

consulting, have been provided to a number of

major industrial clients and projects, in Sweden

as well as internationally.

Alucrom, specializing in advanced corrosion protection

coatings for steel structures, is reporting its best result ever.

The fixed paint shops have dramatically improved their result and

the on-site painting has doubled its volume since last year. One

of the more spectacular assignments in 2006 was the assign-

M I D R O C E U R O P E

2006 – a record breaking year!

6

ment for touch up painting of the Öresund Fixed Link bridge.

The market for electrical installations has also improved

during 2006 and Midroc Electro is presenting its best year ever.

Medium size projects still form the base for the operations but

major installation projects are becoming more frequent: During

this year, the installation of electrical systems as well as systems

for instruments and control for a new iron ore pelletizing plant for

LKAB was concluded for the iron mine in Malmberget. At this

point in time, a similar task – turning out to be the largest order

ever for Midroc Electro – was assigned by the same

client, now for the ore mine in Kiruna. Midroc Electro

has also successfully concluded the electrical installa-

tion work for three new IKEA home stores in Sweden.

Metalock operations in Germany are extremely

successful and have once again surpassed itself by

reporting an outstanding good result, needless to

say their best result ever. In Hamburg as well as at

Metalock UK in Coventry, business is growing and

the planning for expansion of the premises is in progress at

both locations.

This year was the first year in which Metalock operations

in Sweden again were undertaken by one single company,

Metalock Sweden, after having been subdivided into four legal

”We have continued

to improve sales and

operational efficiency.

In 2006 we achieved

our best result ever!”

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100

150

200

250

300

350

400

MSEK

2003 2004 2005 2006

Midroc EuropeTotal income before taxes

MSEK

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120

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200

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240

2003 2004 2005 2006

Contracting

Property Development

Midroc EuropeBusiness Area income before taxes

7M I D R O C E U R O P E

Segment turnover(Total 3.0 MMSEK)

Contracting 74%

ABV Rock Group 1%

GP Ställningar 1%

Midroc Environment 1%

Midroc Engineering 3%Alucrom 6%

Midroc Electro 40%

Metalock Group 16%

Midroc Real Estate 6% BAC Corrosion Control 2%

Property Development 23%

Project Management &Engineering 3%

Company turnover(Total 3.0 MMSEK)

Rodoverken 8%

Midroc PropertyDevelopment 16%

entities for the last five years. Improvement in cost pattern has

already been noted. In order to improve the business presence in

the Stockholm area, the mechanical service provider STIREP,

employing 15 men, will be acquired in 2007.

The part owned shipyard in Landskrona, comprising a dry

dock and a floating dock for repair and newbuild, was divested

to the partner during the year.

The volume of remediation contracting services rendered to

the environmental sector has grown as a response to the staff

expansion by new-employed project managers. The former busi-

ness line, focusing on major, multi-year remedial tasks for aban-

doned underground gasoline and oil storage plants has now

been successfully expanded to also include minor and quickly

executed projects. Our strong position regarding fixed plants for

treatment of organically contaminated soil remains however,

based on our nine local facilities throughout Sweden.

Midroc has reassured its position as a successful property

developer. Midroc Property Development is particularly active in

the south of Sweden and several new office and housing projects

have been undertaken during the year. Several early development

projects have been entered and other, ready developed properti-

es have been successfully divested, significantly impacting the

income of the Property Development business segment.

The real estate portfolio being managed by Midroc was

expanded further by the acquisition of the complete property,

soon housing the World Trade Centre complex in Malmö. Midroc

also holds properties for office and retail properties in the central

business district of Stockholm. Here, market rents continued to

stabilize during the year and efforts spent previous year in redu-

cing the high vacancy have proven successful in 2006.

Midroc has also continued the development of new techno-

logies for grinding and drying of waste material together with

partners.

The success of the Group is ultimately dependent on the

way our people respond at all levels, delivering services, develo-

ping client relationships and winning new business. It is testimony

to their efforts that Midroc Europe has performed so well and we

would like to thank them for their ongoing dedication.

Midroc Europe’s outstanding trading performance demon-

strates both its skills and its resilience. In our assessment of the

prospect for 2007 we are pleased to note the encouraging trade

outlook and continued buoyancy of our local markets in Europe.

We also welcome the additional opportunities available through

the strength of our related Midroc Groups in Middle East and

Africa as well as the group’s operations in the oil exploration and

refinery sector. This, combined with the workload in hand gives

us confidence in the prospects for the Group’s continued growth!

8

Contracting

Increasingly our customers wish to buy more services from fewer

suppliers. With our breadth of skills and services, we are able to

respond to that customer need and to deliver a “one-stop-shop”,

integrated service. Our ability to tailor our services to meet indivi-

dual Client needs by harnessing expertise from across the Group

differentiates us from other suppliers.

