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									   ANNUAL REPORT    2 0 0 3


           1    Highlights of 2003
                                                      Annual General                                      Financial
           2    Gunnebo – a presentation
           3    Business idea, goals and strategy     Meeting                                             information
           4    Comments by the CEO
                                                      The Annual General Meeting will be held             Interim report January-March
           6    Gunnebo’s shares                      at 5.00 p.m. on Monday, 29 March 2004               29 April 2004
           8    The security market                   at Chalmers Student Union’s union build-
                                                      ing, Chalmersplatsen 1, Göteborg.                   Interim report January-June
           10   Report of the directors
                                                                                                          10 August 2004
           12       Review of the Group               Notification
           14       Five-year review                  Shareholders who wish to participate in the         Interim report January-September
                                                      Annual General Meeting must have their              28 October 2004
           16       Financial risk management and     names entered in the register of sharehold-
                    sensitivity analysis              ers maintained by VPC AB by no later                Year-end release 2004
                                                      than 19 March, and notify the company by            3 February 2005
           18       Gunnebo Physical Security
                                                      no later than noon on 23 March.
           22       Gunnebo Integrated Security       Shareholders whose shares are registered in         These financial reports, which are pub-
           26       Gunnebo Perimeter Security        nominee names must, if they wish to exer-           lished in both Swedish and English, will be
                                                      cise their right to vote at the Meeting, have       available on or may be ordered from the
           31       Gunnebo Steelage                  their shares temporarily re-registered in           following:
           33       Gunnebo Asia Pacific              their own names by 19 March.
           34       Gunnebo Engineering
           36       Gunnebo’s employees               The Board proposes to the Annual General            +46 31 83 68 00 (tel)
           37       Gunnebo and the Environment       Meeting that a dividend of SEK 4.50 per             +46 31 83 68 10 (fax)
                                                      share be paid for 2003 and that the date of         Gunnebo AB, Box 5181, 402 26
           39   Consolidated income statement         record for entitlement to dividend be 1             Göteborg, Sweden.
           40   Consolidated balance sheet            April. It is expected that the dividend will
                                                      be distributed by VPC on 6 April 2004.

           42   Consolidated cash flow analysis
           43   Parent company income statement       Share split
           44   Parent company balance sheet          The Board is proposing that the company’s
                                                      shares be split, whereby shareholders will
           46   Parent company cash flow analysis     receive two new shares for each one they
           47   Accounting principles                 own.
           49   Notes and supplementary information
           55   Proposed treatment of
                unappropriated earnings
           55   Report of the auditors                Gunnebo in brief
           56   Board and auditors
           57   Management                            Sales by market                                     Operating profit by division
                                                      Total sales: MSEK 6,961                             (before depreciation of goodwill)
           58   Gunnebo worldwide
                                                                                                          Total: MSEK 466

                                                                            s France, 26%                                         s Gunnebo
                                                                            s Great Britain, 10%                                    Physical Security, 40%
                                                                            s Sweden, 10%                                         s Gunnebo
                                                                            s Germany, 10%                                          Integrated Security, 36%
                                                                            s Benelux, 7%                                         s Gunnebo Engineering, 17%
                                                                            s Asia Pacific, 7%                                    s Gunnebo
                                                                            s Spain, 6%                                             Perimeter Security, 6%
                                                                            s North America, 5%                                   s Gunnebo Steelage, 1%
                                                                            s Other, 19%

                                                      Sales by division                                   No of employees by division
                                                      Total sales: MSEK 6,961                             Number of employees: 8 100

                                                                             s Gunnebo                                            s Gunnebo
                                                                               Physical Security, 37%                               Physical Security, 33%
                                                                             s Gunnebo                                            s Gunnebo
                                                                               Integrated Security, 30%                             Integrated Security, 30%
                                                                             s Gunnebo Engineering, 16%                           s Gunnebo Engineering, 14%
                                                                             s Gunnebo                                            s Gunnebo Steelage, 14%
                                                                               Perimeter Security, 15%                            s Gunnebo
                                                                             s Gunnebo Steelage, 2%                                 Perimeter Security, 9%
                       Highlights of 2003

• After another year of consolidation concentrating on improving margins and cash flow,
  the Group is now financially strong and ready for further expansion.

• The profit after financial items increased by 22 per cent to MSEK 341 (280).

• Gunnebo Security raised its operating profit before depreciation of goodwill by 11 per
  cent to MSEK 428 (385) and improved its operating margin to 7.4 per cent (6.6).
  Strong marginal improvements for both Gunnebo Integrated Security and Gunnebo
  Physical Security.

• Gunnebo Engineering increased its operating profit before depreciation of goodwill by
  7 per cent to MSEK 87 (81), and improved its operating margin to 7.6 per cent (6.9).

• The operative cash flow remained strong; excluding restructuring costs it amounted to
  MSEK 500 (501).

• Net debt declined by MSEK 272 to MSEK 1,309 (1,581), and the equity ratio rose to
  37 per cent (30).

• Earnings per share increased by 13 per cent to SEK 11.95 (10.55). It is proposed to
  increase the dividend by12.5 per cent to SEK 4.50 per share (4.00). The Board is also
  proposing a two for one share split.

                                                                                              Highlights of 2003
• The business outlook for 2004 as a whole is good.

 Key ratios                                                       2003        2002    2001

 Invoiced sales, MSEK                                             6,961       6,976   6,671
 Operating profit, MSEK                                                399     361     321
 Profit after financial items, MSEK                                    341     280     223
 Operating margin, %                                                    5,7     5,2     4,8
 Return on capital employed, %                                         12,1    10,4    10,1
 Earnings per share after dilution, SEK                           11:95       10:55    7:65
 Net debt, MSEK                                                   1,309       1,581   1,872
 Operative cash flow, excluding structuring costs, MSEK                500     501     348
 Equity ratio, %                                                        37      30      27
 Cash flow per share, SEK                                         21:30       21:15    6:65
 Market capitalisation, 31 December, MSEK                         3,929       2,630   2,672
 P/E ratio, 31 December                                                 15      12      16
 Number of employees at year-end                                  8,108       8,351   8,399

                                      1   Gunnebo Annual Report 2003
                                                         Gunnebo – a presentation

                           Gunnebo conducts its business through four security                                            Gunnebo Engineering is a market leader in lifting and
                           divisions, organised within Gunnebo Security, and                                              fastening equipment and systems.
                           through Gunnebo Engineering.                                                                      Gunnebo has an annual turnover of some MSEK
                              Gunnebo Security comprises Gunnebo Physical                                                 7,000 and some 8,100 employees in 110 companies
                           Security, the world leader in high-graded burglar- and                                         located in 32 countries.
                           fire-resistant safes; Gunnebo Integrated Security,                                               Gunnebo also sells to a further 100 or more markets
                           which has a very strong position on the market for                                             via agents and distributors. Since 1997, Gunnebo has
                           electronic security systems in Southern Europe and a                                           more than doubled its turnover by means of organic
                           global position in entrance control systems; Gunnebo                                           growth and via acquisitions. During the same period,
                           Perimeter Security, the leading company in Northern                                            the security-related business has expanded from 46
                           Europe in outdoor and indoor perimeter protection;                                             per cent of total sales to 84 per cent, and the foreign
                           and Gunnebo Asia Pacific, a newly formed division that                                         sales ratio from 61 to 90 per cent of the total.
                           was created on 1 January 2004 for security activities in
                           Asia. This division has a very strong market position in
                           India and Indonesia.

                                                                                            Organisation of the Group

Gunnebo – a presentation

                                                                                                                                Legal affairs/M&A
                                                                                                                                Human Resources
                                                                                                                                Information and Investor Relations

                                    Gunnebo                               Gunnebo                               Gunnebo                                Gunnebo                              Gunnebo
                                 Physical Security                   Integrated Security                    Perimeter Security                        Asia Pacific                         Engineering

                           Products and services                 Products and services                 Products and services                Products and services                 Products and services
                           High-graded burglar- and fire-        Integrated electronic security sys-   Outdoor perimeter protection         High-graded burglar- and fire-        Products and systems for heavy
                           resistant safes. Security products    tems; burglar alarms, fire alarms,    and entrance control such as         resistant safes. Security products    lifting, such as chains, hooks,
                           for banks: safety deposit boxes,      CCTV surveillance, alarm cen-         gates and fences, and alarm sys-     for banks: safety deposit boxes,      lifting slings and blocks. Chain-
                           bank vaults and vault doors.          tres for alarm monitoring,            tems. Products for road safety.      bank vaults and vault doors, and      based non-skid products.
                           Security products for cash han-       entrance control and access con-      Machine security and indoor          products for banking automa-          Fastening systems.
                           dling and transportation for          trol systems. Fire extinguishing      perimeter protection for industry,   tion. Fire-resistant safes for com-
                           banks and retailers, such as auto-    systems. Bullet resistant glass       warehouses, public environments      puter equipment. Fire extin-          Brand names
                           matic cash handling machines,         walling and partitioning.             and homes. Installation and          guishing equipment, fire alarms,      Gunnebo Lifting, Gunnebo
                           service boxes, deposit boxes and      Installation and service.             service.                             alarm centres. Security booths,       Fastening, Gunnebo Johnson,
                           transit safes. Fire-resistant safes                                                                              entrance control systems, CCTV        Gemla Mekanik, OFA, ANJA,
                           for the storage of documents and      Brand names                           Brand names                          and surveillance. Installation and    Tellefsdal
                           data media in offices. Installation   Fichet-Bauche, Ritzenthaler,          Gunnebo Protection, Wego,            service.
                           and service.                          Rosengrens Larm, Gunnebo              Werra, Alura, Polaraidat, Troax
                                                                 Entrance Control, Gunnebo                                                  Brand names
                           Brand names                           Mayor, Gunnebo Metro,                                                      Steelage, Minimax, Chubbsafes,
                           Chubbsafes, Fichet-Bauche,            Gunnebo Italdis, Gunnebo                                                   Fichet-Bauche, Rosengrens,
                           Rosengrens, Garny, Leicher,           Omega, Armapod, CSI Security,                                              Gunnebo Perimeter Protection,
                           SecureLine                            Hygiaphone, SMC                                                            Gunnebo Entrance Control,
                                                                                                                                            Indolok Bakti Utama

                                                                                                   2   Gunnebo Annual Report 2003
       Business idea, goals and strategy

The business and the future                    ucts and services of high quality. On those       Financial goals
Gunnebo is active on markets with consid-      markets where customers so demand,                Gunnebo’s financial goals are:
erable potential for growth and development.   Gunnebo can offer a complete range of             • For the Group’s growth to be achieved
     Thanks to its very strong, world-lead-    customised security products and systems.           subject to good profitability and mainte-
ing brand names, the broad network of dis-                                                         nance of a strong financial position
tributors, specialised range of services and   Brand names                                       • For the Group to earn in the long term -
the high standard of its service, Gunnebo      Gunnebo has at its disposal several leading,        over an economic cycle – a minimum
now occupies a strong position on the mar-     global brand names, and a large number of           return on capital employed of 15 per cent
kets in Europe and parts of Asia.              very strong, local brands.                          and to have a minimum operating mar-
     Gunnebo’s security business consists          Their common denominator is that                gin, after depreciation of goodwill, of 7
primarily of high-graded, fire- and burglar-   customers shall recognise that Gunnebo’s            per cent. In 2003, the Group had a
resistant safes, security products for cash    brand names represent high quality and              return on capital employed of 12.1 per
handling, alarm systems, fire protection       functionality. All activities carried out on        cent and an operating margin of 5.7 per
products, entrance and access control sys-     the market shall therefore be designed to           cent.
tems, CCTV, alarm centres, and outdoor         strengthen the Group’s priority brand             • The equity ratio shall not fall below 30
and indoor perimeter protection.               names.                                              per cent in the long term. The equity
     Gunnebo Engineering’s business com-                                                           ratio at the end of 2003 was 37 per cent.
prises systems for heavy lifting and fasten-
ing, as well as non-skid products.                                                               The market
     Since it was formed ten years ago, the                                                      The global security market is estimated to

                                                                                                                                                Business idea, goals and strategy
“new” Gunnebo has gone through two                                                               be worth some SEK 1,000 billion and to
phases. The first phase – between 1994 and                                                       be growing at a rate of 4-7 per cent a year.
2001 – was a period of strong growth and                                                              Gunnebo intends in the future to
transformation from a traditional industrial                                                     expand both organically and by means of
conglomerate into a modern security                                                              strategic acquisitions, with the object of
group. The second phase – 2002 and 2003                                                          continuing to grow faster than the market.
– was one of consolidation and improved                                                               Gunnebo has a very strong position on
profitability.                                                                                   the West European market and a leading
     During this period, Gunnebo focused                                                         position on the Indonesian and Indian
on improving profitability, which involved                                                       markets in Asia.
giving priority to earning higher margins                                                             Gunnebo Security also has a strong
rather than increasing volumes on certain                                                        position on the Canadian and South
markets and in certain product areas.                                                            African markets.
     Phase three, which will begin in the                                                             Gunnebo’s presence on the North
2004 financial year, will see a return to                                                        American security market is currently lim-
strong growth via acquisitions – together                                                        ited.
with investments intended to promote                                                                  Gunnebo’s goal is to strengthen its
growth through modernisation of the                                                              position via acquisition on markets where
Group’s own product range.                                                                       its market share is currently low. One aim,
                                                    Examples of brand names that                 for example, is to strengthen Gunnebo
Business idea                                     represent a significant share of the           Integrated Security’s position outside
Gunnebo’s business idea is to build an              Group’s intangible fixed assets.             France.
international security group with very                                                                Within Perimeter Security we also
strong brands mainly focused on a well                                                           intend to strengthen our position in
developed product concept within physical                                                        Europe by means of selective acquisitions
security as well as electronic security sys-                                                     and structural changes.
tems. Furthermore, Gunnebo shall contin-
ue to build its business upon local presence
with production, sales and service on all
                                                             Long term goal                                   Actual outcome
important markets.
                                                                                                 2003     2002      2001      2000     1999
Customer focus                                 Return on capital employed, %             15      12.1      10.4      10.1      15.4     12.7
On each individual market, customers           Operating margin, after
should recognise Gunnebo’s ability to satis-    depreciation of goodwill, %                  7    5.7       5.2       4.8       6.8      6.1
fy their current and future needs for prod-    Equity ratio, %                         > 30        37        30        27        29       30

                                                    3   Gunnebo Annual Report 2003
                                                 Comments by the CEO

                                                                                                                      appointment, above all on account of the
                                                                                                                      structural crisis the German economy is
                                                                                                                      going through. The cost situation, in com-
                                                                                                                      bination with a weak economy, has nega-
                                                                                                                      tively affected our German subsidiaries. To
                                                                                                                      this, we may add that parts of the security
                                                                                                                      industry is still suffering from specific
                                                                                                                      problems caused by the structure of the
                                                                                                                           Outside the EU, export sales to Eastern
                                                                                                                      Europe and North Africa have been going
                                                                                                                      well. We have stepped up our canvassing of
                                                                                                                      markets served by distributors.
                                                                                                                           Progress in Asia has been very encour-
                                                                                                                      aging, especially on the Group’s main mar-
                                                                                                                      kets there, namely India and Indonesia.
                                                                                                                      The order intake saw steady growth towards
                                                                                                                      the end of the year.

                                                                                                                      The divisions
                                                                                                                      At the beginning of 2001 we established
                                                                                                                      our present organisation with four security
Comments by the CEO

                                                                                                                      divisions and one division for lifting and
                                                                                                                      fastening systems.
                                                                                                                           The reason for this move was to enable
                                                                                                                      us to focus, in each product area, on mak-
                                                                                                                      ing structural changes that would improve
                                                                                                                      profitability. These projects have for the
                                                                                                                      most part been completed, except for
                                                                                                                      Perimeter Security. The first step in the
                                                                                                                      development of the main organisation was
                                                                                                                      taken with the formation of Gunnebo Asia
                                                                                                                      Pacific Division as of January 1, 2004.
                                         Bjarne Holmqvist, President and CEO                                               In 2003, we successfully completed the
                                                                                                                      restructuring of Gunnebo Physical Security
                                                                                                                      and Gunnebo Integrated Security.

                                                                                                                      Gunnebo Physical Security
                      In 2003, Gunnebo’s business was charac-        transit segment being of particular impor-       Following the acquisition of Chubb Safes
                      terised by further consolidation of the        tance. Sales in France increased by more         in 2000, Gunnebo Physical Security’s pro
                      Group’s financial position.                    than 8 per cent and profitability was good.      forma result has improved from a loss of
                           The profit after financial items incre-        On other markets in Europe, such as         MSEK 100 to a profit of MSEK 204. The
                      ased by 22 per cent to MSEK 341, and the       the Nordic and Benelux countries, Great          operating margin in 2003 was 7.8 per cent
                      operative cash flow amounted to MSEK           Britain and Spain, the clear focus on            and the return on operating capital 23 per
                      500 for the second year in a row.              improving profitability instead of raising       cent.
                           During the past two years, the opera-     volumes was successful. We have made con-             The three-year structuring programme
                      tive cash flow - after investment activities   scious efforts to raise both the gross and net   is now broadly finished. Relocation of pro-
                      and changes in working capital - has           margins by being attentive to the quality of     duction, closure of factories and the num-
                      totalled MSEK 1,000. This enabled us to        the order portfolio.                             ber of product models reduced has both
                      significantly reduce the net debt and raise         Organic growth was consequently weak        efficiently and successfully been accom-
                      the Group’s equity ratio to 37 per cent.       in terms of invoiced sales, and negative in      plished. Parallel to this, we have sharpened
                                                                     terms of the order intake in 2003.               our focus on banking automation and cash
                      Markets                                        Nonetheless, both the operating margin and       handling products, including the launch of
                      In business terms, the French market devel-    the operating profit rose markedly.              SafePay.
                      oped strongly in 2003, with our deliveries          Among the large markets of importance            Service has now grown to 25 per cent
                      of products and services in the cash-in-       to Gunnebo in Europe, Germany was a dis-         of the division’s business.

                                                                          4   Gunnebo Annual Report 2003
     The restructuring of the traditional        Perimeter Security intends to play a leading      to consolidation and profitability improve-
safe business and increased concentration        role in this process.                             ments; now a period of renewed growth is
on cash handling and service are important                                                         about to begin.
strategic changes in the character of the        Gunnebo Steelage                                       In Europe we hope to be able to make
division’s business that will improve prof-      – Gunnebo Asia Pacific                            a number of acquisitions to strengthen
itability.                                       Gunnebo Steelage became a member of the           Gunnebo Perimeter Security.
     Gunnebo Physical Security is now one        new Gunnebo Asia Pacific division on 1                 Gunnebo Physical Security will expand
of the world’s leading security companies.       January 2004.                                     in Europe, and later on in the USA, while
It is based on a stable foundation and has           In 2003, Gunnebo Steelage noted a             Gunnebo Integrated Security will have to
good potential for further expansion within      modest improvement in its operating               establish a stronger presence outside of its
and outside of Europe.                           result, which amounted to MSEK 6. The             existing markets in the south of Europe.
                                                 operating margin was 5.4 per cent, and the             Market prospects for 2004 is good.
Gunnebo Integrated Security                      return on operating capital 7 per cent.           The result is stable, the balance sheet
A marked improvement in the result, espe-            Gunnebo Steelage’s Physical Security          strong and cash balances healthy. The
cially in France, is reflected in a 28 per       business area had a good year and its oper-       transformation of Gunnebo from an indus-
cent increase in operating profit to MSEK        ating margin was 10 per cent, whereas             trial conglomerate into a modern interna-
183. The operating margin improved               Minimax and Security Projects both                tional security group is moving into its
sharply to 8.6 per cent, and the return on       incurred losses.                                  final phase. Parallel to this, Gunnebo
operating capital was 29 per cent.                   The enlargement and modernisation of          Engineering is still developing well.
     Three business units were particularly      the safe factory in Halol has been completed.          We intend to demonstrate to our
successful: Fichet Sécurité Electronique,                                                          shareholders, employees and partners over
Ritzenthaler and Gunnebo Entrance                Gunnebo Engineering                               the coming years that an investment in

                                                                                                                                                  Comments by the CEO
Control. Dedicated work, both internal           Despite another relatively weak year for the      Gunnebo will produce results in both the
and external, has enabled these business         economy, the division improved its opera-         short and the long term.
areas to achieve profitability levels that are   ting profit to MSEK 87. The operating                  We have very strong global brand
very good for the sector.                        margin was 7.6 per cent and the return on         names and an extensive local presence on
     The introduction of new products and        operating capital 12 per cent.                    all the important markets around the
system solutions has sharpened Gunnebo                Gunnebo Lifting is still doing very          world. Together with the well established
Integrated Security’s profile as a leading       well, while Gunnebo Blocks’ result                service business, this means we are in par-
supplier of electronic security solutions on     declined owing to the weak economic con-          ticularly good shape to move into the
the division’s main markets.                     ditions in the USA and the depreciation of        growth phase we have planned for the cur-
     The business in Indonesia, which has        the dollar. Gunnebo Fastening earned a rela-      rent year. 2004 will be an important year
now been transferred to the division             tively satisfactory result, given the low level   in our growth strategy.
Gunnebo Asia Pacific, has made further           of building activity.
sound progress.                                       Despite this, the division is earning a      Göteborg, February 2004
                                                 healthy operating profit and its operative
Gunnebo Perimeter Security                       cash flow was both high and stable.
The operating result declined further to a
weak MSEK 28. The change of manage-              Summary and outlook for 2004
ment and the new action programmes have          The most important divisions for the
not yet shown through in the result. The         Gunnebo Group in terms of size and prof-
operating margin was 2.7 per cent and the        itability - Gunnebo Physical Security and         Bjarne Holmqvist
return on operating capital only 6 per cent.     Gunnebo Integrated Security - are still
     Both Gunnebo Perimeter Protection           developing strongly in their respective
and Gunnebo Troax saw their operating            business areas and markets.
results decline sharply on markets subject            Gunnebo is now financially very strong
to fierce competition, especially in             and is ready to move into a more intensive
Germany and England.                             acquisition phase, which will generate
     Excess capacity, narrower margins and       faster growth.
high marketing overheads, were among the              The “new” Gunnebo’s almost decade-
factors behind the weaker profitability.         long history may best be summarised in
     To restore income levels to those of        the strategic changes that have been made.
two or three years ago, the industry, in         Between 1995 and 2001, the company was
Gunnebo’s view, is facing a necessary            transformed into an expanding security
process of consolidation. Gunnebo                group. In 2002 and 2003, the focus shifted

                                                      5   Gunnebo Annual Report 2003
                                                           Gunnebo’s shares

                                    Gunnebo’s share price Januari 1999 - february 2004                                                           Earnings per share
                                                                                                                                                    after dilution
                                     Gunnebo        Affärsvärldens General Index        Turnover (no. of shares in thousand)
                         200                                                                                                               SEK
                                                                                                                    (c) SIX                 12
                         100                                                                                                                 2

                                                                                                                                                  99     00     01     02     03
                                                                                                                                                 s Items affecting comparability

                         60                                                                                                        2,000         Dividend per share

                         40                                                                                                                  4
                               99              00            01                    02                 03                      04

                   Share capital                                          owned 24 per cent, and foreign sharehold-                          1
                   Gunnebo has a share capital of MSEK 219                ers 17.2 per cent of the capital.
Gunnebo’s shares

                   that is divided into 21,889,974 shares,                    Vätterledens Invest AB, together with                               99       00   01      02     03
                   each having a par value of SEK 10. All                 associates, is Gunnebo’s largest shareholder                           s Bonus
                   shares have equal voting rights and share              with 23.4 per cent of the capital and votes.                            * Board proposal

                   equally in the company’s assets and earn-              The second largest shareholder is the Stena
                   ings. In 2003, the number of shares in                 Group, together with associates, with 12.4                               Equity per share
                   issue rose by 678,776 following the conver-            per cent of the capital and votes.                                        after dilution
                   sion of an outstanding convertible loan.
                                                                          Share price                                                      100
                   Gunnebo on the stock market                            The listed price of Gunnebo’s shares
                   Gunnebo’s shares have been listed on                   increased by 45 per cent during the year.
                   Stockholmsbörsen since December 1993                   The stock market general index increased                          60

                   and on its “A” list since 1996. A trading              by 25 per cent over the same period, while                        40
                   block consists of 200 shares.                          the Carnegie Small Cap Index rose by 42
                                                                          per cent.
                   Dividend policy                                             Since the shares were floated in                              0
                                                                                                                                                  99     00     01     02     03
                   The Board’s dividend proposal shall take               December 1993 the listed price has risen
                   into account Gunnebo’s long-term devel-                by 590 per cent, while the stock market
                   opment potential, its financial position and           has risen by 140 per cent. In 2003 the low-                            Cash flow per share
                   its investment needs.                                  est price Gunnebo’s shares traded at was
                        The Board has decided that the target             SEK 116.00, while the highest price was                           25
                   for the dividend is that in the long term it           SEK 188.00. The closing listed price was
                   shall amount to 30-40 per cent of the prof-            SEK 179.50.
                   it after tax. For the current year, it proposes                                                                          15
                   that a dividend of SEK 4.50 per share be               Turnover
                   paid, which corresponds to 38 per cent of              In total 9,044,914 shares were traded in
                   the profit after tax.                                  2003 for a value corresponding to MSEK
                                                                          1,382. The average volume traded each day                          0
                                                                                                                                                  99     00     01     02     03
                   Shareholders                                           was 36,325 shares. The turnover rate in
                   The number of shareholders on 31                       2003 was 42 per cent, which may be com-
                   December 2003 was 9,500 (9,800).                       pared with an average of 138 per cent for
                   The ten largest shareholders controlled                shares on the “A” list. Gunnebo’s beta value
                   56.2 per cent of the votes and capital.                (the fluctuation in its share price in relation
                       Swedish institutional shareholders                 to the stock market index) was 0.69 in 2003.

