HL Display annual report 2009

HL Display
annual report 2009
HL DispLay ÅrsreDovisning 2007
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Innehåll HL Display Årsredovisning 2009
ConTenT
3 The year in brief
4 HL Display’s business model – an overview
6 statement by the Ceo
9 acquisition
10 HL Display – operations, strategies and objectives
14 HL Display’s market and sales work
19 HL Display’s offering to customers
22 product development
24 operations
27 Case story
28 support processes – administration
30 Corporate responsibility
34 The share
36 risk and sensitivity analysis
37 nine year summary
37 Definitions
38 administration report
group
40 income statement for the group
40 statement of Comprehensive income for the group
41 statement of Financial position for the group
42 statement of Changes in equity for the group
42 statement of Cash Flows for the group
parent Company
43 income statements for the parent Company
44 Balance sheets for the parent Company
45 statement of Changes in equity for the parent Company
45 statement of Cash Flows for the parent Company
46 notes to the Financial statements
69 audit report
70 statement by the Chairman
71 Corporate governance report 2009
76 Board of Directors
77 senior executives
78 History
79 Financial information
This annual report has been prepared in
swedish and translated into english. in the
event of any discrepancies between the
swedish and the translation, the former
shall have precedence.
HL DispLay ÅrsreDovisning 2007

HL Display annual report 2009 The year in brief 3
THe year in BrieF
• net sales amounted to MseK 1,360 (1,536).
• profit before tax was MseK 84 (136).
• earnings per share after tax amounted to seK 1.88 (3.11).
• equity per share amounted to seK 17.81 (17.40)
as of 31 December 2009.
• acquisition of ppe Ltd.
• Maintained dividend proposed, seK 1,38 per share.
Key raTIos 2009 2008 2007
net sales, MseK 1,360 1,536 1,571
operating profit, MseK 86 130 161
profit before tax, MseK 84 136 155
profit after tax, MseK 58 96 108
earnings per share, seK 1.88 3.11 3.48
eBiTa margin, % 6.4 8.5 10.3
eBT margin, % 6.2 8.9 9.8
equity/assets ratio, % * 44.4 57.3 53.3
equity per share, seK * 17.81 17.40 15.26
average number of employees 906 983 968
* Key ratios affected by the ppe acquisition.
For key ratio definitions, refer to page 37.
ImporTanT evenTs DurIng THe year
Q1 Q2 Q3 Q4
Targeted actions aimed at
adapting production capacity
to lower demand. a new matrix
organisation was launched,
resulting in increased regional
and functional responsibilities,
and less independent local
subsidiaries. This opens up
for rationalisations and shared
services.
retail customers on all markets
were putting their investments
in the stores on hold. Brand
customers continued investing.
Decision was taken to use recycled
peT in the next generation of
shelf dividers, optimal +. Heavy
increase in raw material prices.
signs in the market of having
passed the worst period.
HL Display reached a balance
between capacity and demand.
Launch of powerTrack , a unique
system for supplying power to the
shelf. HL Display sees great
potential when combined with
ad’lite – HL Display’s new
lighting system.
The acquisition of ppe Ltd. is
announced just before Christmas.
ppe is HL Displays largest
acquisition so far, with a turnover
of MgBp 27. The company adds
significant strengths to HL Display’s
operations, particularly with regards
to the brand manufacturers.
HL Display starts a regional sales
company in Dubai and a regional
logistics centre in Hungary.
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HL Display’s business model – an overview HL Display annual report 2009
HL DispLay’s Business MoDeL
– an overview
HL Display is europe’s leading merchandising company. with more than 50 years
experience, the company specialises in displaying products in stores in a way that
increases sales and makes the store-work more efficient, and at the same time
providing end consumers with all the information necessary to make a purchasing
decision. net sales amounted to MseK 1,360 in 2009. The HL Display share is
quoted on the nasdaq oMX stockholm small Cap list.
HL Display’s customers
come from the food and
non-food retail sectors,
and from the brand
manufacturers which
produce the products
sold in the stores.
most of the world’s leading food
chains, non-food chains and brand
manufacturers figure among the
Company’s customers.
FooD reTaIL
ahold (inkl iCa)
auchan
Carrefour
Casino
Champion
intermarché
Metro
système u
Tesco
wal-Mart (asDa)
non-FooD reTaIL
Baumax
Decathlon
Dsg retail Ltd.
intergamma
Müller
BranD manuFaCTurers
BaT
Colgate
Danone
Kraft
L’oréal
Masterfoods
nestlé
philip Morris
procter & gamble
unilever
HL DispLay ÅrsreDovisning 2007
HL Display’s business
activity is based on direct
sales to customers.
The majority of the 46
markets are serviced
by the Company’s own
sales companies.
marKeTs servICeD By own saLes
CompanIes
austria
Belgium
Bulgaria
China (Hong Kong)
China (shanghai)
Czech republic
Finland
France
germany
Hungary
india
indonesia
Latvia
Lithuania
Malaysia
netherlands
norway
poland
romania
russia
serbia
singapore
slovakia
slovenia
south Korea
spain
sweden
switzerland
Taiwan
Thailand
Turkey
ukraine
united arab emirates
united Kingdom
marKeTs servICeD By DIsTrIBuTors
Canada
Denmark
estonia
greece
iceland
ireland
israel
italy
Kazakhstan
Malta
portugal
united states
HL Display sells products
and solutions helping the
food and non-food retail
sectors increase sales
and rationalise work in
the store.
To the food and non-food retail
sectors HL Display offers products
and solutions for merchandising
and In-store communication.
merchandising – products which
present goods attractively and utilise
store space efficiently, while allowing
ease of maintenance.
In-store communication – products
which ensure consumers have all the
purchasing information they need
and are able to find their way around
the store with ease.
– approximately 90 percent of sales
come from projects connected with
store openings or remodelling of
existing stores.
– The other 10 percent comes
from replacement sales (new parts
or spare parts).
– sales connected with new store
openings are dominated by emerging
markets, while store remodelling
sales are dominated by developed
markets. stores are normally
remodelled every four to six years.

HL Display annual report 2009 HL Display’s business model – an overview 5
HL Display sells products
and solutions helping
brand manufacturers
optimise brand- building
and give their products
visibility in the store,
ultimately resulting in
increased sales.
To the brand manufacturers
HL Display offers products and
solutions for primary placement
and secondary placement.
primary placement – products which
allow brand manufacturers to make
optimal use of their allocated shelf
space in the store and tempt shoppers
to make a purchase.
secondary placement – products
which allow brand manufacturers to
display their goods elsewhere in the
store rather than just on the shelf.
– The majority of these sales come
from projects connected with
launches or relaunches of brand
manufacturers’ products. Brand
manufacturers run these projects on
a regular basis for all their products.
HL Display’s focus on
innovation, product
development and design
is one of the Company’s
main competitive
advantages.
– HL Display invests more in innovation,
product development and design than
any other company in the sector.
– HL Display’s innovations have a
proven record of establishing new
standards on the market.
Most of the products
sold by HL Display are
manufactured in the
Company’s own factories.
– HL Display has four factories in
sweden (one co-owned), one in the
uK, one in China and one in the usa
(co-owned).
– at the turn of the year 2010, a stateof-the-art
production facility was added
in the uK through the acquisition of ppe.
– efficient logistics shall ensure that
customers experience high service
levels and short lead times.
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statement by the Ceo HL Display annual report 2009
gooD proFiTaBiLiTy
DespiTe reCession
when i wrote my Ceo report for the 2008 financial year back in
January 2009, i made reference to the difficulty in predicting how
the market might develop during the coming year. i also stressed
the importance of being attentive to changes in the market, and
quickly taking action where necessary.
in hindsight, it can be observed that these thoughts became
reality almost immediately. The market developed more negatively
than we expected – even in our worst-case-scenario.
we have however successfully adapted to the lower sales level
during the year, which means that we retained a good profitability
level. in addition, we have acted to strengthen our operations for the
future, through our largest and most important acquisition to date.
Two key developments
i would like to summarise the year by highlighting two key
developments. it will come as no surprise that the first point
is market development. even in the early part of the year, we
saw many customers applying the brakes and reducing their
investments. our total net sales declined by 11 percent during
2009. excluding currency effects, the decline was 15 percent.
The second key development is the earnings trend. we have
adjusted our costs to match the lower sales during the year, which
is why we can report an eBiTa margin of over six percent. it is
important to point out that the cost reductions have been gradual
during the year, which means that it is only towards the end of the
year that we have had full benefits of a reduced cost level. entering
2010 we have a trimmed-down, cost-effective operation. This will
create exciting opportunities when the market picks up again.
sales development
if we take a more detailed look at sales development, we see a
variation between the customer segments. Looking at our priority
segments (food retail, non-food retail and brand manufacturers),
we can conclude that sales to the two largest, food retail and brand
manufacturers, have remained on acceptable levels during the year.
sales to brand manufacturers have risen by 5 percent, mainly
because these companies continue to invest in merchandising
and in-store communication. one reason is to meet competition
from private labels which are being increasingly marketed by the
food retail sector. we also provide these customers with a stronger
offering than previously. sales to food retail, which is easily our
largest customer segment, fell by 5 percent.
non-food retail has been hit harder by the recession, not least
we have successfully adopted to the lower sales level
during the year, which means that we retained a good
profitability level.
HL DispLay ÅrsreDovisning 2007
within categories such as home electronics and Diy (do it yourself).
Consequently, our non-food retail sales have fallen, showing a 20
percent decline on the previous year’s figure.
The figures have been pulled down largely by the two secondary
segments, external distributors and shop-fitting companies. Both
these segments show sales declines of around 30 percent. The
shop-fitting companies have suffered from low levels of new store
openings and store remodellings and the external distributors
generally seem more affected by the recession than our own
sales companies.
all regions affected
we feel the effects of recession in all the countries where we
operate, albeit to varying degrees. asia and Middle europe
performed better than other regions. sales decreased by 8 and 7
percent respectively. For much of the year, sales in Middle europe
were virtually unchanged from the previous year. However, towards
the end of the year, sales declined somewhat, particularly in poland
and austria.
in the nordic, Baltics and uK region, sales fell during the year,
ending on minus 15 percent. However, towards the end of the year,
the situation has improved significantly.
The countries of Central/eastern europe are some of the biggest
victims of the recession. This was also reflected in our sales, which
were down significantly at the beginning of the year. The situation
was particularly serious in russia and ukraine. it should be said,
however, that the trend reversed in the latter part of the year, with
russia in particular showing strong sales growth. although the
market situation is still difficult, we note an improvement. in total,
sales in the region fell by 14 percent in 2009.
The southern europe region started quite well, only to experience
a downward trend later. in total, sales fell by 16 percent on last
year’s figures. our sales in spain have suffered badly in the latter
part of the year, which is a clear reflection of the severe economic
climate in spain at the moment. sales in France have also shown
increasing negative growth during the year.
adapted cost level
as i said in my opening sentences, we have successfully adapted
to the lower sales level. rationalisation measures have largely
affected our sales companies across the world, where we have
reduced our staff by approximately 90 jobs. we also made capacity
adjustments in production; the workforce at our factories has been
reduced by approximately 50 jobs. To some extent we have been
able to do this gradually by not replacing staff that has left the
company and by applying stricter control on new recruitments, thus
minimising internal distractions and turbulence.
The entire organisation has aimed at improving working methods
in order to achieve cost savings. Combined with the centralisation
of the purchasing organisation, we have been able to reduce costs
for energy, iT, travel, and our car fleet. Consequently, we are able
to show a percentage reduction in operating expenses which is
roughly on a par with the decline in sales.

HL Display annual report 2009 statement by the Ceo 7
In 2009 we launched two highly important solutions –
powerTrack and ad’Lite – that mark the start of our
drive for new technology.
The investment level in tools and machinery has been maintained,
in particular to ensure increasing automation, which we
consider essential in our efforts to achieve a sharper competitive
edge. we have also upgraded our production facility in Falun with
a digital printing line.
potential for sales improvement
after the measures we implemented during the year, i strongly feel
that HL Display is a company with an attractive range of products,
competitive production costs and reduced operating expenses. our
primary objective in the short term is to increase sales. it is our
opinion that this may partly change with an economic turnaround.
Many customers will have an accumulated investment need as they
are postponing investments at the moment. at the same time, it
should be said that there is potential for improvement in our sales
work. at present, we are implementing changes with regard to the
sales process and the work of the sales companies in order to
make better use of the opportunities on the market.
Drive towards new technology
an area where we have kept our investment level high is product
development. This is a deliberate policy on our part. HL Display aims
to be the market leader first off the mark with innovative new solutions
that have the potential to become the market standard – just as
HL Display’s datastrip has become the natural standard in stores.
in 2009 we launched two highly important solutions –
powerTrack and ad’Lite – that mark the start of the drive for
new technology. powerTrack is a cost-effective, easy-to-install
infrastructure which brings low voltage power to the shelf edge. with
the new solution, the shelf edge is prepared for digital applications
such as digital signage. in connection with this, we also launched
ad’Lite , a lighting solution for this infrastructure. ad’Lite is more
cost-effective and environmentally friendly than the fluorescent lamps
normally used for this type of lighting. For us, this is an important
entry into an area where we see very interesting potential.
sustainability issues attracting more interest
in recent years, we have increasingly addressed responsibility
issues, in particular in order to strengthen the communication
about all the measures we take with regard to economic, social
and environmental sustainability. at HL Display, we have a strong
tradition of addressing our environmental impacts, while also
operating an economically successful business. at the end of the
1990s, our largest factories were environmentally certified under
the iso 14001 environmental management system. we engage in
continuous improvement work associated with these areas. some
of the changes during the year include using an increased proportion of
recycled materials in our new optimal + system, an improved shelf
divider system based on the already successful optimal range. we
have also entered an agreement to run our swedish production and
distribution facilities entirely on green electricity from 2010. our code
of conduct serve as guidance in all contracts we sign with suppliers.
Largest acquisition in the company’s history
in recent years, we have clearly stated that our aim is to strengthen
the company’s offering and market position by means of acquisitive
growth. During December, ppe Ltd. was acquired, which adds
significant strengths to our operations, particularly with regards to
the important brand manufacturers customer segment. HL Display
gains access to strong skills and extensive experience in designing
and manufacturing customized merchandising solutions. Brand
manufacturers have high demands with regard to customisation and
short lead times from concept and prototype to finished product.
This is an excellent complement to our own production which is
directed more towards cost effectiveness in long batches. we also
gain access to expertise in multi-material production, in other words
production of products with parts made of plastic, metal and wood,
for example.
ppe has just over 280 employees and sales exceeding MseK
300. This means that the acquisition also gives us considerably
stronger position in the British market. HL Display and ppe have a
combined net sales of MseK 400 in the uK and will become one
of the strong participants in the market. already from 2010 the
acquisition is expected to contribute positively to the profit.
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statement by the Ceo HL Display annual report 2009
outlook for 2010
as i mentioned at the beginning of my report, the key developments
of the year were the fall in demand caused by the economic
slowdown and our success in adapting operating expenses to the
new situation.
The changes have obviously put pressure on all of us who work
at HL Display. i would like to take this opportunity to thank all
employees who participated in, and therefore made possible, the
change work we have implemented. i would also like to extend a
warm welcome to all the new colleagues who have joined us
from ppe.
as far as the market is concerned, it is our judgement that the
situation is starting to stabilise, although not showing any major
improvements. This means that we will remain alert to changes in
the market climate and be ready to act in response to these.
at the same time, it is important to remember that the recession
prompted us to further sharpen our processes. we know that we
have efficient operations and are maintaining a good profitability
level, despite considerably lower sales than in the previous year.
we also have clearly defined focus areas (see page 13) in order to
HL DispLay ÅrsreDovisning 2007
further strengthen our operations. HL Display’s financial position
remains strong. we have secured a more efficient capital structure
both in the short and long term. we have also taken measures to
improve our cash flow. in other words, the stage is set for us to
emerge from the recession as a more successful company than we
were, which feels very exciting.
nacka strand, February 2010
gérard Dubuy, president and Ceo
During December, we acquired the British company
ppe Ltd. The acquisition adds significant strengths to our
operations, particularly with regards to the important
brand manufacturers customer segment.