Through well-established company brands, this business

segment provides contracting services to the building and indus-

trial sector. Services are directed towards manufacturing, proces-

sing and petrochemical industry, comprising new- and rebuild as

well as maintenance and overhauls.

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MSEK

20072002 2003 2004 2005 2006

Income before tax

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MSEK

20072002 2003 2004 2005 2006

Income before tax

Result for Contracting segment

Our contracting companies are found among our legal groups

Midroc AB and Granitor Invest AB. Applying a cross view on con-

tracting, the virtual turnover of the Contracting segment was SEK

2,215 million (3,091) with an income of SEK 152 million (84) befo-

re appropriations and tax. The group’s building contractor, Midroc

Construction, with its significant turnover, was assigned begin-

ning of 2006, thus explaining the decreased turnover for the con-

tracting segment, compared to 2005.

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2002 2003 2004 2005 2006 2007

Income before tax

The Metalock Group

The Metalock group contains several business units for underta-

king service and repair work for heavy industry world wide. The

group supplies mechanical specialist skill to the international

heavy industry with the aim to reduce the customer’s fixed cost

for maintenance and investment projects.

During the year, the group has operated through wholly

owned subsidiaries in Sweden, Germany, the UK and France.

Generally, the group provides a wide range of mechanical ser-

vices such as mechanical repair, on-site machining, thermal

spraying, maintenance and mechanical erection. And of course

Alucrom AB

Alucrom AB is the largest anti-corrosion contractor in Sweden

with a well established position on the steel coating market.

Movable steel objects are blasted and painted in one of the com-

pany’s twelve permanent paint shops throughout Sweden and one

in Poland. Larger and sometimes spectacular objects – bridges,

tanks and large steel structures- are being treated at location.

Alucrom is also the only Swedish licensee for applying

Chartek world leading epoxy intumescent fire protection pro-

ducts, used worldwide by many industries within hydrocarbon

processing and chemical processing. In addition, Chartek materi-

als are also used for industrial and commercial applications where

longevity, durability and corrosion protection are a requirement.

Metalocking, the unique cast iron repair method that has lent its

name to the group. There may however be a difference in profes-

sional specialization among the individual Metalock business

units, based on historical development, staff skill and geographi-

cal location. Common to all units is however the international

mobility, necessary to undertake projects at short notice on loca-

tions all over the world.


During 2006 Alucrom carried out corrosion protection repair work on steel members of the Öresund Fixed Link.

M I D R O C E U R O P E1 0

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2002 2003 20072004 2005 2006

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20072002 2003 2004 2005 2006

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Midroc Electro

Midroc Electro AB is working mainly with electrical installations

and related services within the fields of electrical power, security-,

data- and telecommunication. Through its Automation depart-

ment, the company also offers advanced services in the field of

Integrated Automation, an engineering field that connects pro-

cesses and production with advanced control and follows up.

Operations are conducted from 35 locations in Sweden with the

Head Office located in Sandviken. The Midroc Electro group has

900 employees.

Rodoverken AB

Rodoverken is a successful service and contracting company in

the piping and tank construction business. Rodoverken has spe-

cialized in the design, construction and erection of tailored indus-

trial plants. Its operations comprise tank erection, pipe spool

fabrication and pipe erection mainly for clients in the Nordic

countries. The company has a recognized position on the market

and well known to the industry is the unique spiral technique in

which tanks are built without scaffolding but are instead lifted up

as fabrication proceeds.

Midroc Environment Group

Midroc Environment Group is a leading provider of environmental

remedial services. The subsidiary Ekotec AB provides biological

treatment of contaminated soil while BACT System AB provides

flue gas emission control systems. Aquacor AB provides solu-

tions and products for treatment of process water and Airgrinder

AB develops techniques for material defragmentation and drying.

All subsidiaries are based in Skelleftehamn, Sweden.

The treatment of contaminated soil is the largest field of

business with permanent processing plants at nine locations in

Sweden. Three of these are operated under own management

and the remainder is operated in cooperation with partners.

BAC Corrosion Control Ltd

BAC Corrosion Control in the UK provides a full range of

Engineering Services in the cathodic protection field related to

pipelines, harbors, offshore installations, power stations, ships

and railroads.

Services are ranging from pre-installation design and survey

activities right through to installation testing and commissioning

surveys and on to maintenance and inspection programs.

GP Ställningar AB

GP Ställningar is a scaffolding contractor, providing safe and flexi-

ble scaffolding applications for the industry and construction pro-

jects, located on Sweden’s west coast.

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4

6

MSEK

2002 2003 2004 2005 2006

Income before tax

2007

2007

The Metalock Group supply world wide mechanical specialist skill to the international heavy industry with the aim to reduce the customer’s fixed cost for maintenance and investment projects.