                                                                                   6    Gunnebo Annual Report 2003
                                                                                                                      Information to the capital market
   Data per share                                             2003                2002                2001
                                                                                                                      On 13 November 2003 Gunnebo
Earnings per share, SEK                                         12.00               10.75                 7.80        arranged a capital market day at
Earnings per share after dilution, SEK                          11.95               10.55                 7.65        Gunnebo-Ritzenthaler’s factory in
Earnings per share after dilution,                                                                                    Baldenheim, France, which was attended
  excluding items affecting comparability, SEK                 14.95               13.45                10.40         by 29 analysts, portfolio managers and
Equity per share, SEK                                          85.45               77.60                71.35         journalists from Sweden, Norway,
Equity per share after dilution, SEK                           88.35               79.10                73.10
                                                                                                                      Denmark, Switzerland and France.
Cash flow per share, SEK                                       21.30               21.15                 6.65
Listed price on 31 December, SEK                              179.50              124.00               126.00            Gunnebo also participated in numer-
P/E ratio                                                         15                  12                   16         ous meetings with analysts in Sweden
Dividend, SEK                                                   4.50*               4.00                 3.50         and abroad, and addressed 13 meetings
Direct yield, %                                                  2.5                 3.2                  2.8         of the Swedish Shareholders Association
Closing no. of shares, x 1,000                                21,890              21,211               21,205         and the Association’s autumn conference
Average no. of shares, x 1,000                                21,608              21,209               21,205         in Göteborg, which was attended by
No. of shares after dilution, x 1,000                         21,890**            21,988**             21,988
                                                                                                                      around 1,200 people.
* Board proposal
** Excluding warrants that, in the event of dilution, would involve the issue of 1,000,000 shares at a subscription
   price of SEK 152 per share.ktie                                                                                    Analysts who follow Gunnebo
                                                                                                                      Alfred Berg ABN AMRO
                                                                                                                      Henrik Fröjd
  Largest shareholders 31 December 2003                                                No.                            +46-8-723 58 33
Vätterledens Invest AB with associates                                        5,126,228                23.4 %
Stena Adactum AB with associates                                              2,713,360                12.4 %
Handelsbanken funds                                                           1,012,381                 4.6 %         Danske Equities
2nd AP Fund                                                                     723,438                 3.3 %         Sören Samsöe
Odin funds                                                                      605,200                 2.8 %         +45-3344 04 48
JP Morgan Chase Bank                                                            526,009                 2.4 %
Robur funds                                                                     481,670                 2.2 %
Investors Bank & Trust                                                          470,000                 2.1 %
                                                                                                                      D. Carnegie AB
Svenskt Näringsliv with associates                                              400,000                 1.8 %

                                                                                                                                                                Gunnebo’s shares
Bjarne Holmqvist with associates                                                265,667                 1.2 %         Björn Enarsson
Carnegie Fond AB /Small Cap                                                     262,000                 1.2 %         +46-8-676 88 00
Östersjö Foundation                                                             245,000                 1.1 %
Carlsson Small Cap Fund                                                         206,100                 1.0 %
Hans Ståhlgren                                                                  190,941                 0.9 %         Deutsche Bank AG
Banque Carnegie Luxembourg Funds                                                188,600                 0.9 %
                                                                                                                      Mattias Karlkjell
Other                                                                         8,473,380                38.7 %
Total                                                                        21,889,974               100.0 %         +46-8-463 55 19

                                                                                                                      Enskilda Securities
   Share holders                                            % of share            No. of            % of no. of       Stefan Mattsson
   by size                         No. of shares                capital     shareholders          shareholders
                                                                                                                      +46-8-522 297 74
00001 - 500                          1,280,205                    5.9              7,544                 79.3
00501 - 1,000                          902,105                    4.1              1,066                 11.2         Monika Elling
01,001 - 5,000                       1,466,443                    6.7                648                  6.9         +46-8-522 295 44
05,001 - 10,000                        680,360                    3.1                 90                  1.0
10,001 - 50,000                      2,193,632                   10.0                106                  1.1
50,001 -                            15,367,229                   70.2                 52                  0.5         Hagströmer & Qviberg
Totalt                              21,889,974                  100.0              9,506                100.0
                                                                                                                      Lars Glemstedt
                                                                                                                      +46-8-696 18 54
                                                           Change in                Share          Total no. of
   Changes in share capital, MSEK
                                                         share capital             capital              shares
                                                                                                                      Handelsbanken Capital Markets
1991   Formation                                                                       4              4,000           Mikael Sens
1992   Split 100:1                                                                     4            400,000
                                                                                                                      +46-8-701 12 51
1992   New issue                                                  +96                100         10,000,000
1995   New issue                                                  +50                150         15,000,934 
1995   Conversion                                                  +3                153         15,280,783
1996   Conversion                                                 +10                163         16,275,819           Kaupthing Bank
1997   New issue                                                   +4                167         16,715,819           Henrik Alveskog
1997   Conversion                                                 +27                194         19,351,121           +46-8-791 48 69
1998   Conversion                                                  +4                198         19,813,150
1998   New issue                                                   +2                200         19,973,150
1999   Conversion                                                   0                200         19,982,310
1999   New issue                                                   +6                206         20,625,881           Nordea Securities
2000   Conversion                                                  +6                212         21,204,528           Johan Wettergren
2002   Conversion                                                   0                212         21,211,198           +46-8-407 92 47
2003   Conversion                                                  +7                219         21,889,974 

                                                                                                                      Swedbank Markets
                                                                                                                      Mats Larsson
                                                                                                                      +46-8-585 925 42

                                                                   7     Gunnebo Annual Report 2003
                                                          The security market

                      Over the past few decades, the                                                                          The market for high-graded safes and
                      security market as a whole has                                  The global                         other traditional banking products has a
                      grown some two or three per cent                           security market, 2003                   limited growth in Europe, whilst demand in
                      faster than GDP on each compo-                                                                     Eastern Europe, Asia and Africa is expected
                      nent market.                                                                                       to grow much faster.
                         One factor behind the rapid                                     20%                                  Gunnebo is the market leader by a
                      growth is the higher rate of crime                                                                 wide margin in Europe with the strong
                      against companies, the public sec-                                                                 brands Chubbsafes, Fichet-Bauche,
                      tor and individuals; another is the                                                                Rosengrens, Garny and Leicher.
                      threat of new acts of terrorism and                                                                     Gunnebo Physical Security has some
                      various kinds of natural disaster.                              s North America                    25 per cent of the world market for high-
                                                                                      s Europe
                      The security market can therefore                               s Rest of the world                graded, burglar- and fire-resistant safes.
                      be expected to show annual                                                                              Gunnebo’s competitors on the
                      growth of 4 to 7 per cent during                                                                   European market for high-graded safes are
                                                                                    The European
                      the coming five-year period, with                                                                  for the most part local manufacturers, such
                                                                                 security market, 2003
                      growth in emerging markets in                                                                      as Format, Bode-Panzer and Lampertz/
                      Asia, Africa and Latin America at                                                                  Sistec in Germany, Robur and Håbeco in
                      the top end of this range.                                                                         Scandinavia, SMP and Dudley in Great
                                                                                         28%                             Britain, Conforti in Italy and Ferrimax and
                      The global security market is estimated to be                                                      Bausa in Spain.
                      worth more than 1,000 billion kronor.                                 32%
                           North America accounts for most of the                                                        High growth for integrated
The security market

                      market (approx. 500 billion kronor) while                       s Guarding services                electronic security systems
                                                                                      s Alarm systems
                      Europe accounts for an estimated 300 bil-                       s Intrusion protection
                                                                                                                         Gunnebo Integrated Security has so far
                      lion. This means that North America and                                                            concentrated on the banking sector in
                      Europe together account for more than 80                                                           Southern Europe, where the division is
                                                                             The global security market
                      per cent of the total security market.                                                             market leader. Electronic security systems
                                                                              per customer category for
                      In terms of products and services, the security                                                    for airports, ports, public institutions, casi-
                                                                             safety products and service
                      market can be divided into three segments:                                                         nos, prisons etc. are a growing area of busi-
                      • Intrusion protection (physical security)                                                         ness for the division.
                      • Alarm systems (electronic security systems)                       10%                                 The electronic security business seg-
                      • Guarding services (including secure trans-                                                       ment, which includes electronic surveil-
                        port of cash)                                                 25%                                lance systems, electronic access control sys-
                                                                                                   65%                   tems, CCTV (surveillance using cameras
                      Within the first two segments, which are                                                           and monitors) and alarm monitoring cen-
                      Gunnebo’s main areas of interest, sales of                                                         tres, is expected to grow faster than the rest
                                                                                      s Industrial and commercial
                      security products and service are distrib-                      s Privat market                    of the security market.
                                                                                      s The public sector
                      uted as follows:                                                                                        The market for electronic security sys-
                      • Industrial and commercial, 65 %                                                                  tems is highly fragmented in Europe, as in
                      • Private market, 25 %                                                                             the rest of the world, despite several major
                      • The Public sector, 10 %                         boxes, and vault doors. The division also        structural deals in recent years. This market
                                                                        manufactures products for the secure han-        is expected to grow by some 8-10 per cent
                      Gunnebo’s security business is focused pre-       dling and transport of cash for the banking      a year.
                      dominantly on industry, commerce and the          and retail sectors, including automatic cash          Gunnebo Entrance Control equips
                      public sector.                                    dispenser and deposit machines, service boxes,   office buildings and commercial premises,
                           In Europe, where Gunnebo conducts            deposit boxes, transit safes, and systems for    airports, ports, underground railways,
                      most of its business, demand breaks down          secure cash handling in the retail trade.        sports arenas etc. with complete entrance
                      as follows: intrusion protection (approx. 85          Service accounts for a growing propor-       control systems, including a range of sys-
                      billion kronor), electronic security systems      tion of the turnover.                            tems for visitor identification. Growth rates
                      (95 billion) and surveillance (120 billion).          The cash handling market, especially         in Europe and the USA, where Gunnebo
                                                                        in the retail sector, will show marked           Entrance Control has a small but fast-
                      GUNNEBO’S DIVISIONS                               growth in coming years.                          expanding business, are expected to remain
                      Physical security                                     SafePay, Gunnebo Physical Security’s         high.
                      Gunnebo Physical Security manufactures            completely closed and secure cash handling            The “bullet-resistant environment” seg-
                      and markets high-graded burglar- and fire-        system for the retail sector, has very large     ment includes systems for security booths,
                      resistant safes, bank vaults, safety deposit      market potential.                                bullet-resistant windows and doors, securi-

                                                                             8   Gunnebo Annual Report 2003
ty products for banks and exchange offices       aim of improving its profitability in this      brought together all its security-related
with built-in communication systems.             segment by means of consolidation.              business into a single division – Gunnebo
Growth in this segment is to some extent              There is a trend on the market towards     Asia Pacific – with effect from 1 January
related to increasing terrorism and armed        increasingly sophisticated security solu-       2004. The division is described in more
robberies, and the consequent tightening of      tions, whereby it is becoming more com-         detail on page 33.
national security laws.                          mon to supplement conventional fencing
     Gunnebo Integrated Security operates        and gates with fence or ground alarms,          Developments on the security
a number of alarm monitoring centres with        CCTV surveillance and a variety of access       market
24-hour service for banks and other insti-       control systems.                                Terrorist attacks around the world have
tutions in France, Spain and Portugal. This           Gunnebo Troax is one of Europe’s lead-     taken place in new and unexpected places,
segment is believed to have considerable         ing companies in indoor perimeter protection.   and security has come into sharper focus as
development potential.                                The European market for indoor             a result of intensive media coverage, regard-
     The “fire protection” segment is esti-      perimeter protection is estimated to be         less of where in the world the acts of ter-
mated to be expanding at an annual rate of       worth some three billion kronor.                rorism take place.
some 5 per cent, with slight differences              Troax has a market share of some 15             Despite the existence of wide geo-
between one market and another.                  per cent in Europe.                             graphical differences, the security industry
     Gunnebo Integrated Security’s share of           The competition mainly comes from          is relatively insensitive to economic fluctua-
the total market in Europe is estimated at       small, local operators that are active on       tions and only marginally affected by gen-
2-3 per cent, with considerably stronger         geographically confined markets.                eral developments in the global economy.

                                                                                                                                                  The security market
positions in France, Spain, Portugal and              Demand is concentrated on products
Belgium.                                         for machine protection in the automotive        Gunnebo Security: trends
     There are some large competitors on         and robotics industries intended to separate    The main factors influencing developments
the European market, including TYCO              safe from hazardous environments, and for       in the security areas of interest to Gunnebo
and United Technology (Chubb Security)           the security and protection of materials        Security during the year are:
from the USA, Cerberus (Siemens) from            handling and transport flows. The building      • A marked increase in demand for security
Germany and Sweden’s Securitas.                  industry is a third market segment, requir-       products for asset protection outside the
     There are also numerous small, local com-   ing garage boxes and secure storage facili-       banking sector amongst companies that
panies on most sub-markets in Europe, which      ties, for example.                                handle large quantities of cash, including
canvass narrowly defined market segments.             The market for conventional indoor           retailers, petrol stations, public authori-
                                                 perimeter protection is believed to have          ties and service establishments.
The market for perimeter protection              moderate development potential, whereas          • An increase in Gunnebo’s sales of servic-
Gunnebo Perimeter Security is the Group’s        the potential for system deliveries to the         es ancillary to physical and electronic
division for outdoor and indoor perimeter        manufacturing sector is believed to be             security products during the 2003 finan-
protection through Gunnebo Perimeter             brighter. A strong local presence combined         cial year. Many customers now receive
Protection and Gunnebo Troax respectively.       with expertise in customer-oriented system         24-hour service on all their security
     Gunnebo Perimeter Protection is one         sales will remain essential, as will detailed      products.
of Northern Europe’s leading suppliers of        knowledge of the relevant local security        • Major contracts were received during the
products and services for outdoor perime-        regulations, as a means of strengthening          year for the modernisation and conver-
ter protection. The European market is           the market position.                              sion of mechanical and manual security
estimated to be worth some 10 billion kro-                                                         products into electronic and automatic
nor in total, and to be growing only slowly.     Strong growth in Asia                             ones.
     Gunnebo Perimeter Protection has a          More than half of the world’s population        • An increased number of deliveries of
market share of some 6 per cent in Europe.       live and work in Asia.                            complete security systems, including out-
     The main competitors with broad cov-             To date, this market has accounted for       door perimeter protection, access control
erage include Bekaert, CRH Fencing and           only 10-15 per cent of the world’s existing       systems with CCTV, alarm installations
Security, Dirickx, Elkosta, Rivisa and Best      security installations. According to a study      and conventional security products such
Fencing Group, along with numerous               carried out in 2003 by Freedonia, an              as burglar- and fire-resistant safes.
small, local competitors. The process of         American market research company, the           • More stringent legal requirements for
consolidation on this market has already         market for security products in this region       greater security, which provided a plat-
begun with CRH Fencing’s acquisition of          will grow by at last 10 per cent a year dur-      form for significant non-recurring con-
Adronit.                                         ing the coming five year period. In               tracts in 2003, above all in France.
     Gunnebo Perimeter Protection will also      response to this growing market demand
make a number of acquisitions with the           for security solutions, Gunnebo has

                                                      9   Gunnebo Annual Report 2003
                                                                      Report of the Directors

                                                        Review of the group

                      Market developments                                                                                         Of the companies within Gunnebo
                      The security market is characterised by sus-                     Invoiced sales                        Integrated Security, Fichet Securité
                      tained healthy growth, even though certain                                                             Electronic in particular significantly streng-
                      markets and product areas are growing at          MSEK                                                 thened its market position outside its tradi-
                      lower rates.                                      7,000
                                                                                                                             tionally strong bank sector. Important
                           The Group’s foreign sales ratio was          6,000                                                security installations were carried out dur-
                      90 per cent (91).                                 5,000                                                ing the year for customers in the transport
                           The sales trend in Europe, which             4,000                                                sector, department stores, the automotive
                      accounts for over 85 per cent of Gunnebo                                                               industry, casinos, prisons and the public
                      Security’s sales, was firm, particularly in                                                            sector. The updated version of the Arcana
                      France, Spain and Scandinavia, while the               0                                               alarm has been well received on the mar-
                      German market remained weak. In France,                     99      00     01     02     03            ket. Ritzenthaler and Gunnebo Entrance
                                                                                 s Sweden
                      the security market was affected during the                s Abroad                                    Control both made good progress.
                      year by stricter legislation requiring the                                                                  Gunnebo Entrance Control successful-
                      banking industry to implement certain                                                                  ly launched two new products: the PasSec
                      measures to tighten security by the end of               Operating profit,                             anti-reflow security booths, which has been
                      2003. Consequently, Gunnebo Security                   Gunnebo Security and                            sold to customers like the Norwegian Civil
                      delivered a very high volume of security               Gunnebo Engineering                             Aviation Administration, and ImmSec, a
                      products during the year. Outside of                                                                   unique automated immigration security
                      Europe, market developments were favour-         MSEK                                                  gate with biometric identification.
                      able in Indonesia and on several agency                                                                     Within Gunnebo Perimeter Security,
                      markets, such as Russia and in Africa.             400                                                 both Gunnebo Perimeter Protection and
Review of the group

                           Gunnebo Security’s market strategy for        300
                                                                                                                             Gunnebo Troax experienced weak markets.
                      the past year retained its focus on improv-                                                            The markets for perimeter protection were
                      ing profitability, which involved giving pri-                                                          characterised by considerable excess capaci-
                      ority to margins rather than volume on cer-        100                                                 ty, which put heavy pressure on prices on
                      tain markets and in certain product areas.             0
                                                                                                                             several markets.
                           For Gunnebo Physical Security, devel-                  99     00      01     02     03                 Gunnebo Perimeter Protection’s new
                      opments in the banking automation seg-              s Operating profit before depreciation of          divisional management drew up an action
                                                                            goodwill, Gunnebo Security
                      ment were very favourable, with several             s Operating profit before depreciation of          plan during the year to restore the division
                                                                            goodwill, Gunnebo Engineering
                      large orders from French, German, Dutch                                                                to profitability. A decision was also taken
                      and Scandinavian high-street banks, where-                                                             regarding Gunnebo Perimeter Protection’s
                      as the demand for traditional bank prod-                                                               active role in the consolidation of the
                      ucts was more subdued. OEM deliveries of                                                               European market for perimeter protection.
                      ATM safes for automatic cash dispensers               Profit after financial                           The Scandinavian market has developed
                      declined during the year.                          items and return on equity                          well, while the markets in Germany and
                           SafePay – the Group’s secure cash hand-                                                           Holland were relatively weak.
                      ling system for the retail sector – was                                                                     Gunnebo Troax also had a weak year in
                      launched successfully on several primary         MSEK                                             %    2003 owing to slacker demand in the
                                                                        350                                             35
                      markets in Europe. Deliveries commenced                                                                building industry on the key markets in
                                                                         300                                            30
                      towards the end of the year to ICA/Statoil                                                             England, Germany and Sweden. The mar-
                                                                         250                                            25
                      in Sweden, Denmark and Norway and to                                                                   ket for machine protection was more
                                                                         200                                            20
                      COOP-Fakta stores in Denmark.                                                                          favourable, with for instance important
                                                                         150                                            15
                      Agreements on additional test installations        100                                            10
                                                                                                                             installations to some of Europe’s largest car
                      were signed with large retail chains in             50                                            5
                                                                                                                             manufacturers. Gunnebo Troax took far-
                      Germany, Holland and Sweden. During                  0                                            0
                                                                                                                             reaching actions during the year to restore
                      the end of the year SafePay signed con-                     99     00     01     02      03            the business to profitability.
                                                                                 s Profit after financial items, MSEK
                      tracts on additional test installations in                 s Of which items
                                                                                                                                  Gunnebo Steelage performed satisfac-
                      new retail-segments, for example bakeries                    affecting comparability                   tory in 2003. The factory in Halol was
                                                                                 s Return on equity, %
                      and drugstores.                                                                                        extended and modernised. Products from
                           Gunnebo Physical Security’s service                                                               the new factory will significantly strength-
                      operations continued to make good                                                                      en Gunnebo Steelage’s market position.
                      progress.                                                                                                   Gunnebo’s security-related businesses
                           Gunnebo Integrated Security contin-                                                               in India, Indonesia, Australia, Singapore,
                      ued to do well in France, which is                                                                     Malaysia and China were brought together
                      Gunnebo’s largest market.                                                                              on January 1, 2004 within a newly formed

                                                                        10       Gunnebo Annual Report 2003
division, Gunnebo Asia Pacific.                   accounted for 1 percentage point, and                Ritzenthaler have made very good progress
     Within Gunnebo Engineering, the              acquisitions for 2 points, while currency            with solid improvements in volume and
markets for Gunnebo Lifting in England,           fluctuations reduced the figure by 3 per-            margins. Gunnebo Entrance Control’s
Holland, Ireland, South Africa and Japan          centage points.                                      business noted a very strong performance.
developed well.                                       Both Gunnebo Security and Gunnebo                The business in Indonesia remained stable.
     Anti-skid products also enjoyed healthy      Engineering noted organic growth in                       Gunnebo Perimeter Security’s operat-
demand, and the integration with                  invoiced sales of 1 per cent. Gunnebo                ing margin narrowed to 2.7 per cent (4.5).
Tellefsdal’s anti-skid division, which was        Security’s invoiced sales amounted to                Both Gunnebo Perimeter Protection and
acquired in the middle of the year, greatly       MSEK 5,817 (5,810) and Gunnebo                       Gunnebo Troax reported lower margins.
strengthened market positions in Norway           Engineering’s to MSEK 1,144 (1,166).                 Non-recurring costs were taken against the
and on the North American market.                                                                      result in connection with the current devel-
     Gunnebo Block, with most of its sales        Results                                              opment process that is intended to improve
on the American market, has carried out a         The consolidated operating profit before             profitability. The result was also affected by
far-reaching cost-reduction programme             depreciation (EBITDA) increased by 6 per             negative currency effects of MSEK 15.
designed to adapt production to the steadi-       cent to MSEK 627 (590) and the operat-                    Gunnebo Steelage’s business in India
ly declining demand.                              ing margin improved to 9.0 per cent (8.5).           noted an operating margin of 5.4 per cent
     Gunnebo Fastening’s markets in                    The operating profit before goodwill            (4.0).
Sweden and Poland developed favourably,           depreciation (EBITDA) increased by 9 per                  Gunnebo Engineering’s profit
whereas the markets in Finland and                cent to MSEK 466 (426), which reflects an            improved by 7 per cent to MSEK 87 (81)
Norway were weaker.                               improvement of the operating margin to               and its operating margin improved to 7.6
                                                  6.7 per cent (6.1).                                  per cent (6.9). Gunnebo Lifting’s result
Order intake and invoicing                             Gunnebo Security’s operating profit             and margin improved, while Gunnebo

                                                                                                                                                        Review of the group
 The Group’s order intake for the year            improved by 11 per cent to MSEK 428                  Block reported a poorer result owing to the
declined by 2 per cent to MSEK 6,994              (385) and the operating margin increased             persistent weakness of the American econo-
(7,150).                                          to 7.4 per cent (6.6).                               my and the depreciation of the US dollar.
    After adjustments for acquisitions and             All units within Gunnebo Security,              Gunnebo Fastening had a poor year in
currency fluctuations, the order intake           except Gunnebo Perimeter Security,                   Finland, and its overall result showed a
declined by 1 per cent. Company acquisi-          achieved improved results and operating              slight deterioration.
tions raised the order intake by 2 per cent       margins. Gunnebo Physical Security                        The consolidated operating profit after
while currency fluctuations reduced it by         improved its operating margin to 7.8 per             depreciation of goodwill (EBIT) rose to
3 per cent.                                       cent (6.5). A healthy earnings trend was             MSEK 399 (361). This figure includes
    Gunnebo Security’s order intake               noted in countries such as France,                   depreciation according to plan of MSEK
decreased by 2 per cent to MSEK 5,830             Belgium, Sweden and Denmark; in                      228 (229), of which goodwill depreciation
(5,945). Gunnebo Engineering’s order              Holland the result remained stable, while it         accounted for MSEK 67 (65) and other
intake declined by 3 per cent to MSEK             deteriorated slightly in Germany, England            depreciations of MSEK 161 (164).
1,164 (1,205). The organic growth in the          and Canada. The business in South Africa                  Net financial costs improved to MSEK
orderintake declined by 1 per cent at both        has been incurring losses and production             58 (cost 81), largely thanks to a strong cash
Gunnebo Security and Gunnebo                      has been discontinued.                               flow and lower interest rates in the Group’s
Engineering.                                           Gunnebo Integrated Security improved            main currencies.
    The Group’s invoiced sales amounted           its operating margin to 8.6 per cent (6.8).               The profit after net financial items
to MSEK 6,961 (6,976). Organic growth             In France, Fichet Securité Electronic and            improved by 22 per cent to MSEK 341

  Invoiced sales, operating profit, operating margin and return on capital employed

                                                                                                                                Return on capital
                                    Invoiced sales, MSEK            Operating profit, MSEK       Operating margin, %              employed, %
                                   2003      2002     2001          2003     2002      2001   2003     2002     2001         2003     2002     2001
Gunnebo Security                  5,817       5,810   5,465          428     385      315        7.4       6.6      5.8      27.5     22.9     20.9
Gunnebo Engineering               1,144       1,166   1,206           87       81       86       7.6       6.9      7.1      12.3     11.1     11.5
Central Group items                    –          –         –        –49     –39       –30        –          –        –          –        –        –
Items affecting comparability          –          –         –          –       –1       11        –          –        –          –        –        –
Group total before
 depreciation of goodwill         6,961       6,976   6,671          466     426      382        6.7       6.1      5.7      19.2     16.8     16.6
Depreciation of goodwill               –          –         –        –67     –65       –61        –          –        –          –        –        –
Group total                       6,961       6,976   6,671          399     361      321        5.7       5.2      4.8      12.1     10.4     10.1

                                                       11       Gunnebo Annual Report 2003
                      (280). Company acquisitions contributed           Sales by market, MSEK
                      MSEK 4 to the result, while currency fluc-
                                                                                                 2003                   2002                      2001
                      tuations reduced the profit by MSEK 30.
                                                                      France                   1,801      26 %         1,663      24 %          1,447      22 %
                      The result, excl. acqusitions and currency
                                                                      Germany                    674      10 %           680      10 %            637      10 %
                      effects improved by MSEK 87, or with
                                                                      Sweden                     671      10 %           638       9%             621       9%
                      31 per cent.
                                                                      Great Britain              669      10 %           808      12 %            757      11 %
                           Tax costs amounted to MSEK 80 (51).        Spain                      440        6%           430       6%             391       6%
                      The consolidated result after tax increased     Denmark                    276        4%           227       3%             221       3%
                      by 14 per cent to MSEK 260 (229).               The Netherlands            255        4%           258       4%             271       4%
                           The return on capital employed             Norway                     239        3%           282       4%             272       4%
                      improved to 19.2 per cent (16.8) before         USA                        230        3%           292       4%             273       4%
                      goodwill depreciation and to 12.1 per cent      Other                    1,706      24 %         1,698      24 %          1,781      27 %
                      (10.4) after goodwill depreciation.             Group Total              6,961     100 %         6,976    100 %           6,671     100 %

                           A county court decision handed down
                      in June rejected a deduction on the sale of
                      shares. Gunnebo, as previously reported, is
                      standing firm on its position, which has the
                      support of leading tax specialists, and has     (Germany), Dordrecht (Holland) and              continuing operations amounted to MSEK
                      appealed the decision to the Fiscal Court of    Wadeville (South Africa) were closed and        465 (462), of which structuring costs that
                      Appeal. Should the company not be               co-determination at work negotiations have      influenced the cash flow resulted in a
                      allowed by the court of final instance to       begun on the closure of the factory in          deficit of MSEK 87 (deficit 57).
                      make this deduction it would incur an           Malung (Sweden).                                     The operating cash flow after invest-
Review of the group

                      additional tax cost of some MSEK 80. No             A sum of MSEK 101 from the Group’s          ment activities and chan-ges in working
                      provision has been made.                        total structuring reserve was utilised during   capital, but before interest, paid tax and
                                                                      the period, after which the remaining           struc-turing costs, amounted to MSEK 500
                      Company acquisitions                            reserve amounts to MSEK 51, which will          (501). The very good level from last year
                      On 1 July, Gunnebo Engineering acquired         be used for the remainder of the structur-      was maintained as a result of further reduc-
                      the anti-skid division of Tellefsdals A/S,      ing programme.                                  tions in the capital tied up in inventories
                      which has an annual turnover of some                                                            and operating recei-vables. Gunnebo
                      MSEK 45 and 50 employees. The acquisi-          Product development                             Security’s cash flow amounted to MSEK
                      tion complements other anti-skid activities     The Group’s expenditure on the develop-         470 (435) and Gunnebo Engineering’s to
                      in the transport and farming segments and       ment and maintenance of its existing            MSEK 83 (88).
                      has significantly strengthened the market       product programme and the develop-
                      position in Norway, the USA and Canada.         ment of entirely new products in existing       Liquid funds and financial position
                           In order to further strengthen its posi-   or new market segments amounted to              The Group’s liquid funds amounted to
                      tion on the automated cash handling mar-        around MSEK 100, of which MSEK 33               MSEK 221 (362), over and above which
                      ket, Gunnebo Physical Security acquired in      (28) were capitalised in the balance sheet      the Group has undrawn credit facilities
                      November 2003 Kubon AG, a German                as intangible fixed assets.                     amounting to some MSEK 1,385.
                      company with an annual turnover of some                                                              The Group’s net loan liabilities
                      MSEK 60 and 55 employees. Kubon’s               Capital expenditure                             declined by MSEK 272 to MSEK 1,309
                      main business is the manufacture of auto-       The Group’s fixed capital expenditure,          (1,581).
                      matic coin-roll dispensers. Kubon also          exclusive of company acquisitions, amount-           The equity ratio rose to 37 per cent
                      manufactures automatic change machines          ed to MSEK 198 (168), a level that corre-       (30) and the debt-equity ratio declined to
                      and cash cabinets with inbuilt timelocks.       sponds to 123 per cent (102) of the peri-       0.7 (1.0).
                      After two years of consolidating a faster       od’s depreciation. The investments were              In July, an agreement was reached on a
                      expansion through acquisitions is to be         largely for replacement and rationalisation.    five-year MEUR 200 credit facility. The
                      expected.                                            Net capital expenditure after deducting    loan, which is a Multicurrency Revolving
                                                                      sales of fixed assets amounted to MSEK          Credit Facility, replaces a corresponding
                      Structuring programme                           190 (161).                                      loan of MEUR 143.
                      The Group’s three-year restructuring pro-            Gunnebo Security’s capital expenditure
                      gramme for safe production was virtually        amounted to MSEK 146 (117) and                  Employees
                      completed in 2003. The programme fol-           Gunnebo Engineering’s to MSEK 49 (50).          The number of employees at the end of the
                      lowed agreed time schedules and cost                                                            year was 8,108 (8,351). The number of
                      budgets and brought high-grade safe pro-        Cash flow                                       employees abroad was 7,157 (7,413), of
                      duction capacity into line with demand.         The Group’s cash flow remained very             whom 2,219 (2,274) were employed in
                      During the year the factories in Mörfelden      strong during the year. Cash flow from          India and Indonesia. The number of

                                                                          12    Gunnebo Annual Report 2003
employees in Sweden was 951 (938).                                                             the Chairman, one board member and the
During the year the number of employees           Fixed capital expenditure                    CEO whose role is to decide such matters
increased by 105 as a result of acquisitions.         and depreciation                         as the employment conditions of the
                                                MSEK                                           Group’s executive management.
                                                 200                                                In addition to this, the compensation
Per share data
Earnings per share after full conversion                                                       committee deals with the question of man-
amounted to SEK 11.95 (10.55), an                                                              agement succession and the identification
increase of 13 per cent. Equity per share        100                                           of potential managers as well as other
after full conversion increased to SEK                                                         aspects of personnel development prepared
86.95 (79.10).                                    50                                           by the management.
     The number of shareholders at the
year-end was 9,500 (9,800).                                99      00    01        02   03     Introduction of IFRS 2005
                                                           s Fixed capital expenditure         As of 2005, Gunnebo will start to present
                                                           s Depreciation excluding goodwill
Parent company                                                                                 its financial reports in accordance with
The parent company’s business consists pri-                                                    IFRS (International Financial Reporting
marily of the provision of functions for                         Interest cover                Standards). It will be mandatory for all list-
group management, corporate develop-                                                           ed companies in the EU to present their
ment, human resources, legal affairs, finan-         times                                     reports in accordance with IFRS as of
cial control/finance and information.                6                                         2005. During 2003, a study of all compa-
                                                     5                                         nies in the Gunnebo Group was carried
The Board and its procedures                         4                                         out to identify differences between their
The Board, whose activities are based on a           3                                         current reporting practices and IFRS.