HL Display annual report 2009 acquisition 9
aCquisiTion oF ppe
on 21 December 2009, HL Display completed the acquisition of ppe Ltd, a uK manufacturer of merchandising
solutions. The acquisition strengthens HL Display’s offering to the brand manufacturers segment and the
Company’s uK market position.
in recent years, it has been HL Display’s aim to strengthen its
offering and market position by means of acquisitions. efforts have
been constantly directed towards identifying and analysing potential
acquisition candidates.
major strategic importance
The acquisition of ppe is HL Display’s largest and most important
acquisition to date. it is of major strategic importance in that it
provides an excellent complement to HL Display’s operations.
ppe has extensive experience and a high level of expertise in the
design and manufacture of customised merchandising solutions.
The company’s business is structured in such a way as to respond
to the exacting demands of brand manufacturers. a high level of
creative design and short production lead times are among ppe’s
main qualities.
To date, ppe has sold its products and solutions mainly to the uK
market, although demand for this type of products is global. This
is where HL Display will be able to deploy its well developed sales
network, encompassing 46 markets worldwide, and gradually offer
these products in all its other active markets. Together, ppe and
HL Display will present a very attractive and competitive offering
to brand manufacturers – a customer segment which HL Display
considers important to future growth.
Joining forces to become a uK leader
ppe is a large and well established player in the uK market – a
market which HL Display believes to have good future potential.
However, HL Display has not so far achieved the success it wanted
on the uK market. with the acquisition, the combined forces
of HL Display and ppe now form one of the country’s leading
market players.
another important advantage is that HL Display gains access
to ppe’s expertise in multi-material production – the production of
displays made of different materials, such as plastic, metal and
wood. This creates new opportunities for HL Display, which will be
of future benefit to the customers as HL Display can now supply the
major international brands with products that the company previously
could not offer.
good profitability and financial position
HL Display’s acquisition criteria require potential candidates to be
well managed, profitable companies in a good financial position.
ppe fulfils all these requirements. The company has shown good
profitability since it was established in 1971. in 2009, the eBiTa
margin was 10 percent, with sales of MseK 304 (eleven months).
This means the acquisition will make a positive contribution to
HL Display’s sales and results from 2010 onwards. The total
acquisition price was MseK 318 (based on a gBp/seK exchange
rate of 11.71) and was mainly financed by bank loans, which allows
scope for future acquisitions.
The management of ppe will remain in place and will also take
over responsibility for developing HL Display’s entire uK operations.
in addition to Harlow-based ppe with 280 employees, these consist
of a sales company in Kirmington with 30 employees and a
production facility in shipley with 20 employees.
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HL Display – operations, strategies and objectives HL Display annual report 2009
HL DispLay – operaTions,
sTraTegies anD oBJeCTives
HL Display’s business operations are based on three business processes – sales & Marketing, product
Development and operations – which work in synergy to create maximal customer value and customer
satisfaction. This is the cornerstone of the group’s efforts to achieve its overall business objective, namely
to be a market-leading merchandising company with high growth and good profitability, and delivering added
value for shareholders.
HL Display’s business operations – from customer need to delivery
HL Display’s business operations are based on three primary
business processes: sales & Marketing, product Development
and operations. These are supplemented by group-wide support
processes which include administration (Finance and iT) and Human
resources.
sales & Marketing is largely made up of the work carried out
at the sales companies across the globe and represents the
company’s primary interface with customers. in addition to sales
Customer
need
strategies
HL DispLay ÅrsreDovisning 2007
sales & marketing
administration (Finance, IT)
Human resources
HL Display will employ four main strategies to achieve the group’s financial targets.
1. Focus on three primary customer segments – food retail, non-food retail and
brand manufacturers.
2. prioritise on design and innovation with a view to setting new standards.
product development will be customer-driven.
3. streamline and adapt the organisation to market requirements and needs.
4. strengthen the product range and market position by means of acquisitions.
that are based on the existing product range, the business process
also involves taking onboard ideas for new products based on
customers’ needs and preferences. These ideas are passed on
to product development for further evaluation and exploitation.
in addition to new developments, product Development is also
responsible for managing and further developing the existing
product range. operations consists of HL Display’s entire supply
chain responsible for sourcing, production and logistics.
product
Development

HL Display annual report 2009 HL Display – operations, strategies and objectives 11
Business concept HL Display’s business concept is to increase
its customers’ profitability by offering the retail sector and brand
manufacturers cost-efficient products and solutions for in-store
communication and merchandising. The focus is on making
products and solutions that can be adapted to customers’
specific needs.
operations
– production
– sourcing
– Logistics
Delivery
to Customer
Long-term financial targets
• eBiTa margin of at least 12 percent.
• annual organic growth of 5-10 percent.
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HL Display – operations, strategies and objectives HL Display annual report 2009
HL Display’s financial targets – prerequisites for achieving
objectives
HL Display has two long-term financial targets excluding currency
effects: an annual growth target (organic growth) of 5-10 percent
and a profit target corresponding to an eBiTa margin of at least
12 percent. HL Display’s work on achieving the targets can be
described in three separate parts which have a direct bearing on
the company’s ability to achieve the profit target. These are cost
of goods sold, operating expenses and sales growth (organic and
acquisitive).
Cost of goods sold can be reduced by continued measures
which include streamlining production and work on materials in the
company’s products. elsewhere, HL Display has focused strongly on
achieving an effective and appropriate organisation and employing
efficient procedures to allow a reduction in operating expenses.
The measures implemented during 2009 have enabled HL Display
to make major progress in streamlining its operations, with regard
both to cost of goods sold and operating expenses. However, there
still remains a certain measure of streamlining to be done.
EBITA margin %
Goal 12%
4.9
2005
7.4
2006
10.3
2007
8.5
2008
6.6
2009
HL DispLay ÅrsreDovisning 2007
Growth %
3
2005
13
2006
2007
The critical parameter for achieving the profit target is the
creation of profitable growth. To create the conditions for achieving
the growth target, HL Display introduced large-scale efforts to
enhance sales work in the sales companies around the world during
2009. These initiatives involve the design and implementation
of a new group-wide sales model, which will also provide working
methods for maximising time spent with customers, and the
formulation of follow-up methods aimed at improving the control
and management of sales work.
Follow-up of results for 2009
HL Display has been strongly affected by the economic slowdown
which started in late 2008 and worsened in 2009. excluding
currency effects, net sales fell by 15 percent in 2009, while our
long-term target for annual organic growth is 5-10 percent.
as mentioned above, HL Display has taken a number of
measures to adapt operations to the current market situation.
efforts to reduce operating expenses have been particularly
successful, which is largely the reason why profitability was
satisfactory in 2009 despite the decline in sales. The eBiTa
margin for 2009 was 6.4 percent, while HL Display’s long-term
target for the eBiTa margin is 12 percent.
Key focus areas for HL Display
For several years now, HL Display has reported on the areas the
company considers particularly important during the coming year.
on the next page follows a review of the previous year’s focus
areas, the results achieved in each area and how the work will be
developed in 2010.
outlook for 2010
it is the Board’s judgement that the market is beginning to
stabilise, however still acknowledging that there is large uncertainty
in predicting how the market will develop over the year ahead.
The Board’s estimate is that HL Display’s net sales and profit will
increase in 2010. The estimate is based on the addition of ppe and
the completed cost efficiency measures.
2008
Organic growth
Goal for organic growth 5-10%
Acquisition
8
-2
-11
2009
Operating expenses, excluding
freight, in relation to net sales %
35.4
2005
33.5
2006
31.5
2007
34.8
2008
36.3
2009

HL Display annual report 2009 HL Display – operations, strategies and objectives 13
Key FoCus areas
area Focus areas for 2009 results in 2009 Focus areas for 2010
group-wide operating expenses
although the target of operating expenses
below 30 percent of sales is still a longterm
target, it is unlikely to be achieved with
sales growth below target. During 2009,
HL Display will focus on keeping operating
expenses unchanged, measured in local
currencies.
Corporate responsibility
priority will continue to be given to initiatives
in the area of the environment, with
an emphasis on continuous improvements.
in 2009, particular emphasis will be placed
on improving production processes to significantly
reduce raw material waste, and
increase the proportion of recycled waste.
acquisitions
HL Display plans to continue strengthening
the company’s product range and market
position by means of acquisitions. present
market conditions are likely to increase the
scope for acquisitions. with HL Display’s
financial strength, the company should be in
a position to make acquisitions during the
coming years.
operations production
Continued streamlining measures are
planned in production. important issues
include the distribution of production
capacity and how to deal with over-capacity.
The aim is for production in russia to be
up and running in 2009.
Logistics
expansion of the logistics centre for Central
europe will be implemented in stages during
2009.
purchasing (new 2009)
HL Display will prioritise work in the area
of purchasing in order to obtain economic
benefits. a new purchasing strategy is
already in place.
product development Innovation
efforts to promote more innovation in
product development will continue and be
supplemented by increased investments
in 2009.
operating expenses excluding freight,
measured in local currency, declined
by MseK 57 during the year and
amounted to 36 percent of net sales.
in 2009 the group staff was reduced to
836 employees, excluding ppe.
work during the year resulted in a
reduction in production waste. 75
percent of all waste was recycled.
in December 2009, HL Display made its
largest acquisition ever. The motivation
behind the acquisition is to strengthen
the product range, production capacity
and competitiveness.
Further streamlining measures were
implemented. The workforce was reduced
by a total of 50 jobs at the factories. a
production start-up in russia has been
postponed as the result of a fall in
demand on the russian market.
During the year, operations started at
the new logistics centre in györ, Hungary.
The slovakian and Hungarian markets
were connected during 2009.
The success of these efforts has
enabled HL Display to reduce costs for
input goods in production as well as for
energy and iT.
This was achieved in 2009. Launches
during the year included powerTrack and
ad’Lite , which represented HL Display’s
first step into new areas such as digital
technology and lighting solutions for
shelves.
The efforts in the area of operating
expenses are well established
throughout the group. Therefore it will
not constitute a separate focus area
in 2010.
environmental initiatives aimed at
continuous improvement remain a
high priority. During 2010, HL Display
will develop measurements and
reporting in accordance with accepted
standards.
HL Display plans to continue to
strengthen the company’s product
range and market position by means
of acquisitions. integration of the
acquired operations in ppe will be
given high priority in 2010 in order to
ensure HL Display is able to quickly
exploit the competitive advantages
associated with the acquisition.
in 2010, production efforts will focus
on further development of processes
concerning lean manufacturing, as
well as further restructuring.
a further four countries will be
connected to the györ logistics centre
in 2010. another logistics centre will
be opened in eastern europe.
The new purchasing function is well
integrated into the group’s operating
activities. Therefore it will not
constitute a separate focus area
in 2010.
efforts within product development
continues to be of utmost importance
to HL Display and is well integrated
into the group’s operating activities.
Therefore it will not constitute a
separate focus area in 2010.
sales and marketing sales (new 2010)
efforts to strengthen sales – both
the actual sales process and working
methods and control and management
– will be HL Display’s top priority
in 2010.
administration
(Finance and IT)
Finance (new 2010)
in 2010, efforts to establishing new
processes and setting new goals for
the operations within Finance will be
prioritised.
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HL Display’s market and sales work HL Display annual report 2009
HL DispLays DispLay’s MarKnaD MarKeT
oCH anD saLes FörsäLJningsarBeTe
worK
HL Display’s market strategy is based on a strong local presence on all important markets. 34 markets are
serviced by the company’s own sales companies. a further 12 markets are serviced by distributors.
MarKeT
HL Display’s operations are geographically divided into five regions
– nordic, Baltic and uK; Middle europe; southern europe; Central/
eastern europe; asia & australia (the table on page 18 shows which
countries come under each region).
The markets differ from region to region. There is a clear dividing
line between the regions which are in western europe and can be
described as developed markets, and the regions eastern europe
and asia & australia, which are emerging markets.
Differences between developed markets and emerging markets
one of the clearest differences between developed markets and
emerging markets is the level of market consolidation. Mature
markets characteristically have a high level of consolidation in the
retail sector. The five largest players in each market have (with
a few exceptions) a total market share of over 50 percent, and
sweden is one such example. in the food sector, the three largest
chains have a market share of almost 80 percent.
The situation is often the reverse in emerging markets. Markets
are more fragmented, with the five largest players having a total
market share of less than 50 percent – even as low as 4-5 percent,
which is the case in india. For HL Display, this generally means a
small number of large customers in developed markets and a large
number of small customers in emerging markets.
new building versus renovation
another clear difference between developed markets and emerging
markets can be seen in the projects in which HL Display is involved.
over several years, large local and international chains have
expanded their operations in emerging markets. Consequently, the
rate of new store openings in these markets is high, while in developed
markets it is considerably lower. instead, stores are renovated
when retail chains implement new retail concepts or develop existing
concepts, which they normally do every four to six years.
in emerging markets, HL Display’s sales are therefore made up
of a higher proportion of the basic products and solutions required
in new stores, while sales of larger concepts and innovations are
more important in developed markets.
Brand manufacturers important
The brand manufacturers – companies which produce the branded
goods sold in stores – are often quick off the mark in establishing
their brands in new markets. This makes them an important
customer segment both in developed and emerging markets.
HL DispLay ÅrsreDovisning 2007
The products and solutions in demand from brand manufacturers
do not differ substantially between developed markets and
emerging markets.
Factors affecting demand in developed markets
– general economic development.
– HL Display’s development of innovative new products and
solutions.
– implementation of new retail concepts/renovation projects.
– new trends in store design.
– introduction of new technology such as electronic price labels.
– Brand manufacturers’ investment in brand-strengthening
campaigns in stores.
Factors affecting demand in Emerging markets
– general economic development.
– new store openings.
– Market maturity, triggering demand for more sophisticated
solutions.
– Brand manufacturers’ investment in brand-strengthening
campaigns in stores – to establish a brand on a market,
for example.
market development, Developed markets
nordic, Baltic and uK; Middle europe, southern europe
The economic slowdown had an adverse effect on consumption
patterns in 2009. The retail sector was hit harder in some countries
than others. it can generally be observed that caution on the part of
consumers prompted the retail sector to focus strongly on costs in
2009 in order to try to maintain profitability levels.
The economic slowdown affected both the food sector and
non-food sector, albeit to differing extents. The food sector is
normally more resistant to economic declines than the non-food
sector, particularly in the area of capital-intensive goods such as
computers and home electronics.
according to eurostat, the statistical office of the european
union, the volume of retail trade in the eu (eu27) in December
2009 was down by 1.0 percent on the figure for the same month
the previous year. However, the trend differs from country to
country. in sweden, the volume of retail trade in December 2009
was just over three percent higher than the same month in 2008,
while the equivalent figure for germany was -2.5 percent.
in the wake of the recession, a desire on the part of the food
sector to position itself from a price perspective can also be
detected. This is important in order to retain customers and

HL Display annual report 2009 HL Display’s market and sales work 15
respond to competition from established low-price players such
as Lidl and aldi which have been very successful. For the large
food chains, a high proportion of sales still come from the
home markets, despite strong geographical expansion in recent
years. it has therefore been important to maintain a high level of
competitiveness in these markets, and for this very reason the food
retail sector saw price-cutting campaigns in 2009.
However, investment in private labels has also played a key
role. The retail industry’s private labels allow product prices to be
reduced without any too significant effect on margins. Today the
chains often have their own brands not only in budget products but
also in the medium and premium segments.
another clear and increasing market trend is for food chains to
seek alternatives to the large hypermarkets situated outside towns
and cities – a market which is starting to become saturated in many
countries. instead, they are starting to favour smaller supermarkets,
often located close to city centres.
market development, emerging markets
eastern europe; asia & australia
retailing in emerging markets was also adversely affected by the
economic slowdown in 2009. This was particularly the case for many
countries in eastern europe, where the economic crisis in general
had a more serious impact than in western europe and asia.
The retail sector in most emerging markets has undergone a
rapid metamorphosis in recent years, and this also continued in
2009. This transformation also involves more modern retailing,
which is driven by international expansion by multi-national chains
and expanding national chains aiming to gain a market advantage
over the international players. The relatively fragmented retail
markets have made it an attractive proposition for western chains
to establish themselves there. interest in these markets is also
driven by large gDp increases and a rapidly growing middle class
which demands new goods and global brands.
as the international chains continue their expansion in emerging
markets, it can be observed that they have become more selective.
There are several examples of chains which have pulled out of
certain markets to concentrate on a smaller number of more
attractive countries.
The expanding retail sector has focused on india, russia and
China in recent years, and these are still among the countries with
the highest level of expansion activity.
although the rate of growth in the Chinese economy slowed down
during the year, China’s gDp increased by 7.7 percent in the first
three quarters of 2009, largely due to generous stimulus packages.
Many of the multi-national chains such as wal-Mart, Carrefour,
auchan and Metro have a presence in China and also nurture
ambitious expansion plans. Meanwhile, the national chains are
expanding significantly by means of organic and acquisitive growth
with the aim of gaining a lead over the international players.
The russian economy shrank in 2009 but many analysts expect
it to revert to growth again as early as next year. The russian retail
market is still fragmented and the five largest retail players have
a market share of less than ten percent. This creates potential
for further expansion, which is additionally supported by a rapidly
growing middle class. Just as in China, national chains such as
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HL Display’s market and sales work HL Display annual report 2009
X5 are expanding aggressively with a view to strengthening their
market position.
The rate of retail development in india is considerably slower
than in China, for example. This is mainly due to legislation limiting
direct foreign investment in multi brand retailing, which includes
the food sector. The large chains are established instead by means
of franchise models or joint ventures with local players. as is the
case in other emerging markets, the fragmented market and a
growing middle class seeking more international brands are the key
motivation for international chains to establish themselves in india.
THe mosT aTTraCTIve growTH marKeTs
(based on a weighting of risk, market attractiveness, market
saturation and time horizon)
1. india
2. russia
3. China
marketing and
Business Development
research and Development
operations
(production and sCm)
Finance and IT
Human resources
4. united arab emirates
5. saudi arabia
source: The 2009 a.T. Kearney global retail Development index
area Manager
nordic, Baltic
& uK
HL DispLay ÅrsreDovisning 2007
area Manager
middle
europe
group managing Director
HL DispLay’s saLes worK
HL Display’s sales work is based on direct sales to end customers
through the Company’s sales companies across the world. a local
presence in all key markets is of crucial importance to HL Display.
although many customers are large multi-national retailers, very little
central coordination takes place in the purchasing of products
and solutions for merchandising and in-store communication. These
purchasing decisions are made by the local companies.
a higher degree of coordination is evident in the brand manufacturers
customer segment, where merchandising solutions are
often purchased for a large number of countries at the same time.
Consequently, HL Display’s targeting and sales to this market have
more central coordination.
new establishment in the middle east
at the end of the year, HL Display began its establishment process
in the Middle east by opening a sales company in Dubai. work in
the region will initially focus on the united arab emirates and saudi
arabia, subsequently expanding to other countries, including egypt.
organisation and management of sales work
HL Display’s sales companies are divided into five
geographical regions. The regions are led by area
Managers, each having full responsibility for sales and
results in their own region. The area Managers report
directly to HL Display’s Ceo, thereby ensuring short
decision- making channels and effective follow-up and
control of sales work. HL Display’s group-wide functions
(horizontal axis in the figure below) act as support to
the regional organisation.
area Manager
southern
europe
area Manager
Central/eastern
europe
area Manager
asia &
australia