Consulting

The business segment provides consulting services such as pro-

ject management and administration, engineering and design,

focusing on the civil and industrial market. From 2007, a dedica-

ted subgroup for companies that provide consulting services has

been formed within Midroc AB. The new subgroup (Midroc

Consulting AB) will hold existing and future companies providing

consulting services.

Result for Consulting segment

The total turnover of the Consulting segment was SEK 125 milli-

on (123) with an income of SEK 4.2 million (5.9) before appropri-

ations and tax.

Midroc Engineering AB

Midroc Engineering AB is a knowledge partner, offering a full

range of engineering services, from subcontract work to turnkey

projects – everything from idea to finished plant and start-up. It

has offices in Stockholm, Gothenburg, Malmö and Lysekil. In

2006 the demand for engineering and consulting services has

been reasonably high but the company has struggled with shor-

tage in personnel and therefore not been able to fully take advan-

tage of the situation.

During 2007 the favorable market situation is expected to

last and Midroc Engineering will expand its business and work-

force significantly.

Income before tax

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MSEK

2002 2003 2004 2005 2006 2007

Income before tax

ABV Rock Group AB

The company offers administrative and procurement services for

projects outside Europe, mainly in the Middle East and Africa. A

main service taker over the years has been the Saudi Strategic

Storage Program but in response to the approaching completion

of this program, ABV Rock Group AB will reduce its business

activity correspondingly.

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Income before tax

2007

The Swedish Rail Administration has appointed Midroc Engineering to form the Project Management team and execute a railway project in Gothenburg. A 1,200 m new track - whereof 550 m in anelevated position- will be interconnected with an existing line. The project is in progress 2005-2007 and once completed, it offers logistic benefits with reduced train approach time to the GothenburgHarbor area by approx. 30 min.

1 4 M I D R O C E U R O P E

Property Development

To Midroc Europe, the investment in real estate covers the full

range from developing of raw land or existing buildings to divest-

ment. Curiosity and speed, knowledge of the market, understan-

ding the customer needs, together with strong engineering and

design background are all essential elements for successfully

developing and managing property.

Midroc works with a large amount of projects, all in their

individual stage of development. It may be in the tentative and

early stage, in some stage of construction or in a completed

stage, ready for divestment to an external investor.

As the Midroc property activities also include traditional pro-

perty management, the business segment is subdivided into

Property Development and Property Management.

PROPERTY DEVELOPMENT

Midroc operations within property development are undertaken

by a dedicated sub-group, Midroc Property Development AB

(MPD), founded only eight years ago. With a wide approach to

development and prudent business operations, MPD has rapidly

become a prominent property developer, providing innovative real

estate concepts to external investors.

Midroc Property Development AB

Development projects may cover housing, tenant-owned living,

offices, commerce and properties for other use. With reference

to housing and accommodation projects, MPD holds more than

260,000 m2 confirmed building rights and additional 70,000 m2

in early development stages. With reference to commercial areas

for trade, office, hotel and similar use, MPD holds more than

165,000 m2 confirmed building rights and additional 40,000 m2 in

early development stages. MPD has a small but efficient staffing

and draws project dedicated resources from Midroc sister com-

panies within the fields of Project Management, Construction

Management and technical installations. The overall volume

covered by the operations puts MPD in the very front of Swedish

property development actors.

The geographical centre of the operations lies in the south of

Sweden. In the West Harbour area of Malmö, where a new city

district is under construction on the former premises of the

Kockums ship yard, MPD has a strong representation from seve-

ral completed development projects but also from projects in

progress. In this area, project development is mainly aimed at

offices, housing and hotel. Projects comprising housing and

commerce are also undertaken in other areas of Malmö.

Midroc has successfully maintained its position as a recogni-

zed actor on the Swedish property development market. The

MPD group has been involved in several development projects,

among them being appointed the official World Trade Center faci-

lity developer for the Malmö area. The WTC concept is a virtual

market place connecting some 300 other World Trade Centers in

75 countries. The “WTC Teknikportalen” property forms the star-

ting point of the concept and is already a meeting place for about

40 companies of various sizes. Over 800 persons work in the

building. Currently in progress is the construction of a second

office building “WTC Hamnplan”, having an airy design and a

high technical standard. Once completed, the WTC facility in

Malmö it will comprise 50,000 m2 of office spaces, conference

rooms, restaurants, show rooms and a fitness facility. Both pro-

perties will be owned by the property management group Midroc

Property Öresund.

Divestment of ready developed property is with necessity

infrequent and has of course a significant impact on the annual

income profile as can be seen in the graph.

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PROPERTY DEVELOPMENT

2006

Living 61%

Hotel, others 7%

Commerce 21%

Office 11%

Building rights, 425,000 m2 gross floor area

In Höganäs, Midroc Property Development acquired properties and initiated the upgrade and expansion of existing storehouse and outlet.


PROPERTY MANAGEMENT

Within the Midroc group, property management is undertaken by

a dedicated group, Midroc Real Estate AB.