                                                                                                                                                Review of the group
set of written procedures and an instruc-            2
                                                                                                    The single most important difference
tion for the President, has seven members                                                      relates to IAS 19, which covers the
who are elected by the Annual General                                                          accounting treatment of pensions. IAS 19
Meeting. In addition, three members and                     99     00    01        02   03     accords with the Swedish Financial
one deputy are elected by the unions to                                                        Accounting Standards Council’s
represent the employees. In 2003, the                                                          Recommendation RR29, which will
Board had six minuted meetings over and                       Balance sheet                    already come into effect in 2004. It is esti-
above the statutory meeting. One meeting                     total and equity                  mated that the difference in accounting
was held at Gunnebo/Ritzenthaler’s factory                                                     principles will result in a reduction of some
in Baldenheim, France.                          6,000                                          MSEK 100 in equity.
     The activities of the Board followed a     5,000
                                                                                                    The accounting treatment of hedges
prearranged plan and decisions have been                                                       arranged to cover future currency flows
made on capital expenditure, acquisitions                                                      will, in accordance with IFRS, be valued at
and other major structural changes etc.                                                        closing date rates. Based on the applicable
     Gunnebo’s Annual General Meeting                                                          exchange rates on 31 December 2003, the
held on 29 April 2003 elected a nomina-                                                        new rules would have resulted in an
tions committee consisting of Roger                  0                                         increase in equity of MSEK 3.
                                                            99     00     01       02   03
Holtback (Chairman of the Board), Nils-                                                             Otherwise, no significant differences
                                                           s Balance sheet total
Olov Jönsson (Board member), Dan Sten                      s Of which equity                   have been identified. Non-recurring effects
Olsson of Stena-Gruppen and Ragnhild                                                           of the changeover to RR29 will be stated
Wiborg of Odin Fonder.                                      No. of employees                   direct against equity in accordance with
     The company’s auditors report their                      at year-end                      RR5 Accounting Treatment of Changes in
observations to the Board as a whole.                                                          Accounting Principles.
There is no separate audit committee as         10,000
such, but the Chairman and one member                                                          Outlook for 2004
of the Board serve as a planning body for                                                      The commercial outlook for the financial
contacts between the auditors and the            6,000                                         year 2004 as a whole is good. According to
Board and they have held separate plan-          4,000                                         the normal seasonal pattern the first quar-
ning meetings with the auditors. During                                                        ter result is expected to be weak. A profit
the year, the auditors attended two Board                                                      forecast will be published in connection
meetings to present their views following              0                                       with the first quarter interim report.
                                                             99     00     01      02    03
completion of their audit.                                  s Sweden
     Within the Board there is a special                    s Outside Sweden

compensation committee which consists of

                                                13       Gunnebo Annual Report 2003
                                                                     Five-year review

                                                                             During the past five years Gunnebo has adhered to a long-term strategy that involved
                                                                             developing the security business conducted by Gunnebo Security as well as
                                 Return on capital
                                                                             strengthening Gunnebo Engineering’s business. In both these segments, strategic
                                    employed                                 acquisitions and organic growth combined with profitability improvements have been
                                                                             key elements in the strategy. During the past two years, measures to improve the
                           20                                                result and margins, and to strengthen cash flow, were given priority over volume

                           10                                                Income statement, MSEK                                    2003     2002        2001         2000        1999
                                                                             Invoiced sales                                           6,961     6,976       6,671       5,000       5,264
                            5                                                Cost of goods sold                                      –4,680    –4,738      –4,604      –3,489      –3,734
                                                                             Gross operating profit                                   2,281     2,238       2,067       1,511       1,530
                            0                                                Items affecting comparability                                –        –1          11         115          31
                                99     00    01     02     03                Other operating costs                                   –1,882    –1,876      –1,757      –1,287      –1,237
                                                                             Operating profit                                           399       361         321         339         324
                                                                             Interest in earnings of associate companies                  –         –           5          40          17
                                                                             Net financial items                                        –58       -81        –103         –54         –75
                                 Return on equity                            Profit after financial items                               341       280         223         325         266
                                                                             Taxes                                                      –80       –51         –58         –78         –67
                            %                                                Minority interest in profit                                 –1         0           0           0           0
                           20                                                Net profit                                                 260       229         165         247         199

                           15                                                Balance sheet, MSEK                                      2003      2002        2001        2000         1999
                                                                             Intangible fixed assets                                 1,048      1,050       1,063         903          607
                           10                                                Tangible fixed assets                                   1,011      1,041       1,087         990        1,146
                                                                             Financial fixed assets                                     81        131         137          66           62
                            5                                                Inventory                                               1,061      1,090       1,185       1,002          885
Five-year review

                                                                             Operating receivables                                   1,668      1,760       1,819       1,722        1,281
                            0                                                Liquid funds                                              221        362         295         339          212
                                99     00    01     02    03                 Total assets                                            5,090      5,434       5,586       5,022        4,193

                                                                             Equity                                                  1,870      1,646       1,513       1,456        1,263
                      Operating cash flow, excluding                         Minority interests                                          6          6           7          11            6
                           restructuring costs                               Interest-bearing provisions and liabilities             1,541      1,957       2,179       1,728        1,565
                                                                             Other provisions and liabilities                        1,674      1,825       1,887       1,827        1,359
                                                                             Total equity and liabilities                            5,090      5,434       5,586       5,022        4,193
                                                                             Cash flow analysis, MSEK                                 2003       2002        2001        2000        1999
                                                                             Cash flow from current operations
                          400                                                 before changes in working capital                        360        394         136         259          308
                          300                                                Change in working capital                                 105         68           7        –162          –52
                                                                             Cash flow from current operations                         465        462         143          97          256

                          100                                                Operative cash flow, MSEK                      2003                 2002        2001        2000        1999
                            0                                                Operative cash flow excluding structuring costs 500                  501         348         173         264
                                99     00    01     02     03                Operative cash flow including structuring costs 413                  444         170          93         236

                   DEFINITIONS                                               Cash flow per share: Cash flow from current oper-         Return on equity: Profit after tax as a percentage of
                                                                             ations divided by the number of shares in issue after     average equity.
                   Gross margin: Gross profit as a percentage of                                                                       Return on operating capital: Operating profit before
                   invoiced sales.                                           Net debt: Interest-bearing provisions and liabilities     depreciation of goodwill as a percentage of average
                                                                             including loan stock less liquid funds and interest-      capital employed excluding goodwill and liquid funds.
                   Dividend yield: Dividend in relation to listed price on   bearing receivables.
                   December 31.                                                                                                        Return on capital employed: Operating profit plus
                                                                             Operative cash flow: Cash flow from current oper-         financial income as a percentage of average capital
                   Equity per share after dilution: Equity and con-          ations, after fixed capital expenditure but before        employed.
                   vertible loans plus the value of outstanding options      interest and tax paid.
                   divided by the number of shares in issue after dilu-
                   tion.                                                     P/E ratio: Listed price on 31 December divided by
                                                                             earnings per share after dilution.
                   Capital turnover rate: Invoiced sales in relation to
                   average capital employed.

                                                                                  14     Gunnebo Annual Report 2003
Gunnebo Security                                           2003       2002         2001        2000          1999
Invoiced sales, MSEK                                       5,817      5,810        5,465       3,851        3 342
Operating profit, MSEK*                                      428        385          315         182          200                   Operating profit and
Operating margin, %                                           7.4        6.6          5.8        4.7          6,0                    operating margin
* Before depreciation of goodwill and excluding items affecting comparability.
                                                                                                                            MSEK                                       %
Gunnebo Engineering                                        2003       2002         2001        2000          1999             400                                     8
Invoiced sales, MSEK                                       1,144      1,166        1,206       1,149        1 946
Operating profit, MSEK*                                       87         81           86         104          166             300                                     6
Operating margin, %                                           7.6        6.9         7.1         9.1          8,5
* Before depreciation of goodwill and excluding items affecting comparability.                                                200                                     4

Key ratios                                                  2003         2002      2001         2000         1999             100                                     2
Return on capital employed before
   depreciation of goodwill, %                              19.2         16.8       16.6         22.5         18.6              0                                     0
Return on capital employed, %                               12.1         10.4       10.1         15.4         12.7                   99     00     01     02     03
Return on capital employed, excluding
                                                                                                                                    s Operating profit, MSEK
   items affecting comparability, %                         12.1         10.4        9.8         11.0         11.6
                                                                                                                                    s Operating margin, %
Return on equity, %                                         14.8         14.5       11.1         18.2         17.0
Return on equity, excluding items
   affecting comparability, %                               14.8         14.5       10.7         10.1         14.6
Gross margin, %                                             32.8         32.1       31.0         30.2         29.1                   Capital employed
Operating margin before depreciation, %                      9.0          8.5        8.4         10.3         10.0
Operating margin before depreciation                                                                                       MSEK
    of goodwill, %                                           6.7          6.1         5.7          7.6          7.0        4,000
Operating margin, %                                          5.7          5.2         4.8          6.8          6.1
Operating margin, excluding items                                                                                          3,000
    affecting comparability, %                               5.7          5.2         4.6          4.5          5.6
Profit margin, %                                             4.9          4.0         3.3          6.5          5.0        2,000
Capital turnover rate                                        2.0          1.9         1.9          1.9          1.9

                                                                                                                                                                                   Five-year review
Equity ratio, %                                               37           30          27           29           30        1,000
Interest cover                                               5.8          4.1         3.0          5.5          4.6
Debt/equity ratio                                            0.7          1.0         1.2          0.9          1.1             0
                                                                                                                                    99     00     01     02     03
Data per share, SEK                                         2003      2002         2001        2000          1999
Earnings per share after dilution                          11.95      10.55         7.65       11.40          9.40
Earnings per share after dilution,
                                                                                                                                 Equity and equity ratio
  excluding items affecting comparability                   11.95  10.55           7.35         6.40         7.95
Equity per share after dilution                             88.35  79.10          73.10        70.50        62.50           MSEK                                      %
Dividend                                                     4.50*  4.00           3.50         4.25**       3.25           2,000                                     40
Listed price 31 December                                   179.50 124.00         126.00        90.50        76.00
* Board proposal                                                                                                            1,500                                     30
** Including bonus of SEK 1:00
                                                                                                                            1,000                                     20
Other information                                          2003        2002         2001        2000         1999
Foreign sales ratio, %                                        90         91           91          88           77             500                                     10
Order intake, MSEK                                         6,993      7,150        6,660       5,001        5,268
Capital employed, MSEK*                                    3,417      3,610        3,699       3,195        2,835               0                                     0
Net debt, MSEK*                                            1,309      1,581        1,872       1,359        1,349                    99     00     01     02     03
Fixed capital expenditure, MSEK                              198        168          173         117          173
                                                                                                                                    s Equity, MSEK
Depreciation, MSEK                                           228        229          237         174          202                   s Equity ratio, %
Of which depreciation of goodwill, MSEK                       67         65           61          39           43
Average no. of employees                                   8,273      8,250        8,290       5,653        4,949
* At year-end

Return on capital employed before depreciation               Operating margin before depreciation of good-            Profit margin: Profit after financial items as a per-
of goodwill: Operating profit before depreciation of         will: Operating profit before depreciation of goodwill   centage of invoiced sales.
goodwill plus financial income as a percentage of            as a percentage of invoiced sales
average capital employed excluding goodwill.                                                                          Earnings per share after dilution: Profit after tax
                                                             Debt/equity ratio: Net debt divided by the sum of        plus interest costs after tax on convertible loans, divid-
Interest cover: Profit after financial items plus inter-     equity and minority interests.                           ed by the number of shares in issue after dilution.
est costs divided by interest costs.
                                                             Equity ratio: Equity including minority interests as a
Operating margin: Operating profit as a percentage           percentage of balance sheet total.
of invoiced sales.
                                                             Capital employed: Balance sheet total less interest-
                                                             free provisions and liabilities.

                                                                    15    Gunnebo Annual Report 2003
                                                                           Financial risk management
                                                                             and sensitivity analysis
                                                     The object of Gunnebo’s financial              Financing risk                                                has two long-term credit facilities, which
                                                     activities is to minimise the                  Financing risk is the risk that financing will                amount in total to MSEK 500, and which
                                                     Group’s long-term financing costs              not be available in the future or that the                    run until 2005 and 2008 respectively. The
                                                     and manage and control its finan-              financing conditions are, for whatever rea-                   Group also has access to principally short-
                                                     cial risks in an effective manner.             son, particularly unfavourable at any given                   term credit facilities amounting to some
                                                        Given the international charac-             point in time. Gunnebo’s general aim is to                    MSEK 430, as well as local financing for
                                                     ter of its business, Gunnebo is                have predominantly long term credit agree-                    subsidiary companies.
                                                     exposed to financial risks in con-             ments with the object of limiting this risk.
                                                     nection with changes in interest                   Gunnebo has agreed credit facilities                      Liquid funds
                                                     rates, exchange rates and refi-                totalling some MSEK 2,750, of which                           Closing liquid funds amounted to MSEK
                                                     nancing, and counterpart risks.                MSEK 1,365 had been drawn at the year-                        221. The Group also had available un-
                                                                                                    end. The average duration of the Group’s                      drawn credit facilities of MSEK 1,385.
                                                     Currency and interest rate changes             agreed loan facilities was 3.8 years;                         The financial policy guidelines stipulate
                                                     In 2003, the US dollar weakened further        Gunnebo’s borrowing is at a fixed interest                    that liquid funds and undrawn credit facili-
                                                     in relation to the Swedish krona, depreciat-   margin throughout the term of the agree-                      ties shall always amount to a minimum of
                                                     ing from 8.74 at the beginning of the year     ments.                                                        MSEK 300.
                                                     to 7.27 at the end. The sterling also weak-        According to the finance policy, at least                      Gunnebo has centralised its liquidity
Financial risk management and sensitivity analysis

                                                     ened against the krona during the year. At     two-thirds of the Group’s loan portfolio                      management in the form of cash pools at
                                                     the end of the year, the euro was more or      shall have a minimum duration of twelve                       national level in the large European coun-
                                                     less unchanged in relation to the Swedish      months.                                                       tries where it is active. The Group uses
                                                     currency.                                          In 2003, Gunnebo arranged with a                          these “cash pools” to match the local sub-
                                                          The short-term market interest rates in   consortium of 15 banks a new MEUR 200                         sidiaries’ surpluses and deficits in each
                                                     Gunnebo’s most important borrowing cur-        syndicated Multi-Currency Revolving                           country and currency.
                                                     rencies – Swedish kronor, Swiss francs and     Credit Facility with a five-year duration.                         The aim is to minimise interest-bear-
                                                     euro – declined further in the spring of       This loan, which replaced a MEUR 143                          ing liabilities, and to use liquid funds pri-
                                                     2003, as a result of central banks cutting     syndicated loan facility, has an interest                     marily to reduce outstanding liabilities.
                                                     their prime rates.                             margin of 0.55 per cent at the current
                                                          The figure alongside shows the past       debt-equity ratio. In addition, Gunnebo                       Interest rate risk
                                                     five years’ changes in the interest rates                                                                       The interest rate risk refers to the effect
                                                     and currencies with the greatest impact                                                                         on the Group’s net interest costs of a
                                                     on the Group’s cash flow and result.                       Exchange rates 1999-2003                             lasting change in market interest rates.
                                                                                                                                        x USD x EUR x GBP
                                                                                                                                                                     The sensitivity of the result can, howev-
                                                     Organisation and activities                                                                                     er, be limited by the interest maturity
                                                     The Gunnebo Group’s financial activities                                                                        structure.
                                                     are centralised at its subsidiary Gunnebo                                                                            According to Gunnebo’s finance
                                                     Treasury SA. Gunnebo Treasury is                                                                                policy, the average duration of the fixed
                                                     responsible for the Group’s mainly exter-      11
                                                                                                                                                                     interest rate period may fluctuate
                                                     nal financing, centralised cash manage-        10                                                               between 4 and 12 months. At the end
                                                     ment and currency risk management. It           9                                                               of the year, Gunnebo’s portfolio had an
                                                     also functions as the Group’s internal          8                                                               average interest rate duration of 8 (7)
                                                     bank, and is responsible for supporting         7                                                               months, and the average rate of interest on
                                                                                                         1999      2000          2001       2002         2003
                                                     the Group’s subsidiaries with loans,                                                                            the entire loan portfolio was 3.6 % (4.6).
                                                     placements and currency transactions.
                                                                                                          3 month interest rates 1999-2003
                                                     Through the centralisation the Group is                                                                         Currency risk
                                                     allowed to benefit from economies of                                                                            Currency fluctuations affect the Group’s
                                                                                                     Interest, % x STIBOR 3 months x CHF3 months x EUR 3 months
                                                     scale and synergies within the financial        6                                                               result and equity as a result mainly
                                                     area.                                           5
                                                                                                                                                                     depending on the following currency
                                                          The financial activities are carried                                                                       exposures:
                                                     out in accordance with the financial poli-                                                                      • Transaction exposure – the result is
                                                     cy established by the Board, which regu-        3                                                                 affected by the fact that income and
                                                     lates how financial risks are to be man-        2                                                                 costs are denominated in different
                                                     aged, and sets the limits within the inter-     1
                                                     nal bank and Gunnebo’s subsidiaries may                                                                         • Result exposure – the result is affected
                                                     operate.                                            1999      2000         2001         2002      2003            by the fact that foreign subsidiaries’
                                                                                                                                                                       results are translated into Swedish kro-

                                                                                                           16     Gunnebo Annual Report 2003
     nor on average exchange rates for the                lation effects and changes in spot rates had   explained below. The calculation is made
     period                                               the effect of reducing the result by MSEK      on the basis of the Group’s structure at the
• Translation exposure – subsidiary compa-                30, in relation to the previous year, of       year-end and assuming all other factors
  nies’ net assets in foreign currencies are              which a reduction of MSEK 27 affected          remain unchanged.
  translated into Swedish kronor at closing               the operating result.
  date rates. The differences thus arising                                                               Selling prices
  from changes in exchange rates since the                Translation exposure                           A change of one per cent in selling prices
  previous closing date are taken direct to               The Group’s foreign net assets amounted        affects income and the result after financial
  equity                                                  to MSEK 3,460 (3,313) on 31 December           items by some MSEK 70.
                                                          2003. The Group hedges a large propor-
Transaction exposure                                      tion of these assets by raising loans or       Labour costs
Foreign sales accounted for 90 % (91) of                  entering into forward contracts in corre-      A change of one per cent in labour costs,
the Group’s total turnover. Since many of                 sponding currencies. On the closing date,      including social security charges, affects the
the costs are incurred in the same currency               MSEK 3,221 (3,087), or 93 % (93), were         result after financial items by some MSEK 25.
as income, the transaction exposure is                    hedged.
greatly reduced. All in all, Gunnebo’s net                                                               Interest costs
flows into Sweden in foreign currencies                   Credit and counterpart risks                   On the basis of the average duration of the

                                                                                                                                                          Financial risk management and sensitivity analysis
amount to some MSEK 250 a year.                           The Group has no significant concentra-        Group’s total loans outstanding at the year-
According to the Group’s finance policy, at               tion of its credit risks. Counterparties to    end, a simultaneous change of one per cent
least 70 % of the estimated currency                      derivative contracts and cash transactions     in all of Gunnebo’s loan currencies would
inflows for the coming 12 months are to                   are limited to financial institutions with a   affect the result by MSEK 6 during the fol-
be hedged. At the closing date, the propor-               high credit rating.                            lowing 12 months.
tion hedged was 86 % (76). The value of
the Group’s forward contracts calculated on               Financial derivative instruments               Currencies
the spot rates of the contracts amounted to               Financial derivative instruments such as       A change of 10 % in the exchange rate of
MSEK 218 at the year-end. The correspon-                  forward contracts, “swaps”, and, to a cer-     the Swedish krona against the euro, sterling
ding value based on closing date rates was                tain extent, options are used to manage        and the US dollar would affect the result
MSEK 215. This profit will be taken into                  and control financial risk. Derivative         after financial items by around MSEK 50,
the income statement when the respective                  instruments are used in order to reduce the    of which MSEK 20 would be transaction
contracts expire during the coming 12-                    exposure to financial risks.                   exposure, without taking the Group’s
month period.                                                 The Group has also arranged interest       hedges into account. The remaining MSEK
     A weighted currency index for the                    swaps that are not included in the closing     30 is attributable to result exposure. Taking
Group’s most important currencies                         balance sheet. The nominal amount of           into account the hedges in place at the
declined by 4.8 % during the year, which                  these swaps is just over MSEK 470 and          year-end, the effect of the transaction expo-
means that these currencies weakened                      their average term is 1.3 years. The market    sure on the result for the coming 12
against the Swedish krona. Forward con-                   value, were they to be closed at the end of    months would be marginal.
tracts that matured during the period had a               the year, is marginally negative.                   The figure below illustrates the sensi-
positive effect of MSEK 10 (6) on the                                                                    tivity of the result at a 10 per cent change
result, when compared with the conversion                                                                in the exchange rate of each currency.
of currency flows at the spot rates prevail-              Sensitivity analysis
ing at the time of conversion. The sum of                 The result is affected by changes in certain
currency fluctuations in the net flow, trans-             factors of importance to the Group, as

            Currency flow exposure                            Loan maturity structure, MSEK                  Sensitivity analysis, currencies
       Based on estimated net flow for 2004                                                                             at 10 % change
                                                           Mature        Credit     Of which
       MSEK                                                in year       facility     drawn Proportion
        200                                                2004           391           91      7%             35

                                                           2005           200          130     10 %            30
                                                           2006             8            8        –            25

                                                           2007             2            2        –            20
                                                           2008         2,149        1,134     83 %
             50                                                                                                10
                                                           Total        2,750        1,365    100 %

       Currency    EUR   GBP   USD   NOK    AUD    DDK
                                                                                                                      EUR        GBP          USD
     hedged, %     100   84    71     71     74     60
                                                                                                                     s Result exposure
     Hedged at
                   9:09 13:20 7:78   1:09   5:40   1:23                                                              s Transaction exposure
 average rate of
                                                              17     Gunnebo Annual Report 2003
                                                Gunnebo Physical Security

                                                                              GUNNEBO PHYSICAL SECURITY                                 2003            2002              2001

                                                                              Invoiced sales, MSEK                                     2,627           2,597             2,590
                                                                              Operating profit, MSEK*                                    204             170                140
                                                                              Operating margin, %*                                        7.8             6.5                5.4
                                                                              Return on operating capital, %*                              23             18                     16
                                                                              Capital expenditure, MSEK                                    74             57                     48
                                                                              No of employees                                          2,696           2,973             2,300
                                                                              * before goodwill

                                                                              Sales by product area                                 Sales by market

                                                                                                    s Burglar- and                                       s France, 28%
                                                                                                      fire-resistant safes,                              s Great Britain, 13%
                                                                                                      vaults and vault doors, 36%                        s Germany, 13%
                                                                                                    s Retail and banking                                 s The Netherlands, 7%
                                                                                                      automation, 26%                                    s Belgium, 6%
                                                                                                    s Service, 25%                                       s Canada, 5%
                                                                                                    s Other, 13%                                         s Sweden, 5%
                                                                                                                                                         s Norway, 5%
                                         Torbjörn Browall                                                                                                s Other, 18%

                               Head of Gunnebo Physical Security
Gunnebo Physical Security

                            Operations in 2003                                                                                      growth in France and Scandinavia especial-
                            Following numerous acquisitions, Gunnebo         Products and services                                  ly, it has weakened in England, Spain and
                            Physical Security has achieved a position        High-graded burglar- and fire-resist-                  Italy, and was weak in Germany.
                            on the market as the world’s leading manu-       ant safes. Security products for banks:                      The Russian market is developing very
                            facturer of high-graded burglar- and fire-       safety deposit boxes, bank vaults and                  strongly, above all for bank boxes and elec-
                            resistant safes. The division has also           vault doors. Security products for                     tronic locking systems. Outside of Europe,
                            evolved into one of the leading suppliers of     cash handling and transportation for                   South Africa and Canada experienced low
                            products for banking automation and              banks and retailers, such as automatic                 growth.
                            closed cash handling systems for the retail      cash handling machines, service                              Gunnebo Physical Security improved
                            trade.                                           boxes, deposit boxes and transit safes.                its operating margin and earnings were
                                 These positions have mainly been            Fire-resistant safes for the storage of                strong in France, Belgium, Sweden and
                            reached as key customers recognise the           documents and data media in offices.                   Denmark, for example, but slightly poorer
                            division as the most innovative and com-         Installation and service.                              in Germany, England and Canada. In
                            plete supplier of security products and                                                                 South Africa the business has incurred loss-
                            services for the storage and handling of         Brand names                                            es and production has been discontinued.
                            cash and securities. The predominating           Chubbsafes, Fichet-Bauche,
                            customer category consists of banks and          Rosengrens, Garny, Leicher,                            Acquisitions
                            financial institutions, which particularly       SecureLine                                             To further strengthen its position in auto-
                            appreciate the division’s ability to deliver                                                            mated cash handling, the division acquired
                            turn-key systems that includes all security                                                             a German company, Kubon AG, during
                            products.                                                                                               the year. Kubon had a turnover of some
                                 Thanks to the close co-operation                                                                   MSEK 60 and had 55 employees in 2003.
                            between banking customers and the divi-                                                                     Kubon’s main business consists of the
                            sion’s companies, mainly in Europe, it has          The market for traditional security                 development, manufacture and marketing
                            been possible to further expand the service    products for banking, such as bank vaults,               of coin rolling machines for self service. It
                            activities, and develop and test new prod-     safety deposit boxes, burglar-resistant safes,           also has a range of change machines and
                            ucts, mainly for banking automation, in        deposit safes, and ATM products (safes for               cash cabinets with time locks.
                            real bank environments.                        automatic cash dispenser machines) has                       This acquisition will strengthen the
                                 The market for automated banking          tended to weaken.                                        division in one of the fastest growing areas
                            services, such as deposit and withdrawal            A further clear development in cash                 - automated cash handling for banks and
                            machines, coin rolling machines, safety        handling is the shift away from the bank-                the retail trade.
                            deposit robots and other automated cash        ing system to the retail trade.
                            handling systems, has developed especially          The market situation in Europe has
                            strongly.                                      been very fragmented; it has shown healthy

                                                                               18     Gunnebo Annual Report 2003
Millium DTM

In 2003, Fichet-Bauche installed its Millium
DTM closed system for depositing and
transferring day’s takings and till contents at
35 McDonald’s restaurants in France. The
system will markedly improve the security of
the personnel, while also improving cash-in-
transit efficiency. Cash-in-transit companies
can now collect the day’s takings and leave
a change till at any time of the day or night
as the transfer unit is accessed from outside
the restaurant.