HL Display annual report 2009 HL Display’s market and sales work 17
HL DIspLay’s CompeTITIon
examples of
competitors
Competitors’
strengths
HL Display’s
competitive
advantages
International players
(operations in ≥ 5 markets)
regional players
(operations in 2-4 markets)
vKF renzel (germany) Kleerex (ireland)
wilson & Brown (poland)
– well-developed product range
within their niche.
– efficient production process.
– Low prices.
– Total offer that satisfies customer’s
total needs.
– offers complete category solutions.
– significant investments in
product development create
a leading position.
– good relations with the end customer,
in contrast to competitors who often
work via distributors or agents.
Creating more effective sales
During the year, HL Display made major changes to the Company’s
sales work. The changes, which are aimed at creating more
resource-efficient and impactful sales work, affect everything
from the sales process and work in the sales companies to followup
of sales development. HL Display aims to use the changes to
more effectively exploit market opportunities, even in the current
economic climate.
Customers
HL Display has three prioritised customer segments – food, nonfood
and brand manufacturers. There are also some sales to the
shop-fitting companies which fit out the stores.
Most of the world’s leading food chains, non-food chains and
brand manufacturers figure among the Company’s customers.
HL Display’s dependence on individual key customers is low,
and the 20 largest customers accounted for 27 percent of sales
in 2009.
Brand manufacturers’ share of total sales during the year
increased from 19 to 22 percent compared with the previous
year. There are two main reasons for this. Firstly, HL Display has
deliberately focused on increasing sales to this customer segment.
Many of the products launched in 2008 and 2009 have been
clearly targeted towards brand manufacturers, while sales efforts
in this customer segment have been intensified. secondly, brand
manufacturers have maintained a virtually unchanged investment
level, even in the economic slowdown.
– often family companies with a low
cost base.
– Flexible production process
for small batches.
– good contacts with customers
in the region.
– Total offer that satisfies customer’s
total needs.
– offers complete category solutions.
– Through its global presence,
HL Display can follow its major
customers when they expand and
become a preferred supplier.
– HL Display’s size and financial
strength.
Local players
(operations in one market)
aL-Display (germany)
visioplast (France)
– very good customer contacts.
– High level of customisation.
– Major global retail companies
and brand manufacturers value
a supplier who can help them
in several markets.
– significant investments in
product development create
a leading position.
– HL Display’s size and
financial strength.
Competitors
HL Display has to deal with an extremely fragmented
competitive situation. at present none of HL Display’s
competitors can match the Company’s breadth of product
range and global presence. HL Display’s sales are also
considerably higher than those of its competitors.
80-90 percent of competitors sell their products in one
or two countries. Most of them compete with HL Display
in one or two customer segments and one or two product
areas.
Consequently, there are a large number of competitors.
about 150 more or less direct competitors of varying sizes
can be identified.
The table above shows a summary of the competitive
situation facing HL Display.
Sales per customer segment MSEK
Retail food 575 (2008: 630)
Brand manufacturers 299 (2008: 287)
Retail non-food 187 (2008: 223)
Shop-fitters 116 (2008: 155)
Distributors 69 (2008: 103)
Other 114 (2008: 138)
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HL Display’s market and sales work HL Display annual report 2009
saLes anD proFIT By area
area
nordic,
Baltic and uK
net sales
MseK 400
operating profit
MseK 58
middle europe
net sales
MseK 220
operating profit
MseK 29
southern
europe
net sales
MseK 409
operating profit
MseK 39
Central/
eastern europe
net sales
MseK 189
operating profit
MseK 19
asia and
australia
net sales
MseK 134
operating profit
MseK 10
other sales
net sales
MseK 10
1) percentage change in local currencies.
HL DispLay ÅrsreDovisning 2007
own sales
companies Distributors market position
Finland, Latvia/
Lithuania,
norway,
sweden and uK.
austria,
germany, poland,
serbia, slovenia
and switzerland.
Belgium, France,
netherlands and
spain.
Bulgaria,
Czech republic,
Hungary,
romania, russia,
slovakia, Turkey
and ukraine.
China
(Hong Kong),
China (shanghai),
india, indonesia,
Malaysia,
singapore, south
Korea, Taiwan
and Thailand.
Denmark,
estonia,
ireland and
iceland.
greece, italy,
Malta and
portugal.
israel and
Kazakhstan.
australia
and new
Zealand.
HL Display is the market’s leading
supplier of products and solutions
for in-store communication and
merchandising to both the retail
sector and brand manufacturers.
The acquisition of ppe will
strengthen market position
significantly in the uK.
HL Display has a generally strong
market position in Middle europe,
both in the retail and brand
manufacturers sectors.
HL Display has a market leading
position as supplier of products
and solutions for in-store
communication and merchandising
to the retail sector and brand
manufacturers.
By having quickly established
operations in many of the region’s
countries, HL Display now holds a
strong market position in both the
retail and brand manufacturers
sectors.
HL Display’s market position
has strengthened considerably
in recent years, partly because
the company has sharpened its
competitive edge by establishing
local production facilities.
Development
during the year 1)
sales in the region decreased by
15 percent during the year. after a
weak start of the year, the sales
development has gradually improved.
in Middle europe, sales were virtually
unchanged for much of the year.
Towards the end of the year, sales
declined somewhat which in total
meant that sales during the year
decreased by 7 percent.
sales in the region developed quite
well at the beginning of the year.
During the second half of the year,
the development showed a clear
downward trend. sales development
was especially weak in spain which,
combined with a more difficult market
in France, meant that sales in total
decreased by 16 percent.
eastern europe is one of the regions
most affected by the recession. sales
were significantly down during the first
half of the year. The situation however
improved during the latter part of the
year. in total, sales decreased by 14
percent during the year.
asia and australia, together with
Middle europe, have performed
better than other regions during the
recession. The more difficult market
situation is however clearly affecting
sales in this region as well, which
meant that sales fell by 8 percent
during the year.
north america
Trion industries is responsible for all sales work in the us market. at present sales initiatives are exclusively
targeted towards retail companies. sales in the north american market has been affected by the ongoing dispute
with Trion industries and amounted to MseK 9 (16) in 2009.
middle east
a sales company was opened in Dubai, united arab emirates, late in 2009, which represents the first step in further
establishment in the Middle east. operations in the Middle east are reported under other markets in 2009, but will
constitute a separate segment in 2010.

HL Display annual report 2009 HL Display’s offering to customers 19
opTisHop anD BranDMan –
HL DispLay’s oFFering To CusToMers
HL Display’s products are available in two main product families – optishop and Brandman .
optishop comprises products and solutions for the food retail and non-food retail sectors, while
Brandman includes products and solutions for brand manufacturers.
positioning of HL Display’s product range
HL Display’s four core values – innovation, quality, Competence and
Customer focus – are the guiding principles of the Company’s entire
business. They also play a vital part in how the Company’s products
and solutions are positioned on the market.
Level of innovation – HL Display shall be the supplier developing
the innovations that become industry standards. The Company’s
product development initiatives are unparalleled in the industry.
Quality – HL Display’s products and solutions are characterised by
high quality and functionality.
Competence – HL Display has built up a wealth of expertise of
in-store communication and of displaying products in shops.
HL Display is a natural partner of retail companies and brand
manufacturers who are fitting out shops or developing new
concepts for their shops or brands.
Customer focus – The Company’s product development takes place
in close cooperation with customers to guarantee new products and
solutions which best satisfy their particular business needs.
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HL Display’s offering to customers HL Display annual report 2009
opTisHop
The food and non-food sectors demand solutions which increase
sales in the store and improve efficiency. This in turn brings cost
savings as it allows a reduction in the number of store employees –
and HL Display currently has the market’s widest range of products
and solutions which do just that. These include solutions both for
merchandising and in-store communication.
merchandising
Merchandising is essentially about presenting merchandise to
the consumer in such a way as to stimulate a purchase. But there
are other aspects which are also important to the stores. a well
organised merchandising solution makes optimal use of shelf
space, resulting in a more efficiently functioning store. one clear
example is HL Display’s divider system with an automatic feed
system. products automatically advance to the shelf front in
correct order, giving an attractive, full-face display. This also
means time spent on shelf management and re-merchandising is
kept to a minimum.
HL DispLay ÅrsreDovisning 2007
Making the most out of your selling space
In-store communication
in-store communication consists essentially of two main missions.
Firstly, ensuring the store has well laid out overall information to
allow customers to quickly and easily find the products they are
looking for. secondly, ensuring customers have all the necessary
information to make a purchasing decision right where the product
is. This means providing basic price information, as well as more
detailed information such as product campaigns and discount
vouchers or environmental labelling.

HL Display annual report 2009 HL Display’s offering to customers 21
BranDMan
Brand manufacturers demand solutions which optimise brandbuilding
and give their products visibility in the store, ultimately
resulting in increased sales. HL Display responds to these needs
by providing solutions for product placement on the shelf and
Campaign placement. The acquisition of ppe has enabled
HL Display to strengthen its range of products and solutions for
brand manufacturers, in particular by providing new solutions for
floor display and a higher degree of customisation in general.
product placement on the shelf
HL Display offers solutions which allow brand manufacturers to
Bring your brand to life
make best possible use of their allocated shelf space in the store
and create an attractive product presentation to tempt a purchase.
This is combined with various accessories which give customers
relevant product information or special solutions to support brand
manufacturers’ new product launches.
Campaign placement
Campaign placement comprises solutions allowing brand manufacturers
to display their goods elsewhere in the store, rather than
just on the shelf. These include floor stands that can be placed at
the check-outs or solutions for cross merchandising, which means
closely-associated products (such as pasta and pasta sauce) are
displayed together in order to generate extra sales.
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product development HL Display annual report 2009
proDuCT DeveLopMenT
product development is one of HL Display’s key success factors, and the Company sets itself ambitious goals
in this area. HL Display is committed to being the market leader which produces solutions with the potential to
become an established standard in the retail sector, just as the Company’s datastrip established a standard on
how price information was displayed on the shelf.
HL Display has three ways of expanding its range of products and
solutions offered to customers. not surprisingly, the Company’s
own product development is the most important of these, and
HL Display invests more than any other sector in this area. The
other two ways of expanding the product range are partnerships
with other producers of unique products and through acquisitions.
Investments in new areas
over the last two years, HL Display has invested in product
development in new areas; one reason being to harness the
potential of digital technology. powerTrack , a flexible infrastructure
which brings low voltage power to shelves, was launched during the
year. power supply has proved an obstacle to gaining full benefit
from new applications such as digital signage, where battery
operation is often insufficient. with powerTrack , power supply
problems are resolved, thereby opening the door to a large
number of new applications which require power. During the
year, HL Display also launched an initial application for its new
infrastructure, ad’Lite , which is a new solution providing shelves
with ambience lighting to enhance the product display.
HL DispLay ÅrsreDovisning 2007
Customer-driven product development
The Company’s own development takes place in close proximity
to customers. This ensures the developed products correspond
perfectly with customers’ needs and preferences.
ideas for new products are often generated in collaboration
between customer, sales company and product manager. These
might include ideas for resolving specific problems or improving
the product display. The products managers are also responsible
for the project throughout the development phase. The product
development group also includes constructors and designers,
as well as factory or production managers, to ensure a prompt
start to production once the product has been perfected. overall
responsibility for development strategy and decisions on which
projects will be undertaken rests with the market council, which
includes members of group management.
effective development process
HL Display works according to a structured five-stage development
process (see figure on next page). around 30 development projects
of varying sizes are normally in progress at one given time. The
development process has been constantly refined since the
beginning of 2007, cutting the development phase for projects by
an average of 6 months between 2006 and 2009. The development
phase for small and medium-sized projects is currently three
months, while for large concepts it is between six and nine months.
environmental consideration in the development phase
For some years now, environmental screening has been
incorporated into the concept phase of development projects.
For HL Display, this largely involves maximising transport efficiency
in the finished product, which means it must have optimised
packaging and be as light as possible. it also involves materials
and use of recycled materials.
with powerTrack , power supply problems are resolved,
thereby opening the door to a large number of new
applications which require power.

HL Display annual report 2009 product development 23
Concept engineering Tooling Industrialisation market launch
– product
specification
– Market analysis
– project approval
paTenT anD DesIgn proTeCTIon 2009
– 78 (74) registered patents.
– 20 (21) pending patent applications.
– 4 (4) new patent applications in 2009.
– 80 (78) registered protected designs.
– Total cost of patents and design protection was MseK 2 (2).
seLeCTIon oF new proDuCTs 2009
– Drawings
and technical
specifications
– Design review
– Tenders for
tooling invited
– investment is
approved
– powerTrack – cost-effective, easy-to-install infrastructure
bringing low voltage power to the shelf edge.
– ad’Lite – mood lighting for shelves.
– optimal + – a new generation shelf divider systems,
partly manufactured using recycled material.
HL DIspLay’s proDuCT DeveLopmenT proCess
– Tool order
– Tooling design
approved
– Final acceptance
of tooling
– Tooling
validated
– product
samples
produced
– production
parameters
validated
– Launch
material
– Full scale
launch
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operations HL Display annual report 2009
operaTions
operations comprises HL Display’s distribution and supply chain
– from purchasing to production and logistics.
purCHasing
HL Display’s purchasing organisation was restructured in 2009,
in order to achieve a higher level of centralisation. The aim was
to build up a purchasing organisation in which large purchases
are centralised and local purchases of products and services are
handled via the regional service centres around the world, instead
of by individual sales companies. The process of developing and
streamlining the purchasing organisation will continue in 2010.
This process is advantageous to HL Display in several respects.
supplier risk is minimised by continuously monitoring selected
suppliers and assessing their fulfilment of contractual terms and
conditions. another key consideration is to reduce the total cost
of purchasing. The work in this area was successful in 2009.
increasing numbers of suppliers became qualified and agreements
were renegotiated in areas including energy and raw materials. This
generated cost reductions, while also improving other contractual
terms and conditions.
proDuCTion
The majority of the products and solutions sold by HL Display
are produced in the Company’s own factories using automated
processes. The Company focuses primarily on three production
methods – extrusion, injection moulding and plastic sheet
processing (bending, cutting and printing). HL Display has four
factories in sweden, two in the uK and one in China. production
HL DispLay ÅrsreDovisning 2007
operaTIons
suppliers purchasing production Logistics
Customer
in the Chinese factory is mainly focused on the asian market. The
glossary on the next page shows more detailed information about
the factories and the different production methods.
The work in 2009
as the economic slowdown gathered strength in 2009, HL Display’s
production activities were re-prioritised. The focus was directed on
two main areas – adapting production costs to the fall in demand
and adapting production processes to an increased level of
automation.
as a result, HL Display reduced staffing at all its factories. The
workforce was reduced by a total of 50 jobs.
The Company has also established an automation group made
up of representatives from the different factories in order to share
expertise and create comprehensive automation principles. earlier
work in this area has resulted in a large part of the production
processes having a satisfactory level of automation. nevertheless,
there are still some areas where further improvements are
desirable – in particular, automated processes for packaging and
labelling.
it had been HL Display’s intention to start production in russia at
the end of 2009. However, the economic slowdown left an inadequate
foundation for a production start-up and this project was put on hold.
Continuing investments in production
HL Display continued to invest in production facilities in 2009 in
order to reap the benefits of increased automation, as previously