Midroc Real Estate AB

The company owns and manages property at prime locations in

Stockholm and Malmö via its subsidiaries.

The property holdings in Stockholm are managed by the

subgroup Midroc Properties AB. The portfolio consists mainly of

centrally located properties in the inner commercial district of

Stockholm. The use is mainly for office but there are also areas

for retail and leisure. The buildings are all extremely well maintai-

ned and of a very high standard.

The regional economy in the Malmö/ Copenhagen area

shows a continuous growth after the completion of the fixed link

across Öresund in 2000. The commercial prospects are very pro-

mising and are attracting the interest of Midroc real estate invest-

ments. Midroc Property Öresund AB was formed in 2005, now

holding the two properties forming the newly established World

trade Center in Malmö.

Other property

The property holdings being owned and managed by Midroc also

include premises outside the main city areas and traditional use.

For example, north of Stockholm, a conference facility is opera-

ted and it is currently in a stage of expansion. A newbuild of

5.000 m2 accommodation and conference areas is under con-

struction and with a scheduled inauguration late 2008. In Kävlinge,

north of Malmö, a large facility for meat production has been

acquired and is temporarily being managed while awaiting

project development.

Sectors

The total rentable area for the properties is 160,000 m2 and the

portfolio has a mix of various uses. In terms of size, the heavy

point is in space for lighter industry and offices spaces. Other

uses have a minor share of the managed overall portfolio.

Market Value

The overall market value for the managed portfolio was assessed

in September 2005 and estimated at 1,650 MSEK, indicating an

overvalue against the books of 512 MSEK.

This office building is situated at Engelbrektsplan in the Stockholm commer-cial center. It was constructed at the end of the 19th century. It comprises3,500 m2 office space and a total of 800 m2 retail area.

Production 48%

Office 39%Retail 2%

Others 6%

Living 5%

Rentable area, 160,000 m2

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”Teknikportalen” is one of the two Midroc properties, forming the World Trade Center of Malmö.

Midroc AB – Result and Position

In 2006, Midroc Holding AB changed its name to Midroc AB.

Midroc AB, registration number 556366-0033 is a holding

company, operating through four sub groups with descriptive

names; Midroc Contracting AB, Midroc Consulting AB, Midroc

Property Development AB and Midroc Support AB. These

subgroups in turn hold subsidiaries, active in the corresponding

field. Furthermore, Midroc Support AB holds the Midroc Europe

shared functions, that is, not only for Midroc AB but for all

parent companies, Granitor Invest AB, Midroc Real Estate AB

and also for Midroc New Technology AB. Shared functions are

Business Development, Information and Communication,

Human Resources Management and IT.

Turnover and Result

For 2006 the Midroc AB Group generated a consolidated result

significantly above budget. The subsidiaries, active in the indus-

trial contracting business have been able to utilize the upward

economic trend in Europe and some of them have produced

their best result ever. Also reflected in this year’s group result

are the successful divestments of property projects, developed

by Midroc Property Development.

Income before taxes was SEK 190.4 million (161.6) and the

group’s Operating income ended up at SEK 182.5 million (165.6).

The group's turnover totaled SEK 1,565 million (1,623).

Balance Sheet

The balance sheet total has changed very little, from SEK 1,253

million in 2005 to SEK 1,256 million in 2006. The group’s solidity,

defined as equity plus financing by shareholders divided by the

balance sheet total as per 2006-12-31 was 61% (49%) which

opens up possibilities for further investments. Property and land

within the Property Development segment are considered as cur-

rent assets. The actual market value of land and property assets

is substantially higher than the booked value.

Parent company

Midroc AB company generated a turnover of SEK 0 million (0)

and an income of SEK -0.008 million (-0.026) before appropria-

tions and tax.

Personnel

The Midroc AB group employed at an average 900 people during

2006. Out of these, 300 were employed by the subsidiaries in

Germany, UK, France and Poland. The remaining was employed

by Swedish companies within the group.

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190

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Income before tax


Midroc AB

Midroc Contracting AB

Alucrom AB

Midroc Consulting AB

Midroc Property Development AB

Midroc Support AB

GP Ställningar AB

Rodoverken AB

BAC Corrosion Control Ltd

Metalock Engineering AB

Midroc Engineering AB

Midroc Projects CM AB

Midroc Projects AB

Midroc Land Development AB

(Dedicated project companies)