D: DEPOSIT. The personnel deposit cash safely
through an opening in the top of the deposit unit.
The envelope with the cash cannot be removed
once it has been dropped into the unit. The money
falls through an opening into the transit safe.                                       2. The envelope falls into the transit safe,
                                                                                      where it remains until the safe is emptied.

T: TRANSFER. The cash is transferred in Millium              1. Restaurant
                                                             personnel place
DTM’s transit safe. The cash-in-transit personnel            envelopes with                                        3. The cash-in-tran-
open the transit safe from the outside. The opening

                                                                                                                                               Gunnebo Physical Security
                                                             the day’s takings                                     sit personnel empty
is protected by a folding lid.                               inside the                                            the envelopes from
                                                             deposit unit.                                         the transit safe.

M: MONEY. When the cash-in-transit company
collects the day’s takings from the transit safe it                                                                4. The cash-in-tran-
                                                             5. The till falls into                                sit personnel put a
leaves a till behind for the next day. The till falls        the safe and can                                      new till into the tran-
into the lower section of the safe, and can then be          be removed by the                                     sit safe.
removed by the restaurant’s personnel through an             restaurant person-
                                                             nel from the
opening on the restaurant side. All transactions in
the system are recorded in a transit log.

                                                                                                Structuring programme
                                                                                                In connection with the acquisition of
                                                                                                Chubb Safes in 2000, a restructuring pro-
                                                                                                gramme was started with the object of
                                                                                                reducing production capacity for high-
                                                                                                graded, burglar- and fire-resistant safes in
                                                                                                Europe by 40 percent, thereby adapting
                                                                                                production to the prevailing demand as
                                                                                                well as streamlining the product range.
                                                                                                Factories in Canada and England have
                                                                                                already been closed and during the year the
                                                                                                plants in Mörfelden (Germany) and
                                                                                                Dordrecht (Holland) were also closed. The
                                                                                                factory in South Africa has been closed and
                                                                                                negotiations have opened to close the facto-
                                                                                                ry in Malung (Sweden).
                                                                                                     As a result of the launch at the end of
                                                                                                the year of an entirely new series of fire-
                                                                                                resistant safes, mainly for the storage of
                                                                                                data media, the product rationalisation
The SafePay integrated cash handling system was launched on several markets in                  phase of the structuring programme has
Europe in 2003. This pilot unit has been installed in a food store in Holland.                  been completed. This is reflected, for
                                                                                                example in a reduction in the number of

                                                 19     Gunnebo Annual Report 2003
                            During the year, Gunnebo Physical Security launched a new series of banking products.
                            The product family consists of SafeCash R, a cash deposit and withdrawal machine
                            the SafeCash Eco deposit machine and the coin-roll machine SafeCoin D. The prod-
                            ucts are installed in the banks’ self-service banking halls, and broaden Gunnebo’s
                            competence as a supplier of total systems for the banking sector.

                                                                               The new brand name for safes in lower
                                                                          security grades and intended for the
                                                                          SOHO market (small offices, home offices)
                                                                          will be SecureLine.
                                                                               Thanks to the common manufacturing
                                                                          platform that applies to the different
                                                                          brands valuable synergies can be achieved,
                                                                          above all in product development and
                                                                               A good example of this is the family of
                                                                          fire-resistant safes that was newly developed
                                                                          during the year.

                                                                          The division is represented on about 120
                                                                          markets, either through its own sales com-
                                                                          panies on some 20 markets or through
                                                                          agents and distributors on a further 100
                                                                               Gunnebo Physical Securities largest
                                                                          single customer category is still banking
Gunnebo Physical Security

                                                                          and financial institutions. The fastest grow-
                                                                          ing market segments are service, which cur-
                            Garny has modified the design and a           rently accounts for some 25 percent, retail,
                            number of technical features on its AVM       and products for automated banking.
                            safety deposity robot. The most important          A segment that has been declining in
                            modification is on the customer’s termi-      recent years is OEM deliveries of ATM
                            nal; the customer faces a small counter       safes, for which the division is a sub-con-
                            with touch screen and an integrated card      tractor supplying safes for automatic cash      SafeCash ECO is a member of the
                            reader, which together guide the auto-        machines.                                       SafeCash family and complements
                            matic unit to the cartridge. This solution         There has also been some co-ordina-        Gunnebo Physical Security’s product
                            has been approved by all international        tion in the marketing of products and serv-     range for banking automation. The prod-
                            safety classification societies. The unit     ices to multinational customers.                uct can also be connected to (WIN) Safe
                            above is installed at Stadtsparkasse in                                                       Net Gunnebo’s software for cash han-
                            Hildesheim, Germany.                          Competitors                                     dling and surveillance systems. A Safe-
                                                                          Gunnebo Physical Security is market leader      Cash ECO unit allows the customer to
                                                                          by a wide margin on the market for high-        move the deposit across the counter to
                                                                          graded fire- and burglar-resistant safes.       the self-service area. The machine is also
                            models and sizes from around 280 to the       The competition comes mainly from pri-          available on a 24/7 basis.
                            current 80.                                   vately owned regional manufacturers such
                                The three-year restructuring programme    as Format, Bode-Panzer, and Lampertz/
                            has thus adhered closely to the agreed time   Sistec (Germany), Robur and Håbeco
                            table and cost budget. The structuring        (Scandinavia), SMP and Dudley (Great            SafePay – closed cash handling
                            reserve of MSEK 270 is expected to lead to    Britain), Conforti (Italy) and Ferrimax and     system for the retail trade
                            annual cost reductions of around MSEK         Bausa (Spain).                                  SafePay was launched at the end of 2002
                            125 with full effect from 2004 and most of         On the Asian market, Gunnebo has           and by February 2003 had already signed
                            the benefit coming through before the end     one of the world’s most modern units for        an initial agreement with ICA Ahold to
                            of 2003.                                      the manufacture of safes. Located in            deliver 4,800 complete SafePay systems
                                                                          Djakarta it was inaugurated in 1998 and         during 2004 and 2005 worth some MSEK
                            Very strong brand names                       became part of the group via the acquisi-       400. Deliveries to ICA started in the final
                            The brand name review carried out during      tion of Chubb Safes in 2000.                    quarter of 2003, as did deliveries to Fakta
                            the year means that the number of names            Low production costs combined with         (COOP) in Denmark and further test
                            per product area will be reduced and in       competitive distribution costs provide a        installations in Holland and Germany.
                            future include Fichet-Bauche, Chubbsafes,     sound basis for strengthening the competi-      COOP Sweden has put SafePay through
                            Rosengrens, Garny and Leicher.                tive position and further expansion of the      full-scale tests in a store and approved both
                                                                          division’s business.                            the technical characteristics and the sys-

                                                                              20   Gunnebo Annual Report 2003
                                                                                             Test of fire-resistant safes

                                                                                             One type of test involves putting a
                                                                                             data-media safe, for instance, that
                                                                                             has been classified for 120 minutes
                                                                                             into a furnace where it is exposed for
    A fire-resistant safe is designed to
                                                                                             two hours to temperatures of up to
    prevent the contents from being
                                                                                             1000°C. The furnace is then switched
    exposed to high temperatures even if
                                                                                             off and the safe is left there for 24
    the ambient temperature in event of
                                                                                             hours before it is removed and the
    a fire exceeds 1000°C.
                                                                                             test completed. Through out the
       The development of fire-resistant
                                                                                             entire process the temperature inside
    safes includes testing them at
                                                                                             the data-media safe is registered. For
    Gunnebo’s new fire test facility in
                                                                                             the product to be approved, the tem-
    Bazancourt before the final product
                                                                                             perature must not exceed 52°C.
    receives its classification certificate
                                                                                               Another type of test simulates the
    from an independent test institution
                                                                                             destruction by fire of the floor where
    and goes into regular production.
                                                                                             the data-media safe is standing and
                                                                                             of the safe falling several storeys
                                                                                             inside the burning building. In the test
                                                                                             the safe is placed for 30 minutes in a
tem’s functionality when integrated with
                                                                                             test furnace that has been heated to
the COOP’s cash register system.
                                                                                             1000°C. It is then removed and
                                                                                             dropped from a height of nine metres
New series of fire-resistant safes
                                                                                             on to a pile of gravel. The safe is then
Fichet-Bauche, Chubbsafes and
                                                                                             exposed to a temperature of 1000°C

                                                                                                                                              Gunnebo Physical Security
Rosengrens’ new fire-resistant safes, which
                                                                                             for another 90 minutes in the test fur-
all share a common platform, offer unique
                                                                                             nace, after which it is allowed to cool.
characteristics in terms of capacity and
                                                                                             The measuring equipment in the safe
                                                                                             registers that the inner temperature
      As a means of optimising capacity the
                                                                                             does not exceed 52°C, despite this
safes have been designed from the inside
                                                                                             physical damage.
and out and are based on the format of
present and future data media. The weight
has been reduced by some 20 % by the use
of more effective and thinner protective
walls. The new series of safes have been                                                     Chubbsafes’ new DataPlus+ data-media

adapted and approved by all certification                                                    safe protects important data media against

authorities in Europe and the USA, and                                                       fire, heat, smoke and dust. The safe is gen-

they are manufactured in accordance with                                                     erous in size and is tested to satisfy the

“Gunnebo Physical Security’s Quality                                                         most stringent international safety stan-

Guidelines”, which also include ISO 9001                                                     dards. The slam function secures that the

and ISO 14000. Substantial investments                                                       safe is being tightly shut even if the door is

were made during the year in various types                                                   slammed in an emergency. DataPlus+ is

of test equipment such as a new test fur-                                                    manufactured in five sizes, which enables it

naces and impact testing apparatus. The                                                      to satisfy customers’ individual storage

new programme of fire-resistant safes has                                                    capacity requirements.

been combined with the best test facilities
on the market to ensure that this segment         products for automated banking service.
is successful on the market in 2004 and           These products are characterised by a
thereafter.                                       higher degree of complexity in terms of
                                                  technical content and demands for
Outlook                                           24/7 functionality, which will lead to
On the basis of its new, extensive product        increased business opportunities for the
ranges, including the new fire resistant safes,   division’s service units.
Gunnebo Physical Security will be able to             SafePay, which was launched on
consolidate its market position in Europe         the principal European markets during
and expand on the growing markets in              the year, has healthy development
Eastern Europe - primarily Russia - and           potential.
North America. The product mix will shift
away from traditional bank products to

                                                      21   Gunnebo Annual Report 2003
                                              Gunnebo Integrated Security

                                                                               GUNNEBO INTEGRATED SECURITY                          2003            2002                 2001

                                                                               Invoiced sales, MSEK                                2,133           2,100                1,804
                                                                               Operating profit, MSEK*                                183            143                     88
                                                                               Operating margin, %*                                   8.6             6.8                    4.9
                                                                               Return on operating capital, %*                         29              22                    13
                                                                               Capital expenditure, MSEK                               33              29                    30
                                                                               No. of employees                                    2,453           2,367                2,916
                                                                               * before goodwill

                                                                               Sales by product area                            Sales by market

                                                                                                   s Electronic security, 47%                         s France, 43%
                                                                                                   s Entrance control, 19%                            s Spain, 19%
                                                                                                   s Access control, 17%                              s Great Britain, 11%
                                                                                                   s Other, 17%                                       s Indonesia, 6%
                                                                                                                                                      s Italy, 6%
                                                                                                                                                      s Other, 15%

                                          Christian Selosse
                                Head of Gunnebo Integrated Security
Gunnebo Integrated Security

                              Operations in 2003                                                                                Ritzenthaler have developed well with
                              Gunnebo Integrated Security develops,           Products and services                             good volume- and marginal improve-
                              manufactures, markets, sells and installs       Integrated electronic security systems:           ments. The development in Spain has
                              electronic security systems such as elec-       burglar alarms, fire alarms, CCTV,                been positive as well. The business with-
                              tronic burglar alarms, fire alarms and fire     alarm monitoring centres, entrance                in Gunnebo Entrance Control has also
                              protection equipment, CCTV, and                 and access control systems.                       had a very positive development.
                              entrance and access control systems. The        Fire-extinguishing systems. Bullet-
                              division also has responsibility for a          resistant glass walls and partitioning.           Electronic security systems
                              number of alarm monitoring centres in           Installation and service.                         earning healthy profitability
                              France, Spain, Portugal and Indonesia                                                             The profitability of the electronic security
                              that offer a full 24/7 service capability.      Brand names                                       business showed a further sharp improve-
                                  Gunnebo Integrated Security com-            Fichet-Bauche, Ritzenthaler,                      ment, mainly owing to a more customer-
                              bines expertise from risk management and        Rosengrens Larm, Gunnebo Entrance                 focused organisation with tight cost con-
                              security auditing with the development          Control, Gunnebo Mayor, Gunnebo                   trol, improved quality and a standardised
                              of customised integrated security solu-         Metro, Gunnebo Italdis, Gunnebo                   product range.
                              tions – using state-of-the art technology.      Omega, Armapod, CSI Security,                          Synergies resulting from the closer
                                  As a supplier of systems or individual      Hygiaphone, and SMC.                              coordination of the companies in the divi-
                              products, Gunnebo Integrated Security                                                             sion have increased markedly, especially in
                              can offer a variety of intelligent security                                                       electronic and mecatronic security solu-
                              solutions. Regardless of whether the cus-                                                         tions. Focused product development proj-
                              tomer prefers a complete system or an         tems. The business is concentrated pri-             ects have enabled the division to launch
                              individual product, it is important that      marily in the Mediterranean countries               several new products in both electronic
                              the solution provides satisfactory security   and Continental Europe, where some 40               security and access control, including a
                              based on the perceived threats.               per cent of its customers are banks or              new version of the Arcana alarm system,
                                  By using Internet-based control and       other financial institutions. However,              which has been installed at companies and
                              wireless communication for supervision        there is a tendency for this dependence             public institutions in Southern Europe.
                              and maintenance follow-up, customers          on banks and financial institutions to                   Ritzenthaler’s new system for mobile,
                              are provided with modern security solu-       decline in favour of logistics centres, fac-        bullet-resistant walls, partitioning and secu-
                              tions with total control.                     tories, public institutions, casinos etc.           rity booths, known as SkyRitz, was very
                                  Gunnebo Integrated Security is one            During the year, Gunnebo Integrated             well received on the market. The bullet-
                              of the larger companies in Southern           Security substantially increased its prof-          resistant booths are installed using patented
                              Europe in electronic security and one of      itability. In France, the business within           profiles that permit flexible fencing-in of
                              the three largest in access control sys-      Fichet Sécurité Electronic and                      various areas of open-plan offices.

                                                                                22     Gunnebo Annual Report 2003
                                                                                Gunnebo Integrated Security is one of the
                                                                                leading suppliers of electronic security sys-
                                                                                tems in Southern Europe. Key concepts are
                                                                                production and integration of the best com-
                                                                                ponents on the market, all selected to cre-
                                                                                ate the optimal solution for each individual

                                                                                                                                Gunnebo Integrated Security
Ritzenthaler, one of Gunnebo Integrated
Security’s business units, manufactures
bullet-resistant glass walls and partition-
ing and develops its own proprietary soft-
ware. To deliver a complete security solu-
tion to the customer, Gunnebo Integrated
Security selects cameras, VDTs, and the
necessary IT equipment, integrates it all
into one system and installs it on the cus-
tomer’s premises. Advisory services,
operation and maintenance complement
the offer to make up a total solution.

                                              23   Gunnebo Annual Report 2003
                                                                                                                              PasSec HS is a double, anti-reflow security booth
                                                                                                                              for passenger control. The double doors and the
                                                                                                                              corridor between them improve security as passen-
                                                                                                                              gers can transit from the arrivals hall to luggage
                                                                                                                              retrieval – but not vice versa. This system was
                                                                                                                              installed at Luleå’s Kallax airport in 2003. Gunnebo
                                                                                                                              Entrance Control received its first major order for
                                                                                                                              PasSec HS from Avinor, Norway’s civil aviation
                                                                                                                              authority, towards the end of the year.
Gunnebo Integrated Security

                              Moreover, new explosion-resistant doors               Gunnebo Entrance Control has also         division that commenced operations on
                              have been developed for high-risk facilities     launched ImmSec, a unique barrier for          1 January 2004.
                              in the petrochemical industry.                   automated passport control with the aid of
                                   Gunnebo Integrated Security has also        facial recognition intended for use at air-    Customers and competitors
                              continued with the development of a cus-         ports and ports. The barrier combines two      Gunnebo Integrated Security is the market
                              tomer-oriented, integrated security concept      important requirements for current and         leader in bank security in France and
                              for such users as airports, ports, private       future passenger control – security and        Spain. It also has a very strong position in
                              hospitals, public authorities, banks, indus-     rapid movement of passengers.                  this market segment elsewhere in Southern
                              trial premises and the petrochemical indus-           It took two years to develop ImmSec,      Europe. Nowadays, buyers at banks and
                              try; the customer can rely on a single sup-      which is based on various types of biomet-     financial institutions, power stations, in the
                              plier for both installation and service of the   ric recognition, including iris recognition,   petrochemical industry, at airports and port
                              turn-key system.                                 fingerprints, handprints, voice identifica-    authorities, and at public authorities are
                                                                               tion or facial scanning. Several major air-    frequently engineers with broad IT compe-
                              Further strong progress by                       ports have shown interest in ImmSec since      tence. Other key customer categories
                              Gunnebo Entrance Control                         it was launched in December 2003. Orders       include architects and security consultants
                              Gunnebo Entrance Control is one of               have already been signed for pilot installa-   who are brought in at an early planning
                              Europe’s leading suppliers on the market         tions in Germany and other countries.          stage to ensure that the delivered facility
                              for access control systems. The business did                                                    has a comprehensive security system.
                              particularly well during the year in terms of    Leader in Indonesia                                 Another key group of customers con-
                              volume and profitability, with improved          Gunnebo is one of the leading companies        sists of public authorities with rigorous
                              productivity.                                    on the market for integrated security serv-    demands for reliable and cost-effective
                                   A new system has been developed for         ices in Indonesia, a country with a popula-    security and entrance control systems in
                              airports that ensures secure movement            tion of 220 million and a fast growing         areas where large numbers of people are on
                              between arrival halls and baggage retrieval.     security market.                               the move. All categories of customer are
                              Known as PasSec High Security, Gunnebo’s              The business developed well during the    canvassed direct by Gunnebo Integrated
                              new system provide secure anti-reflow sys-       year with large fire protection contracts      Security’s own sales companies or by
                              tem and more than satisfies the new EC           being booked from the power industry as        agents. Sales are also channelled through
                              directive on improved airport security. The      well as contracts with several banks for       retailers, wholesalers and specialist installers
                              first major order was signed towards the         total security solutions.                      of alarms and security equipment.
                              end of the year with Avinor, Norway’s civil           Gunnebo’s business in Indonesia pro-           The largest competitors on the
                              aviation authority.                              vides a very useful platform and business      European market are Tyco and United
                                                                               model for Gunnebo Asia Pacific, the new        Technology (acquired Britain’s Chubb

                                                                                   24   Gunnebo Annual Report 2003
Ritzenthaler has provided security for the Paris-Montparnasse office of La Poste,
France’s postal authority. The vaults are protected by SkyRitz walls that harmonise with
the building’s architecture. The office is also equipped with transfer safes from Haffner
and parcel and change hatches from Hygiaphone. In addition, the total installation is
connected to an alarm monitoring and response centre that is manned on a 24/7

                                                                                                                                          Gunnebo Integrated Security
Security during the year) from the USA,         integrated security solutions, and as a sup-
Siemens-Cerberus (German), and Securitas        plier of after-market service through its
(Swedish).                                      extensive network of service engineers and     ImmSec – a unique barrier for automat-
    On most European sub-markets there          technicians.                                   ed passport control, was launched in
                                                                                               2003 by Gunnebo Entrance Control.
are also numerous small, local companies             Technically, Gunnebo Integrated
                                                                                               Using biometrics, in this case facial
that only canvass narrowly defined seg-         Security is engaged in the further develop-
                                                                                               recognition, ImmSec can combine
ments of the market.                            ment of online security solutions, biomet-     security with a rapid flow of passen-
                                                rics, and systems for secure wireless com-     gers, two features that are particularly
Outlook                                         munication.                                    important demands in the air traffic of
Gunnebo Integrated Security is active on a           Gunnebo Integrated Security will con-     today and tomorrow.
market showing annual growth of around          solidate its position of leadership by con-
8-10 per cent – and its goal is to increase     centrating on development within areas
its turnover at a faster rate than the market   that will improve its customers’ productivi-
over the next few years.                        ty, and by engaging in the contract opera-
     Future growth will be organic – above      tion of large, comprehensive security sys-
all in the service segment – combined with      tems.
further acquisitions of small or medium-
sized security companies in Northern and
Continental Europe.
     By offering customers advanced and
reliable security solutions, Gunnebo
Integrated Security will strengthen its posi-
tion on existing markets and improve its
chances of breaking into new ones. The
focus of the division’s business development
involves intensifying efforts to exploit syn-
ergies between the various business units
with the object of being able to offer cus-
tomers turnkey security solutions. On sev-
eral markets, Gunnebo Integrated Security
is already recognised by customers as a one-
stop supplier of a comprehensive range of

                                                    25   Gunnebo Annual Report 2003
                                         Gunnebo Perimeter Security
                                                      GUNNEBO PERIMETER PROTECTION / GUNNEBO TROAX

                             All activities relating to out-   GUNNEBO PERIMETER SECURITY                           2003       2002                  2001
                             door and indoor perimeter
                                                               Invoiced sales, MSEK                                1,038       1,091                1,103
                             security have been brought        Operating profit, MSEK*                                28           49                      76
                             together within Gunnebo           Operating margin, %*                                  2.7           4.5                     6.9
                             Perimeter Security. This          Return on operating capital, %*                         6           10                      15
                             division consists of two          Capital expenditure, MSEK                              31           29                      26
                             business units: Gunnebo           No. of employees                                      717           790                 802
                                                               * before goodwill
                             Perimeter Protection and
                             Gunnebo Troax.
                                                               Sales by business unit                            Sales by market

                                                                                   s Gunnebo                                        s Germany, 27%
                                                                                     Perimeter Protection, 59%                      s Sweden, 21%
                                                                                   s Gunnebo Troax, 41%                             s Denmark, 10%
                                                                                                                                    s Great Britain, 10%
                                                                                                                                    s France, 8%
                                                                                                                                    s Norway, 6%
                                                                                                                                    s Finland, 5%
                                                                                                                                    s Switzerland, 5%
                                                                                                                                    s Other, 8%
Gunnebo Perimeter Security

                                                                26     Gunnebo Annual Report 2003
GUNNEBO PERIMETER PROTECTION                                                                 Gunnebo Perimeter Protection’s prod-
                                                                                        ucts for improved road safety also noted
Operations in 2003                                                                      solid growth, above all in Scandinavia. This
Gunnebo Perimeter Protection is one of                                                  product range, which includes everything
Northern Europe’s leading suppliers of                                                  from animal fencing to cable and crash
solutions for outdoor perimeter protection.                                             barriers, also enjoys strong market potential
     Gunnebo Perimeter Protection’s main                                                elsewhere in Europe.
business idea is to plan, together with the                 Philip Mozes
customer, outdoor perimeter protection          Head of Gunnebo Perimeter Protection    SecuFix
that provides an optimal security solution,                                             The launch of SecuFix - with up to 60 per
including manufacture, installation and                                                 cent shorter installation times - was very
after-market service.                                                                   well received, especially on the German
     The division covers the markets in          Products and services                  market, where it was first launched. 2003
Sweden, Denmark, Norway (Gunnebo                 Outdoor perimeter protection and       saw further market launches on other mar-
Protection), Finland (Polaraidat), the           entrance control; gates and fences,    kets in Northern Europe.
Netherlands (Alura), Germany, Switzerland        and alarm systems. Products for road
and France (Wego) with its own sales             safety.
organisations and resources for installation
and service, often complemented with a           Brand names
network of subcontractors and strong, local      Gunnebo Protection, Wego, Werra,
brand names.                                     Alura, Polaraidat

                                                                                                                                        Gunnebo Perimeter Security
     Important customer segments in this
area include manufacturing industry,
defence establishments, ports and harbours,
airports, logistics centres, power stations            Sales by product area
and telecommunication installations.                      Total: 600 MSEK
     Price competition has been fierce, espe-
cially in Germany, which resulted in a
weak pattern of earnings at Gunnebo
Perimeter Protection last year. The market
in Sweden developed very favourably.
     The market for outdoor perimeter pro-
tection is suffering from considerable excess
                                                          s System sales, 58%
capacity, which is causing depressed prices               s Product sales, 38%
                                                          s Road safety, 4%
on most markets.
     At the end of 2003, Gunnebo
Perimeter Protection drew up a strategic
                                                        Sales by market
plan. On the basis of this it was decided
                                                        Total: 600 MSEK
that Gunnebo Perimeter Protection should
play an active role in the consolidation of
the European perimeter protection market
by means of strategic acquisitions of select-
ed companies in the industry, followed by                                               A specially ordered gate for the
a process of consolidation to improve prof-                                             Copenhagen Zoo being manufactured at
itability.                                                                              Gunnebo Perimeter Protection’s factory
                                                            s Germany, 38%              in Varde, Denmark. The Zoo was com-
                                                            s Sweden, 23%
Market                                                      s Denmark, 13%              pelled to replace an existing gate from
                                                            s The Netherlands, 7%
In 2003 the market, which has normally                      s Norway, 6%
                                                                                        1936 with a new motor-driven sliding
grown at 2-3 per cent a year, showed signs                  s Other, 13%
                                                                                        gate with microprocessor control and
of slackening, with demand falling espe-                                                entrance control. The Zoo also wanted to
cially in the construction sector, although                                             keep some of the hand-forged compo-
in the logistics and airport segments, where                                            nents in the form of animals from the old
security levels are being upgraded, demand                                              gate. Gunnebo Perimeter Protection
is still strong.                                                                        therefore manufactured a modern sliding
                                                                                        gate that retained the design features
                                                                                        and components from 1936.

                                                  27   Gunnebo Annual Report 2003
                             EntraSec                                       Competitors                                    its priority product areas and on its priority
                             EntraSec, which is a new motor-driven          The European market for outdoor perime-        markets. This will be accomplished by
                             sliding gate with opening widths of up to      ter protection is estimated to be worth        offering customers innovative and cost-
                             10 metres, was launched at the beginning       some MSEK 10,000.                              effective security systems for outdoor
                             of 2003. Its lightweight construction,              Gunnebo Perimeter Protection is one       perimeter protection.
                             mainly in aluminium, and low-friction          of Northern Europe’s leading suppliers,             Gunnebo Perimeter Protection will also
                             movement, give the product higher opera-       with a market share of around 6 per cent       intensify its efforts to offer complete, func-
                             tional reliability and a long service life.    in Europe. It is the market leader by far in   tion-tested products, together with installa-
                             EntraSec satisfies European safety standards   the Nordic region, while in Germany, the       tion in situ and after-market service.
                             and by virtue of its patented, modular         business unit’s largest market, Gunnebo             These specialised product concepts and
                             manufacturing concept, provides greater        Wego is one of the leading suppliers.          more efficient product sourcing will enable
                             simplicity and flexibility in product sourc-        The main competitors on the               the business unit to achieve higher growth
                             ing as well as lower transport and installa-   European market with international cover-      on existing as well as new markets.
                             tion costs.                                    age are Bekaert Fencing, CRH Fencing and            A comprehensive cost-reduction pro-
                                  During the year, sales volumes devel-     Security, Dirickx, Best Fencing Group and      gramme for the production and market
                             oped well, and products to broaden the         Elkosta. There are also numerous small,        organisations has been launched as part of
                             product range have been launched.              local competitors.                             the new strategic plan. It is expected to
                             EntraSec is now available for two gateway                                                     have its full effect towards the end of 2004.
Gunnebo Perimeter Security

                             widths, of 6-10 metres and 3-6 metres          Outlook
                             respectively.                                  Gunnebo Perimeter Protection’s vision is to
                                                                            achieve a position of market leadership in

                             The EntraSec security gate was one of the new product launches in 2003. The photograph is from Rohwedder in Berlin. As the gate-
                             way is so wide, EntraSec, which is made of aluminium, was the ideal solution for the customer, who preferred a manual gate to an
                             electric one.