HL Display annual report 2009 operations 25
mentioned. with new machines, the processes can be adapted to a
situation of lower staffing. Consequently, it is possible to increase
the rate of production without any substantial increase in the
number of employees.
HL Display also replaced machinery at the factory in Falun.
The purchases, which included a digital printing machine and new
hot-bending machines, bring considerable production advantages
to Falun.
Change work focusing on lean manufacturing
as previously mentioned, the extraordinary market situation in
2009 prompted re-prioritisations in the area of production. This
meant that the programme to align production working methods
with lean manufacturing principles temporarily took a back seat.
Lean manufacturing is an approach aimed at optimal handling
of resources. it is about identifying and eliminating factors in the
production process which do not bring added value to the end
customer. Change work in this area will remain a priority in 2010.
new materials
another priority area during the next year is work on new materials.
HL Display has created a new materials group called green edge.
The group’s mission is to identify materials which are more environmentally
friendly, less expensive or offer other advantages such as
faster rates of production.
HL DIspLay’s proDuCTIon LInes LoCaTIon proDuCTIon meTHoDs – gLossary
extrusion – High speed
The High speed line manufactures datastrips, which can be produced
at high speed.
extrusion – Flexible
The Flexible line manufactures mature products – often with several
varieties – in which manufacturing is characterised by short batches
and quick changeovers.
extrusion – Complex
Complex is used to produce newly developed datastrips and strips
which combine different materials or functions.
Injection moulding – Dividers
The main products are shelf dividers in transparent plastic materials,
which are produced on injection moulding lines with integrated robots.
Injection moulding – Frames – hi-tech parts
Karlskoga carries out injection moulding of items such as frames with
plastic accessories.
plastic sheet processing
The main products are shelf talkers that are bended and printed.
assembly line
Manual assembly of standard articles and manufacturing of
labour-intensive products.
multi-material
Manufacture of customised merchandising solutions with multi material
capabilities.
sundsvall
and suzhou
sundsvall
and suzhou
sundsvall
and suzhou
sundsvall
and suzhou
Karlskoga
extrusion
a production method that involves molten plastic being forced
through a nozzle. The nozzle’s profile determines the form of
the product’s cross-section. The products are manufactured
in strips which are cooled in a water bath and then cut to
the required length. Datastrips are one example of products
manufactured using this method.
Injection moulding
a production method that involves molten plastic being injected
into a hollow mould. The form of the hollow determines the
product’s shape. shelf dividers and frames are examples of
products manufactured using this method.
Falun plastic sheet processing
printing of plastic sheets which in many cases are further
processed by means of punching, cold-bending or hot-bending.
suzhou assembly
production method with a high degree of manual labour.
Harlow
acquired
(ppe)
added capabilities
The acquisition of ppe will open up new opportunities for
HL Display in terms of manufacturing. ppe has several
production processes that are not present elsewhere in the
HL Display group. some examples are high speed digital
printing, state of the art laser cutting of metal and CnC
router cutting – all under the same roof.
one other trait that ppe is bringing is sequenced parallel
handling of production operations, which reduces the lead
time of each order. This method will be evaluated and
possibly ported to the group’s other production processes.
multi-material
The manufacturing processes in the Harlow factory are
adapted to the manufacture of merchandising solutions with
a high degree of customisation, and consisting of several
different materials, for example plastic, metal and wood. The
manufacturing process is characterised by short lead times.
other production
The cold/hot-bending of acrylic display stands takes place in shipley in the uK. Metal display hooks are manufactured at a joint venture in Lesjöfors
(co-owned with Trion international LLC) and products for the us market are extruded in wilkes-Barre, pennsylvania, usa (also co-owned with Trion).
HL DispLay ÅrsreDovisning 2007
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operations HL Display annual report 2009
QuaLITy
Lead time in days
Refers to average lead time from order to delivery
production facility Target 2009 2008
Falun 12.0 11.6 12.0
Karlskoga 8.0 9.0 7.9
sundsvall 11.0 10.8 10.6
suzhou 9.0 7.0 7.0
Delivery performance (as a percentage)
Defines the proportion delivered within the agreed delivery time
production facility Target 2009 2008
Falun 97.0 96.8 96.0
Karlskoga 98.0 97.3 98.4
sundsvall 98.0 98.0 98.7
suzhou 98.0 98.1 99.9
proportion of complaints (as a percentage)
Refers to the number of complaints in relation to the total
number of orders
production facility Target 2009 2008
Falun 0.60 0.70 0.70
Karlskoga 0.30 0.30 0.40
sundsvall 0.30 0.40 0.50
suzhou 0.30 0.35 0.40
Quality
HL Display engages in extensive work on quality, based on key figures
with clearly defined targets. These key figures are followed up every
month. all the factories have quality systems which are based on
the international iso 9001 quality standard. The factories in Falun,
Karlskoga, sundsvall and suzhou are all certified under iso 9001.
LogisTiCs
HL Display’s logistics structure is based on regional service centres
for logistics around the world. at present, the Company has logistics
centres in Falkenberg (sweden), Tours (France), györ (Hungary),
Moscow (russia) and in singapore. another logistics centre is
planned in central europe during 2010. The exact location is yet
to be determined. in time, all sales companies will be serviced by
a regional logistics centre.
HL DispLay ÅrsreDovisning 2007
in addition to stock management and distribution, the service
centres also provide ancillary services such as administration and
finance for the associated sales companies.
major productivity improvements in 2009
in 2009, HL Display implemented major initiatives aimed at
boosting productivity in its distribution activities and utilising the
Company’s advantageous logistics structure.
The work was successful in many respects, both with regard to
stock size and turnover and adaptation of costs to the lower sales
volume in 2009.
inventory coverage days were 19 percent down at the end
of 2009 compared with the same period the previous year, a
key performance indicator that is neutral in relation to sales
development. The total stock value at fixed exchange rates fell
by 29 percent during the same period. This is largely due to
HL Display’s structured work to reduce superfluous and obsolete
stock during the year.
This work was complemented by a clearly expressed aim to
reduce other costs associated with logistics. The overall effect was
that the Company successfully aligned costs relating to stock and
logistics to the decreased sales during the year.
one of the most important achievements during the year was
the successful launch of the györ logistics centre in Hungary.
The logistics centre will eventually provide logistics and ancillary
services to six markets in Central/eastern europe.
Improved internal processes
an important change in 2009 was the restructuring of the internal
product supply organisation that handles traded articles. There is
now a central support function for internal product orders made by
the sales companies around the world. This has resulted in cost
savings and more efficient routines as the sales companies now
have one single contact channel for ordering products.
Continued efforts in 2010
HL Display will continue its efforts to increase productivity in
logistics in 2010. The deployment of the györ logistics center
will be completed by connecting austria, Bulgaria, romania and
slovenia to the logistics center. Further efforts include continued
standardisation of logistic methods and procedures across the
logistics network, centralisation of the management of slow
movers to save on obsolescence costs and preparation of a wMs
(warehouse Management system) implementation to get further
productivity improvements.
Iso Certification
as is the case with production, HL Display has initiated a programme
aimed at aligning logistics working methods with lean principles.
The new logistics centre in the Hungarian city of györ will act as a
pilot project in this initiative and the practises established here will
be gradually adopted by all the Company’s service centres.
HL Display has also launched a project aimed at obtaining iso
certification for all its logistics centres, after which every part of the
Company’s operations will be iso certified. The Company expects
the iso certification of the largest logistics centers – Falkenberg,
györ and Tours – to be completed during 2010.

HL Display annual report 2009 Case story 27
CaTCHing CusToMers’ aTTenTion
what was it that made you buy that new shampoo or decide to try a different washing powder? you probably
thought these products looked better, more exciting or better value for money than the other alternatives in the
shop. But do know you really know why you thought that? There’s a big chance that your decision was influenced
by the way the shop displayed the products.
studies show that at least 2/3 of all purchasing decisions are
influenced in store. This can be everything from choosing a product
you didn’t intend to buy, to switching brand or pack size. in other
words, it isn’t that difficult to understand how important it is for
shops to present their products in the right way. one person who’s
an expert in influencing in-store sales is Jens nordfält, head of the
retail programme at the stockholm school of economics and author
of an award-winning book on in-store marketing.
attention affects our image of the product
according to Jens nordfält, how the shop works on its store
environment, product placing and information is crucial to how
customers perceive the products.
“say that the shop presents a product in a way that means you
notice it, such as the label on the edge of the shelf being in a
colour that makes it stand out, or that the display has the products
sticking out slightly over the edge of the shelf. if you pay attention
to the product, your brain tends to interpret this as meaning that
the product is better than the others. This is why studies show that
customers think that goods in a shelf solution which attracts their
attention are of higher quality than the same goods in an ordinary
shelf solution,” Jens nordfält explains.
The in-store environment influences us more than we think
The environment inside the store affects customers more than
most people realise. one clear example is that the true price of a
product actually plays a fairly minor role in what the customer thinks
of the price. instead the price experienced by the customer is 4/5
guided by visual effects such as price signs or if the store decor
and environment make a cheap or expensive impression. in other
words, it is completely possible for a store with a higher price to be
thought of as less expensive on the basis of what it looks like.
although this might appear not to make sense, Jens nordfält
says it is entirely in line with research in the field of attributions
psychology. put simply, it’s about the feeling you get from the store
environment being transferred to the product.
“if you take an item of clothing and put it in an elegant branded
clothing store, customers tend to think that the quality of the product is
higher than if the same garment is in a low-price store,” says nordfält.
Location in the store also has a major effect on sales. Jens
nordfält cites shelf-end displays as a clear example.
“studies show that sales of a product increase by up to about
500 percent if it is displayed on the end of a shelf. if it’s a product
that people often impulse buy, the increase in sales can be even
greater,” nordfält points out.
in the same way, the height at which the product is displayed on
the shelf is also important. The best location is at the customer’s
eye level.
Inspiring the customer
The reason why it is so important to create attention is that most
people go shopping “on autopilot”. Customers automatically identify
around ten products that they normally buy and don’t even see the
others. in this context, the way the store displays the products can
help its customers. Most customers say that they would like shops
to inspire them more.
“studies carried out show, for example, that 85 percent of
customers would like to eat more fruit and vegetables. so why
aren’t they buying them? well, because they’re not thinking when
they are shopping. when the shop changes its displays, customers
are forced to think and then they remember, ‘oh yes, that’s exactly
the product i was looking for’,” nordfält explains.
product display trends
Jens nordfält thinks that retailers in recent years have seriously
realised that they can do a great deal with the store environment
and that the effects of this work can be measured. Looking ahead,
he can see that the introduction of digital technology to stores may
open up a number of new opportunities.
“There is great interest in animated shelf-edge solutions, such as
small screens that can create attention. in purely perceptual terms,
colour is one of the most effective ways of creating attention.
Lighting is also a good tool for creating points of colour and contrast
on the shelf. These areas are only in their infancy at the moment,”
nordfält concludes.
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support processes – administration HL Display annual report 2009
aDMinisTraTion
The administration support function
encompasses Finance and iT.
FinanCe
HL Display’s finance function has six main areas of responsibility:
Business Control, Financial Control, Treasury, M&a, investor
relations and iT.
in 2009, HL Display initiated a restructuring process in the
finance function, aimed at creating processes, working methods
and an organisation that ensure the highest quality in decision
support and control for the lowest possible relative cost. a large
number of initiatives were commenced and completed in 2009.
These included the production of a new comprehensive monthly
report package, the implementation of new targets and key figures
for cost saving and capital efficiency in the group.
as part of this work, the accounting and controlling function was
restructured to reflect the same regional and functional division as
the Company’s matrix structure.
Business Control
The Company’s controllers have responsibility for control, monitoring
and decision support in each business area and support function
(production, for example). They are also responsible for identifying
and introducing efficient working methods and procedures throughout
the group, and providing support to managers in the monitoring
and development of the group’s profitability and profit growth and
cash flows in each region and entity.
m&a
The group’s increased focus on mergers and acquisitions is supported
by a dedicated resource at group level, which specialises
HL DispLay ÅrsreDovisning 2007
in the area of acquisitions and acquisition candidates. The M&a
function is responsible for financial analysis and evaluation in the
initial phase, project management of the acquisition process and
the initial integration phase.
Treasury
HL Financial services (HFs) is HL Display’s treasury department.
HFs is responsible for management of currency risk and all the
group’s financing activities. it also acts as a service centre for the
swedish production companies and the service centre in riga with
regard to trade receivables (including netting) and scanning and
e-authorisation of supplier invoices.
in connection with the acquisition of ppe, a new overall financing
structure for the group was established. The restructuring of the
loan structure means that after the acquisition is financed there
is still sufficient capacity to take advantage of future acquisition
opportunities. Long-term credit and confirmed overdraft facilities
have been set up. These can be used in different currencies in
addition to the previously utilised financing.
Most of the group’s flows and balances are concentrated, so that a
deficit in one currency can be netted against a surplus in another. This
advanced cash pool-solution has resulted in a considerable reduction
in financing costs. starting from 2010, HFs will also manage currency
hedging of positions in all the group companies. HFs previously
managed currency hedging primarily for the swedish entities.
Financial Control
HL Display demands high quality in financial control at all its
companies and requires this to take place in a way that supports

HL Display annual report 2009 support processes – administration 29
internal monitoring as well as legal requirements. HL Display has
a high level of ambition for its external reporting. The aim is to
achieve fast internal and external reporting without jeopardising
quality. The Company’s financial control functions are responsible
for all external and internal reporting in each region and in the
legal entities. They have ultimate responsibility for identifying and
introducing more efficient working methods and procedures in all
the group’s financial control processes.
Investor relations
HL Display further strengthened its business structure in 2009 by
establishing a resource with responsibility for all investor relations
issues. HL Display was awarded the title stockmarket Company
of the year in 2005, and its 2007 annual report won the nasdaq
oMX stockholm’s competition for the Best annual report, small
cap class. The 2005 and 2006 reports also received honourable
mentions.
The aim is to further develop the proud tradition of transparency
and service to the Company’s shareholders – large and small alike.
iT
in order to have efficient operations and processes, there must
be an iT environment that supports and allows this. The overall
goal of HL Display’s iT structure is to meet to the organisation’s
requirements for availability, user-friendliness and security, and to
do so with an explicit cost-awareness.
new outsourcing partners
HL Display conducted a general review of its iT supply contracts in
2009. The review was aimed at reducing costs and ensuring these
contracts give the Company an optimal service level. as a result of
the review, HL Display has changed its outsourcing partners for the
development, administration, support and operation of a large part
of its iT structure.
projects during the year
a large number of projects were implemented during the year, mainly
related to production and logistics. one of the most important of
these was the establishment of a logistics centre in györ in Hungary.
at the same time, HL Display reviewed its iT strategy, which also
involved making a global evaluation of architecture and systems.
Key figures and associated long-term financial targets have been
produced for follow-up and monitoring. work is in progress aimed at
expanding the monitoring to include service levels and productivity
in the area of iT.
Direction for 2010
Development of the iT strategy will focus on two main areas in
2010. The first will be a review of the administration organisation,
which will also include a general review of roles in the organisation
in order to guarantee competence and optimal staffing. The second
will be an improvement of the financial follow-up of iT development
projects.
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Corporate responsibility HL Display annual report 2009
CorporaTe responsiBiLiTy
HL Display has been committed to corporate responsibility issues for a long time. The Company’s largest
production facilities were already certified to the iso 14001 environmental management standard back in
the late 1990s. Communicating and establishing a culture of good business ethics and respect for human
values to subsidiaries was particularly important during the rapid expansion of the 1990s and the early
years of the new millennium.
HL Display decided to reinforce its corporate responsibility
communication in 2009. HL Display is keen that its corporate
responsibility reporting should have a high degree of transparency
and allow benchmarking. During 2009, the Company started
preparations for sustainability reporting in 2010 in accordance
with the global reporting initiative’s guidelines (gri). The gri’s
sustainability reporting guidelines are the most established
reporting framework available today. HL Display is also a participant
in un global Compact, which means the Company actively supports
the un’s fundamental values and principles in the areas of human
rights, labour, environment and anti-corruption.
HL Display’s central policy in terms of corporate responsibility is
its Corporate responsibility policy, which was adopted by the Board
in early 2010. around it are the other policies that govern the work
in this area, including HL Display’s Code of Conduct, environmental
policy, work environment policy, purchasing policy and the common
operational policy for the production facilities.
preparations for grI reporting
in 2009, HL Display started preparations for introducing
sustainability reporting in accordance with the global reporting
initiative’s guidelines. The work has the consensus of the Board
and has now been introduced at group management level.
a survey of corporate stakeholders was initiated towards the end
of 2009 to find out which aspects of sustainability they believe to
be most important to HL Display. HL Display’s main stakeholders
are customers, employees, shareholders and suppliers. The survey
was carried out on a representative sample of these stakeholders.
The stakeholder survey will make an important contribution to
the materiality analysis which will form the basis of our priorities in
sustainability work and sustainability reporting.
HL DispLay ÅrsreDovisning 2007
environMenTaL aspeCTs
HL Display has production at four factories in sweden, two in the
united Kingdom and one in China. The main environmental impacts
associated with HL Display’s production are plastic waste, energy
consumption and use of plastic raw materials. as a Company
with sales companies and distributors in 46 markets around the
world, HL Display’s transport operations also have an impact on
the environment. only the factory in Falun has operations that
are subject to notification requirements. This is because a small
amount of solvent is used in the screen-printing process.
environmental certification
Certification to the environmental standard iso 14001 plays an
important part in HL Display’s environmental protection activities.
HL Display’s largest production facilities, situated in sundsvall,
Falun and Karlskoga, have held this certification since the end of
the 1990s. These facilities account for around 80 percent of
HL Display’s total production turnover. The Company intends to
obtain this certification for its factory in China and the largest regional
logistics centres, which are in Falkenberg and Tours (France). it is
HL Display’s goal that all production facilities and regional logistics
centres will have environmental certification by 2012.
plastic and other waste
HL Display addresses the problem of waste in production in
two ways. The first way is to reduce plastic waste generated in
production by fine-tuning the production processes where possible.
The second is to recycle plastic and other waste as far as possible.
HL Display’s goal is for all waste from production to be able to
be recycled.
we Care
in order to highlight HL Display’s environmental work, a
new logotype has been developed. The we Care logotype
is used on products, packaging and other communication
from HL Display.