ABV Rock Group AB

Midroc AB GroupYear-end statement 2006

CONSOLIDATED INCOME STATEMENT

SEK (THOUSANDS) 2006 2005

Net sales 1 565 255 1 623 100

Cost of goods sold - 1 207 347 - 1 275 382

Administrative expenses - 210 020 - 182 763

Other operating income and expenses 34 605 648

Operating income 182 493 165 603

Financial items 7 948 - 4 026

Income before appropriations and taxes 190 441 161 577

Taxes -43 897 - 34 212

Discontinued operations - 1 587 - 7 902

Minority share - 228 - 108

Net income 144 729 119 355

CONSOLIDATED BALANCE SHEET

Assets

SEK (THOUSANDS) 2006-12-31 2005-12-31

FIXED ASSETS

Intangible assets 12 032 16 925

Tangible assets 160 478 162 445

Financial assets 69 244 93 404

Total fixed assets 241 754 272 774

CURRENT ASSETS

Inventories, etc. 21 685 19 227

Property for resale 308 365 245 162

Accounts receivable, etc. 528 938 500 808

Liquid assets 155 937 215 811

Total current assets 1 014 925 981 008

TOTAL ASSETS 1 256 679 1 253 782

CONSOLIDATED STATEMENT OF CASH FLOW


Cash flow from operating activities excl. of working capital 143 799 161 585

Changes to inventories - 50 960 37 523

Changes to working capital - 111 972 - 23 292

Cash flow from operating activities - 19 133 175 816

Net from investments and sales - 7 558 - 46 257

External financing - 33 068 - 8 653

Owner financing 601 - 573

Cash flow for the year - 59 158 120 333


Equity and liabilities

SEK (THOUSANDS) 2006-12-31 2005-12-31

EQUITY

Restricted equity 391 800 391 800

Retained earnings 209 581 93 185

Net income 144 729 119 355

Minority interest - 2 641

Total equity 746 110 606 981

LIABILITIES

Shareholder’s loan, interest bearing 13 950 13 349

Long-term liabilities, interest bearing 96 361 143 215

Long-term liabilities, non-interest bearing 887 828

Current liabilities, interest bearing 2 584 1 618

Current liabilities, non-interest bearing 396 787 487 791

Total liabilities 510 569 646 801

TOTAL EQUITY AND LIABILITIES 1 256 679 1 253 782

M I D R O C E U R O P E 1 9

Granitor Invest AB– Result and Position

Granitor Invest AB, with registration number 556615-2491 is the

parent company of Midroc Invest AB, with registration number

555620-6768, WP International AB, with registration number

556355-2628. While WP International only is undertaking minor

business operations and Tumstock Sverige is in the process of

establishing a web shop for construction tools, outfit and suppli-

es, the bulk of activities are related to contracting, performed by

Midroc Electro and the Midroc Environment group.

Turnover and Result

The market for electrical installations improved during 2006 and

Midroc Electro made its strongest year ever. The company has

continued to improve profitability and managed to succeed the

budget. The installation work at the new pelletizing plant in

Malmberget for LKAB was successfully concluded during the

year and a similar assignment, only larger, was awarded by the

same client, this time for the pelletizing plant in Kiruna. This latter

assignment constitutes Midroc Electro’s largest single underta-

king so far.

The Midroc Environment group, providing services within soil

remediation through its subsidiary Ekotec, delivered a positive

result, reflecting an improved Swedish market for soil remediation

contracts. Operations at the permanent treatment plants in sout-

hern Sweden have however been satisfactory.

The group's turnover totaled SEK 1,257 million (998) with an

income before taxes of SEK 70.1 million (19.1). The group’s ope-

rating income ended up at SEK 65.7 million (24.9).

Balance Sheet

The balance sheet total increased from SEK 379 million in 2005

to SEK 484 million at year-end 2006. The group’s solidity defined

as equity plus financing by shareholders divided by the balance

sheet total as per 2006-12-31 was 40% (30%).

Parent company

The parent company Granitor Invest AB generated a turnover of

SEK - million (-) and an income of SEK 17.5 million (-3.6) before

appropriations and tax. Of the profit before appropriations and

tax, 21.200 MSEK thereof is anticipated dividends from compani-

es in the group.

Personnel

The Midroc Invest Group employed at an average 1,000 people

during 2006. All were employed at subsidiaries in Sweden.