                                                                                28   Gunnebo Annual Report 2003
                                                                                         Customers and competitors
Operations in 2003                                                                       Important customers in the automotive
Gunnebo Troax is Europe’s leading supplier                                               and robotics industries during the year
of products for indoor perimeter security.                                               were the PSA-group (Peugeot and Citroën)
                                                                                         in France, Caterpillar in England,
The business is organised into three areas of                                            Volkswagen and BMW in Germany, and
application:                                                                             Volvo Cars in Sweden.
• Automotive and robotics – consulting                  Stefan Andersson                     In the manufacturing segment, which
  services and systems for machine security           Head of Gunnebo Troax              includes key customer groups in the ware-
• Security and safety systems for materials                                              house and industrial walling segment, the
  handling and transport flows, warehouses                                               market stabilised at a lower level, the effect
  and industrial walling, wire-mesh shelv-                                               of which was to depress prices.
  ing and stabilisers for pallet racking        Products and services                        Most of the competitors are small, local
• Perimeter protection in the building          Machine protection and indoor            companies operating on geographically
  industry - garage boxes and storage units     perimeter protection for industry,       confined markets, along with a few
                                                warehouses, public environments and      European competitors such as Axelent in
                                                homes.                                   Sweden.
Troax is the market leader in Europe in
indoor perimeter protection with 12 sales       Brand names
companies.                                      Troax, C Lee
     In 2003, the result was unsatisfactory,

                                                                                                                                          Gunnebo Perimeter Security
mainly owing to lower demand in the
building industry on the most important               Sales by product area
markets, namely England, Sweden and                      Total: 438 MSEK
France, and to unfavourable currency
effects. The market for machine protection
has shown a more encouraging trend, with
major orders being booked from some of
Europe’s largest car manufacturers.
     During the year, with the object of
reversing the declining earnings trend,
Troax was engaged on a cost-reduction and                 s Industrial automation, 34%
                                                          s Materials handling,
restructuring project that included stepping                Logistics, 31%
                                                          s Perimeter protection,
up the rate of product development, a                       building industry, 28%
                                                          s Other, 7%
more rational flow-optimised production
layout at the factory in Hillerstorp, a new
organisation and significantly improved
logistical systems. In particular a new dis-            Sales by market
tribution centre at Hillerstorp for the                 Total: 438 MSEK
European market has resulted in shorter
delivery times to end customers, improved
cost-efficiency and a higher standard of
     During the year, Troax invested in a
new production line at the Hillerstorp fac-
tory for fully automatic welding of coarse
wire-mesh sections. This investment also                  s Great Britain, 23%
                                                          s Sweden, 17%
resulted in improvements to the environ-                  s France, 13%
                                                          s Germany, 12%
ment at the plant as well as higher produc-               s Switzerland, 8%
                                                          s Denmark, 6%
tivity.                                                   s Other, 23%

                                                                                         RapidFix is a flexible fastening system for
                                                                                         machine protection that is easy to mount
                                                                                         and dismantle, which saves time as well
                                                                                         as space in the workshop.

                                                 29   Gunnebo Annual Report 2003
                                                                                                                   In 2003, Troax invested in a new produc-
                                                                                                                   tion line at its Hillerstorp factory for the
                                                                                                                   manufacture of coarse wire-mesh sec-
                                                                                                                   tions for the building industry, machine
                                                                                                                   protection, warehouses and manufactur-

                                                                                                                   Gunnebo Troax will continue to concen-
Gunnebo Perimeter Security

                                                                                                                   trate on customer-oriented system sales
                                                                                                                   with total solutions including service for
                                                                                                                   major customers, such as large multination-
                                                                                                                   al enterprises.
                                                                                                                        Completed investment projects will
                                                                                                                   lead to more rational and customer-orient-
                                                                                                                   ed production.
                                                                                                                        The more rational logistical systems
                                                                                                                   will further strengthen the company’s com-
                             Stabilisers prevent goods from falling off the back of pallet racking shelves. This   petitive position.
                             system has been installed at catering and restaurant supplies wholesaler                   Troax’s modernised and lighter product
                             Servera’s warehouse in Norrköping. The shelves were also supplied by Troax.           programme – SafeLite – which will facili-
                                                                                                                   tate quicker and more efficient final assem-
                                                                                                                   bly, has been successfully launched on the
                                                                                                                        At the beginning of 2003, Gunnebo
                                                                                                                   Troax launched RapidFix, an entirely new
                                                                                                                   mounting system for its welded panels.
                                                                                                                   RapidFix, which satisfies all European safe-
                                                                                                                   ty standards, has considerable market
                                                                                                                   potential, especially in the automotive and
                                                                                                                   robotics industries.
                                                                                                                        The main advantages are that machine
                                                                                                                   protection can be installed closer to the
                                                                                                                   robots, which permits more efficient use of
                                                                                                                   space and reduces assembly and dismount-
                                                                                                                   ing times in the event of planned or
                                                                                                                   unplanned production downtime.

                             Machine protection is Troax’s largest product segment. In 2003 half a kilometre of
                             SafeFix machine protection was installed at SCA’s modern mill in Värnamo, Sweden.

                                                                             30    Gunnebo Annual Report 2003
                                                                                                                                                            Gunnebo Perimeter Security
                                            Gunnebo Steelage

                                                         GUNNEBO STEELAGE                                     2003            2002               2001

                                                         Invoiced sales, MSEK                                  112             124                113
                                                         Operating profit, MSEK*                                  6               5                 1
                                                         Operating margin, %*                                   5.4             4.0                0.9
                                                         Return on operating capital, %*                          7               7                 2
                                                         Capital expenditure, MSEK                                8               2                 8
                                                         No. of employees                                    1,101           1,151               1,267
                                                         * before goodwill

                                                         Sales by product area                            Sales by market

                                                                               s Physical Security, 52%                          s India, 100%
                                                                               s Minimax, 23%
                                                                               s Projects, 25%

              Deepak Khetrapal
         Head of Gunnebo Steelage
   Fr.o.m. 1 januari 2004 Chef Gunnebo Asia Pacific

                                                                                                                                                          Gunnebo Steelage
   Products and services
   High-graded burglar- and fire-resist-
   ant safes. Security products for banks:
   safety deposit boxes, bank vaults and
   vault doors; products for banking
   automation. Fire-resistant safes for
   data media. Fire-extinguishing equip-
   ment, fire alarms. Perimeter protec-
   tion, entrance control systems, access
   control systems, CCTV. Installation
   and service.

   Brand names
   Steelage, Minimax, Chubbsafes,
   Gunnebo Perimeter Protection

                                                          Manufacturing of fire extinguishers at Gunnebo Steelage’s factory in Chennai, India.

Operations in 2003                                    ing systems and is well positioned on the           invoiced sales declined by 10 per cent.
Gunnebo Steelage is India’s second largest            Indian security market with its portable                In 2003, Gunnebo Steelage continued
security company. It offers an extensive              and mobile fire extinguishing equipment             with the launch of its total security concept
range of security products and services. In           and the installation of fire alarms and             in India. Gunnebo Steelage, in co-opera-
physical security, Gunnebo Steelage devel-            sprinklers.                                         tion with Gunnebo’s other security divi-
ops, manufactures, markets and sells a                     The market is canvassed through 14             sions, has also begun to market entrance
broad range of high-graded, burglar- and              sales offices and 70 retailers, which gives         control systems, CCTV equipment, and
fire-resistant safes.                                 Gunnebo Steelage a strong local presence.           perimeter protection. Its co-operation with
     Gunnebo Steelage is India’s leading                   Organic growth in 2003 was 4 per               Gunnebo Physical Security, in particular,
supplier of fire alarms and fire-extinguish-          cent. Translated into Swedish kronor                offers great potential for product and

                                                          31     Gunnebo Annual Report 2003
                                                                      In 2003, Gunnebo Steelage
                                                                      launched a range of suspended fire
                                                                      extinguishers, which improve safety
                                                                      in locations where it is not possible
                                                                      to install sprinkler systems.

                   design improvements, as well as introduc-
                   ing an entirely new range of products for
                   the banking sector.

                   Gunnebo Steelage conducts its business
                   through three business areas:
                   • Physical Security
                   • Minimax
                   • Projects

                   Physical Security
                   This business area currently accounts for
                   more than 50 per cent of Gunnebo
                   Steelage’s turnover, mainly through its pro-
                   duction of high-graded, fire- and burglar-
                   resistant safes. With some 30 per cent of
                   the market, Physical Security is the second
                   largest supplier of physical security prod-
                   ucts in India with a very strong position in
                   the banking segment.
                        Gunnebo Steelage has one main com-
                   petitor in this segment, Godrej, whose
                   market share is estimated at around 60 per
Gunnebo Steelage

                        The factory in Halol was enlarged and
                   modernised in 2003 with the object of
                   doubling production capacity and signifi-
                   cantly improving the quality level.
                        This investment gives Gunnebo
                   Steelage valuable competitive advantages in
                   India, while also enabling the factory to
                   supply other markets with competitive
                   security products.

                   The Indian market for portable fire extin-
                   guishers is highly fragmented with numer-          Ericsson had RevoSec revolving security doors installed at its office in New Delhi
                   ous local manufacturers that supply the            in 2003. The order was won as a result of close co-operation between Gunnebo
                   market with low-price products. With its           Integrated Security and Gunnebo Steelage.
                   well-known Minimax brand name,
                   Gunnebo Steelage is well placed for further
                        Gunnebo Steelage is market leader with        Gunnebo Steelage is one of the largest     public sector making greater demands for
                   15 per cent of the market. A brand new         suppliers of these systems and in 2003 it      integrated security systems.
                   family of suspended fire extinguishers was     completed delivery of numerous large               Gunnebo’s accumulated competence in
                   launched during the year, designed primari-    orders – including complete surveillance       the different security sectors and its many
                   ly to increase fire safety in unmanned         and fire-extinguishing systems for large       years of experience of design and product
                   workplaces and at locations, such as railway   power stations.                                development will accelerate the process of
                   coaches, where it is not possible to install                                                  transforming Gunnebo Steelage into a
                   sprinkler systems.                             Outlook                                        modern and profitable security company.
                                                                  Many segments of India’s security market       Gunnebo Steelage has become a member of
                   Projects                                       remain undeveloped and fragmented. The         the new Gunnebo Asia Pacific division as
                   The fastest-growing segment of the security    country’s infrastructure is currently under-   of 1 January 2004.
                   market in India is the design and installa-    going an extremely rapid development
                   tion of fire protection systems.               process, with companies, banks, and the

                                                                      32   Gunnebo Annual Report 2003
                                    Gunnebo Asia Pacific

        Sales by product area
           Total: 350 MSEK

                                                                                                              Sales companies
             s Physical Security, 55%                                                                         Jointly owned factory
             s Fire protection systems, 35%
             s Electronic security, 10%                                                                       Countries with distributors

                                                                                                                                            Gunnebo Asia Pacific
           Sales by market
           Total: 350 MSEK

             s Indonesia, 40%
             s India, 35%
             s Australia, 15%
             s Other, 10%

As of January 1, 2004, the Gunnebo                Gunnebo Asia Pacific comprises the              The product range consists primarily
Group has co-ordinated all of its             Group’s security operations conducted          of security products and services including
security-related operations in Asia           through wholly owned subsidiaries in           high-graded burglar- and fire-resistant
and Australia/New Zeeland in a                India, Indonesia, Australia, Singapore and     safes, security products for banks, burglar
new division – Gunnebo Asia                   China, a 30 per cent interest in Chubb         and fire alarms, fire-extinguishing equip-
Pacific.                                      Malaysia and some 30 distributors.             ment, perimeter protection, entrance con-
                                                  Gunnebo Asia Pacific has an initial        trol systems, access control systems, CCTV,
The region encompasses 26 countries, from     1,900 employees and an estimated annual        alarm monitoring and response centres,
Pakistan in the west to Japan in the east.    turnover of MSEK 350.                          and installation and service.
The total population of this rapidly              The goal is to double turnover within           Deepak Khetrapal, former president of
expanding region is around 3,500 million,     three years via organic growth and strategic   Gunnebo Steelage, has been appointed
and security has become a matter of grow-     acquisitions.                                  head of the Gunnebo Asia Pacific division.
ing concern during the past few years.

                                                  33   Gunnebo Annual Report 2003
                                                     Gunnebo Engineering

                                                                    GUNNEBO ENGINEERING                         2003           2002                 2001

                                                                    Invoiced sales, MSEK                       1,144          1,166                1,206
                                                                    Operating profit, MSEK*                        87             81                    86
                                                                    Operating margin, %*                          7.6            6.9                    7.1
                                                                    Return on operating capital, %*                12             11                    12
                                                                    Capital expenditure, MSEK                      49             50                    58
                                                                    No of employees                            1,121          1,054                1,096
                                                                    * before goodwill

                                                                    Sales by product area                   Sales by market

                                                                                         s Lifting, 59%                           s Sweden, 27%
                                                                                         s Fastening, 31%                         s USA, 15%
                                                                                         s Blocks, 10%                            s Finland, 8%
                                                                                                                                  s Norway, 8%
                                                                                                                                  s Great Britain, 7%
                                                                                                                                  s Denmark, 4%
                                                                                                                                  s Other, 31%

                                   Christer Lenner
                            Head of Gunnebo Engineering
Gunnebo Engineering

                      Operations in 2003                                                                         During the year Tellesfdal A/S’ non-
                      Gunnebo Engineering’s business is conducted                                           skid division was acquired. This acquisition
                      through the following business units:                                                 will complement other non-skid activities
                      • Gunnebo Lifting                                                                     on the transport and agricultural markets
                      • Gunnebo Blocks                                                                      and lead to an improvement in the market
                      • Gunnebo Fastening                                                                   position in Norway, Canada and the USA.
                                                                                                            The non-skid business within Gunnebo
                      Gunnebo Engineering is involved with well                                             Lifting comprises an own business unit
                      known products in established market seg-                                             Gunnebo Non Skid, as of January 1, 2004.
                      ments and is the leader in each product                                                    Gunnebo Engineering improved its
                      area. Demand for the division’s products                                              operating result, mainly through further
                      was relatively weak during the year,                                                  rationalisation and greater cost efficiency.
                      although a slight recovery has been noted
                      in Asia, Australia and South America. In                                              Gunnebo Lifting
                      the USA, by contrast, the market was weak.                                            Gunnebo Lifting, which has some 20 per
                      In Europe markets were cautious but with                                              cent of the global market, develops, manu-
                      demand changing for the better on the                                                 factures, markets and sells lifting products
                      Central and in Eastern Europe.                                                        for handling heavy goods, shackles and rig-
                                                                                                            ging screws for marine use and chain-based
                                                                                                            non-skid products. Production takes place
                                                                                                            in Sweden, Norway, Finland, Poland and
                                                                    Two new chain dimensions, 6 mm          South Africa with sales going through 13
                                                                    and 16 mm, will broaden                 subsidiaries and through external distribu-
                        Products and services
                                                                    Gunnebo Lifting’s Grab IQ multi-        tors to 80 or so markets in all parts of the
                        Products and systems for heavy lifting                                              world.
                                                                    function system, which consists of
                        such as chain, hooks, lifting slings                                                    Demand for Gunnebo’s lifting prod-
                                                                    top components, chain and hooks
                        and blocks. Chain-based non-skid                                                    ucts was buoyant in Japan, Australia,
                                                                    that can lift loads weighting from
                        products. Fastening systems.                                                        Brazil, as well as in England and the
                                                                    1.5 tonnes to 21 tonnes in a
                                                                    3-part lifting system.
                                                                                                            Netherlands in Europe, although it was
                        Brand names                                                                         weak elsewhere in Europe.
                        Gunnebo Lifting, Gunnebo                                                                Extensive investments were made,
                        Fastening, Gunnebo Johnson, Gemla                                                   mainly in the forge at Gemla, near Växjö
                        Mekanik, OFA, ANJA, Tellefsdal                                                      in Sweden. A new forging machine has
                                                                                                            been installed which will enable the unit to
                                                                                                            deliver a comprehensive range and has raise

                                                                     34     Gunnebo Annual Report 2003
In the autumn of 2003 Gunnebo Lifting launched its new service business in Sweden.
Customers who sign service agreements with Gunnebo Lifting will have their equipment
tested and inspected to ensure it satisfies the Work Environment Authority’s require-
ments. The van is fitted with various items of test equipment and a small stock of prod-

production capacity by 30 per cent.              screws, hardened wooden screws and band-
Significant environmental improvements           ed nails.
have also been made at the Gemla facility.            During the year, heavy investments
     Investments have been made in machi-        were made in a new central warehouse at
nes at the Gunnebo chain factory in the          the Polish factory in Orneta. Parallel to the
form of an entirely new line for the manu-       enlargement the unit obtained quality,
facture of chain, together with further auto-    environmental and work environment cer-
mation at the production plant in Ramnäs.        tification. The programme will continue for
     Product development in the business         the coming two years and is intended to
unit was concentrated on further extending       provide new capacity for sheet metal fas-
the GrabIQ system.                               tening.
     The purchase of Tellefsdals’ non-skid            Leading competitors are NKT in
division and the formation of the Gunnebo        Denmark, Spigerverket in Norway and
Non Skid business unit will enhance our          Pintos in Finland. Gunnebo Fastening’s
ability to canvass the large markets in          products are dependent on the develop-
Scandinavia and North America. Following         ment of the building market, which has
the acquisition, a complete range can be         been weak in the nordic countries, while
offered to the markets in forestry, transport    Central and Eastern Europe enjoyed steady
and farming. In its segments, Gunnebo            growth.
Lifting is one of the largest suppliers in the
world. Major competitors include FKI in          Outlook
England and Pewag/Weissenfels, which is          Gunnebo Engineering is active in estab-
based in Austria/Italy.                          lished and mature sectors. By taking active

                                                                                                                                                Gunnebo Engineering
                                                 measures to adjust costs, investing heavily,
Gunnebo Blocks                                   and engaging in focused product develop-
Gunnebo Blocks develops, manufactures,           ment, the division succeeded in improving
markets and sells heavy lifting systems, some    its profitability in 2003.
of which are key components in materials              In the event of an economic recovery
                                                                                                 This sheave is part of a motion compensa-
handling systems while others are cus-           that will lead to stronger demand for
                                                                                                 tion system on an offshore platform for oil
tomised components for the OEM market.           Gunnebo Engineering’s products, the divi-
                                                                                                 exploration and drilling at sea. The wheel
    Development and manufacture take             sion can rapidly adapt to higher volumes,
                                                                                                 was delivered to Shaffer, a division of
place at Gunnebo Blocks’ facility in Tulsa,      which will enable it to achieve higher prof-
                                                                                                 Varco International, in November 2003. It
Oklahoma, USA and most of its output is          itability.
                                                                                                 is 2.6 meters in diameter and uses wires
sold on the North American market.
                                                                                                 that are 7.3 cm in diameter. The system
    Gunnebo Blocks is a leader in systems
                                                                                                 is capable of lifting up to 1,135 tonnes.
and components for very heavy lifting for
end users in the building, offshore and
other heavy industries. Among the larger
competitors are McKissick in the USA and
Ansel-Jones in England. Gunnebo Blocks’
products are intended for the capital goods
market, which was very slack in North
America during the year.

Gunnebo Fastening
Gunnebo Fastening, which is market leader
in Scandinavia, develops, manufactures,
markets and sells a variety of fastening sys-
tems mainly for the building market but
also for industrial purposes.
    Production takes place in Sweden,
Finland and Poland with the output main-
ly destined for the North and East
European markets.
    A shift in the market away from tradi-
tional nail products to other types of fas-      Gunnebo Fastening’s range is stocked by the Jula chain of hardware stores at its newly built
teners has resulted in greater attention         outlet in Uddevalla. Most of Gunnebo Fastening’s turnover comes from store sales.
being given to the range of plugs, façade        Gunnebo also markets flat nails for any types of nail pistols on the market.

                                                     35   Gunnebo Annual Report 2003
                                                   Gunnebo’s employees

                                                                     comply with the code of ethical conduct
                                                                     that regulates the Group’s responsibility
                                                                     towards its customers, employees, suppliers
                                                                     and society at large. Gunnebo’s ethical rules
                                                                     are based on the UN’s Global Compact
                                                                     Principles and the OECD’s guidelines for
                                                                     multinational enterprises.
                                                                         In Europe, Gunnebo works closely
                                                                     with the union organisations through the
                      Gunnebo of today is a global group             Gunnebo European Works Council
                                                                     (EWC). Apart from the main annual meet-             ago. Gunnebo Academy provides training
                      with 8,100 employees, who work
                                                                     ing, the EWC’s executive committee meets            for existing and future managers that is
                      for 110 subsidiaries in 32 countries
                                                                     representatives of Group management reg-            intended to raise competence and stimulate
                      in all parts of the world.
                                                                     ularly during the year.                             cross-divisional co-operation. In 2003, 40
                        Gunnebo’s highly decentralised
                                                                                                                         managers received training under the aegis
                      organisation enables the Group to
                                                                     Competence development                              of Gunnebo Academy, and planning for
                      offer its employees a work environ-
                                                                     Responsibility for the development and              continuation courses that are more individ-
                      ment where they can develop and
                                                                     professional training of Gunnebo’s employ-          ual in character will start in 2004.
                      where their regular competence
                                                                     ees is largely delegated to the divisions,               In all, 150 managers have undergone
                      development is based on the cus-
                                                                     business units and companies. As Gunnebo            training with Gunnebo Academy.
                      tomers’ demands.
                                                                     has a highly decentralised organisation,
                                                                     responsibility and decision-making authori-         Market conditions
                      International opportunities
                                                                                                                         Gunnebo has prepared a system for ensur-
Gunnebo’s Employees

                      Gunnebo’s global presence provides oppor-      ty are delegated down the organisation in
                                                                     many areas. This also means that many               ing that personnel are employed on market
                      tunities for international contacts that are
                                                                     employees are involved in making impor-             conditions in the countries and markets
                      both stimulating and challenging for pres-
                                                                     tant decisions, and also that tasks are             where Gunnebo is active. Gunnebo is also
                      ent and potential employees.
                                                                     becoming broader and more qualified.                taking a proactive approach to succession
                          Gunnebo Asia Pacific, a new division
                                                                          Parallel to this, the need for qualified       planning to ensure that vacancies are filled
                      within Gunnebo that was formed on
                                                                     managers with international experience is           quickly and efficiently.
                      January 1, 2004, has responsibility for all
                      security-related business in this fast grow-   becoming more marked in line with
                                                                     Gunnebo’s rapid expansion.                          Unitech – recruitment for the
                      ing region. The division has been manned
                                                                          In order to meet this need, the compa-         long term
                      with personnel from Gunnebo Physical
                                                                     ny started Gunnebo Academy two years                Gunnebo has been involved for the past
                      Security and Gunnebo Integrated Security,
                                                                                                                         two years in Unitech, an association of
                      and the initial establishment is 1,900
                                                                                                                         technical institutions and prominent
                      employees. Gunnebo’s factory in Jakarta,
                                                                                                                         European enterprises, with the object of
                      Indonesia, which is managed by Gunnebo
                                                                                                                         offering students traineeships and giving
                      Sourcing and Production, a part of                 No. of employees by country
                                                                                                                         the companies opportunities to identify
                      Gunnebo Physical Security, is not included
                                                                                                                         and recruit the business leaders of tomor-
                      in the new division.
                                                                                                                         row. Among the companies associated with
                                                                                                s France, 1,156
                                                                                                s Indonesia, 1,118       Unitech are ABB, Mercedes-Benz, SKF and
                      Equality of opportunity and                                               s India, 1,101
                                                                                                s Sweden, 950            Gunnebo. During the year, Gunnebo was
                      ethical rules                                                             s Germany, 541
                                                                                                s Spain, 480
                                                                                                                         able to offer six traineeships, I England,
                      Gunnebo’s attitude towards equality of                                    s Great Britain &        France, Germany and Sweden.
                      opportunity is reflected in the equal oppor-                                Ireland, 473
                                                                                                s The Netherlands, 278
                      tunities offered to men and women for                                     s Other, 1,611
                                                                                                                         Advanced technology
                      employment, development and promotion
                                                                                                                         Many of Gunnebo’s companies make use of
                      and the fact that their pay should be                Average no. of employees
                                                                                                                         advanced technology. The ability to main-
                      assessed equally, regardless of gender. In                  by gender
                                                                                                                         tain a high technical status, to absorb and
                      practice, this means that Gunnebo gives
                                                                                                                         apply new technical advances and turn
                      priority to attracting women onto its man-                                s Male, 85%
                                                                                                s Female, 15%            them into successful business ideas is an
                      agement training courses. The long-term
                                                                                                                         important means of advancing our market
                      recruitment programme also focuses on
                                                                                                                         position. Gunnebo therefore works closely
                      attracting more female applicants with the
                                                                                                                         together with a number of universities and
                      object of achieving a better gender balance.
                                                                                                                         institutes of technology, both in Sweden
                           It is a demand within Gunnebo that all
                                                                                                                         and abroad.
                      companies, in their day-to-day activities,

                                                                         36   Gunnebo Annual Report 2003
               Gunnebo and the environment

                                                                                                  Following the successful introduction of
                                                                                                  the environmental management system,
                                                                                                  the ISO 14001 team at Chubb Safes fac-
                                                                                                  tory in Jakarta, Indonesia, celebrate the
                                                                                                  award of their certificate by the British
                                                                                                  Standards Institution.

Environmental activities                             tive and official requirements being the     ual situation. Information and environ-
The overall goal of Gunnebo’s environ-               minimum requirement                          mental training for all employees were key
mental activities is to contribute actively to     • We shall give careful consideration to the   elements in the introduction of the envi-
more sustainable use of limited natural              environment in the development of new        ronmental management system, which has
resources.                                           products and manufacturing methods           been examined and certificated by Lloyds
     Gunnebo’s environmental policy pro-           • We shall regularly endeavour to make         Register of Quality Assurance.
vides guidelines for its environmental activ-        more efficient use of resources and reduce        In 2003, Gunnebo Industrier’s unit in
ities, and the Group’s overall environmen-           the use of hazardous substances              Orneta, Poland introduced management
tal goals ensure that these activities are         • We shall adopt an open attitude towards      systems for the environment, quality and
focused on areas where the need for im-              the environment.                             the work environment. DNV has audited
provement is most needed.                                                                         them and verified that they satisfy the

                                                                                                                                                  Gunnebo and the environment
     A key tool for these activities is provided   Environmental management and                   requirements of ISO 14001, ISO 9000 and
by the environmental management systems            ISO 14001                                      OHSAS 18001.
introduced at the Group’s production units.        The Gunnebo Environmental Manage-                   At Chubb Safes factory in Jakarta, the
     Many of Gunnebo’s products have very          ment System provides guidelines and pro-       existing quality system was augmented dur-
long service lives, and their characteristics      cedures for the environmental activities at    ing the year with a management system
have been further improved by continuous           and reporting by the various units. This       that satisfies the requirements of ISO
development and quality activities. In com-        Group-wide system includes the produc-         14001. This system was certificated by the
bination with the continuous development           tion of an annual report on the environ-       British Standards Institution in 2003.
of Gunnebo’s manufacturing processes to            mental performance of each of the produc-
reduce emissions and energy consumption,           tion units.                                    Environmental objectives
and to increase recovery, this contributes to           During the year, seven production         The Gunnebo Group has established envi-
the achievement of the overall goals.              units introduced environmental manage-         ronmental objectives that stipulate the pri-
     Capable and dedicated personnel are           ment systems and had them certificated in      ority areas in which we shall improve our
important in these environmental activi-           accordance with the ISO 14001 interna-         environmental performance. At local level,
ties. The environmental managers at the            tional standard.                               these goals are broken down into detailed
manufacturing facilities belong to a net-               Gunnebo’s goal is for all production      targets adapted to local conditions. These
work set up for the sharing of experiences         units in the Group to introduce environ-       targets are to be achieved by taking suitable
and expertise.                                     mental management systems that satisfy         measures that are specified in formally
                                                   the requirements of ISO 14001. A well          adopted action programmes.
Environmental policy                               functioning management system is a valu-
The activities of the Gunnebo Group shall          able aid in the environmental activities by    The following environmental objectives have
be characterised by a holistic approach in         virtue of the need to identify the main        been established:
which importance is given to environmen-           environmental impact of each unit and          • To minimise emissions into air of volatile
tal considerations. In our day-to-day activi-      then to base environmental goals and             organic substances.
ties, we shall foster good health, regularly       action programmes on it.                       • To optimise the use of energy in our
improve our environmental activities, min-              During the year, Gunnebo Industrier         processes, buildings and the transporta-
imise the environmental impact of our              completed a successful project for the           tion of goods and people.
business, and make lean use of resources.          introduction and certification of a com-       • To make efficient (lean) use of raw mate-
                                                   mon environmental management system              rials and natural resources.
This means that:                                   for five production units in Sweden, name-     • To maintain effective sorting-at-source
• We shall use information and training to         ly Gemla, Gunnebo, Göteborg, Ramnäs              and recycling of materials, so that we can
  foster a responsible attitude towards the        and Junsele. These units co-operate closely      minimise the amount of waste that is not
  environment on the part of all employees         on the environment and have also intro-          recovered.
• We shall base our environmental activi-          duced procedures and instructions that are     • To establish a strategy for product devel-
  ties on challenging targets, with legisla-       specifically designed for their own individ-     opment that takes into account environ-

                                                       37   Gunnebo Annual Report 2003
                              Grazyna Skoog, a Lloyds audi-                                                               Anna Marciniec (right)
                              tor, and Bill Nelson, Gunnebo’s                                                             and Magda Mokot
                              service manager, examine the                                                                have been actively
                              heat recovery from the com-                                                                 involved in Gunnebo
                              pressors at Gunnebo                                                                         Baltic’s certification
                              Engineering’s nail factory in                                                               process.