HL Display annual report 2009 Corporate responsibility 31
Raw materials and input goods 2009 %
Aluminium, steel and wire 3
Packaging 6
Semi manufactured
articles 10
Polycarbonate (PC) 3
PVC 39
Other 5
Tape 9
Electricity and
cooling water 7
Other plastic
raw materials 18
Total waste at the Company’s production facilities in 2009 was
1,400 tonnes. 75 percent of this was recycled.
raw material consumption
HL Display’s main raw material is plastic, in particular pvC. These
account for 60 percent of the group’s total raw material purchases.
HL Display has also introduced an initiative aimed at using a
higher proportion of recycled materials in the Company’s products.
HL Display’s new optimal + shelf divider system, for example,
contains 15 percent recycled peT.
HL Display complies with reaCH, the eu’s chemicals legislation,
and this is taken into account when the Company approves new
materials. The Company now requires its raw materials suppliers
to complete a special declaration form based on the reaCH
requirements. no substances classified as svHC (substances
of very High Concern) may be used, and the use of phase-out
substances is also controlled.
energy consumption
in 2009, HL Display consumed approximately 15.5 (18.6) gwh
electricity in production. Different measures for reducing electricity
consumption are being implemented at all factories. These range
from heating the factories using waste heat from machinery to
installing time relays for lighting.
HL Display has concluded a new energy agreement which
came into force on 1 January 2010. The agreement covers all its
factories in sweden, as well as the logistics centre in Falkenberg.
under the agreement, with the electricity supplier vattenfall, all the
swedish factories will run entirely on green electricity – in other
words, electricity from renewable sources.
use of chemicals
as previously mentioned, the Falun factory is subject to notification
requirements as it uses solvents in the screen-printing process.
solvents are used in the printing ink itself and to wash templates
used in the printing process. Total solvent consumption in 2009
was 3,800 litre.
use of solvents has been reduced radically in recent years, as
solvent-based inks can be replaced by uv inks to some extent.
unlike traditional solvent-based inks, uv inks are dried using uv
radiation rather than by evaporation of the solvents. HL Display
invested in a new digital printing line in 2009, which will reduce the
use of screen printing.
Logistics
with sales companies on several continents around the world,
it is important for HL Display to have efficient logistics operations.
HL Display engages third-party suppliers for its transport and
requires these suppliers to have environmental programmes in
place. HL Display also works with its logistics suppliers to route
inward and outward transport flows from road transport to sea and
rail transport wherever possible.
in parallel with this, HL Display has a global company car policy.
The policy, which only allows fuel-efficient diesel engines, is
designed to reduce the car fleet’s carbon dioxide emissions.
There are also certain measures that HL Display carries out
itself. These include increasing the number of products per package
and reducing the size of packaging, thereby creating more efficient
logistics.
awareness in everyday work
even the smallest action can make a difference. HL Display
endeavours to promote a high level of environmental awareness in
everyday activities at the Company’s offices around the world. This
means collecting and sorting paper, packaging material and old
electronic equipment and ensuring they are sent for recycling.
For many years, HL Display has been using telephone and video
conferences as an alternative to travel between offices. The result
is fewer environmental impacts and more efficient work.
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Corporate responsibility HL Display annual report 2009
soCiaL aspeCTs
as a participant in un global Compact, HL Display supports their
declarations on the environment, human rights, labour and anticorruption.
HL Display’s Corporate responsibility policy and Code
of Conduct constitute a framework for the Company’s work in these
areas. The Company expects the same of its sub-contractors. They
are required to sign a purchasing policy containing requirements
and information relating to the points above.
in its Cr policy, HL Display takes a very firm stand against
corruption. Corruption among employees will not be tolerated under
any circumstances. This is also reiterated in the Code of Conduct,
which is signed by everyone at managerial level in the Company.
Average number of employees
933
2005
949
2006
968
2007
983
2008
906
2009
HL DispLay ÅrsreDovisning 2007
Value added per employee KSEK
510
2005
525
2006
601
2007
employees
HL Display’s Cr policy defines the fundamental values that will
be adhered to throughout the Company. The policy clearly states
that the Company shall offer all employees equal opportunities
regardless of background, gender, ethnicity or age. HL Display also
respects employees’ rights to collective bargaining, and encourages
organisation into trade unions as this facilitates dialogue with the
employees.
2009 was dominated by an extraordinary market situation,
which necessitated cost-cutting measures and optimisation of
staffing in each subsidiary. This was a central part of the work
of the Human resources department in 2009. staff cuts were
necessary in the production companies and the sales companies
across the world. approximately 140 jobs were discontinued.
HL Display closely monitors local legislation and collective
agreements in this process.
spotlight on management development
HL Display values the importance of leadership in the Company
and has high expectations with regard to the managerial role.
Leadership plays a key role in the development of the business and
in encouraging employee loyalty, motivation and performance.
During the year, HL Display implemented a large-scale management
development programme. The main aim of the programme
was to support managers and give them the necessary tools to
successfully introduce the group’s overall business strategy into
the local operations.
HL Display will be increasing its focus on skills development in
the future for two main reasons. Firstly, employees expressed a
wish for more skills development in HL Display’s employee survey.
secondly, the staffing freeze introduced in 2009 reduced the inflow
of expertise. This increased the need for internal skills development
for the Company’s employees. skills development for sales
personnel will be prioritised in 2010.
appraisal discussions
all employees at HL Display are offered appraisal discussions,
referred to as ”plus” discussions. These are an important tool
in supporting employees in their development. one of the aims
is to clarify the link between the local company’s targets and the
employee’s individual goals. This makes it clear to each employee
that his or her own work is important for the business as a whole
and that individual goals are linked to the company’s ability to
achieve its targets.
585
2008
529
2009
Age distribution year
4
-20
268
422
279
112
21-30 31-40 41-50 51-60
29
61-

HL Display annual report 2009 Corporate responsibility 33
Individual wage system
it is HL Display’s aim to have a wage system that encourages and
rewards positive efforts and good results at work. employees must
be able to see a link between their own performance and how their
wages develop. This helps ensure the right expertise remains in the
Company and encourages employees to develop their skills and performance.
Finally, this type of wage system strengthens productivity,
profitability and competitiveness in the group companies.
skills supply
HL Display appreciates the importance of creating a strong base
of proficient employees able to move up the organisation. The
Company works systematically to identify managers who have the
potential to assume a more important role than their present one.
it also identifies what are referred to as career positions. people
are recruited to these positions if they have the capacity to
gradually take on roles with more responsibility.
HL Display is also committed to promoting internal recruitment.
The number of internally recruited managers rose to 70 (50) in 2009.
HL Dialogue – HL Display’s employee survey
HL Dialogue was improved further in 2009 by initiatives such as
the introduction of new iT support, which will allow more efficient
monitoring of results. employees in 10 subsidiaries in seven
empLoyee FaCTs 2009 2008
number of employees as of December 31 1,114 974
gender structure, % Male 64 62
Female 36 38
education level, % university 29 35
investment in
staff training
Costs related to health
promotion activities
upper secondary school 44 53
Compulsory school 26 12
Total, MseK 3 2
per employee, KseK 2 2
per employee, KseK 2 2
reported incidents Minor 5 21
Number of years employed %
>24 years 2
20-24 years 3
15-19 years 8
10-14 years 17
5-9 years 23

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The share HL Display annual report 2009
THe HL DispLay sHare
The HL Display share was listed in 1993 and is currently quoted
on the nasdaq oMX stockholm small Cap list. as at 31 December
2009 the share capital in HL Display totalled seK 38,673,860,
divided among 30,939,088 shares, of which 3,652,096 are class
a shares and 27,286,992 class B shares. each share has a quota
value of seK 1.25. Class a shares carry one vote and class B
shares 1/10 of a vote. all shares provide equal entitlement to a
share of the company’s assets and profits.
share price development
since its stock exchange launch, the share’s value has increased
by 1,081 percent from seK 3.59 (corrected for bonus issues and
share split) to seK 42.40 on 30 December 2009. During the same
period the oMXspi increased by 279 percent. in 2009 the price
increased by 79 percent, while the oMXspi recorded an increase
of 47 percent. The highest price paid during the year for the
HL Display share was seK 42.60, and the lowest seK 23.00.
volume weighted average price was seK 29.64 and average closing
spread 1.73 percent. at the end of 2009 HL Display’s market
capitalisation reached MseK 1,157.
Trade volumes
During the year 4,677,433 shares were traded at a value of
MseK 138, corresponding to a turnover rate of 17.1 percent.
Liquidity provider
Hq Bank aB acts as liquidity provider in the company’s share. The
intention is to promote liquidity in the share. The agreement means
in brief that the liquidity provider will provide bid and offer prices
for the HL Display share and undertakes to buy and sell shares at
these prices on its own account.
shareholders
as at 31 December 2009 the number of shareholders was 2,145
(1,695). The proportion of institutional shareholders is estimated
at 62 (62) percent of capital and the proportion of foreign
shareholders is 5 (4) percent.
option schemes
There are three option schemes aimed at employees in senior
management positions. The option schemes totals 287,252
employee stock options and 906,000 warrants, which represents a
total of 3.90 percent of share capital and 1.87 percent of votes in
HL Display if fully subscribed. if the warrants are fully subscribed,
the number of shares will amount to 32,132,340. The warrants
have been issued on commercial terms, defined in accordance with
the so called Black & scholes valuation model, and the purchase
price was paid in cash.
utilisation of the warrants is not subject to continued
employment. The employee stock options have been issued to the
Ceo without fee. The entitlement of the Ceo to these options is
conditional on the achievement of certain group goals 2006-2008.
utilisation is conditioned by his continued employment.
HL DispLay ÅrsreDovisning 2007
The programme has been reported in accordance with iFrs 2.
Dividend policy
in the long term the Board is striving to achieve a dividend proportion
corresponding to 30-50 percent of the profit per share after tax.
Dividend
For the financial year 2009 the Board proposes a dividend of
seK 1.38 (1.38) per share, equivalent to 73 (44) percent of
earnings per share after tax. The justification for the proposal of
an unchanged dividend in seK is the Boards positive view of the
company’s long-term development.
70
60
50
40
30
Share price trends
B-share
OMXSPI
Number of shares traded, thousands (incl. after-hours)
20
2005 2006 2007 2008 2009
Shareholder structure %
Foreign owners 4.5
Swedish unit-trusts 16.4
Swedish institutions 40.7
Swedish private owners 38.4
12,000
10,000
8,000
6,000
4,000
2,000
© NASDAQ OMX

HL Display annual report 2009 The share 35
option schemes, number of options and subscription prices
number of proportion of
number of employee share capital if proportion of votes subscription
year of implementation warrants stock options fully subscribed if fully subscribed price exercise period
2006 – 287,252 0.97% 0.47% 39.25 1) 2009-03-31 - 2011-03-31
2007 2) 256,000 – 0.83% 0.40% 56.50 2010-03-01 - 2010-04-30
2009a 3) 325,000 – 1.05% 0.50% 33.95 2012-02-01 - 2012-03-31
2009B 3) 325,000 – 1.05% 0.50% 50.69 2012-02-01 - 2012-03-31
Total 906,000 287,252 3.90% 1.87%
1) Corrected for share split (4:1) 2008-04-28.
2) at the end of the reporting period 196,000 warrants had been acquired by employees.
3) at the end of the reporting period, all warrants in scheme 2009a had been acquired by employees but none from 2009B.
ownership structure on 31 December 2009
no. of shares no. of shareholders no. of shares % of shares
1 - 500 1,167 254,356 0.8
501 - 2,000 616 708,465 2.3
2,001 - 10,000 287 1,220,843 4.0
10,001 - 50,000 44 972,518 3.1
50,001 - 100,000 11 792,538 2.6
100,001 - 20 26,990,368 87.2
Total 2,145 30,939,088 100.0
1, 2)
Data per share
2009 2008 2007 2006 2005 2004 2003 2002 2001
earnings per share after tax, seK 1.88 3.11 3.49 1.97 1.15 1.52 -1.31 1.43 1.81
earnings per share after
dilution and tax, seK 1.88 3.11 3.48 1.96 1.14 1.51 -1.31 1.43 1.81
Dividend per share, seK 3) 1.38 1.38 1.38 0.88 0.75 0.63 0.41 0.41 0.39
Dividend, % of earnings after tax 73.4 44.4 39.4 44.5 65.4 41.2 n/a 28.9 21.5
share price end of period, seK 42.40 23.00 48.75 46.00 35.25 34.25 27.75 22.75 32.00
equity per share, seK 17.81 17.40 15.26 12.53 11.13 10.67 9.53 10.27 9.22
equity per share,
after dilution, seK 17.81 17.40 15.24 12.50 11.10 10.65 9.51 10.27 9.22
Direct yield, % 3.3 6.0 2.8 1.9 2.1 1.8 1.5 1.8 1.2
p/e ratio, 31 December 22.5 7.4 14.0 23.4 30.7 22.6 n/a 15.9 17.7
operational cash flow per share, seK 4.42 5.44 4.59 3.81 1.15 2.57 1.03 2.16 1.38
no. of shares 30,939,088 30,939,088 30,939,088 30,908,688 30,755,488 30,755,488 30,755,488 30,755,488 30,755,488
weighted-average no. of shares 30,939,088 30,939,088 30,933,176 30,774,032 30,755,488 30,755,488 30,755,488 30,755,488 30,755,488
weighted- average
no. of shares, diluted 30,939,088 30,939,088 30,984,444 30,843,836 30,838,152 30,828,556 30,801,440 30,769,556 30,755,488
1) see page 37 and note 15 for definitions of key ratios. 2) years 2001-2003 not restated according to iFrs. 3) according to the Board’s proposal.
Largest shareholders, 31 December 2009
no. of no. of Total no. share of no. of share of
a shares B shares of shares capital, % votes votes, %
ratos aB 436,864 8,463,416 8,900,280 28.8 1,283,206 20.1
The remius family and company 3,215,232 5,518,632 8,733,864 28.2 3,767,095 59.0
Didner & gerge mutual fund – 2,863,129 2,863,129 9.2 286,313 4.5
Livförsäkringsaktiebolaget skandia – 1,763,958 1,763,958 5.7 176,396 2.8
Lannebo funds – 1,255,000 1,255,000 4.1 125,500 2.0
Jp Morgan Chase Bank – 875,000 875,000 2.8 87,500 1.4
unionen – 468,400 468,400 1.5 46,840 0.7
Jonsson family – 420,751 420,751 1.4 42,075 0.7
psg Capital – 336,182 336,182 1.1 33,618 0.5
invus investment aB – 331,200 331,200 1.1 33,120 0.5
others – 4,991,324 4,991,324 16.1 499,132 7.8
Total 3,652,096 27,286,992 30,939,088 100.0 6,380,795 100.0
HL DispLay ÅrsreDovisning 2007
35

3 6
36
risk and sensitivity analysis HL Display annual report 2009
risK anD sensiTiviTy anaLysis
sensitivity analysis effect on net
Factor Change profit/loss, mseK
net sales 1% volume 6.7
Decline in the largest market -1% volume -1.3
price of pvC 1% 0.8
price of polycarbonate 1% 0.1
price of electricity 1% 0.1
Cost of personnel 1% 3.9
interest rates 1 percentage point 1.4
Depreciation 1% 0.4
euro exchange rate 10 öre 2.0
raw material sensitivity
plastic raw materials constituted 47 percent of the group’s raw
material purchases. The major raw material, pvC, was responsible
for 39 percent the group’s total raw material costs. although the
price of crude pvC recorded a steady increase during 2009, the
average price in 2009 is 13 percent lower than in 2008. The price
of pvC reached its highest recorded level in september 2008,
but has since decreased. Customer agreements are generally
renegotiated once annually and price adjustment clauses covering
raw material fluctuations are rare in this business. an increase of
one percent in pvC purchasing costs in 2009 would have reduced
profit before tax by MseK 0.8. HL Display purchases raw materials
on longer terms, often with currency clauses. in order to decrease
raw material price sensitivity, HL Display is successfully developing
methods for use of alternative materials.
Currency risk
HL Display’s main markets are within the euro area. Consequently
the company is exposed to exchange rate fluctuations as production
mainly takes place in sweden and invoicing in foreign currencies.
invoicing to subsidiaries is carried out in local currency in order to
concentrate the group’s currency exposure to sweden. external
distributors are invoiced in seK. The currency effects that impact
the company’s earnings are the transaction flows in the different
cur rencies, transaction exposure, and recalculation of the foreign
subsidiaries’ profit and loss statements and balance sheets,
translation exposure.
1,200
1,100
1,000
900
800
700
600
500
Price of crude PVC EURO/TONNE
2003 2004 2005 2006 2007 2008 2009
Source: ICIS-LOR
HL DispLay ÅrsreDovisning 2007
11.5
11.0
10.5
10.0
9.5
9.0
8.5
Exchange rate EURO/SEK
2004
2005
2006
2007
2008
2009
Source: The Riksbank (Sweden’s Central bank)
Transaction exposure
Transaction exposure is caused partly by invoicing in foreign
currencies and partly by purchases in foreign currency or purchases
where price is regulated by a currency clause. The swedish krona
was weakened in comparison with HL Display’s most important
export currencies in 2009, especially the euro and the norwegian
Krona. in relation to the British pound and the russian ruble, the
swedish Krona was strengthened. 39 percent of turnover is invoiced
in euro, 7 percent in gBp, 6 percent in ruB and 8 percent in noK.
HL Display’s purchases that affect exposure primarily consist of
overhead expenses for the overseas sales companies and of
material purchases whose prices are regulated through a currency
clause. HL Display’s general policy is to hedge future cash flows
in the most important currencies. HL Display’s currency exposure
has, as compared to 2008, had a positive effect on operating profit
before taxes by MseK 11.3, according to the table below.
Currency’s effect on profit before taxes
(as compared to average exchange rate in 2008, MSEK)
net sales 49.2
Costs goods/services sold incl. freight -25.5
selling expenses -13.3
administrative expenses -4.2
Development expenses -0.2
other operating income/expenses 5.3
Total effect of currency exchange rate changes on operating profit 11.3
Translation exposure
The net value of assets in currencies (equity in subsidiaries) other
than the reporting currency (seK) will change according to exchange
rate fluctuations. This risk is termed translation exposure. For more
information please refer to note 2.
Financial risks and financial instruments
For a description of financial risks, financial instruments used, and
financial policy in HL Display, please refer to note 2.
Raw materials and input goods 2009 %
Aluminium, steel and wire 3
Packaging 6
Semi manufactured
articles 10
Polycarbonate (PC) 3
PVC 39
Other 5
Tape 9
Electricity and
cooling water 7
Other plastic
raw materials 18