10

0

-10

20

30

40

50

60

70

MSEK

2002 2003 2004 2005 2006 2007

Income before tax


Granitor Invest AB

Midroc Invest AB

Midroc Electro AB

WP International

Midroc Environment AB

Tumstock Sverige AB

Granitor Invest GroupYear-end statement 2006



Net sales 1 257 195 988 168

Cost of goods sold - 1 128 006 - 913 412


Other operating income and expenses - 1 571 1 102


Financial items - 4 396 - 5 801

Income before appropriations and taxes 70 099 19 057

Taxes -17 437 -5 797

Minority share - 2 596 - 284

Net income 50 066 12 976


Assets

SEK (THOUSANDS) 2006-12-31 2005-12-31

FIXED ASSETS

Intangible assets 23 476 24 551

Tangible assets 16 378 47 567

Financial assets 1 029 61

Total fixed assets 40 883 72 179

CURRENT ASSETS

Inventories, etc. 11 756 10 011



Total current assets 443 174 307 620

TOTAL ASSETS 484 057 379 779



Cash flow from operating activities excl. of working capital 49 207 18 180

Changes to inventories - 1 745 - 622

Changes to working capital 38 522 - 16 846

Cash flow from operating activities 85 984 712

Net from investments and sales - 5 773 - 9 544

External financing 21 854 - 4 428

Owner financing 29 999 -

Cash flow for the year 132 064 - 13 260



SEK (THOUSANDS) 2006-12-31 2005-12-31

EQUITY

Restricted equity 102 102

Retained earnings 35 512 28 537

Net income 50 066 12 976

Minority interest 3 534 996

Total equity 89 214 42 611

LIABILITIES


Long-term liabilities, interest bearing 50 770 72 190

Long-term liabilities, non-interest bearing 3 121 3 012



Total liabilities 394 843 337 188

TOTAL EQUITY AND LIABILITIES 484 057 379 779


Midroc Real Estate AB– Result and Position

In common with the Swedish Property Market in general and theStockholm market in particular we continue to experience anextremely challenging leasing market. The market remains verydifficult notwithstanding a widely held view that the prospects willimprove. Effective from 2006, the Midroc Real Estate group hassubsequently been re-organized and dedicated subgroups havebeen created, managing the Stockholm portfolio (MidrocProperties) and the Malmö portfolio (Midroc Property Öresund)respectively.

Midroc Properties AB

The rented accommodation market in Stockholm has been cha-racterised by a rich supply of vacant units which has also increa-sed competition in central Stockholm. The investments made onlettings have produced results and rental levels have begun torise during 2006. The properties Jacob Mindre 11, Spectern 8and Postiljonen 1 are fully let, and in other properties there areonly a few units where no contracts have yet been written.

Our premises for retail are all hired out. Despite the weakmarket in 2006, the Stockholm market is expected to improveduring 2007.

Midroc Property Öresund AB

This company was formed in 2005 and it is the parent companyof the properties forming the World Trade Center complex inMalmö.

Hackholmssund Conference Center AB

The conference centre, located approx. 55 km to the north-west ofStockholm operates on a market that remains very competitive.

MRE Holding AB

Our major strategic investment in Peab has continued to experi-ence appreciation in value, about 60% during 2006. The overva-lue of this holding is 505 MSEK before tax. The process of redu-cing the position in Peab share was started in 2006.

Result and Position

2006 brought an improved market situation in Stockholm.The group's turnover totaled SEK 183 million (124). The overallannual result of SEK 124.3 million (-39.9) was to its greatest part(SEK 95 million) created by divestment of listed PEAB shares.The loss in 2005 was related to a non-recurring cost after re-negotiating the financing package.

Balance Sheet

The balance sheet total increased from SEK 1,946 million in 2005to SEK 2,147 million at year-end 2006. A property valuationmade in 2005 shows that the market value is exceeding thebook value by 512 MSEK before tax.

Parent company

The parent company Midroc Real Estate AB generated a turn-over of SEK 1.4 million (0) and an income of SEK -14.7 million(-4,5) before appropriations and tax.

Personnel

During 2006 an average of 11 people were employed in the group.

-40

-20

0

20

40

60

80

100

120

140

MSEK

2002 2003 2004 2005 2006 2007

Income before tax



Midroc Properties AB

Midroc Property Öresund AB

Others

Midroc Real Estate GroupYear-end statement 2006



Net sales 183 912 124 285

Property expenses - 72 288 - 49 892



Financial items 40 244 - 97 214

Income before appropriations and taxes 124 324 - 39 985

Taxes - 11 631 -

Net income 112 693 - 39 985


Assets

SEK (THOUSANDS) 2006-12-31 2005-12-31

FIXED ASSETS

Tangible assets 1 710 718 1 617 205

Financial assets - 227 375

Total fixed assets 1 710 718 1 844 580

CURRENT ASSETS


Short-term investments 191 196


Total current assets 436 707 101 904

TOTAL ASSETS 2 147 425 1 946 484



Cash flow from operating activities excl. of working capital 51 452 -23 148

Changes to inventories - 29 363 - 30 314

Cash flow from operating activities 22 089 -53 462

Net from investments and sales 53 919 45 234

External financing - 49 402 - 7 722

Owner financing 55 000 58 600

Cash flow for the year 81 606 42 650



SEK (THOUSANDS) 2006-12-31 2005-12-31

EQUITY

Share capital 10 000 10 000

Restricted reserves 17 767 2 700

Non-restricted reserves - 2 250 52 802

Net income 112 693 - 39 985

Total equity 138 210 25 517

LIABILITIES


Long-term liabilities, interest bearing 1 449 769 1 628 824

Long-term liabilities, non-interest bearing 13 315 2 598



Total liabilities 2 009 215 1 920 967

TOTAL EQUITY AND LIABILITIES 2 147 425 1 946 484

M I D R O C E U R O P E 23


The Midroc trade mark is a brand name owned by Sheik

Mohammed Hussein Al-Amoudi. The Midroc international hol-

ding company has its headquarter in Jeddah, Saudi Arabia

and operations have a global reach across four continents

with 24,000 employees of varied nationalities.