                                mental aspects, such as energy consump-                     CO2 emissions in                                 • At its Dutch unit in Deotinchem, it has
                                tion and the use of natural resources                      relation to turnover                                been installed new equipment for dealing
                                throughout each product’s total life cycle.                                                                    with welding fumes. This will improve
                                                                                       Tonnes of CO2/MSEK
                              • To introduce at all production units envi-           15                                                        the work environment and reduce emis-
                                ronmental management systems that sat-               12
                                                                                                                                               sions into air.
                                isfy the ISO 14001 standard.                                                                                 • During the year, Gunnebo Industrier’s
                                                                                                                                               plant in Gemla was extensively rebuilt,
                              The climate                                              6                                                       including the entire forge, which has
                              Far-reaching measures are being taken to                 3
                                                                                                                                               enabled noise and vibrations from the
                              make more efficient use of energy and thus                                                                       plant to be significantly reduced. In this
                              reduce emissions of CO2, as a means of                       98       99       00     01      02*                connection, a unit was installed to recov-
                              reducing Gunnebo’s contribution to the                    *Figures for 2003 are published in mid 2004.           er heat from the furnaces for heating the
                              greenhouse effect. In recent years, emis-                                                                        premises in the winter.
                              sions have been reduced relative to the size                                                                   • In 2003, Gunnebo Industrier’s unit in
                              of the business as a result of modifications    Environmental projects                                           Gunnebo launched a comprehensive
                              to production equipment and buildings,          Active environmental measures also require                       review of its energy consumption. The
                              improvements to transport efficiency and        concrete action to reduce the environmen-                        review will be completed in 2004.
                              rationalisation of business travel.             tal impact of the business, in the form, say,                  • The factory in Bazancourt, France has
                                   By way of example, measures to reduce      of investments in cleaning equipment, or                         installed a new heating system that will
Gunnebo and the environment

                              travel include greater use of video-confer-     changes in the use of raw materials, energy                      reduce the unit’s energy consumption.
                              encing. Properly used, this type of meeting     and other resources.                                             The equipment for fire tests has been
                              saves both time and money, as well as help-          During the year, several environmental                      supplemented with a post-burn chamber
                              ing to reduce the effect on the climate and     projects were carried out by the units with-                     to reduce emissions into air. The
                              the use of resources.                           in the Group. The following section                              Bazancourt unit has also commissioned a
                                                                              describes some of the completed projects.                        buffer tank for recirculation of process
                              Folksam’s Climate Index                         • At the factory in Mora, emissions of                           water so that it can be re-used in the
                              Gunnebo has participated for some years in        hydrocarbons were reduced by investing                         cleaning processes.
                              evaluations of the environmental perform-         in equipment that can use pigments with                      • Gunnebo Troax has installed a unit at
                              ance of the production facilities, both in        a lower solvent content. Emissions from                        Hillerstorp for recovering heat from com-
                              Sweden and abroad, of listed Swedish com-         the factory have declined by around 25                         pressors and also commissioned a new
                              panies.                                           per cent at an unchanged production vol-                       energy control system to regulate the
                                  Folksam’s Climate Index is based on           ume.                                                           maximum power taken from the facility.
                              each company’s total emissions of CO2 and       • At the unit in Granollers, Spain, a new                      • At the factory in Markersdorf, diesel-
                              the measures taken to minimise emissions.         drying furnace was commissioned during                         engined forklift trucks have been replaced
                              In the latest evaluation, Gunnebo was             the year. The new equipment will help to                       by electric ones. This will improve the work
                              ranked as “Excellent” for its measures on         reduce emissions of volatile organic sub-                      environment and reduce consumption of
                              the climate and the quality of its response.      stances (solvents).                                            fossil fuels and emissions of carbon dioxide.

                                Units in Sweden that are required to have a permit or submit reports

                              The table below shows the Swedish units that are covered by the demand to have a permit or submit reports.
                                                                                                                         Environmental impact takes the form of
                                                                              Statutory           Emissions               Emissions                         Chemical          Residual
                              Company                                         obligation           into air               into water         Noise          products          products
                              Gunnebo Industrier AB, Gunnebo                  Licence                    •                        •            •                 •                •
                              Gunnebo Industrier AB, Ramnäs                   Report                     •                                                                        •
                              Gunnebo Industrier AB, Gemla                    Licence                    •                                     •                                  •
                              Gunnebo Industrier AB, Junsele                  Licence                                                                            •                •
                              Gunnebo Troax AB, Hillerstorp                   Licence                                             •                              •                •
                              Gunnebo Protection AB, Ödeborg                  Report                     •                                                       •                •
                              Rosengrens Produktions AB, Mora                 Licence                    •                                                       •                •
                              Rosengrens Produktions AB, Malung               Licence                                             •            •                 •                •
                              All of these units have the necessary permits or have submitted reports to the respective supervisory authority.

                                                                                   38      Gunnebo Annual Report 2003
             Consolidated income statement
                                                                          MSEK           MSEK       MEUR   1)
                                                                                                                MEUR   2)

                                                            Notes          2003           2002      2003        2002

Invoiced sales                                                      1      6,961.1        6,975.5    763.3        761.5
        Cost of goods sold                                                –4,679.9       –4,737.9    –513.2      –517.2
Gross operating profit                                                     2,281.2        2,237.6    250.1        244.3

        Selling costs                                                     –1,104.5       –1,100.4    –121.0      –120.1
        Administrative costs                                  2, 26         –805.8        –835.9      –88.4       –91.3
        Other operating income                                      3         24.6          59.6        2.7         6.5
        Interest in earnings of associated companies                           3.6            0.5       0.4         0.0
                                                                          –1,882.1       –1,876.2    –206.3      –204.9

Operating income                                            1, 4, 22         399.1         361.4       43.8        39.4

Financial income and costs
        Interest income                                                        5.8          11.2        0.6         1.2
        Interest costs                                                       –61.7         –90.5       –6.8        –9.9
        Other financial income                                                 9.1          10.0        1.0         1.1
        Other financial costs                                                –11.3         –11.9       –1.2        –1.2

                                                                                                                            Consolidated income statement
                                                                             –58.1         –81.2       –6.4        –8.8

Profit after financial items                                                 341.0         280.2       37.4        30.6

        Taxes                                                       5        –79.8         –51.4       –8.7        –5.6
        Minority interest                                           6         –1.4           –0.3      –0.2         0.0
Net profit for the year                                                      259.8         228.5       28.5        25.0

Earnings per share, SEK                                             7        12.00         10.75       1.32        1.17
Earnings per share after dilution, SEK                              7        11.95         10.55       1.31        1.15

     1 EUR = 9.12 SEK
     1 EUR = 9.16 SEK

                                                       39   Gunnebo Annual Report 2003
                                                  Consolidated balance sheet
                                                                                                      MSEK             MSEK            MEUR     1)
                                                                                                                                                       MEUR   2)

                                  ASSETS                                              Notes       31 Dec. 2003     31 Dec. 2002     31 Dec. 2003     31 Dec. 2002

                             Fixed assets
                             Intangible fixed assets
                                     Goodwill                                                 8         958.8            992.2            105.4           108.0
                                     Other intangible fixed assets                            8           89.6            57.3              9.9             6.2
                             Total intangible fixed assets                                            1,048.4          1,049.5            115.3           114.2

                             Tangible fixed assets
                                     Buildings and land                                       9         473.8            510.5             52.2            55.5
                                     Machinery and plant                                      9         345.5            353.0             38.0            38.4
                                     Equipment, tools, fixtures and fittings                  9         131.9            129.2             14.5            14.1
                                     Fixed assets under construction                          9           59.4            48.1              6.5             5.3
                             Total tangible fixed assets                                              1,010.6          1,040.8            111.2           113.3

                             Financial fixed assets                                        11             81.2           130.9              8.9            14.2

                             Total fixed assets                                                       2,140.2          2,221.2            235.4           241.7

                             Current assets
Consolidated balance sheet

                             Inventories                                                   12         1,060.5          1,090.2            116.7           118.6
                             Operating receivables
                                     Accounts receivable                                              1,403.3          1,535.9            154.3           167.1
                                     Tax receivables                                                      22.3            26.8              2.5             2.9
                                     Other current receivables                                          144.3            122.6             15.9            13.4
                                     Prepaid costs and accrued income                      13             98.2            75.1             10.8             8.2
                             Total operating receivables                                              1,668.1          1,760.4            183.5           191.6

                             Cash and bank                                                              221.2            362.3             24.3            39.4

                             Total current assets                                                     2,949.8          3,212.9            324.5           349.6

                             TOTAL ASSETS                                                             5,090.0          5,434.1            559.9           591.3

                                  1 EUR = 9.09 SEK
                                  1 EUR = 9.19 SEK

                                                       These brand names represent a major proportion of the Group’s intangible fixed assets.

                                                                                 40   Gunnebo Annual Report 2003
                                                                 MSEK             MSEK          MEUR   1)
                                                                                                               MEUR   2)

     EQUITY AND LIABILITIES                       Notes       31 Dec. 2003     31 Dec. 2002   31 Dec. 2003   31 Dec. 2002

Equity                                                14
        Restricted equity
        Share capital                                              218.9            212.1           24.1           23.1
        Restricted reserves                                        561.7            469.6           61.8           51.1
                                                                   780.6            681.7           85.9           74.2
        Non-restricted equity
        Non-restricted reserves                                    829.7            736.3           91.3           80.0
        Net profit for the year                                    259.8            228.5           28.5           25.0
                                                                 1,089.5            964.8          119.8          105.0
Total equity                                                     1,870.1          1,646.5          205.7          179.2

Minority interest                                                    5.9              6.1            0.6            0.7
        Pension provisions                         15, 21          176.3            204.1           19.3           22.2
        Deferred tax liability                            5         49.7             41.8            5.5            4.6
        Other provisions                              16           159.6            292.2           17.6           31.7
Total provisions                                                   385.6            538.1           42.4           58.5

                                                                                                                            Consolidated balance sheet
Interest-bearing liabilities                          17
        Overdraft facilities                                        25.2             49.3            2.8            5.4
        Liabilities to credit institutions            20         1,339.6          1,610.3          147.3          175.2
        Convertible loan                              18                –            93.2            0.0           10.1
Total interest-bearing liabilities                               1,364.8          1,752.8          150.1          190.7

Interest-free liabilities
        Liabilities to suppliers                                   756.2            801.5           83.3           87.2
        Other current liabilities                                  253.5            214.9           27.9           23.4
        Accrued costs and deferred income             19           453.9            474.2           49.9           51.6
Total interest-free liabilities                                  1,463.6          1,490.6          161.1          162.2

TOTAL EQUITY AND LIABILITIES                                     5,090.0          5,434.1          559.9          591.3

Pledged assets                                        20            50.3             67.5            5.5            7.3
Contingent liabilities                                21           308.8            155.1           34.0           16.9

                                                                 MSEK             MSEK          MEUR   1)
                                                                                                               MEUR   2)

     CHANGE IN CONSOLIDATED EQUITY                            31 Dec. 2003     31 Dec. 2002   31 Dec. 2003   31 Dec. 2002

Opening equity                                                   1,646.5          1,513.4          179.2          162.7
Currency differences                                               –32.9            –22.0           –1.6           –0.5
Net profit for the year                                            259.8            228.5           28.5           25.0
Dividend                                                           –84.8            –74.2           –9.3           –8.1
Conversion of convertible loan                                      81.5              0.8            8.9            0.1
Closing equity                                                   1,870.1          1,646.5          205.7          179.2

     1 EUR = 9.09 SEK
     1 EUR = 9.19 SEK

                                             41   Gunnebo Annual Report 2003
                                                Consolidated cash flow analysis
                                                                                                       MSEK           MSEK       MEUR   1)
                                                                                                                                             MEUR   2)

                                                                                         Notes          2003          2002       2003        2002

                                  CURRENT OPERATIONS
                                          Operating profit                                                399.1        360.9        43.8        39.4
                                          Depreciation charged against the result                         227.5        228.9        24.9        25.0
                                          Capital losses/gains                                             –1.1          1.1        –0.1         0.1
                                          Other items not affecting cash flow                               3.6              –       0.4             –
                                          Change in provisions                                           –134.8        –54.5       –14.8        –5.9
                                          Net financial items affecting cash flow            23           –83.5        –92.4        –9.2       –10.1
                                          Dividends from associate companies                                3.3              –       0.4             –
                                          Paid taxes                                                      –54.0        –50.5        –5.9        –5.5
                                  Cash flow from current operations
                                  before changes in working capital                                       360.1        393.5        39.5        43.0

                                  Cash flow from changes in working capital
                                          Change in inventories                                             9.8         95.2         1.1        10.4
                                          Change in operating receivables                                 121.5         29.5        13.3         3.2
                                          Change in interest-free liabilities                             –26.1        –56.2        –2.9        –6.2
                                  Total change in working capital                                         105.2         68.5        11.5         7.4
Consolidated cash flow analysis

                                  Cash flow from current operations                                       465.3        462.0        51.0        50.4

                                  INVESTMENT ACTIVITIES
                                          Fixed capital expenditure                         8, 9         –197.7       –168.0       –21.7       –18.4
                                          Sales of fixed assets                                             8.0          7.4         0.9         0.8
                                          Acquisition of subsidiaries                        24           –56.4        –65.2        –6.2        –7.1
                                  Cash flow from investment activities                                   –246.1       –225.8       –27.0       –24.7

                                  FINANCING ACTIVITIES
                                          Change in interest-bearing receivables                            2.2         –1.9         0.2        –0.2
                                          Change in interest-bearing liabilities                         –262.6        –84.6       –28.7        –9.2
                                          Dividend                                                        –84.8        –74.2        –9.3        –8.1
                                  Cash flow from financing activities                                    –345.2       –160.7       –37.8       –17.5

                                  Cash flow for the year                                                 –126.0         75.5       –13.8         8.2

                                  Opening liquid funds                                                    362.3        294.6        39.4        31.8
                                  Translation differences on liquid funds                                 –15.1         –7.8        –1.3        –0.6
                                  Closing liquid funds                                                    221.2        362.3        24.3        39.4

                                       1 EUR = 9.12 SEK
                                       1 EUR = 9.16 SEK

                                                                                    42   Gunnebo Annual Report 2003
       Parent company income statement
                                                                     MSEK           MSEK       MEUR   1)
                                                                                                           MEUR   2)

                                                       Notes          2003          2002       2003        2002

Invoiced sales                                             27            17.5         13.7         1.9        1.5
        Administrative costs                               26           –63.9        –50.2        –7.0       –5.5
Operating loss                                           4, 22          –46.4        –36.5        –5.1       –4.0

Financial income and costs
        Anticipated dividends from Group companies                      161.4         20.0        17.7        2.2
        Write-down of shares in Group companies            10          –125.2         –0.1       –13.7        0.0
        Group contributions received                                     48.6         52.8         5.3        5.7
        Group contributions paid                                        –17.3         –3.2        –1.9       –0.4
        Interest income from Group companies                              9.1         12.5         1.0        1.4
        Other interest income                                                –         1.4         0.0        0.2
        Interest costs to Group companies                               –56.9        –66.0        –6.2       –7.2
        Other interest costs                                             –2.1        –10.2        –0.2       –1.1
        Other financial income                                           39.8         37.2         4.4        4.1
        Other financial costs                                            –3.2         –3.7        –0.4       –0.4
                                                                         54.2         40.7         6.0        4.5

                                                                                                                       Parent company income statement
Profit before tax                                                         7.8          4.2         0.9        0.5
        Taxes                                                  5             –             –           –           –
Net profit for the year                                                   7.8          4.2         0.9        0.5

     1 EUR = 9.12 SEK
     1 EUR = 9.16 SEK

                                                  43   Gunnebo Annual Report 2003
                                             Parent company balance sheet
                                                                                                   MSEK             MSEK          MEUR   1)
                                                                                                                                                 MEUR   2)

                                    ASSETS                                          Notes       31 Dec. 2003     31 Dec. 2002   31 Dec. 2003   31 Dec. 2002

                               Fixed assets
                               Tangible fixed assets
                                       Equipment                                            9          3.6              1.5            0.4            0.2
                               Total tangible fixed assets                                             3.6              1.5            0.4            0.2

                               Financial fixed assets
                                       Shares in Group companies                        10         2,726.4          2,832.5          300.0          308.2
                                       Other securities held as fixed assets            11             9.3                 –           1.0            0.0
                               Total financial fixed assets                                        2,735.7          2,832.5          301.0          308.2

                               Total fixed assets                                                  2,739.3          2,834.0          301.4          308.4

                               Current assets
                               Operating receivables
                                       Accounts receivable                                             0.3                 –           0.0               –
                                       Receivable from Group companies                                33.9             47.0            3.6            5.1
                                       Other current receivables                                       2.3             13.7            0.3            1.5
Parent company balance sheet

                                       Prepaid costs and accrued income                 13            36.3             24.2            4.0            2.6
                               Total operating receivables                                            72.8             84.9            7.9            9.2

                               Cash and bank                                                           0.5             69.6            0.1            7.6

                               Total current assets                                                   73.3            154.5            8.0           16.8

                               TOTAL ASSETS                                                        2,812.6          2,988.5          309.4          325.2

                                    1 EUR = 9.09 SEK
                                    1 EUR = 9.19 SEK

                                                                               44   Gunnebo Annual Report 2003
                                                                      MSEK              MSEK          MEUR   1)
                                                                                                                     MEUR   2)

     EQUITY AND LIABILITIES                             Notes      31 Dec. 2003      31 Dec. 2002   31 Dec. 2003   31 Dec. 2002

Equity                                                      14
        Restricted equity
        Share capital (21,889,974 shares each having
         a par value of SEK 10)                                          218.9            212.1           24.1           23.1
        Share premium reserve                                            214.0            139.3           23.5           15.2
        Legal reserve                                                    320.0            320.0           35.2           34.8
                                                                         752.9            671.4           82.8           73.1
        Non-restricted equity
        Retained earnings                                                454.3            534.9           50.0           58.2
        Net profit for the year                                            7.8              4.2            0.9            0.5
                                                                         462.1            539.1           50.9           58.7
Total equity                                                           1,215.0          1,210.5          133.7          131.8

Interest-bearing liabilities                                17
        Liabilities to Group companies                                 1,528.0          1,563.4          168.0          170.1
        Overdraft facilities                                               6.9             34.7            0.8            3.8
        Liabilities to credit institutions                                   –             50.0               –           5.4

                                                                                                                                  Parent company balance sheet
        Convertible loan                                    18               –             93.2               –          10.1
Total interest-bearing liabilities                                     1,534.9          1,741.3          168.8          189.4

Interest-free liabilities
        Liabilities to suppliers                                           7.4              3.5            0.8            0.4
        Liabilities to Group companies                                    42.6             21.8            4.7            2.4
        Other current liabilities                                          2.5              0.6            0.3            0.1
        Accrued costs and deferred income                   19            10.2             10.8            1.1            1.1
Total interest-free liabilities                                           62.7             36.7            6.9            4.0

TOTAL EQUITY AND LIABILITIES                                           2,812.6          2,988.5          309.4          325.2

Pledged assets                                                           None             None           None           None
Contingent liabilities                                      21         1,472.5          1,671.2          162.0          181.8

                                                                      MSEK              MSEK          MEUR   1)
                                                                                                                     MEUR   2)

     CHANGE IN PARENT COMPANY EQUITY                               31 Dec. 2003      31 Dec. 2002   31 Dec. 2003   31 Dec. 2002

Opening balance                                                        1,210.5          1,279.7          131.8          137.6
Currency differences                                                         –                 –           1.4            1.7
Net profit for the year                                                    7.8              4.2            0.9            0.5
Dividend                                                                 –84.8            –74.2           –9.3           –8.1
Conversion of convertible loan                                            81.5              0.8            8.9            0.1
Closing equity                                                         1,215.0          1,210.5          133.7          131.8

     1 EUR = 9.09 SEK
     1 EUR = 9.19 SEK

                                                   45   Gunnebo Annual Report 2003
                                           Parent company cash flow analysis
                                                                                                                MSEK           MSEK       MEUR   1)
                                                                                                                                                      MEUR   2)

                                         MSEK                                                     Notes          2003          2002       2003        2002

                                    CURRENT OPERATIONS
                                            Operating loss                                                         –46.4        –36.5       –5.1        –4.0
                                            Depreciation charged against the result                                  0.7          0.2        0.1         0.0
                                            Net financial items affecting cash flow                   23           –12.0        –31.9       –1.3        –3.4
                                            Paid taxes                                                                  –             –           –           –
                                    Cash flow from current operations
                                    before changes in working capital                                              –57.7        –68.2       –6.3        –7.4

                                    Cash flow from changes in working capital
                                            Change in operating receivables                                         27.9         14.6        3.0         1.6
                                            Change in interest-free liabilities                                      8.7         28.9        1.0         3.1
                                    Total change in working capital                                                 36.6         43.5        4.0         4.7

                                    Cash flow from current operations                                              –21.1        –24.7       –2.3        –2.7

                                    INVESTMENT ACTIVITIES
                                            Fixed capital expenditure                                     9         –2.9         –0.9       –0.3        –0.1
Parent company cash flow analysis

                                            Sales of fixed assets                                                    0.1              –      0.0              –
                                            Investments in shares in Group companies                  10           –18.9        –15.8       –2.1        –1.7
                                            Investments in securities held as fixed assets            11            –9.3              –     –1.0         0.0
                                    Cash flow from investment activities                                           –31.0        –16.7       –3.4        –1.8

                                    FINANCING ACTIVITIES
                                            Change in interest-bearing liabilities                                  67.8        161.5        7.4        17.6
                                            Dividend                                                               –84.8        –74.2       –9.3        –8.1
                                    Cash flow from financing activities                                            –17.0         87.3       –1.9         9.5

                                    Cash flow for the year                                                         –69.1         45.9       –7.6         5.0

                                    Opening liquid funds                                                            69.6         23.7        7.6         2.5
                                    Translation differences on liquid funds                                             –             –      0.1         0.1
                                    Closing liquid funds                                                             0.5         69.6        0.1         7.6

                                         1 EUR = 9.12 SEK
                                         1 EUR = 9.16 SEK

                                                                                             46   Gunnebo Annual Report 2003
                                Accounting principles

Accounting and valuation principles               Accounting treatment of                          effects into account.
The annual report is made up in accor-            associate companies                                  In certain cases, interest swaps are
dance with the Annual Accounts Act and            Companies that are not subsidiaries but in       arranged as a means of protecting the
comply with the recommendations and               which Gunnebo owns at least 20 % of the          Group against changes in interest rates.
statements of the Swedish Financial               votes or otherwise exerts a significant influ-   Differences in rates to be received or paid,
Accounting Standards Council.                     ence are stated as associate companies.          if any, on account of an interest swap are
     A number of new recommendations                 Shareholdings in associate companies are      stated as interest income of interest costs
issued by the Council came into effect in         stated using the equity interest method. This    and periodised over the term of the swap
2003. However, their introduction did not         means that the acquisition cost of shares,       agreement.
lead to any effect on the stated result or on     increased or reduced to take into account the
equity. As of 2003, depreciation of goodwill      Group’s interest in the associate company’s      Inventories
is stated among selling costs. In the past, it    result, is stated in the consolidated balance    Inventories are valued at the lower of acqui-
was stated on a separate row in the income        sheet, under financial fixed assets, after       sition value and actual value in accordance
statement. Items disturbing comparability         deduction of depreciation of goodwill and        with the first-in first-out principle. The
are not stated on a separate row as of 2003.      dividend received.                               value of inventories includes an attributable
In comparisons, the figures for 2002 have            The interest in the earnings of associate     share of indirect costs. Inventories are stated
been adjusted for purposes of comparability.      companies is stated in the income statement      net after necessary deductions for obsoles-
     The parent company’s figures for 2002        at two levels:                                   cence and internal profits.
in the comparison have also been adjusted         • The interest in the pre-tax profit is stated        Major projects of long duration on
to improve comparability.                           in the operating profit in the consolidated    behalf of outside parties are recognised in
                                                    income statement                               income on the basis of the degree of com-
Principles of consolidation                       • The interest in the associate companies’       pletion, which is determined by comparing
The consolidated financial statements relate        tax according to the full tax method is        costs incurred on the closing date with the
to Gunnebo AB and those companies in                stated in the consolidated tax cost            estimated total cost.
which the company directly or indirectly

owns shares controlling more than 50 % of         Intra-Group pricing                              Income tax
the votes, of over which the company exer-        Deliveries of goods and services between         The stated income tax comprises tax that is
cises control in some other way.                  companies in the Group are priced on             to be paid or received for the financial year
   The consolidated financial statements are      arms’-length principles.                         in question, adjustments to previous years’
made up in accordance with the purchase                                                            taxes, changes in deferred tax, and interests
method, whereby the consolidated equity           Transactions with related parties                in the tax of associate companies.
includes the parent company’s equity and          Transactions with related parties are priced          All tax liabilities and receivables are val-
subsidiary companies’ equity generated after      on arms’-length principles.                      ued at nominal amounts in accordance with
acquisition dates. The difference between                                                          the tax rules and at the tax rates that have
the acquisition value of shares in subsidiary     Receivables and liabilities in                   been decided or, if announced, will almost
companies and the market value at the time        foreign currencies                               certainly be approved.
of acquisition of the assets and liabilities in   Receivables and liabilities in foreign curren-        Tax effects relating to items in the
the subsidiaries is stated as goodwill. When      cies are valued at closing date exchange         income statement are also stated in the
deemed necessary in connection with the           rates. If currency flows have been hedged,       income statement. The tax effects of items
acquisition analysis, a transfer to reserve is    the exchange rate in the forward contract is     taken direct against equity are stated against
made to cover future restructuring costs.         used for valuing the underlying receivable       equity.
                                                  or liability.                                         Deferred tax is calculated as the differ-
Translation of accounts of foreign                                                                 ence between the value for tax purposes and
subsidiaries                                      Accounting treatment of financial                the stated value of assets and liabilities
The accounts of foreign companies includ-         instruments - hedges                             (temporary differences), and also taking loss
ed in the consolidated financial statements       For hedging of future currency flows, cur-       allowances into account.
are translated using the quoted rate              rency differences on hedging transactions             Deferred tax is also calculated on the
method, whereby all the assets and liabili-       are stated in the same period as the under-      basis of the unrealised result of loans and
ties of subsidiaries are translated into          lying flow. Any hedging premiums/dis-            forward contracts entered into to hedge the
Swedish kronor at closing date rates and all      counts are treated in the same way as inter-     net assets of foreign subsidiaries (equity
income statement items are translated at          est and periodised and stated under net          hedges). Changes in this item are taken
average rates for the year. Translation differ-   interest.                                        direct to equity.
ences arising are taken direct to equity and          To reduce the Group’s currency expo-              Deferred tax receivables are stated only
do not affect the year’s result.                  sure, the net assets of foreign subsidiaries     if there is believed to be a high probability
                                                  are hedged by loans or forward contracts in      that the amounts will be utilised against
Minority interests                                the corresponding foreign currency. In the       taxable profits within the near future.
In the consolidated income statement,             consolidated financial statements, currency
minority interests are stated in the consoli-     differences on the loans are eliminated and      Pension commitments
dated net profit. Minority interests in the       netted off against the translation differences   Provisions for pensions are calculated in
equity of subsidiaries are stated in a separate   arising in connection with the translation of    accordance with local laws and regulations.
item in the consolidated balance sheet.           foreign companies’ net assets, taking tax