HL Display annual report 2009 nine year summary 37
nine year summary
Income statement (KseK) 2009 2008 2007 2006 2005 2004 2003 1) 2002 1) 2001
net sales 1,360,416 1,535,639 1,571,181 1,448,138 1,284,824 1,249,029 1,129,005 1,154,407 1,071,934
gross profit 667,265 759,370 737,413 668,402 589,650 596,663 506,883 541,393 489,919
operating profit/loss 86,215 130,258 160,540 106,727 62,727 107,753 -3,888 75,967 83,031
Depreciation 35,581 36,123 39,515 44,379 46,798 46,460 47,556 49,231 46,572
amortisation of surplus values 435 394 1,081 – – 1,216 2,065 2,444 2,953
profit/loss before taxes 84,143 136,157 154,688 92,254 61,720 92,837 -9,212 65,353 81,831
Loss from discontinued
operations, net after taxes – – – – -7,709 -15,950 – – –
net profit/loss for the year 58,208 96,317 108,236 61,874 34,745 46,621 -10,109 43,900 55,513
Balance sheet (KseK)
non-current assets 487,968 202,233 195,644 233,793 241,993 247,637 171,456 193,697 197,742
Current assets 753,665 744,064 696,053 642,768 518,478 519,778 474,088 456,711 436,897
Total assets 1,241,633 946,297 891,697 876,561 760,471 767,415 645,544 650,408 634,639
shareholders’ equity 551,115 541,853 474,865 387,756 342,329 328,293 292,979 315,821 283,667
provisions – – – – – – 13,876 23,478 26,121
non-current liabilities 315,528 88,780 111,444 129,540 123,083 138,807 66,421 66,444 107,037
Current liabilities 374,990 315,664 305,388 359,265 295,059 300,315 272,268 244,665 217,814
shareholders’ equity and liabilities 1,241,633 946,297 891,697 876,561 760,471 767,415 645,544 650,408 634,639
Key ratios
average number of employees * 836 983 968 952 933 967 975 925 855
revenue per employee, KseK 1,627 1,562 1,623 1,521 1,377 1,292 1,158 1,248 1,254
eBiTa margin, % 6.4 8.5 10.3 7.4 4.9 8.6 -0.3 6.6 7.7
eBT margin, % 6.2 8.9 9.8 6.4 4.8 7.4 -0,8 5.7 7.6
equity/assets ratio, % 44.4 57.3 53.3 44.2 45.0 42.8 45.4 48.6 44.7
Debt/equity ratio 0.64 0.19 0.27 0.52 0.55 0.63 0.49 0.44 0.45
return on total capital, % * 8.9 15.6 18.6 13.0 9.5 14.9 -0.2 12.0 16.0
return on equity after tax, % * 13.6 19.1 25.2 16.6 10.4 15.0 -3.3 14.6 21.2
return on capital employed, % * 12.8 23.0 27.6 19.0 13.5 20.8 -0.3 16.8 23.3
interest coverage ratio 20.9 20.7 16.5 7.4 6.6 6.5 -0.2 6.6 10.2
net investments, KseK 330,056 31,749 70,179 31,662 39,506 64,999 39,344 44,401 47,517
Cash and cash equivalents, KseK 213,427 220,773 177,079 163,244 81,131 112,013 94,840 100,388 65,201
goodwill, KseK 230,754 33,270 23,411 – – – 1,216 3,281 3,941
Development costs, KseK 26,984 28,000 37,545 39,070 40,378 42,142 36,958 32,897 30,589
1) years 2001-2003 not restated according to iFrs. For key ratios per share, see page 35.
Definitions
average collection period
accounts receivables on 31 December
divided by net sales increased by 20
percent vaT (average vaT in the
group) multiplied by 365 days.
Capital turnover rate *
net sales in relation to average
balance sheet total.
Development expenses
Development expenses are expenses
for production, materials and product
development.
Debt/equity ratio
interest-bearing liabilities in relation
to total equity.
Direct yield
Dividend as percentage of share
price on 31 December.
earnings per share after dilution
profit after tax, attributable to parent
company shareholders, divided by the
weighted average number of shares
after dilution.
earnings per share after tax
profit after tax, attributable to
parent company shareholders,
divided by the weighted average
number of shares. Corresponds
to net worth as HL Display does
not have hidden reserves.
eBITa margin
earnings before interest, taxes and
amortisations. operating profit added
for amortisation and impairment of
goodwill on consolidation, in relation
to net sales.
eBITDa
operating profit added for depreciation
amortisation and impairments.
eBT margin
earnings before taxes. profit before
taxes in relation to net sales.
equity/assets ratio
equity including minority share in
relation to balance sheet total.
equity per share after dilution
reported equity divided by the
weighted average number of shares
after dilution.
equity per share
reported equity divided by the
weighted average number of shares.
*2009 average calculated excluding ppe Ltd., which is consolidated from December 31, 2009.
For glossary see page 25.
Interest-bearing net liability/
receivable
interest-bearing liabilities less
interest-bearing assets.
Interest coverage ratio
profit before taxes plus financial
expenses in relation to financial
expenses.
Inventory coverage
inventory on 31 December divided by
net sales per business day.
operating cash flow per share
Changes in cash and cash equivalents
in any given year from operating
activities after deduction of interests
and tax payments, plus investments
in intangible and tangible operational
fixed assets, divided by the weighted
average number of shares.
p/e ratio
share price on 31 December divided
by earnings per share after tax.
return on capital employed *
profit after financial items plus financial
expenses in relation to average
capital employed. Capital employed
is the balance sheet total less noninterest-bearing
liabilities.
return on equity after tax *
profit after tax in relation to average
equity. Minority shares have been
excluded from both profit and capital.
return on total capital *
profit before taxes plus financial
expenses in relation to average
balance sheet total.
share turnover velocity %
share turnover during the year/
average Market Cap during period *
250/number of trading days * 100.
staff turnover
no. of employees that have left the
company divided by average number
of employees.
value added per employee
operating profit plus cost of salaries
and social security payments divided
by the average number of employees.
working capital
Current assets excluding cash and
cash equivalents minus non interestbearing
current liabilities.
HL DispLay ÅrsreDovisning 2007
1)
37

3 8
38
administration report HL Display annual report 2009
aDMinisTraTion reporT
HL Display aB (publ), reg. no. 556286-9957, is a swedish public limited
company. The Company’s registered office is in nacka, at the address
Cylindervägen 18, 131 26 naCKa sTranD.
group
Business – general
HL Display is a leading international supplier of merchandising and in-store
communication products and solutions to the retail sector. it is HL Display’s
goal to be a high-growth company with good profitability, thereby creating
added value for its shareholders.
Economic situation
HL is normally affected by seasonal variations, with sales lower in December
and January. This is because customers – mainly retail companies – do not
plan for restructuring during the Christmas period. The economic slowdown
has caused an 11 percent decline in sales. This is commented on later.
Demand
HL Display’s client structure, with a large number of customers in different
markets, means market risk is well distributed. HL produces and delivers
directly on the basis of assignments from customers. production changeover
times are short and lead times are extremely short – in most cases under
two weeks. as HL Display moves more towards customised integrated
solutions, orders are growing in size. This has gradually resulted in more
fluctuations in revenue streams.
Competition
HL Display faces global competition at the product level, with some
international suppliers able to offer individual products to several markets.
in merchandising and in-store communication solutions, the Company is
exposed to competition at the local level; in other words, in a country or a
region. as a global integrated supplier, HL Display does not have any direct
competitors at present. The fact that retail companies need uniform and
common solutions across several markets means HL Display’s risk is low
in developed markets and among large customers. as HL Display follows its
established customers into new markets, the risk in these new markets is
also considered relatively low.
Manufacturing, products and patents
HL Display is a world leader in the production methods which are most
important to the Company. Fresh approaches and innovative design have
been instrumental in HL Display’s establishment of a new product standard
in large areas of retailing. it therefore comes as no surprise that there have
been several instances of the Company’s products being copied. HL Display
has an active patent strategy aimed at protecting all its innovations in the
core competence areas of extrusion and injection moulding. where patent
protection is not possible, pattern or design protection is used to discourage
direct copies. HL Display actively defends its patents in case of infringement.
Political risk
political risk consists of legislation, taxation issues and trade policy factors.
HL Display is not exposed to any significant political risk.
Employees
HL Display has a large number of key personnel with a high expertise
level and well-established customer relations. as the company’s expertise
shifts further out in the organisation, closer to the customer, database
documentation of work with customers becomes increasingly important. a
CrM system to simplify documentation and support customer relationship
work has been installed in the group for some time. work with customers
takes place in teams, which means the financial effects of the loss of
individual key staff are limited. The average number of employees during the
HL DispLay ÅrsreDovisning 2007
year was 906 (983). The number of employees at the balance sheet date was
1,114 (974). Disregarding ppe, the number of employees at the end of the
year was 836 (see also note 8).
Ownership
The HL Display share has been listed since 1993, and is now traded on
the nasdaq oMX stockholm small Cap list. The number of shareholders at
31 December 2009 was 2,145 (1,695). institutional ownership represents
approximately 62 (62) percent of the capital and foreign ownership 5 (4)
percent. The largest shareholder is ratos aB, with 28.8 percent of the capital,
followed by the remius family with 28.2 percent. For more information about
the HL Display share, see pages 34-35.
significant events during and after the financial year
Operations
The markets in which HL Display is active were hit hard by the global
recession. Many retail customers postponed store renovation projects and
new openings. This had an adverse effect on demand, which plummeted in
the nordic region and in Central/eastern europe. However, the trend was not
particularly apparent in asia. initiatives to streamline internal processes and
adjust production capacity progressed continuously throughout the year.
HL Display has continued to develop the regional logistics centre structure,
and a new logistics centre for Central and eastern europe was opened in
Hungary during the year.
Organisational changes
The British ppe Ltd was acquired during the year. The acquisition strengthens
HL Display in the important brand manufacturers’ customer segment by
means of access to expertise in customised merchandising solutions. we
also gain capacity in multi-material production, in other words production
of products with parts made of plastic, metal and wood, for example.
The company was consolidated with effect from 31 December 2009. For
11 months of 2009 (abbreviated financial year), ppe reported net sales of
MseK 304 and eBiTa of MseK 31, after adjustment to comparable principles.
see also note 5.
a sales company was established in Dubai during the year to develop the
market in the Middle east. This brings the number of sales companies to 34.
New financing structure
To secure financing for the acquisition and retain capacity for taking
advantage of future acquisition opportunities, a bank financing package
totalling MseK 382 was arranged in December. The package comprises
three-year credit facilities of MseK 323 consisting of acquisition financing
of MgBp 22 (term loan), with regular repayments and interest payments.
a three-year credit facility of MseK 70 and a 364-day credit line of MseK
60 have been set up, which both were unused at 31 December 2009. in
addition, the group had previously granted credits totalling MseK 75 and
acquired credits amounting to MseK 37 at the end of the reporting period.
notes on earnings, financial position and cash flow
Income statement
The market experienced very negative growth in 2009 and this also affected
HL Display. Measures to increase efficiency and adjust capacity were taken
during the year. The group’s net sales for the year amounted to MseK
1,360 (1,536), which represents a decline of 11 percent on the 2008 figure.
Compared with the previous year, the swedish krona’s value against local
currencies had a positive effect of MseK 49 on sales.
operating profit for the year amounted to MseK 86 (130), while profit
before tax was MseK 84 (136). Compared with the previous year, the
swedish krona’s value against local currencies had a positive effect of
MseK 11 on operating profit. net interest income/expense for the period was
MseK -1 (-1). Currency effects amounted to MseK -1 (7). HL Display’s most

HL Display annual report 2009 administration report 39
important trading currencies apart from the swedish krona are the British
pound, russian rouble and norwegian krone.
Balance sheet
Total assets increased by MseK 295 or 31 percent, which is largely an
effect of the acquisition of ppe Ltd. working capital rose by MseK 10. a new
financing structure was established in connection with the acquisition (see
the section above). net investments in non-current assets for the period
amounted to MseK 330 (32). MseK 302 of this figure is attributable to the
acquisition of ppe. scheduled depreciation for the period was MseK 35
(36). inventories had declined by MseK 36 at 31 December, and constitute
11 (12) percent of net sales (without ppe). The inventory coverage in days,
fell by 19 percent to 23. Trade receivables had declined by MseK 52 at 31
December (without ppe). The receivables turnover ratio was 16 (18) percent.
The average customer credit period was 49 (54) days.
Equity
The group’s equity amounted to MseK 551 (542) at 31 December 2009.
equity per share was seK 17.81 (17.40). The equity/assets ratio was 44 (57)
percent. non-current liabilities increased by MseK 227 to MseK 316. Current
liabilities increased by MseK 59. The debt/equity ratio rose to 0.64 (0.19).
interest-bearing liabilities amounted to MseK 352 (100) at 31 December. of
these, MseK 91 (39) were current liabilities. Changes in equity are largely
made up of profit for the year and the annual dividend to shareholders. in
2009 the dividend was seK 1.38 per share (total MseK 42.7). existing share
option schemes may result in changes in equity in 2010-2012 as the options
can be converted into shares. For more information, see pages 34-35.
Cash flow
The cash flow statement has been prepared using the indirect method.
reported cash flows only include transactions which involved cash inflows
and outflows. Cash flow from operating activities fell to MseK 126 (154) in
2009, with the more effective working capital partly compensating for the
weaker operating profit. The acquisition of ppe had a major impact on cash
flow from investing activities, which amounted to MseK -290 (-24). without
the ppe acquisition, investments amounted to MseK 23 and were largely
made up of property, plant & equipment such as production equipment and
tools for new products. Cash flow from financing activities was MseK 159
(-90). Loans increased by MseK 201 (net) and dividends totalling seK 43
(43) were paid.
research & development
product development is an important part of HL Display’s growth strategy.
Development expenses amounted to MseK 27 (28) in 2009. The level of
investment in tools and production equipment was retained in order to allow
an increased degree of automation.
Information on risks and uncertainties
Fluctuating raw material prices and exchange rates constitute uncertainties,
but not significant risks. a more detailed description of HL Display’s risks and
uncertainties can be found in the risk and sensitivity analysis on page 36.
Dispute
During the year, a dispute arose with the partner in the group’s joint venture,
Trion industries. Consolidated earnings in 2009 were charged with costs
amounting to MseK 4.5. Currently remains uncertainly of up to MseK 10.
Financial instruments and risk management
information about HL Display’s financial policy, risk management and use of
financial instruments can be found in note 2.
Information on the environment
intensive environmental protection programmes have been in progress at all
the production facilities for some years. see page 30. The screen-printing
operations at Falun are subject to notification requirements because of
possible detrimental effects on the air. HL Display does not engage in any
activities which are subject to permit.
The work of the Board during the year
a report on the work of the Board and its committees is contained in the
corporate governance report on pages 71-75.
expectations regarding future growth
Business objectives
The financial objectives of HL Display group are annual organic growth of
5-10 percent, and an eBiTa margin of at least 12 percent within a few years.
Outlook for 2010
sales and earnings are expected to increase compared with 2009.
parent company
The parent company’s head office is in nacka and its operations cover group
services and group management functions. a representative office has been
set up in suzhou in China. The parent company’s profit after financial items
amounted to MseK 74 (124).
remuneration of senior executives
information on remuneration of senior executives can be found in note 8.
note 8 also describes the guidelines for remuneration of senior executives
which were adopted by the 2009 annual general meeting. The guidelines
to be proposed to the 2010 annual general meeting are unchanged apart
from the warrants programme from 2009 being subsidised by 40 percent
compared with 50 percent previously. The proposed guidelines can be found
in note 8.
option schemes
There were three option schemes in the Company at the balance sheet
date. The first is a warrant programme from 2007 comprising 256,000
warrants, 196,000 of which have been subscribed for by members of group
management. The second is a warrant programme from 2009 comprising
650,000 options, 325,000 of which have been subscribed for by members
of group management. The remainder can be subscribed for in March 2010.
The third is a share option scheme comprising a maximum of 287,252 share
options which can be exercised by the Ceo until the end of March 2011. if
all the option schemes are fully exercised, the new shares will represent 3.9
percent of total share capital. For more information, see pages 34-35.
proposed distribution of profit
The Board proposes that the available profits of seK 329,506,850 be
distributed as follows:
Dividend, 30,939,088 * seK 1.38 42,695,941
Carried forward 286,810,909
Total 329,506,850
Details of the Company’s earnings and financial position can be found in the
income statements, balance sheets and associated notes on the following
pages.
HL DispLay ÅrsreDovisning 2007
39