Sheik Al-Amoudi is one of the largest foreign investors in

Sweden. Within Sweden and Europe, the Midroc brand is

represented by three major legal groups, Midroc AB, Granitor

Invest AB and Midroc Real Estate AB. Lately, the newly foun-

ded Midroc New Technology AB has been added.

In addition, Sheik Al-Amoudi is the owner of Preem

Petroleum, Sweden’s largest oil company operating two refine-

ries representing 75% of the Swedish oil refining capacity with

a distribution network comprising 500 gas stations.

The Board of Directors is responsible for the companies’

strategic development and for supervising and controlling the

group business operations. It also decides on major invest-

ments, confirms the companies’ ethical values and operating

principles and oversees their implementation.

The Board of Directors has appointed an Executive

Committee (ExCom) with the task to implement the decided

strategies and to lead the development of the group on a daily

basis. ExCom interacts currently with the individual subsidiary

management in strategic and tactical issues. One or more of

the committee members are represented in every single subsi-

diary board and from this platform the committee members

can fulfil their assignment on a daily basis.

The parent companies of the group have the following

board composition:

Owner & Board of Directors

Midroc AB

Abdullah Al-Amoudi, chairman

Waddah Al-Alem, member

Karim Karaman, member

Roger Wikström, member

Christer Wikström, member

Thomas Mårtensson, special adviser, MD

Granitor Invest AB

Roger Wikström, chairman

Mohammed Al-Amoudi, member

Abdullah Al-Amoudi, member

Christer Wikström, member, MD

Waddah Al-Alem, special adviser

Thomas Mårtensson, special adviser


Abdullah Al-Amoudi, chairman

Waddah Al-Alem, member

Karim Karaman, member

Roger Wikström, member, MD

Christer Wikström, member

Thomas Mårtensson, member


Abdullah Al-Amoudi

Mr. Al-Amoudi is the Director General of the

Midroc International Holding Company since

1998, seated in Jeddah, Saudi Arabia. In his

position he is responsible for the global

Midroc strategies. Since 1978, Mr. Al-Amoudi

has held the top management positions of

the engineering, finance and procurement

departments within international airports pro-

jects in Saudi Arabia.

He is a graduate engineer (Dipl. Ing) in

Electrical Engineering from the University of

Technology in Aachen, Germany.

Waddah Al-Alem

Dr. Al-Alem is the Deputy Director General at

Midroc International Group since 1998 and

before that he worked for Bechtel since

1983. He started his carrier as communica-

tion specialist on the Space Shuttle Program

and then on the communication systems for

three international airports. His experience

includes top management positions in the

fields of Research and Development,

Strategic Planning, Information Technology,

Engineering and Aviation.

He is a PhD honor graduate in Electrical

Engineering from the University of Southern

California.

Roger Wikström

Prior to joining the Midroc Group in 1999,

Mr. Wikström was Managing Director for

Ecuro, a property service provider focusing

on property administration and current main-

tenance and repair. Before that he served in

various managerial positions and has develo-

ped wide expertise, particularly in property

related matters, ranging from development

and construction via management to invest-

ment/sale and related financing.

Mr Wiström is a member of the Execu-

tive Committee with particular attention to

activities and services related to property

development, property management and

engineering.

He holds a Master of Science in Civil

Engineering.

Thomas Mårtensson

Mr. Mårtensson has broad experience from

legal and financial aspects related to the

operation of larger groups with subsidiaries.

Mr. Mårtensson is a member of the

Executive Committee with particular attention

to services related to mechanical installation,

plant maintenance, industrial painting and

corrosion control.

He entered the Midroc group manage-

ment at its formation in 1995 and has served

the group since then.

He holds a Bachelor of Science in

Economics.

Christer Wikström

Mr. Wikström joined the Midroc Group at its

formation in 1995 and has worked in various

managerial positions since then, with his

experience ranging from industrial marketing

and sales via property investments to busi-

ness development and group synergies.

Mr. Wikström is a member of the

Executive Committee with particular attention

to services related to electrical installations,

industrial automation, soil remediation, IT and

emerging new technologies.

He holds a Master of Science in

Mechanical Engineering and a Master of

Business Administration.

Karim Karaman

Mr. Karaman has a background from interna-

tional investments and finance. He is a direc-

tor and President of Preem Holdings since

February 2001 and a director of Preem

Petroleum since 2000. Mr. Karaman is a

director of Svenska Petroleum Exploration AB

since 2000. From 1993 to 1999 Mr. Karaman

worked for a large European Bank in

Amsterdam, Paris and Geneva, leaving as

Vice-President for Private Banking, speciali-

zing in the Middle East.