                                                      47    Gunnebo Annual Report 2003
                             The Group’s companies have different         the cost. Other software of a standard char-       The Group has entered into certain finan-
                        pension systems based on local conditions         acter is stated as a cost. Capitalised expendi-    cial leasing agreements in respect of compa-
                        and practice in those countries in which          ture on acquired software is depreciated lin-      ny cars, copying machines, etc., which, in
                        they operate. The pension systems are nor-        early over its service life.                       view of their limited effect, are stated as
                        mally financed by means of payments to                                                               operational leasing.
                        insurance companies, pension funds or by          Tangible fixed assets
                        internal provisions based on actuarial calcu-     Tangible fixed assets are stated at acquisi-       Cost of borrowing
                        lations. All deficits or supplementary bene-      tion value less depreciation. The acquisition      Borrowing costs in the form of interest are
                        fits that require additional financing are        value includes costs directly attributable to      charged against the result on a regular basis
                        financed by means of payments or provi-           bringing the asset to the location and into        as and when they are incurred.
                        sions spread over a period that does not          the condition required for it to be used for          Front-end costs associated with the rais-
                        exceed the expected remaining working             its intended purpose.                              ing of long-term loans are periodised over
                        time of the employees covered by the system.          Expenditure on improving its perform-          the term of the loan agreement.
                                                                          ance over and above the original level will
                        Provisions                                        increase the stated value. Expenditure on
                        Liabilities that are uncertain in terms of        repairs and/or maintenance are stated as           Cash flow analysis
                        amount or when they will be settled are           operating cost.                                    The cash flow analysis is made up using the
                        stated as other provisions. Provisions to                                                            indirect method. The stated cash flow only
                        cover guarantee costs are based on previous       Depreciation                                       includes transactions that involve disburse-
                        years’ guarantee costs.                           Depreciation according to plan is based on         ments or receipts of cash. All transactions
                                                                          the original acquisition value of the assets       involving foreign subsidiaries are stated
                        Accounting treatment of revenue                   and is provided over the estimated                 after translation at average exchange rates
                        Revenue from the sale of goods and services       economic lives.                                    for the year. Acquisitions or sales of sub-
                        is booked when an agreement has been                                                                 sidiaries are included net under Investment
                        reached with a customer and the products          The following depreciation periods are used:       activities and do not affect the cash flow
Accounting principles

                        have been delivered or the services provided      Vehicles                               5 years     from operations. Liquid funds consist of
                        and when all significant risks have passed to     Computers                           3-5 years      cash and bank deposits.
                        the customer.                                     Other equipment and plant          5-15 years
                           Sales are stated net after value added tax     Buildings and land               20-50 years       Employee stock options
                        (VAT), discounts, returns and freight.            Goodwill                           5-20 years      Social security charges that may arise on the
                                                                          Other intangible fixed assets       3-5 years      Group’s employee stock option plans are
                        Other operating income                                                                               matched when the options are exercised in
                        Other operating income mainly comprises           Goodwill is depreciated over 20 years in the       the income statement by corresponding
                        income in the form of royalties, rent, capi-      case of strategic acquisitions with strong         gains on the hedging agreements with the
                        tal gains on sales of fixed assets, and curren-   brand names and when the benefit is esti-          credit institution. An accrued cost is stated
                        cy gains on receivables and liabilities that      mated to be at least 20 years. Goodwill aris-      in the balance sheet in respect of social
                        are operational in character.                     ing on other acquisitions is depreciated over      security charges together with a correspon-
                                                                          5-10 years. Depreciation of goodwill is stat-      ding accrued income item.
                        Product development costs                         ed in the income statement under selling
                        Expenditure on development projects is            costs.                                             Reporting by segment
                        capitalised under intangible fixed assets to                                                         Lines of business include products or serv-
                        the extent it is expected to generate finan-      Write-downs                                        ices that are exposed to risks and generate
                        cial benefits in the future.                      When there is an indication that the value         types of income that differ from those of
                           Other product development costs are            of an asset has declined, an assessment is         other lines of business. Geographical mar-
                        taken into the income statement when they         made of the asset’s recoverable value. In          kets provide products and/or services within
                        are incurred and are stated under Cost of         cases where the book value of the asset            specific economic environments that are
                        goods sold. Development costs previously          exceeds its estimated recoverable value, the       subject to risks and earn income of types
                        stated as costs in the income statement are       value of the asset is written down to its          that differ from those of units located in
                        not capitalised in later periods.                 recoverable value.                                 other economic environments.
                           Capitalised development costs are depre-                                                             In the Group, lines of business are classi-
                        ciated linearly over the period during which      Leasing                                            fied as primary segments and geographical
                        the estimated benefits are expected to            When a leasing agreement means that the            areas as secondary segments.
                        accrue to the company and from the start          financial benefits is passed on to the Group,
                        of commercial production.                         as the lessee, and the Group bears all the
                                                                          economic risks attributable to the leased
                        Acquired software                                 object ( financial leasing), the object is stat-
                        Expenditure on software that has been             ed as a fixed asset in the consolidated bal-
                        developed or extensively modified on behalf       ance sheet. The corresponding undertaking
                        of the Group, is capitalised as an intangible     to pay leasing charges in the future is stated
                        fixed asset if the software is likely after one   as a liability.
                        year to have financial benefits in excess of

                                                                               48   Gunnebo Annual Report 2003
                                 (Amounts in MSEK except where otherwise stated)

 NOTE 1          Reporting by segment

Primary segments – lines of business
                              Gunnebo             Gunnebo        Gunnebo                  Non-allocated             Total                 Non-allocated
                               Physical          Integrated      Perimeter     Gunnebo        items and         Gunnebo       Gunnebo         items and          Total
2003                           Security            Security       Security     Steelage     eliminations         Security   Engineering     eliminations        Group
External sales                 2,564               2,119            1,022         112                 –           5,817         1,144                 –        6,961
Internal sales                    63                  14               16           –               –93               –             –                 –            –
Total                          2,627               2,133            1,038         112               –93           5,817         1,144                 –        6,961

Operating profit
Profit by line of business       204                 183                28           6                7             428             87            –49             466
Goodwill depreciation              –                   –                 –           –              –59             –59             –8              –             –67
Total                            204                 183                28           6              –52             369             79            –49             399

Operating capital / Capital employed
Assets by line of business      1,085                892               546        104           1,186            3,813            948             329         5,090
Liabilities by line of business  –268               –299               –82        –24            –868           –1,541           –187              55        –1,673
Total                             817                593               464         80             318            2,272            761             384         3,417

Other information
Capital expenditure              74                   33                31           8                –             146             49              3             198
Depreciation excluding goodwill 54                    26                25           2                5             112             47              2             161
Operative cash flow             246                  199                23           2                –             470             83            –53             500

                              Gunnebo             Gunnebo        Gunnebo                  Non-allocated             Total                 Non-allocated
                               Physical          Integrated      Perimeter     Gunnebo        items and         Gunnebo       Gunnebo         items and          Total
2002                           Security            Security       Security     Steelage     eliminations         Security   Engineering     eliminations        Group
External sales                 2,520               2,082            1,084         124               –             5,810         1,166                 –        6,976
Internal sales                    77                  18                7           –            –102                 –             –                 –            –

Total                          2,597               2,100            1,091         124            –102             5,810         1,166                 –        6,976

Operating profit
Profit by line of business       170                 143                49           5               18             385             81            –40             426
Goodwill depreciation              –                   –                 –           –              –58             –58             –7              –             –65
Total                            170                 143                49           5              –40             327             74            –40             361

Operating capital / Capital employed
Assets by line of business      1,200                925               562        112           1,180            3,979            956             499         5,434
Liabilities by line of business  –306               –299               –98        –23            –984           –1,710           –173              59        –1,824
Total                             894                626               464         89             196            2,269            783             558         3,610

Other information
Capital expenditure              57                   29                29          2                 –             117             50              1             168
Depreciation excluding goodwill 54                    29                25          2                 5             115             48              1             164
Operative cash flow             228                  153                66        –12                 –             435             88            –22             501

Gunnebo’s reporting by primary segment follows the internal organi-               interest-free liabilities and provisions. Within Gunnebo Security’s divi-
sation, which consists of two main lines of business – Gunnebo                    sions it is not possible to allocate all of the capital employed. The
Security and Gunnebo Engineering. Within Gunnebo Security there                   assets employed by the divisions in their line of business consist of
are four divisions. The non-allocated costs are central costs. The                tangible fixed assets, intangible fixed assets excluding goodwill,
capital employed in the main segments, Gunnebo Security and                       inventories and accounts receivable. The corresponding liabilities
Gunnebo Engineering, consists of all assets less liquid funds and all             consist of liabilities to suppliers

Secondary segments – geographical regions
                                                     Sales                                             Assets                                     Capital expenditure
                                          2003                 2002                          2003                  2002                       2003                2002
Europe                               5,953                    5,915                       4,456                 4,724                         177                 149
North America                          369                      442                         262                   283                           9                  12
Asia                                   380                      368                         268                   319                          10                   5
Africa                                 132                      120                          45                    49                           1                   1
Australia                               88                       89                          46                    47                           1                   1
South America                           39                       42                          13                    12                           –                   –
Group total                          6,961                    6,976                       5,090                 5,434                         198                 168

The sales figures are based on the country where the customer is located. Assets and capital expenditure are reported on the basis of where
the assets are located.

                                                               49     Gunnebo Annual Report 2003
                                                                                          Note 5 cont.
         NOTE 2         Administrative costs
                                                                                          Specification of deferred tax receivables and liabilities

                                                                                          Deferred tax receivables                                 2003           2002
        Administrative costs for 2002 included structuring costs of MSEK                  Loss carry-forward                                    12.7               5.0
        13.3 relating to Gunnebo Security.                                                Non-realised effect on result of equity hedges        33.3              84.9
                                                                                          Other deductible timing differences                    4.8               1.6
                                                                                          Net off against deferred tax liabilities             –12.7                 –
         NOTE 3         Other operating income                                                                                                  38.1              91.5
                                                                                          Deferred tax liabilities
                                                                           Group          Tangible fixed assets                                 47.7              36.4
                                                                    2003           2002   Other taxable timing differences                      14.7               5.4
        Capital gains on divestment of line of business                –           12.2   Net off against deferred tax receivables             –12.7                 –
        Currency differences                                         8.2           10.4                                                         49.7              41.8
        Other operating income                                      16.4           37.0
        Total                                                       24.6           59.6   The deferred tax receivable on account of loss carry-forward is only
                                                                                          stated if these loss carry-forward are likely to be utilised to reduce
                                                                                          taxable profits within the near future. At the end of 2003, certain
         NOTE 4         Depreciation according to plan                                    subsidiary companies had total loss carry-forward of MSEK 400, for
                                                                                          which no deferred tax receivable had been taken into account, and
                                                                                          of which some MSEK 50 expire within five years. There are both tim-
        Depreciation has been charged against the operating profit as follows:            ing and other constraints that mean that these loss carry-forward
                                                                                          are not expected to be utilised.
                                                 Group               Parent company
                                          2003           2002       2003        2002
        Cost of goods sold              113.8        108.2             –              –
        Selling costs                    83.8         83.7             –              –    NOTE 6         Minority interests in profit for the year
        Administrative costs             29.9         37.0           0.7            0.2
        Total                           227.5        228.9           0.7            0.2                                                                   Group
                                                                                                                                                   2003           2002
        Selling costs include depreciation of goodwill amounting to MSEK                  Profit/loss before tax                                   –2.2           –0.6
        66.6 (65.1).                                                                      Tax                                                       0.8            0.3

                                                                                          Net profit for the year                                  –1.4           –0.3

         NOTE 5         Taxes

                                                                                           NOTE 7         Earnings per share
                                                                    2003           2002
        Actual tax                                              –80.5         –58.0
                                                                                          Earnings per share                                2003                  2002
        Deferred tax                                              1.8           6.3
        Tax in respect of interest in earnings                                            Net profit for the year, MSEK                    259.8             228.5
          of associated companies                                –1.1           0.3
        Total                                                   –79.8         –51.4       Average no of shares in issue              21,607,897      21,208,905

        Provisions have been made for estimated tax costs that are expect-                Earnings per share, SEK                          12:00             10:75
        ed to arise as a result of previous years’ tax audits at subsidiaries.
        A county court decision in June 2003 rejected deductions in con-                  Earnings per share after dilution
        nection with sales of shares. Gunnebo maintains its position, which
        has the support of leading tax experts, and has appealed to the                   Net profit for the year, MSEK                    259.8             228.5
        Administrative Court of Appeal. Should the company be refused the
        right to make the deduction by the court of final instance, this would            Interest costs, convertible
        result in an additional tax charge of some MSEK 80. No provision                  loan after tax effect                              1.3               3.2
        has been made.                                                                    Total                                            261.1             231.7

        Effective tax rate for Group                                                      Average no of shares in
        The Group’s effective tax rate, calculated as stated tax in relation to           issue after dilution                       21,889,974      21,987,861
        consolidated profit before tax, has been influenced by the following
        items:                                                                            Earnings per share after dilution, SEK           11:95             10:55
        Nominal tax rate in Sweden                                                  28    No dilution effect has been calculated for the outstanding employee
        Difference in effective tax rates of foreign subsidiaries                         stock options as the average listed price of the shares during the
          and losses of foreign subsidiaries                                         2    year was SEK 151.90. The subscription price for the option
        Non-deductible depreciation of goodwill                                      5    programme is SEK 152.00.
        Net effect of loss carry-forward and items not
          related to net profit for the year                                       –13
        Other taxes, etc.                                                            1
        Group’s effective tax rate                                                  23

                                                                    50     Gunnebo Annual Report 2003
                                                                                   Note 9 cont.
 NOTE 8          Intangible fixed assets
                                                                                   Depreciation according to plan
                                                                                   Opening depreciation according to plan                                   3.0
                                                                                   Sales/retirements                                                       –0.1
                                                                           fixed   Depreciation during the year                                             0.7
Group                                                  Goodwill          assets    Closing accumulated depreciation according to plan                       3.6
Acquisition value
Opening acquisition value                             1,269.7          132.5       Residual value according to plan                                         3.6
Capital expenditure                                         –           45.8
Acquisitions                                             46.9            0.1
Sales/divestments                                        –2.1           –6.3       NOTE 10         Shares in subsidiaries
Translation differences                                 –16.5           –1.2
Closing accumulated acquisition value                 1,298.0          170.9
                                                                                                                   No. of         % of      % of           Book
                                                                                                                   shares       capital    votes           value
Depreciation according to plan                                                     E A Rosengrens AB           251,000            100      100        288.2
Opening depreciation according to plan                  277.5           75.2       Gunnebo Troax AB             10,000            100      100        253.1
Sales/divestments                                        –2.1           –4.5       Fichet-Bauche SA          5,540,112            100      100        468.0
Depreciation during the year                             66.6           11.6       Gunnebo Treasury SA           7,200            100      100      1,233.0
Translation differences                                  –2.8           –1.0       Gunnebo Entrance
Closing accumulated                                                                 Control AB                 224,000            100      100             22.4
depreciation according to plan                          339.2           81.3       Gunnebo Perimeter
                                                                                    Protection AB                5,500            100      100              1.6
Residual value according to plan                        958.8           89.6       Gunnebo Holding ApS           1,000            100      100             27.5
                                                                                   Steelage Industries Ltd   2,965,989             95       95             85.3
The greater part of the year’s investments in other intangible fixed               Gunnebo Physical
assets consist of capitalised product development projects of MSEK                  Security AB                    100            100      100          0.1
68.5 (36.5). The year’s investments amounted to MSEK 33.0 (28.0)                   Gunnebo Industrier AB       499,799            100      100        347.0
                                                                                   Gunnebo Service AB              500            100      100          0.1
                                                                                   Hidef Industri AB               500            100      100          0.1
 NOTE 9          Tangible fixed assets                                             Total                                                            2,726.4

                             Buildings   Machinery   Equipment, Fixed assets       The year’s investments amount to MSEK 18.9 and relate to a share

                                   and        and      tools and         under     issue by Steelage Industries Ltd. The value of the shares in Gunnebo
Group                             land       plant   installations construction
                                                                                   Troax AB, Steelage Industries Ltd and Gunnebo Physical Security
Acquisition value                                                                  AB was written down by a total amount of MSEK 125.2, of which
Opening acquisition value     793.5      1,234.9        539.2           48.1       MSEK 0.2 related to a direct write-down of a shareholder contribu-
Capital expenditure             8.1         81.0         50.0           12.8
                                                                                   tion. The accumulated acquisition value of shares in subsidiaries
Acquisitions                      –         11.9          0.6              –
                                                                                   amounts to MSEK 2,886.7.
Sales/retirements              –5.9        –29.7        –36.0              –
                                                                                      The statutory specification of company registration numbers and
Reclassifications                 –          1.4            –              –
                                                                                   registered offices of all subsidiary companies in the Group may be
Translation differences       –22.2        –43.1         –8.5           –1.5
                                                                                   obtained from Gunnebo AB’s head office in Göteborg.
Closing accumulated
acquisition value             773.5      1,256.4        545.3           59.4
                                                                                   NOTE 11         Financial fixed assets
Depreciation according to plan
Opening depreciation
according to plan            283.0         881.9        410.0                 –                                                                    Group
                                                                                                                                           2003            2002
Sales/retirements             –3.4         –20.4        –36.1                 –
                                                                                   Deferred tax receivables                                38.1        91.5
Depreciation during the year  26.1          77.7         45.5                 –
                                                                                   Shares in associated companies 1)                       19.7        23.2
Translation differences       –6.0         –28.3         –6.0                 –
                                                                                   Other securities held as fixed assets 2)                12.0         2.6
Closing accumulated depre-
                                                                                   Other long-term receivables                             11.4        13.6
ciation according to plan 299.7            910.9        413.4                 –
                                                                                   Total                                                   81.2       130.9
Residual value
                                                                                   1) Specification of shares
according to plan             473.8        345.5        131.9           59.4                                                      % of      % of           Book
                                                                                   in associated companies                      capital    votes           value
                                                                                   Doetinchem C.V., Netherlands                     99       45             2.8
Specification, buildings and land
                                                                                   FBH Fichet Ltd, Great Britain                    49       49             5.2
Group                                                      2003          2002
                                                                                   Chubb Malaysia Sdn Bhd, Malaysia                 30       30             6.1
Residual value according to plan, buildings             393.2          428.0
Residual value according to plan, land                   80.6           82.5       Ritzenthaler UK                                  45       45             5.6
Total residual value according to plan                  473.8          510.5       Total Group                                                             19.7

Swedish property                                          2003           2002      The statutory specification of company registration numbers and
Residual value according to plan, buildings             107.8          110.5       registered offices of associate companies may be obtained from
Residual value according to plan, land                   28.9           28.9       Gunnebo AB’s head office in Göteborg.
Assessed value, buildings                                55.2           55.1
                                                                                   2) Specification of other securities held as fixed assets
Assessed value, land                                     13.0           12.7
                                                                                                                 No. of         % of       % of            Book
                                                                                                                 shares       capital     votes            value
Parent company                                                      Equipment
                                                                                   Fingerprint Cards AB      654,000          10.3        7.2               9.3
Acquisition value
                                                                                   Other holdings                                                           2.7
Opening acquisition value                                                 4.5
                                                                                   Total                                                                   12.0
Capital expenditure                                                       2.9
Sales/retirements                                                        –0.2      The shares in Fingerprint Cards AB are owned by the parent com-
Closing accumulated acquisition value                                     7.2      pany. Their closing market capitalisation was MSEK 19.6.

                                                          51      Gunnebo Annual Report 2003
                                                                                                    Note 14 cont.                                                    Non-
        NOTE 12         Inventories                                                                                                   Share        Restricted   restricted
                                                                                                    Group                            capital        reserves     reserves             Total

                                                                                                    Closing balance 31 Dec 2002 212.1                469.6        964.8        1,646.5
                                                                      2003             2002         Currency differences not stated
        Raw materials                                              311.4          307.5               in the income statement         –                   –       –32.9          –32.9
        Work in progress                                           263.8          300.8             Net profit for the year           –                   –       259.8          259.8
        Finished goods                                             525.9          556.1             Dividend                          –                   –       –84.8          –84.8
        Work in progress on third-party account                     24.7           41.1             Conversion of convertible loan 6.8                 74.7           –           81.5
        Less advance payments from customers                       –65.3         –115.3             Transfer between non-restricted
        Total                                                    1,060.5        1,090.2               and restricted capital          –               17.4        –17.4              –
                                                                                                    Equity 31 Dec 2003            218.9              561.7      1,089.5        1,870.1

                                                                                                    The currency differences relate to the translation using the daily rate
        NOTE 13         Prepaid costs and accrued income                                            method of the financial reports of foreign businesses. The year’s cur-
                                                                                                    rency differences were reduced by MSEK 165.2 by means of cur-
                                                 Group                 Parent company               rency hedging. The accumulated translation differences at 31
                                        2003             2002         2003       2002               December 2003 amounted to a deficit of MSEK 81.7 (deficit 48.8).
        Accrued interest                33.4             18.2        33.4              17.6
                                                                                                                                        Share                         Non-
        Prepaid rent                     7.9              7.4         0.3                 –                                 Share    premium            Legal    restricted
        Other items                     56.9             49.5         2.6               6.6         Parent company         capital    reserve         reserve       equity            Total
        Total                           98.2             75.1        36.3              24.2         Closing balance
                                                                                                    31 Dec 2001            212.0     138.6            320.0       609.1        1,279.7
                                                                                                    Net profit for
                                                                                                      the year                  –              –            –       4.2            4.2
        NOTE 14         Equity
                                                                                                    Dividend                    –              –            –     –74.2          –74.2
                                                                                                    Conversion of
                                                                                                     convertible loan        0.1         0.7                –            –            0.8
                                        Share      Restricted     restricted
        Group                          capital      reserves       reserves            Total        Equity
        Closing balance                                                                             31 Dec 2002            212.1     139.3            320.0       539.1        1,210.5
          31 Dec 2001                 212.0          479.4         822.0        1,513.4
        Currency differences                                                                        Net profit for

          not stated in the                                                                           the year                  –              –            –       7.8            7.8
          income statement                   –             –       –22.0          –22.0             Dividend                    –              –            –     –84.8          –84.8
        Net profit for the year              –             –       228.5          228.5             Conversion of
        Dividend                             –             –       –74.2          –74.2              convertible loan        6.8       74.7                 –            –        81.5
        Conversion of                                                                               Equity
          convertible loan               0.1              0.7             –             0.8         31 Dec 2003            218.9     214.0            320.0       462.1        1,215.0
        Transfer between
          non-restricted and
          restricted capital              –          –10.5          10.5              –             NOTE 15         Pension provisions
        Equity 31 Dec 2002            212.1          469.6         964.8        1,646.5
                                                                                                                                                                      2003            2002
                                                                                                    FPG/PRI pensions                                              120.9          116.6
                                                                                                    Other pensions                                                 55.4           87.5
                                                                                                    Total                                                         176.3          204.1

        NOTE 16         Other provisions

                                                                Structuring                                                                                  Other
        Group                                                       reserve                    Disputes       Guarantees             Taxes               provisions                   Total
        Opening balance                                           143.9                          49.6               23.2             14.7                    60.8                292.2
        Provisions during the year                                 10.5                          13.5               12.2              0.1                     7.2                 43.5
        Utilised during the year                                 –101.3                         –15.6               –9.2             –0.7                   –20.0               –146.8
        Re-entered during the year                                    –                          –2.4               –1.3             –1.3                    –6.8                –11.8
        Reclassified as accrued costs etc.                            –                             –                  –                –                   –13.4                –13.4
        Currency differences                                       –1.8                          –0.6               –0.5                –                    –1.2                 –4.1
        Closing balance                                            51.3                          44.5               24.4             12.8                    26.6                159.6

        The closing structuring reserve is expected to be utilised in 2004. The remaining reserves are expected to be utilised over the coming five

                                                                     52        Gunnebo Annual Report 2003
NOTE 17          Interest-bearing liabilities                                 NOTE 21          Contingent liabilities

Loans mature or will be renewed as follows:                                                                             Group                Parent company
                                                Group     Parent company                                         2003            2002       2003       2002

2004                                         91.1               1,534,9       Guarantees                           –             –       1,472.5    1,671.2
2005                                        130.0                     –       Performance guarantees etc        98.6         105.1             –          –
2006                                          7.5                     –       Taxes                             80.9             –             –          –
2007                                          2.0                     –       Pension commitments              129.3          50.0             –          –
2008 and later                            1,134.2                     –       Total                            308.8         155.1       1,472.5    1,671.2
Total                                     1,364.8               1,534,9
                                                                              The performance guarantees are mainly guarantees to customers for
The Group has a MEUR 200 syndicated loan agreement maturing in                the fulfilment of undertakings. Taxes refers to a County Court deci-
2008. The loan has an agreed interest spread of 0.55% at the com-             sion of June 2003 rejecting the company’s deduction on the sale of
pany’s present debt-equity ratio. Over and above this, there are two          shares (see Note 5). Pension commitments refers to the difference
long-term credit agreements for a total amount of MSEK 500 running            between pension commitments based on RR29, which comes into
until 2005 and 2008 respectively. The Group has not pledged any col-          effect in 2004 and commitments based on previous principles,
lateral for these credits but has provided the customary covenants.           which followed local rules in each country. As of 2004, the entire
The Group’s unutilised lines of credit amount to MSEK 1,385.                  pension commitment will be stated as a liability. The non-recurring
                                                                              effect of this change will be taken, after tax effects, direct against
                                                                              equity in accordance with RR5 Accounting treatment of changes in
NOTE 18          Convertible loans                                            accounting principles.

Conversions during the year amounted to MSEK 81.5. The loan
matured in June 2003, after which the remaining outstanding loan              NOTE 22          Leasing
was repaid.
                                                                              Leased assets
                                                                              Future payment commitments for leasing contracts have the follow-
NOTE 19          Accrued costs and deferred income                            ing breakdown by year:
                                                                                                                                 Group        Parent company
                                                                              2004                                           102.5                         2.0
                                        Group            Parent company
                                 2003           2002    2003        2002
                                                                              2005                                            77.7                         1.9

Holiday pay liability          134.4        128.5        2.7            2.1   2006                                            53.9                         0.9
Social security charges         67.0         55.0        2.1            1.5   2007                                            34.1                         0.2
Accrued wages and salaries      73.6         72.8        2.7            1.4   2008                                            20.0                         0.1
Deferred income                 63.2         24.3          –              –   2009 and later                                  21.3                           –
Accrued interest                 2.2          8.9        1.1            2.8                                                  309.5                         5.1
Other items                    113.5        184.7        1.6            3.0
Total                          453.9        474.2       10.2           10.8   The year’s cost in the Group of leased assets amounted to
                                                                              MSEK 105.7 (92.4). The parent company’s costs amounted to
                                                                              MSEK 1.8 (1.6).