4 0
40
group HL Display annual report 2009
group
Income statement for the group
KseK, 1 January-31 December note 2009 2008
net sales 3, 4 1,360,416 1,535,639
Cost of goods/services sold -693,151 -776,269
gross profit 667,265 759,370
selling expenses -425,245 -463,214
administrative expenses 39 -123,460 -134,454
research and development expenses -26,984 -28,000
other operating income 6 11,206 5,882
other operating expenses 7 -16,567 -9,326
operating profit 8, 9, 10 86,215 130,258
Financial income 11 2,817 12,794
Financial expenses 12 -4,889 -6,895
net financial items -2,072 5,899
profit before taxes 84,143 136,157
income tax expense 14 -25,935 -39,840
net profit for the year 58,208 96,317
attributable to:
The parent company’s shareholders 58,208 96,254
Minority interest – 63
58,208 96,317
earnings per share 15
before dilution (seK) 1.88 3.11
after dilution (seK) 1.88 3.11
statement of Comprehensive Income for the group
KseK, 1 January-31 December note 2009 2008
net profit for the year 58,208 96,317
other comprehensive income
Translation differences on translation of foreign operations -14,998 22,385
net change in fair value of cash flow hedges 11,486 -9,467
other comprehensive income for the year -3,512 12,918
Comprehensive income for the year 14, 33 54,696 109,235
Comprehensive income for the year attributable to:
The parent company’s shareholders 54,696 108,452
Minority interest – 783
Comprehensive income for the year 54,696 109,235
HL DispLay ÅrsreDovisning 2007

HL Display annual report 2009 group 41
statement of Financial position for the group
KseK, 31 December note 2009 2008
assets 4, 16, 17
non-current assets
intangible assets 5, 18 243,612 42,781
property, plant and equipment 19 223,469 137,922
participations in associated companies and joint ventures 21 3,000 5,000
non-current receivables 22 2,316 2,329
Deferred tax asset 14 15,571 14,201
Total non-current assets 487,968 202,233
Current assets
inventories 24 179,718 187,165
Tax assets 24,900 8,892
Trade and other receivables 25 255,997 271,025
prepaid expenses and accrued income 26 30,158 25,038
other current assets 27 49,465 31,171
Cash and cash equivalents 28 213,427 220,773
Total current assets 753,665 744,064
Total assets 1,241,633 946,297
equity and liabilities
equity 29
share capital 38,674 38,674
reserves 9,266 12,778
retained earnings including net profit for the year 503,175 490,401
Total equity 551,115 541,853
Liabilities
non-current liabilities
interest-bearing non-current liabilities 2, 31 261,077 61,780
other non-current liabilities 25,380 607
pension provisions 32 5,116 4,367
Deferred tax liability 14 23,955 22,026
Total non-current liabilities 315,528 88,780
Current liabilities
interest-bearing current liabilities 2, 31 91,087 38,559
Trade and other payables 101,944 78,614
Tax liabilities 12,302 14,292
other current liabilities 29,554 49,733
accrued expenses and prepaid income 35 140,103 134,466
Total current liabilities 374,990 315,664
Total liabilities 690,518 404,444
Total equity and liabilities 1,241,633 946,297
For information about pledged assets and contingent liabilities, see note 36.
HL DispLay ÅrsreDovisning 2007
41

4 2
42
group HL Display annual report 2009
statement of Changes in equity for the group
equity relating to the parent company’s shareholders
retained earnings
Translation Hedge including profit minority Total
KseK share capital reserve reserve for the year Total interest equity
opening balance Jan 1, 2008 38,674 – 580 432,770 472,024 2,841 474,865
Comprehensive income for the year – 21,665 -9,467 96,254 108,452 783 109,235
Dividend – – – -42,541 -42,541 – -42,541
equity-settled share-based
instruments (iFrs 2) – – – 294 294 – 294
Closing balance Dec 31, 2008 38,674 21,665 -8,887 486,777 538,229 3,624 541,853
equity relating to the parent company’s shareholders
retained earnings
Translation Hedge including profit minority Total
KseK share capital reserve reserve for the year Total interest equity
opening balance Jan 1, 2009 38,674 21,665 -8,887 486,777 538,229 3,624 541,853
Comprehensive income for the year – -14,998 11,486 58,208 54,696 – 54,696
Dividend – – – -42,696 -42,696 – -42,696
acquired minority share – – – – – -3,624 -3,624
warrant premiums paid – – – 779 779 – 779
equity-settled share-based
instruments (iFrs 2) – – – 107 107 – 107
Closing balance Dec 31, 2009 38,674 6,667 2,599 503,175 551,115 – 551,115
statement of Cash Flows for the group
KseK, 1 January-31 December note 2009 2008
operating activities
operating profit 86,215 130,258
Depreciation 35,580 36,123
other items not affecting cash flow 37 4,940 18,697
interest received 3,072 5,326
interest paid -4,508 -6,639
Taxes paid -35,683 -37,155
Cash flow from operating activities before changes in working capital 89,616 146,610
Cash flow from changes in working capital
increase (-)/Decrease (+) in inventories 30,665 -27,408
increase (-)/Decrease (+) in operating assets 18,732 38,866
increase (-)/Decrease (+) in operating liabilities -13,092 -3,650
net cash flow from operating activities 125,921 154,418
Investing activities
investments in property, plant and machinery -24,938 -27,652
sale of property 401 4,247
investments in intangible assets -1,829 -1,116
acquisitions of subsidiaries, net effect on liquidity -265,547 -652
Change in other financial assets 2,000 1,045
net cash flow from investing activities -289,913 -24,128
Financing activities
new share issue, warrant premiums 778 –
Borrowing 258,280 2,688
repayment of debt -57,155 -49,653
Dividend paid to parent company’s shareholders -42,696 -42,541
net cash flow from financing activities 159,207 -89,506
net cash flow for the year -4,785 40,784
Cash and cash equivalents at beginning of the year 220,773 177,079
Foreign exchange differences -2,561 2,910
Cash and cash equivalents at end of the year 213,427 220,773
HL DispLay ÅrsreDovisning 2007

HL Display annual report 2009 parent Company 43
parenT CoMpany
Income statements for the parent Company
KseK, 1 January-31 December note 2009 2008
net sales 3 77,834 101,254
Cost of services sold -81,211 -99,843
gross profit -3,377 1,411
selling expenses 9,844 -2,385
administrative expenses 39 -23,552 -21,774
research and development expenses -18,085 -15,875
other operating income 6 3,196 1,553
other operating expenses 7 -666 –
operating loss 8, 9 -32,640 -37,070
Financial income and expenses:
income from participations in group companies 11 100,500 153,400
income from other securities and receivables that are non-current assets 11 6,584 7,882
other interest income and financial income 11 335 58
interest and other financial expenses 12 -768 -247
profit before appropriations and taxes 74,011 124,023
appropriations 13 -2,696 -12,386
profit before taxes 71,315 111,637
income tax expense 14 -7,583 -19,515
net profit for the year 63,732 92,122
HL DispLay ÅrsreDovisning 2007
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4 4
44
parent Company HL Display annual report 2009
Balance sheets for the parent Company
KseK, December 31 note 2009 2008
assets
non-current assets
intangible assets 18 5,537 7,562
property, plant and equipment 19 5,490 3,055
Financial assets
participations in group companies 20 134,443 80,443
participations in associated companies and joint ventures 21 10,147 12,147
receivable from group companies 23 203,284 –
Deferred tax assets 14 2,097 –
Total financial assets 349,971 92,590
Total non-current assets 360,998 103,207
Current assets
Current receivables
receivables from group companies 23 366,549 367,560
prepaid expenses and accrued income 26 3,950 5,665
other current assets 27 16,323 7,153
Total current assets 386,822 380,378
Cash and cash equivalents 514 10,048
Total current assets 387,336 390,426
Total assets 748,334 493,633
equity and liabilities
equity 29
Restricted equity
share capital (3,652,096 shares class a and 27,286,992 shares class B) 38,674 38,674
statutory reserve 8,010 8,010
Unrestricted equity
Fair value reserve -1,331 –
retained earnings 267,106 235,678
net profit for the year 63,732 92,122
Total equity 376,191 374,484
untaxed reserves 30 54,834 52,138
non-current liabilities
Liabilities to group companies 34 253,766 –
Current liabilities
Trade and other payables 15,534 7,013
Liabilities to group and associated companies, joint ventures 34 27,964 14,900
Tax liabilities – 7,596
other current liabilities 1,397 18,100
accrued expenses and prepaid income 35 18,648 19,402
Total current liabilities 63,543 67,011
Total equity and liabilities 748,334 493,633
pledged assets and contingent liabilities for the parent Company
KseK, as at 31 December note 2009 2008
Contingent liabilities 36 351,731 213,518
HL DispLay ÅrsreDovisning 2007

HL Display annual report 2009 parent Company 45
statement of Changes in equity for the parent Company
restricted equity unrestricted equity
share statutory Fair value retained profit/loss Total
KseK note 29 capital reserve reserve earnings for the year equity
opening balance Jan 1, 2008 38,674 8,010 – 280,844 – 327,528
group contribution paid – – – -2,919 – -2,919
Total changes posted directly to equity – – – -2,919 – -2,919
profit or loss for the year – – – – 92,122 92,122
Total changes in equity, excl. distribution to shareholders – – – -2,919 92,122 89,203
Dividend – – – -42,541 – -42,541
equity-settled share-based instruments (iFrs 2) – – – 294 – 294
Closing balance Dec 31, 2008 38,674 8,010 – 235,678 92,122 374,484
restricted equity unrestricted equity
share statutory Fair value retained profit/loss Total
KseK note 29 capital reserve reserve earnings for the year equity
opening balance Jan 1, 2009 38,674 8,010 – 327,800 – 374,484
group contribution paid – – – -18,883 – -18,883
Total changes posted directly to equity – – – -18,883 – -18,883
profit or loss for the year – – -1,331 – 63,732 62,401
Total changes in equity, excl. distribution to shareholders – – -1,331 -18,883 63,732 43,518
Dividend – – – -42,696 – -42,696
warrant premiums paid – – – 778 – 778
equity-settled share-based instruments (iFrs 2) – – – 107 – 107
Closing balance Dec 31, 2009 38,674 8,010 -1,331 267,106 63,732 376,191
statement of Cash Flows for the parent Company
KseK, 1 January-31 December note 2009 2008
operating activities
operating loss -32,640 -37,070
Depreciation 3,656 3,014
other items not affecting cash flow 37 -2,950 6,771
interest received 7,106 6,968
Dividends received and group contribution 143,363 155,859
interest paid -437 -248
income tax paid -16,852 -15,217
Cash flows from operating activities before change in working capital 101,246 120,077
Cash flow from changes in working capital
increase (-)/Decrease (+) in operating assets -45,550 -37,962
increase (+)/Decrease (-) in operating liabilities -11,862 -13,626
net cash flow from operating activities 43,834 68,489
Investing activities
investments in property, plant and equipment -3,086 -3,011
investments in intangible assets -988 -273
investments in subsidiaries -54,000 -4,159
Loans to group companies -205 088 –
sale of shares and participations 2,000 644
net cash flow from investing activities -261 162 -6,799
Financing activities
new share issue, warrant premiums 778 –
Loans from group companies 253,766 –
Dividend paid -42,696 -42,541
group contributions paid -4,054 -11,190
net cash flow from financing activities 207 794 -53,731
net cash flow for the year -9,534 7,959
Cash and cash equivalents at beginning of the year 10,048 2,089
Cash and cash equivalents at end of the year 514 10,048
HL DispLay ÅrsreDovisning 2007
45

4 6
46
notes HL Display annual report 2009
noTes
noTe 1 sIgnIFICanT aCCounTIng poLICIes
Compliance with standards and laws
The consolidated financial statements have been prepared in accordance
with the international Financial reporting standards (iFrs) issued by the
international accounting standards Board (iasB) and interpretations issued
by the international Financial reporting interpretations Committee (iFriC),
as adopted by the eu. in addition the swedish Financial reporting Board’s
recommendation rFr 1.2, supplementary accounting rules for groups, have
been applied. The group’s accounting policies described below have been
consistently applied to all periods presented in the consolidated financial
statements unless otherwise stated.
The parent Company applies the same accounting policies as the group,
expect in the cases specified below in the section entitled “The parent
Company’s accounting policies”.
The Board has authorised the annual report and consolidated financial
statements for issue on 10 March 2010. The consolidated income
statement, statement of comprehensive income and statement of financial
position will be presented for adoption at the annual general meeting on 22
april 2010.
Basis of preparation
The parent Company’s functional currency is swedish kronor, which is also the
presentation currency. Consequently, the financial statements are presented
in swedish kronor. unless otherwise stated, amounts are reported in seK
thousands, rounded to the nearest thousand. assets and liabilities are
measured at historical cost, apart from certain financial assets and liabilities,
which are measured at fair value. property, plant and equipment are reported at
the lower of the earlier reported value and the fair value, less direct cost to sell.
preparation of financial statements in compliance with iFrs requires
management to make critical judgments, accounting estimates and
assumptions which affect the application of the accounting policies and the
carrying amounts of assets, liabilities, income and expenses. The estimates
and assumptions are based on historical experience and a number of other
factors that are considered reasonable in the prevailing circumstances. The
actual outcome may differ from these estimates. accounting estimates and
assumptions are reviewed regularly. Changes to estimates are reported in the
period in which the change occurs and, where applicable, in future periods.
Critical accounting estimates and assumptions made by management
during application of iFrs are described in more detail in note 41. The
group’s accounting policies described below have been applied consistently
to all periods presented in the consolidated financial statements, unless
otherwise specified.
The group’s accounting policies have been applied consistently to all
periods presented for the reporting and consolidation of the parent Company,
subsidiaries, associates and joint ventures.
amended accounting policies
The following new standards and interpretations have been applied in
preparing the 2009 annual financial statements:
Presentation of financial statements
with effect from 1 January 2009, the group applies the amended ias 1
presentation of Financial statements. The amendment means that income
and expense, previously recognised directly in equity, is now reported under
other comprehensive income in the statement of comprehensive income,
which HL Display presents immediately after the income statement.
HL Display has decided to use the new report titles introduced in ias 1 –
income statement, statement of comprehensive income, statement of financial
position, statement of changes in equity and statement of cash flows.
Comparative periods have been adjusted throughout the annual financial
statements in order to follow the new format. as the changes only affect the
HL DispLay ÅrsreDovisning 2007
presentation, no amounts – either relating to earnings per share or other
items in the financial statements – have been changed.
Segment information
iFrs 8 operating segments, which supersedes ias 14 segment reporting,
introduces a management approach to the classification and presentation
of operating segments. The new principles are described later in a separate
section. iFrs 8 has been applied retrospectively in accordance with the
standard’s transitional provisions, and the prior year disclosures have been
restated. application of iFrs 8 has resulted in a new segment classification
which corresponds to the classification used by group management to review
financial performance. Consequently, the prior year amounts have been
adjusted to reflect this classification.
Disclosure of financial instruments
amendments to IFRS 7 Financial Instruments: Disclosures, effective for
annual periods beginning on or after 1 January 2009, affect the Company’s
financial reporting with effect from the 2009 annual financial statements.
The amendments are essentially new disclosure requirements in respect
of financial instruments measured at fair value in the statement of financial
position. The instruments are divided into three qualitative levels of inputs.
The 3-level hierarchy indicates what disclosures are required and how the
data inputs disclosed are determined. Level 3 is the lowest level of input
quality and is subject to more disclosure requirements than the other
two levels. The disclosure requirements mainly affect note 2 below. The
amendments to iFrs 7 also introduce certain changes regarding liquidity
risk disclosure requirements.
with effect from 1 January 2009, the group applies the amended IAS
23 Borrowing Costs. The amendment means that the group capitalises
borrowing costs relating to qualifying assets with a commencement date
on or after 1 January 2009. Borrowing costs were previously expensed in
the period in which they were incurred rather than being capitalised. The
amendment is applied prospectively in accordance with the transitional
provisions in ias 23. a more detailed description of the accounting policy
can be found later in this note.
new IFrss and interpretations not yet applied
The effective date for the following amended standards is in the next financial
year. The Company has not applied early adoption in preparing these financial
statements. There are no plans for early adoption of new or amended
standards with a future effective date.
iFrs 3 Business Combinations (Revised) and ias 27 Consolidated and
Separate Financial Statements (Revised) include the following changes: there is
a new definition of ’a business’, transaction costs associated with a business
combination are expensed, contingent consideration is required to be measured
at fair value at the time of the business combination, effects of remeasurement
of liabilities relating to contingent consideration are recognised in profit or loss
for the year. The acquisition of additional shares after control has been obtained
is accounted for as an equity transaction with owners, and is recognised directly
in equity. This is a departure from HL Display’s present policy of reporting
excess amounts as goodwill. The revised and amended standards will be
effective for accounting periods commencing on or after 1 January 2010.
iFrs 9 Financial instruments is intended to supersede ias 39 Financial
instruments: recognition and Measurement as of 2013 at the latest. There
are presently no financial assets that are expected to be affected by the new
rules. Changes to ias 24, ias 32, iFrs 2, as well as iFriC 12 and 15-18 are
not expected to have any effects on the group’s profit or financial position.
segment reporting
an operating segment is a component of the group that engages in business
activities from which it may earn revenues and incur expenses, and for which
discrete financial information is available. The segment’s operating results