Midroc New Technology AB

Creative ideas are just the first step in the long journey to building

self-sustaining companies, and eventually, category-leading cor-

porations. In most cases, the commercial development of new

technology requires the financing from a venture capitalist.

Midroc New Technology (MNT) is a newly started venture

capital company within Midroc Europe and its mission is to provi-

de equity capital for carefully selected high-risk business oppor-

tunities with the hope of extraordinary returns. Focus is set on

private equity in new, potentially ground-breaking, technologies

and business concepts with an emerged window of opportunity.

Our philosophy for investing is that the business idea is

interesting in its own right with clearly defined market opportuniti-

es and proprietary technology advances. Preferably, we seek to

invest in companies working on patented technologies that are

revolutionary as opposed to evolutionary. We look for demonstra-

ted prerequisites for a substantial, rapid and international break-

through, primarily but not exclusively in the fields of

• energy efficiency

• environmental care

• security

Although we occasionally make our initial investment in com-

panies at later stages of their growth cycle, we prefer to invest in

new technologies prior to commercial development because it

enables us to leverage our value-added capabilities. We often

evaluate prototypes or examine early demonstrations of pheno-

mena that could offer extraordinary opportunities for development.

The timing and method of returning invested capital are of

course important considerations for MNT as for any venture capi-

talist. Exits will take place at the point in time when a portfolio

company has proven itself and developed enough to allow a sale

to a new structure of ownership that is industrially logical and jus-

tified which can mean a new phase of development, rationaliza-

tions, synergies, restructuring or expansion.

To minimize costs and yet to maximize efficiency, MNT con-

sists of few but productive investment managers / business

developers that actively and continuously assist and accompany

the portfolio companies on the road to a successful exit. The

mark of MNT shall be perceived as a combination of “heart,

brains and wallet”, facilitating pro-active decision making, early

warning notice, professional guidance, cross pollinations and fur-

nishing of strategic alliances.

MNT is currently building up a successful track record of cul-

tivating viable technologies. Our hands-on approach is key rea-

son that leading entrepreneurs choose to partner with us. As

company founders and entrepreneurs ourselves, we know first-

hand what it takes to realize a product and build a successful

company.


Contacts

PARENT COMPANIES OPERATING COMPANIES

Midroc ABP.O. Box 2053SE-174 02 SundbybergSweden

Granitor Invest ABP.O. Box 2053SE-174 02 SundbybergSweden

Midroc Real Estate ABP.O. Box 5785SE-114 87 StockholmSweden

Midroc New Technology ABP.O. Box 2053SE-174 02 SundbybergSweden

Midroc Properties ABP.O. Box 5785SE-114 87 StockholmSweden

Midroc Property Öresund ABP.O. Box 2053SE-174 02 SundbybergSweden

Midroc Electro ABP.O. Box 501SE-811 25 SandvikenSweden

Midroc Engineering ABP.O. Box 2092SE-174 02 SundbybergSweden

Midroc PropertyDevelopment ABSkeppsgatan 11SE-211 19 MalmöSweden

Midroc Projects CM ABP.O. Box 2053SE-174 02 SundbybergSweden

Alucrom ABP.O. Box 8919SE-402 73 GöteborgSweden

HYAB HässleholmsYtbehandlings ABP.O. Box 2034SE-281 02 HässleholmSweden

HYAB Alucrom Sp. Z o. o.Bykow 9055-095 MirkowPoland

BAC Corrosion Control LtdStafford Park 11Telford TF3 3AYUnited Kingdom

GP Ställningar ABKasens IndustriområdeSE-451 50 UddevallaSweden

Rodoverken ABP.O. Box 7SE-444 21 StenungsundSweden

SvedjeholmensIndustrimontage ABBox 23892 21 DomsjöSweden

ABV Rock Group ABP.O. Box 2053SE-174 02 SundbybergSweden

Metalock Sweden ABP.O. Box 1523SE-401 50 GöteborgSweden

Metalock Industrie Service GmbHGutenbergring 64D-22848 NorderstedtGermany

Metalock Engineering UK Ltd11 Paragon Way, Bayton RoadExhall, Coventry CV7 9QSUnited Kingdom

Metalock Industrie Service SARL22, rue des EntrepreneursZ.A. de la Plaine HauteF-91560 CrosneFrance

Bergslagens Elektro-Mekaniska ABHästskovägen 5SE-813 33 HoforsSweden

Tumstock Sverige ABP.O. Box 42501SE-126 16 StockholmSweden

Ekologisk Technologii Skelleftehamn ABP.O.Box 34SE-932 21 SkelleftehamnSweden

Hackholmssund Konferens ABBroSE-197 91 BroSweden

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2 7

www.midroc.se

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