NOTE 20          Pledged assets
                                                                              NOTE 23          Net financial items affecting cash flow

                                                        2003           2002                                              Group               Parent company
                                                                                                                 2003            2002       2003       2002
In respect of liabilities to credit
                                                                              Interest received                  7.1           8.4          9.1        13.9
institutions/overdraft facilities
                                                                              Interest paid                    –88.4         –98.9        –41.7       –64.3
Floating charges                                        22.6           33.8
                                                                              Other items affecting
Property mortgages                                      25.8           31.9
                                                                              cash flow                         –2.2          –1.9         20.6        18.5
                                                        48.4           65.7
                                                                              Total                            –83.5         –92.4        –12.0       –31.9
Other pledged assets
Floating charges                                         1.9            1.8
Total pledged assets                                    50.3           67.5
                                                                              NOTE 24          Acquisition and divestments of subsidiaries

                                                                              Value of acquired assets and liabilities                             Group
                                                                                                                                            2003           2002
                                                                              Fixed assets                                                –59.5       –67.5
                                                                              Working capital                                              –0.1        –1.4
                                                                              Liquid funds                                                 –5.9       –19.3
                                                                              Provisions for taxes/minority interests                      –2.1        –2.2
                                                                              Interest-bearing provisions and liabilities                   5.3         5.9
                                                                              Total amount paid                                           –62.3       –84.5
                                                                              Liquid funds of acquired companies                            5.9        19.3
                                                                              Effect on Group’s liquid funds                              –56.4       –65.2

                                                        53     Gunnebo Annual Report 2003
                                                                                                             Salaries and other benefits and remuneration of
        NOTE 25           Employees
                                                                                                             senior executives in the Group.                                         Other

                                                                                                                                     Salary/                Other       Pension      remu-
        Group                                                                      2003            2002      SEK ’000              Board fee    Bonus     benefits          cost   neration      Total

        Average number of employees                                                                          Chairman                320           –         –             –          52         372
        Sweden                                                                      941             989      President             3,672       1,491       182         1,967           –       7,312
        Australia                                                                    56              49      Other senior
        Austria                                                                      10               9        executives
        Belgium                                                                      87              89      (10 individuals)    15,636        2,631      1,085        4,990           –      24,342
        Brazil                                                                       22              17      Total               19,628        4,122      1,267        6,957          52      32,026
        Canada                                                                      201             208
        China/Hong Kong                                                               1               1      The calculation of bonuses is largely based on the result and cash
        Czech Republic                                                               12               6      flow. Other benefits relate mainly to right to a company car.
        Denmark                                                                     158             139
        Finland                                                                     171             175      Pensions and severance pay
        France                                                                    1,588           1,514      The retirement age of the President is 60. The President has a premium-deter-
                                                                                                             mined pension insurance. Of the parent company’s pension costs, SEK
        Germany                                                                     507             457      1,967,000 (1,652,000) relate to the President. Between 1 September 2001 and
        Great Britain                                                               482             557      the President’s retirement age (60), the pension cost amounts to 55% of his
        Hungary                                                                       3               2      salary, excluding bonus. In the event of the President’s contract of employ-
                                                                                                             ment being terminated by the company he is entitled to one year’s notice and
        India                                                                     1,123           1,151
                                                                                                             severance pay corresponding to one year’s salary, any salary received from
        Indonesia                                                                 1,161           1,123      another employer being netted off. Other senior executives are entitled to up to
        Ireland                                                                      20              18      one year’s notice and severance pay for up to one year in the event of their
        Italy                                                                       115             108      contracts being terminated by the company. Pension benefits broadly corre-
                                                                                                             spond to the general pension plan. However, in one case the retirement age is
        Lebanon                                                                       1               2      lower than 65.
        Luxembourg                                                                    7               7
        Norway                                                                      155             123      Employee stock option programme
        Poland                                                                      126             119      The Annual General Meeting in 2002 resolved in favour of introducing an
        Portugal                                                                     80              80      employee stock option programme (ESOP) for some 50 senior managerial per-
                                                                                                             sonnel within the Group.
        Singapore                                                                     5               2         In the event of full exercise, the ESOP will involve the issue of 1,000,000 new
        South Africa                                                                257             293      shares corresponding to an increase of 4.6% in the issued shares and votes.
        Spain                                                                       483             488      The subscription price was 110% of the average listed price of Gunnebo’s
        Switzerland                                                                  42              42      shares during a certain period around the time of the decision, namely SEK

                                                                                                             152 per share.
        The Netherlands                                                             311             331         The employees will be allotted a maximum of 750,000 options and the
        UAE                                                                           2               2      remaining 250,000 will be reserved to cover the social costs of the programme
        USA                                                                         146             149      payable by the company. The allotment of options per person is 36,000 to the
        Total outside Sweden                                                      7,332           7,261      President, 24,000 to other members of Group management, and 12,000 to
                                                                                                             other senior management personnel. They are not transferable, and conditional
        Total average no. of employees in the Group                               8,273           8,250      upon the individual concerned remaining in the company’s employ. The options
                                                                                                             have been allotted free of charge.
        Of the average number of employees in the Group, 1,256 (1,174) were female.                             So far, 612,000 options have been allotted to 39 individuals. Based on the
        In 2003, the average number of parent company employees was 17 (14), of                              closing price of the shares, the total value of these allotted options is MSEK
        whom 7 were female (5). Women occupied 2% of the senior management                                   16. No amount has been charged against the result. A sum of MSEK 5 is stat-
        positions in the Group. There are no women on the Board of the parent com-                           ed in the balance sheet as an accrued cost and the corresponding amount is
        pany or occupying senior management positions.                                                       stated as accrued income.
                                                                                                                Up to one-third of 75% of the allotted options can be used to acquire shares
        Sick leave within the Parent Company                                                                 in 2004 at the earliest, up to another one-third in 2005 and the final third in
        The rate of long-term sick leave was 5.2 % (5.7) and of short-term sick leave                        2006. The remaining 25% can only be used if the Group achieves and average
        was 0.2 % (1.3).                                                                                     increase in its earnings per share of 8% per year as of 2002, in which case up
                                                                                                             to one-third can be used to acquire shares as of 2004. Each option entitles the
                                                                                                             holders to subscribe to one new share in the company at a price of SEK152
        Wages, salaries, other remuneration and
                                                                                                             per share by no later than 30 April 2007.
        social security charges
                                             2003                                       2002
                              Wages and       Social    Of which    Wages and           Social    Of which
                                    other    security   pension           other        security    pension     NOTE 26          Auditors’ remuneration
                             remuneration    charges       costs   remuneration   contributions      costs

        Parent company    20.1               13.6        5.8          15.4            8.2           3.4                                                    Group                    Parent company
        Subsidiary     1,789.0              532.1       83.9       1,769.6          528.6          81.0                                            2003              2002          2003       2002
        Group total    1,809.1              545.7       89.7       1,785.0          536.8          84.4      Auditing                               7.0              6.8           0.6           0.5
                                                                                                             Other assignments                      4.4              6.0           1.2           1.9
        Of the above amount, a total of MSEK 98.1 (93.3) was paid in salaries and
        other remuneration to Boards and presidents within the Group, of which
        MSEK 9.6 (8.4) consists of bonuses. Of the Group’s pensions costs, MSEK
                                                                                                              NOTE 27           Transactions with related parties
        14.3 (13.8) relates to board members and Presidents within the Group.
          Remuneration to the Board of the parent company amounted to SEK
        1,070,000 (950,000). Salary and other remuneration paid to the President                             Of the parent company’s invoiced sales 93% (87) related to Group companies,
        amounted to SEK 5,163,000 (3,692,000), of which SEK 1,491,000 (632,000)
                                                                                                             while purchases from Group companies accounted for 23% (14) of the total. A
                                                                                                             royalty of MSEK 1.3 (0.9) was received from Chubb Malaysia Sdn, an associ-
        was bonus.                                                                                           ated company. A consulting fee of SEK 52,000 (66,000) was paid to Holtback
          The statutory specification of wages, salaries and other remuneration, and                         och Partner AB, which is owned by Roger Holtback, Gunnebo’s chairman.
        social security charges, by country may be obtained from Gunnebo AB’s head                           Over and above these, there were no other transactions with associates.
        office in Göteborg. A complete annual report may also be obtained from the
        National Patent and Registration Office.

                                                                                   54      Gunnebo Annual Report 2003
                         Proposed treatment of
                        unappropriated earnings
The consolidated non-restricted equity as stated in the consoli-    The Board proposes that the above amount be dealt with as fol-
dated balance sheet amounts to MSEK 1,089.5. No transfer to         lows:
restricted reserve is required.
  The following unappropriated earnings of the parent compa-
ny are at the disposal of the Annual General Meeting:
                                                                    To be paid out to shareholders by way
Retained earnings from 2002                       454.3 MSEK        of dividend of SEK 4.50 per share                 98.5 MSEK
Net profit for the year                             7.8 MSEK        To be carried forward                            363.6 MSEK
                                                  462.1 MSEK                                                         462.1 MSEK
 The income statements and balance sheets will be submitted to the Annual General Meeting to be held on 29 March 2004 for adoption.

                                                     Göteborg, 4 February 2004

                                                           Roger Holtback

       Martin Svalstedt          Rolf Ekedahl              Nils-Olov Jönsson              Mikael Jönsson        Sten Langenius

                                  Ulf Jonsson            Claes-Göran Karlsson             Göran Törnvall

                                                                                                                                       Report of the auditors
                                                          Bjarne Holmqvist
                                                          President and CEO

                            Report of the auditors
                                       To the Annual General Meeting of Gunnebo AB (publ),

We have examined the annual report, the consolidated financial      decisions, measures and circumstances in the company in order
statements, the accounting records and the administration by        to determine whether any member of the Board or the President
the Board and the President of Gunnebo AB (publ) for the 2003       has become liable to pay compensation to the company.
financial year. The Board and the President have responsibility        We have also examined whether any member of the Board or
for the accounting records and the administration of the compa-     the President has acted in any other way in contravention of the
ny. Our responsibility is to express our opinion on the annual      Swedish Companies Act, the Annual Accounts Act or the com-
report, the consolidated financial statements and the administra-   pany’s articles. We consider that our audit provides reasonable
tion of the company on the basis of our audit.                      grounds for our statements below.
   Our audit was performed in accordance with generally accept-       The annual report and the consolidated financial statements
ed auditing standards in Sweden. This means that we planned         are made up in accordance with the Annual Accounts Act and
and carried out the audit in order to assure ourselves, to a rea-   thus provide a true and fair picture of the result and financial
sonable degree, that the annual report and the consolidated         position of the parent company and the Group in accordance
financial statements are free from material error. An audit         with generally accepted accounting practice in Sweden.
involves examining a selection of the documents in support of         We recommend that the Annual General Meeting adopt the
amounts and other information in the accounts. An audit also        parent company’s income statement and balance sheet, and the
involves testing the accounting principles and their application    consolidated income statement and the consolidated balance
by the Board and the President, and making an assessment of         sheet, that the parent company’s unappropriated earnings be
the totality of the information in the annual report and the con-   dealt with in accordance with the proposal in the Report of the
solidated financial statements. As a basis for our statement con-   Directors, and that the members of the Board and the President
cerning discharge from liability we have examined significant       be discharged from liability for the financial year.

                                                     Göteborg, 4 February 2004
                                                     PricewaterhouseCoopers KB
        Ingvar Pramhäll, Principal auditor                                                              Bror Frid
           Authorised public accountant                                                        Authorised public accountant
                                                  55   Gunnebo Annual Report 2003
                                                                   Members of the Board

                                 Roger Holtback, born 1945                      Nils-Olov Jönsson, born 1934               Mikael Jönsson, born 1963                     Sten Langenius, born 1934
                                 Chairman. Chairman of Holtback Invest AB,      Elected to the board in 1994.              Elected to the board in 2000.                 Company Director. Elected to the board
                                 subsidiary and associate companies.            Other board appointments:                  Other board appointments:                     in 1995.
                                 Elected to the board in 1993.                  Executive chairman of Vätterledens         Vätterledens Invest AB and subsidiaries,      Other board appointments: Nordic Shelter
                                 Other board appointments:                      Invest AB. Member: Most Vätterleden        Ksg Systems AB, Wipcore AB.                   Solutions-Group OY, IWS International
                                 Chairman of Capio AB, Song Networks            subsidiaries, and Kopparbergs              Shareholding: 46,000                          Inc., Volvo Construction Equipment Corp.
                                 Holding AB, S.A.T.S. Holding AB, the Swedish   Bryggerier. President of AB N.O.                                                         AB Volvo Penta, and Swemed LAB
                                 Trade Fair Foundation and Nordic Capital       Jönsson.                                                                                 International AB
                                 Review Committee. Member: Holland America      Shareholding: 5,080,228.                                                                 Shareholding: 8,000.
                                 Investment Corp (USA), Stena Group Council.
                                 Shareholding: 80,000.
Members of the Board

                                   Rolf Ekedahl, born 1949                      Martin Svalstedt, born 1963                  Bjarne Holmqvist, born 1945                 Claes-Göran Karlsson, born 1958
                                   President of Rörvik Timber AB.               President Stena Adactum AB. Elected          President and CEO Gunnebo AB.               Representative of the employees.
                                   Elected to the board in 1993.                to the Board in 2003.                        Elected to the board in 1993.               Elected to the board in 2001. Employed
                                   Other board appointments:                    Other board appointments:                    Other board appointments:                   by Rosengrens Produktions AB.
                                   Member: INAC AB, Håells AB, ROL              Chairman of Gislaved Folie AB.               Chairman of Chalmers Foundation for
                                   Inredningar AB, Arcam AB,                    Member: Ballingslöv International AB.        Industrial Technique.
                                   Backemarks Grafiska AB and                                                                Member: Hogia AB
                                   Novmans AB.                                                                               Shareholding: 265,667
                                   Shareholding: 6,000.                                                                      Stock options: 36,000


                       Ulf Jonsson, born 1957               Bo Anders Hansson, born 1954                   Göran Törnvall, born 1946                        Bror Frid, born 1957              Ingvar Pramhäll, born 1942,
                       Representative of the employees.     Representative of the employees,               Representative of the employees.                 Authorised public accountant      Principal auditor
                       Elected to the board in 1998.        deputy member, elected to the                  Elected to the board in 1996.                                                      Authorised public accountant
                       Employed by Gunnebo                  board in 1999.                                 Employed by Gunnebo Industrier AB.
                       Industrier AB.                       Employed by Gunnebo Protection AB.

                                                                                                 56     Gunnebo Annual Report 2003

                                                      Torbjörn Browall                     Christian Selosse                      Christer Lenner
                                                      Born 1962                            Born 1945                              Born 1947
                                                      Head of Gunnebo Physical             Head of Gunnebo Integrated             Head of Gunnebo Engineering
                                                      Security                             Security                               Employed: 1985
                                                      Employed: 2002                       Employed: 1997                         Shareholding: 200
                                                      Stock options: 24,000                Stock options: 24,000                  Stock options: 24,000

Bjarne Holmqvist
Born 1945
President and CEO,
Gunnebo AB.
Employed: 1993

Shareholding: 265,667
Stock options: 36,000

                          Philip Mozes                           Stefan Andersson                  Deepak Khetrapal                  Lennart Gustavsson
                          Born 1954                              Born 1964                         Born 1955                         Born 1945
                          Head of Gunnebo Perimeter              Head of Gunnebo Troax             Head of Gunnebo Asia Pacific      Chief Financial Officer
                          Protection                             Employed: 2002                    Employed: 1994                    Employed: 1993
                          Employed: 1996                         Shareholding: 200                                                   Shareholding: 35,000
                          Shareholding: 1,359                    Stock options: 24,000                                               Stock options: 24,000
                          Stock options: 24,000

                                                                                                   OTHER SENIOR COMPANY OFFICERS

Janerik Dimming                Ulf Johnsson                       Lars Wallenberg                       Torbjörn Olsson                   Björn Strömberg
Born 1945                      Born 1949                          Born 1951                             Born 1962                         Born 1960
Director of Information        Human Resources Director           General Counsel,                      Group Treasurer                   Group Controller
Employed: 2001                 Employed: 2002                     Mergers & Acquisitions                Employed: 2002                    Employed: 1995
Shareholding: 600              Shareholding: 400                  Employed: 2002                        Shareholding: 1,000               Shareholding: 2,000
Stock options: 24,000          Stock options: 24,000              Shareholding: 10,390                  Stock options: 12,000             Stock options: 12,000
                                                                  Stock options: 24,000

                                                          57   Gunnebo Annual Report 2003
                                                    Gunnebo Worldwide

                    Parent Company                                Gunnebo Physical Security                    Gunnebo Integrated Security

                    Gunnebo AB                                    Gunnebo Physical Security AB                 Fichet-Bauche SA
                    P. O. Box 5181                                P. O. Box 5321                               Boîte Postale 11
                    SE-402 26 GÖTEBORG                            SE-402 27 GÖTEBORG                           FR-78141 VELIZY Cedex
                    Sweden                                        Sweden                                       France
                    Office: Drakegatan 5                          Tel: +46-31 749 90 50                        Tel: +33-1 34 65 65 34
                    Tel: +46 31 83 68 00                          Fax: +46-31 749 90 60                        Fax: +33-1 34 65 39 47
                    Fax: +46 31 83 68 10                          Email:                       Email:
                                          Divisional management:                       Divisional management:
                                                                  Torbjörn Browall, Divisional President       Christian Selosse, Divisional President
                    Bjarne Holmqvist, President and CEO           Bertil Gunnesson, Finance/Control            Olivier Miaux, Accounting
                    Lennart Gustavsson, Chief Financial Officer   David Barry, Personnel                       Paul Heilbronner, Personnel
                    Lars Wallenberg, General Counsel, Mergers &   Sven Boëthius, Safes                         Olivier Bianchi, Marketing
                      Acquisitions                                Peter Leicher, Bank automation               Lars Proos, Entrance Control Systems
                    Ulf Johnsson, Human Resources                 Gunnar Konkell, Retail automation            Jean Marie Betermier, Interlocking Doors
                    Janerik Dimming, Group Communication          Jean-Louis Bayard, Production                Laurent Mussilier, Electronic security
                                                                  Tom O’Doherty, Sales America                   systems and surveillance centres
                                                                  Jay Wright, Sales Northern &
                                                                    Eastern Europe
                                                                  Fred Mertens, Sales Southern Europe,
                                                                    Middle East and Africa
Gunnebo Worldwide

                                  Gunnebo Security          Gunnebo Head Office          Gunnebo Engineering        Jointly owned companies

                                                                      58   Gunnebo Annual Report 2003
Gunnebo Perimeter Security               Gunnebo Asia Pacific                     Gunnebo Engineering

Gunnebo Perimeter Protection             Gunnebo Asia Pacific                     Gunnebo Industrier AB
Postbus 18                               907, Maker Chambers V                    SE-590 93 GUNNEBO
NL-2210 AA NOORDWIJKERHOUT               Nariman Point                            Sweden
The Netherlands                          IN-MUMBAI 400 010                        Tel: +46 490 890 00
Tel: +31 252 377 804                     Tel: +91-22 5606 4020                    Fax: +46 490 892 14
Fax: +31 252 341 419                     Fax: +91-22 5637 4738                    Email:
Email:        E-post:
                                                                                  Divisional management:
Divisional management:                   Divisional management:                   Christer Lenner, Divisional President
Philip Mozes, Divisional President       Deepak Khetrapal, Divisional President   Per Olin, Accounting
Fredrik Granat, Accounting               Naresh Hosangady, Gunnebo Steelage       Robert Hermans, Lifting
Ulf Johnsson, Personnel                  William Mouat, PT Indolok Bakti Utama    William Shenloogian, Blocks
                                         Elsie Tay, Gunnebo Security Singapore    Martin Jonsson, Fastening
Gunnebo Troax AB                                                                  Anders Stigvall, Non Skid
P. O. Box 89
SE-330 33 HILLERSTORP                    Divisionsledning:
Sweden                                   Deepak Khetrapal, divisionschef
Tel: +46-370 828 00                      Vemuri Sridhar, ekonomi
Fax: +46-370 824 86
Email:                     Uday Kulkarni, försäljning och marknad

Divisional management:

                                                                                                                          Gunnebo Worldwide
Stefan Andersson, Divisional President
Andreas Green, Accounting
Ulf Johnsson, Personnel
Lasse Siirtola, Projects
Lars-Göran Nilsson, Purchasing
Morgan Barrington, Marketing
Åke Berg, Technology
Anders Carlsson, Logistics
Nebojsa Obradovic, Production

                                             59   Gunnebo Annual Report 2003
                    Country                    Company / Business unit                    President

                              Australia        Gunnebo Chain & Lifting Pty Ltd            Colin Saad
                                               Gunnebo Security Pty Ltd                   Daniel Turner

                              Austria          Gunnebo Troax GmbH                         Erich Reuschel

                              Belgium          Fichet Security SA                         Jean-Pierre Deschuyter
                                               Gunnebo Troax NV                           Jean-Pierre Deschuyter

                              Brazil           Gunnebo do Brasil Ltda                     Stefan Lundqvist

                              Canada           Gunnebo Security Inc.                      Tom O’Doherty

                              China            Gunnebo Rosengrens Asia Pacific Ltd        Elsie Tay
                                               Gunnebo Entrance Control                   Kenneth Ong

                              Czech Republic   Leicher-Fest s r o                         Radek Zykmund

                              Denmark          Gunnebo Protection A/S                     Jens Bollerup
                                               Troax A/S                                  Claus Rolsted
                                               Rosengrens-Seifert A/S                     Henning Dalsgaard

                              Finland          Troax Oy                                   Sakari Pajakoski
                                               OFA Oy Ab, Jokioinen                       Heikki Helminen
                                               OFA Oy Ab, Loimaa                          Jouni Nurminen
                                               Gunnebo Polaraidat Oy                      Marko Heiskanen
Gunnebo Worldwide

                              France           Chubb Safes SA                             Dominic Vomscheid
                                               Eurosecur SARL                             Jean Pierre Seys
                                               Fichet Automation SA                       Olivier du Portal
                                               Fichet-Bauche SA                           Christian Selosse
                                               Fichet Sécurité Electronique SAS           Laurent Mussilier
                                               Fichet Sécurité Physique SAS, Bazancourt   Francois Moutte
                                               Fichet Sécurité Physique SAS, Paris        Olivier du Portal
                                               Fichet-Bauche Télésurveillance             Jean Marc Pretet
                                               Gunnebo Entrance Control SARL              Eric Galinha
                                               Gunnebo Wego SARL                          Pascale Müller
                                               Haffner                                    Dominic Vomscheid
                                               Hygiaphone SARL                            Yves Fazilleau
                                               Ritzenthaler SA                            Jean Marie Betermier
                                               Troax SA                                   Rob Markus

                              Germany          Garny Sicherheitstechnik GmbH              Günther Schönknecht
                                               Gunnebo GmbH                               Horst Schröder
                                               Gunnebo Entrance Control GmbH              Stephen Bates
                                               Gunnebo Security GmbH                      Wolfgang Amann
                                               Gunnebo Wego GmbH Sicherheitssystem        Karsten Hamborg
                                               Leicher Projekt GmbH                       Olaf Kisser
                                               Leicher Tresorbau GmbH & Co. KG            Florian Leicher
                                               Ritzenthaler GmbH                          Marcel Fleischmann
                                               Troax GmbH                                 Wolfgang Falkenberg
                                               Werra Tor & Zaun GmbH                      Hartwig Vogt
                                               Kubon AG                                   Florian Leicher

                              Great Britain    Gunnebo Security Ltd                       Martin Houseman
                                               CSI Security Ltd                           Mike Parry
                                               Churchill Safes Ltd                        Martin Houseman
                                               FBH Fichet Ltd (49% interest)              Andrew J. Mackey
                                               Rosengrens Tann Ltd                        Martin Houseman
                                               Troax UK Ltd                               David Teulon
                                               Troax Lee Manufacturing Ltd                David Teulon
                                               Gunnebo Ltd                                Anders Stigwall
                                               Gunnebo Mayor Ltd                          Rob Wheeler
                                               Ritzenthaler Co Ltd (45% interest)         Graham Midgley

                              Hungary          Leicher Hungaria Kft                       István Roszmann

                              India            Gunnebo Asia Pacific                       Deepak Khetrapal
                                               Steelage Industries Ltd                    Naresh Hosangady

                              Indonesia        PT Indolok Bakti Utama                     William Mouat

                              Ireland          Gunnebo Irland Ltd                         Patrick Doyle

                                                   60    Gunnebo Annual Report 2003
Country                      Company / Business unit                      President

          Italy               Fichet Italia SRL / Fichet SpA               Arrigo Horn
                              Gunnebo Italdis SpA                          Michele Maistri
                              Gunnebo Troax SRL                            Francesco Intini

          Lebanon             Fichet Middle East Ltd                       Nabil Shahlawi

          Luxembourg          Fichet-Bauche SARL                           Jean-Jacques Brusco

          Malaysia            Chubb Malaysia Sdn Bhd (30% interest)        Ravindran Gengadaran

          Northern Ireland    W H Scott Ltd                                Patrick Doyle

          Norway              E A Rosengrens AS/Clausen                    Tor Melleberg
                              Gunnebo Anja Industrier AS                   Atle Jacobsen
                              Gunnebo Troax AS                             Erik Krognes
                              Gunnebo Perimeter Protection                 Øystein Hansen
                              Tellefsdal                                   Per Tellefsdal

          Poland              Rosengrens Praediator Polska Sp zo o         Jerzy Szkalej
                              Gunnebo Baltic Sp zo o                       Örjan Hammar
                              Gunnebo Protection Sp zo o                   Jerzy Szkalej

          Portugal            Fichet Comércio SA                           Carlos Valpradinhos
                              Ritzenthaler Lda                             José Caracol

          Singapore           Gunnebo Security Pte Ltd                     Elsie Tay

                                                                                                      Gunnebo Worldwide
          South Africa        Cargo Control Systems (Pty) Ltd              Richard Eyres
                              Gunnebo Security SA (Pty) Ltd                Gerrit Venter

          Spain               Fichet Industria SL                          Jordi Vendrell
                              Fichet Sistemas y Servicios SA               José A. Ortuño
                              Ritzenthaler                                 Hugo Balaguer
                              Troax Systems SL                             Stéphan Zacharie
                              Gunnebo Entrance Control SL                  Rafael Roy

          Sweden              Gunnebo AB                                   Bjarne Holmqvist
                              Gunnebo Physical Security AB                 Torbjörn Browall
                              E A Rosengrens AB                            Hans Schröder
                              Rosengrens Produktions AB, Mora/Malung       Hans Granqvist
                              Rosengrens Larm AB                           Jay Wright
                              Gunnebo SafePay AB                           Gunnar Konkell
                              Gunnebo Entrance Control AB                  Lars Proos
                              Gunnebo Industrier AB, Gunnebo               Christer Lenner
                              Gunnebo Industrier AB, Fastening, Gunnebo    Martin Jonsson
                              Gunnebo Industrier AB, Lifting, Ramnäs       Håkan Carefall
                              Gunnebo Industrier AB, Lifting, Junsele      Stig-Olof Danielsson
                              Gunnebo Industrier AB, Lifting, Gemla        Patric Martinsson
                              Gunnebo Industrier AB, Lifting, Gunnebo      Jan-Erik Tegstedt
                              Gunnebo Industrier AB, Lifting, Göteborg     Walter Svensson
                              Gunnebo Protection AB, Gunnebo/Ödeborg       Staffan Grimbrandt
                              Gunnebo Troax AB                             Stefan Andersson
                              Troax Sverige AB                             Stefan Henningson

          Switzerland         Gunnebo Security Suisse Pte Ltd              Mike Finders
                              Gunnebo Wego AG                              Urs Studer
                              Gunnebo Troax                                Henrik Skölderfors

          The Netherlands     Alura Hekwerk BV                             Huub Laverman
                              Gunnebo Perimeter Protection                 Philip Mozes
                              Gunnebo Troax BV                             Sellie Huijsmans-Kuperus
                              Koninklijke Martens Brandkasten BV           Henk Portegies Zwart
                              Lips Safes BV                                Henk Portegies Zwart
                              Rosengrens Europe BV                         Wiebe Raap
                              SecureLine                                   Peter Knobel

          United              Gunnebo Security                             Jacob Touma
          Arab Emirates

          USA                 Gunnebo Johnson Corp                         William Shenloogian
                              Gunnebo Omega Inc.                           Garyl Cauble
                              Gunnebo Security Inc.                        Tom O’Doherty
         Gunnebo AB (publ)
      Co. reg. no. 556438-2629
Box 5181, SE-402 26 Göteborg, Sweden
        Tel: +46-31 83 68 00
        Fax: +46-31 83 68 10

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