HL Display annual report 2009 notes 47
are reviewed by the Company’s chief operating decision maker, in order to
make decisions about resources to be allocated to the segment and assess
its performance. see note 4 for a further description of the classification and
presentation of operating segments.
Classification
non-current assets and liabilities are essentially amounts that are expected
to be recovered or paid more than twelve months after the reporting date.
Current assets and liabilities are essentially amounts that are expected to be
recovered or paid within twelve months of the reporting date.
Basis of consolidation
Subsidiaries
subsidiaries are companies over which HL Display aB has control. Control
exists when the Company has the power, directly or indirectly, to govern the
financial and operating policies of an enterprise so as to obtain benefits
from its activities. The existence and effect of potential voting rights that
are presently (i.e. currently) exercisable or presently convertible should be
considered when assessing whether control exists.
subsidiaries are accounted for by applying the acquisition method. The
acquisition is treated as a transaction through which the group indirectly
acquires the subsidiary’s assets and assumes its liabilities. The group’s
cost of acquisition is determined by means of an acquisition analysis. The
analysis determines the cost of acquisition and the fair value of the acquired
identifiable assets and assumed liabilities and contingent liabilities. a positive
difference between cost and the fair value of the acquired identifiable assets
and assumed liabilities and contingent liabilities is recognised as goodwill.
any negative difference is recognised directly in the income statement.
The results of operations of a subsidiary are included in the consolidated
financial statements from the date of acquisition until the date on which
control ceases.
Associates and joint ventures
associated companies are companies that are not subsidiaries, but where
HL Display aB holds, either directly or indirectly, more than 20 percent of
the votes or by some other means has a significant influence on operational
and financial control. participations in associated companies are reported in
the consolidated financial statements according to the equity method. Joint
ventures where HL Display controls more than 50 percent of the number of
votes and holds a deciding influence are consolidated as subsidiaries. Joint
ventures where HL Display through partnership agreements with one or more
parties, holds a joint, deciding influence over operational and financial control,
are consolidated using the proportionate method. The proportionate method
means that HL Display’s share of the joint venture companies’ income,
expenses, assets and liabilities, is reported on an item by item basis.
Transactions eliminated on consolidation
intra-group receivables and liabilities, income and expenses, and unrealised
gains or losses arising from intra-group transactions are eliminated in full
when preparing the consolidated financial statements.
unrealised profits resulting from transactions with associates and jointly
controlled companies are eliminated to the extent that they correspond to
the group’s shareholding in the company. unrealised losses are eliminated
in the same way as unrealised profits, but only to the extent that there is no
indication of any impairment.
Foreign currency
Transactions in foreign currency
Foreign currency transactions are translated into the functional currency using
the exchange rates prevailing at the transaction date. The functional currency
is the monetary unit of account of the principal economic environment in which
the Company operates. Monetary assets and liabilities denominated in foreign
currencies are translated into the functional currency using the exchange rates
prevailing at the reporting date. Foreign exchange gains or losses resulting
from the settlement of such transactions are recognised in the income statement.
non-monetary assets and liabilities recognised at historical cost are
translated using the exchange rate prevailing at the date of the transaction.
Financial statements of foreign entities
assets and liabilities of foreign entities, including goodwill and other fair
value adjustments, are translated into swedish kronor using the exchange
rate prevailing at the reporting date. income and expenses in the income
statements of foreign entities are translated into swedish kronor using
average exchange rates. This average is an approximation of the cumulative
effect of the rates prevailing at the transaction dates. exchange differences
arising from the translation of foreign operations are recognised in other
comprehensive income as a translation reserve.
revenue
The group’s revenue consists almost exclusively of sale of products.
revenue from sale of goods is recognised when the significant risks and
rewards of ownership of the goods have been transferred to the buyer.
revenue from the sale of services is recognised by reference to the stage of
completion at the reporting date. The stage of completion is established by
calculating the relationship between value delivered and total value of order.
revenues are not reported if it is probable that financial advantage will not
accrue to the group. sales are reported net after vaT and discounts.
operating expenses and finance income and costs
Operational leases
operating lease payments are recognised as an expense in the income
statement over the lease term on a straight-line basis. incentives for
the agreement of a new or renewed operating lease are recognised as a
reduction of the rental expense over the lease term. Contingent rents are
recognised as an expense in the periods when they arise.
Finance income and costs
Finance income and costs comprise interest income on bank deposits,
receivables and interest-bearing securities, interest expense on borrowings,
dividend income, exchange differences, unrealised and realised gains
or losses on financial investments and derivatives. interest income on
receivables and interest expense on liabilities are recognised using the
effective interest method. The effective interest rate is the rate that exactly
discounts estimated future payments or receipts through the expected life
of the financial instrument to the net carrying amount of the financial asset
or financial liability. Dividend income is recognised when the right to receive
payment is established. The group does not capitalise interest costs on
assets, as allowed under ias 23.
Loan expenses are recognized in earnings using the effective interest
method except to the extent they are directly attributable to the acquisition,
construction or production of assets that take a considerable time to
complete for use or sale, in which case they are part of the acquisition value.
Taxes
income tax consists of current tax and deferred tax. Taxes are recognised in
the income statement except when the underlying transaction is recognised
in other comprehensive income, in which case the related tax effect is
recognised in equity.
Current tax is the amount of income taxes payable or recoverable in
respect of the taxable profit or loss for the current year, and is calculated
using tax rates enacted or substantially enacted by the reporting date, and
any adjustments relating to prior periods.
a deferred tax liability is recognised for temporary differences between
the carrying amounts of assets and liabilities and their corresponding tax
bases except to the extent that the deferred tax liability arises from the initial
recognition of goodwill or the initial recognition of an asset or liability in a
transaction which is not a business combination and at the time of the transaction
affects neither accounting profit nor taxable profit or loss. a deferred
tax liability is recognised for temporary differences associated with investments
in subsidiaries and associates except to the extent that it is probable
that the temporary difference will not reverse in the foreseeable future. The
measurement of deferred tax is based on the manner in which the Company
expects to recover or settle the carrying amount of its assets and liabilities.
Deferred tax liabilities and assets are measured using the tax rates and tax
laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets on temporary differences and deferred tax assets
arising from the carryforward of unused tax losses are only recognised to
the extent that it is probable that they can be utilised. The carrying amounts
of deferred tax assets are reviewed and reduced to the extent that it is no
longer probable that the deferred tax asset can be utilised.
any additional income taxes arising from the distribution of dividends are
recognised at the same time as the dividend is recognised as a liability.
HL DispLay ÅrsreDovisning 2007
47

4 8
48
notes HL Display annual report 2009
Financial instruments
Financial instruments reported in the statement of financial position under
assets include cash & cash equivalents, trade receivables, financial deposits
and derivatives. Financial instruments reported under liabilities include trade
payables, borrowings and derivatives.
Recognition and derecognition
a financial asset or liability is recognised in the statement of financial
position when the Company becomes a party to the instrument’s contractual
terms. Trade receivables are recognised in the statement of financial position
when invoices are sent. a liability is recognised when the counterparty has
performed and there is a contractual obligation to pay, even if an invoice has
not yet been received. Liabilities are recognised when invoices are received.
Financial assets are derecognised in the statement of financial position
when the rights under the contract have been realised, have expired or the
Company loses control over them. The same applies to a part of a financial
asset. Financial liabilities are derecognised in the statement of financial
position when the contractual obligation has been discharged or extinguished
in some other way. The same applies to a part of a financial liability.
a financial asset and a financial liability may be offset and the net amount
presented in the statement of financial position when, and only when, the
Company has a legally enforceable right to set off the recognised amounts,
and the Company intends either to settle on a net basis, or to realise the
asset and settle the liability simultaneously. purchases and sales of financial
assets are recognised on the trade date (the commitment date).
Classification and measurement
a financial instrument is classified on acquisition according to the purpose
for which it was acquired. The categories described below determine how a
financial instrument is measured subsequent to initial recognition.
Initial measurement
non-derivative financial instruments are initially measured at cost, which
is the equivalent of the instrument’s fair value plus transaction costs. This
is the case for all financial instruments except those recognised at fair
value through profit or loss, which are recognised net of transaction costs.
Derivative financial instruments are initially measured at fair value, with
transaction costs recognised in profit or loss for the period.
Cash & cash equivalents consist of cash, demand deposits with banks and
similar institutions and short-term deposits with an original maturity of three
months or less which are subject to an insignificant risk of changes in value.
Subsequent measurement
– Financial assets or liabilities at fair value through profit or loss
This category consists of two sub-categories: financial assets held for trading
and other financial assets the Company designates as financial assets at fair
value (using the fair value option) on initial recognition. HL Display did not
have any assets in this category in 2009 and 2008.
– Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. assets in
this category are measured at amortised cost, which is calculated based
on the effective interest method used at initial recognition. receivables are
recognised at original invoice amount less an allowance for uncollectible
amounts. HL Display does not have any loan receivables.
– Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets with fixed
or determinable payments and fixed maturity that an entity has the positive
intention and ability to hold to maturity. assets in this category are measured
at amortised cost. HL Display had no assets in this category in 2009 and 2008.
– Available-for-sale financial assets
available-for-sale financial assets are financial assets designated on initial
recognition as available for sale or any other instruments that are not
classified in any of the other categories. Holdings of shares and interests not
reported as subsidiaries, associates or joint ventures are classified in this
category. aFs assets are measured at fair value with the period’s changes in
the statement of comprehensive income. accumulated fair value changes are
recognised directly in equity, except for impairment losses, interest-bearing
HL DispLay ÅrsreDovisning 2007
aFs debt instruments, interest on dividends and foreign exchange gains or
losses on monetary items, which are reported in profit or loss. on disposal
of an asset, accumulated profit/loss is, as previously, recognised in the
statement of comprehensive income under profit/loss for the year.
– Other financial liabilities
Loans as well as other financial liabilities, for example accounts payable –
trade, are included in this category. The liabilities are valued at amortised cost.
Derivatives and hedge accounting
HL Display’s derivative instruments have been acquired for the purpose of
hedging its interest and foreign currency exposure. Derivative instruments
consist of items such as forward contracts, options and swaps. Derivatives
may also be embedded derivatives, with contractual terms which are
embedded into other agreements. HL Display did not have any embedded
derivatives in 2009 and 2008. Derivative instruments are recognised initially
at fair value, with transaction costs recognised as an expense in the income
statement. subsequent to initial recognition, derivative instruments are
recognised as follows:
The portion of the gain or loss on a hedging instrument that is determined
to be an effective hedge is recognised in the income statement on the
same line as the hedged item. in order to meet the criteria for hedge
accounting, required under ias 39, an entity must formally designate the
hedge relationship and show a clear link to the hedged item. The hedging
instrument must be effective, and hedging documentation must be produced,
demonstrating how the hedging instrument’s effectiveness will be measured.
in the event that the criteria for hedge accounting are no longer met, the
derivative instrument is reported at its fair value with the value change in the
income statement.
Hedging of net monetary assets
investments in foreign subsidiaries (net assets including goodwill) have, to a
certain extent, been hedged by means of foreign currency borrowing. Hedge
accounting is not applied as hedging is reflected in the accounting in that the
underlying receivable or liability and the hedging instrument are reported at
the closing rate.
Transaction exposure – cash flow hedges
Foreign exchange forward contracts hedging forecast cash flows are
recognised at fair value in the statement of financial position. when hedge
accounting is applied, fair value changes are recognised directly in other
comprehensive income in the hedging reserve until the hedged cash flow
affects profit or loss. The hedging instrument’s accumulated value changes
are then reclassified to profit or loss in order to meet and match the profit or
loss effects from the hedged transaction
property, plant and equipment
Owned assets
property, plant and equipment is recognised as an asset when it is probable
that future economic benefits associated with the asset will flow to the
Company and the cost can be measured reliably. HL Display measures items
of property, plant and equipment using the acquisition method.
items of property, plant & equipment are recognised at cost less
accumulated depreciation and impairment losses. Cost comprises the
purchase price and any costs directly attributable to bringing the asset to
the location and condition necessary for it to be capable of operating in the
manner intended. The cost of a self-constructed asset includes employee
benefits, costs of materials and other construction costs directly attributable
to the item.
The carrying amount of an item of property, plant and equipment is
derecognised on disposal or when no future economic benefits are expected
from its use or disposal. The gain or loss arising from the disposal of an item
of property, plant and equipment is the difference between the selling price
and the asset’s carrying amount less direct costs to sell. gains and losses
are reported under other operating income/expense.
Subsequent costs
subsequent costs are included in the carrying amount only when it is
probable that future economic benefits associated with the asset will flow
to the Company and the cost of the item can be measured reliably. all other
subsequent costs are recognised as an expense in the period in which

HL Display annual report 2009 notes 49
they are incurred. in order for subsequent costs to qualify for inclusion
in the carrying amount, they must relate to the replacement of identified
components or parts thereof. The carrying amount of a replaced component
or part thereof is derecognised at the time of replacement. repairs are
recognised as an expense in the financial period in which they are incurred.
Depreciation
Depreciation is applied on a straight-line basis over the estimated useful
life of the asset. Land is not depreciated. The group applies component
depreciation, which means depreciation is based on the estimated useful
lives of components.
estimated useful lives:
– facades and interior surfaces, business properties 27-40 years
– fixed installations, business properties 12-50 years
– plant and machinery 5-12 years
– equipment, tools, fixtures & fittings 3-7 years
– improvement of 3rd-party property 20 years
Depreciation methods, residual values and useful lives are reviewed annually.
Intangible assets
Goodwill
goodwill arising from an acquisition is the difference between the cost of
acquisition and the fair value of the acquired identifiable assets and assumed
liabilities and contingent liabilities.
Other intangible assets
Computer systems and market-based assets acquired by the group are
recognised at cost less accumulated amortisation (see below) and impairment
losses (see impairment). The cost of self-constructed or adapted computer
systems includes licenses, employee benefits plus consultancy costs directly
attributable to the computer system. The cost of market-based assets relates
to customer agreements and the value of customer relationships.
Amortisation
amortisation is recognised in the income statement on a straight-line basis
over the intangible asset’s estimated useful life, provided it has a finite
useful life. goodwill and assets with an indefinite useful life are tested for
impairment annually or whenever there is an indication that the intangible
asset may be impaired. amortisation of other intangible assets begins when
the asset is available for use.
estimated useful lives:
– computer systems 4 years
– market-based assets 4-5 years
research and development
Development expenses, for which the results are used to achieve new or
improved products or processes, are capitalised in the statement of financial
position if the product or process is technically and commercially feasible
and the Company has sufficient resources to complete the development and
then use or sell the intangible asset. The carrying amount includes all directly
attributable expenses such as costs of materials and services, salaries and
other indirect costs attributable to the asset in a reasonable, consistent
way. other development expenses are recognised in the income statement
as incurred. in HL Display’s statement of financial position, capitalised
development expenses are reported at cost less accumulated amortisation
and impairment losses as property, plant & equipment. The reason is
that once a decision has been made on commercial production, product
development work essentially consists of designing the production equipment
required to manufacture the product.
Inventories
inventories are measured at the lower of cost and net realisable value. The
cost of inventories is measured using the first-in, first-out (FiFo) method,
and comprises costs of purchase and other costs incurred in bringing the
inventories to their present location and condition. The cost of finished goods
and work in progress includes a reasonable proportion of indirect costs
based on normal operating capacity. net realisable value is the estimated
selling price in the ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the sale.
Impairment
The group’s assets are assessed at each reporting date to determine
whether there is any indication of impairment. ias 36 is applied for
impairment of all assets other than financial assets (ias 39 ), assets and
disposal groups classified as held for sale (iFrs 5), investment property
measured at fair value (ias 40), inventories (ias 2), plan assets used to
fund employee benefits (ias 19), biological assets (ias 41) and deferred tax
assets (ias 12). The carrying amount of assets listed as exceptions above is
estimated within the scope of the relevant standard.
Impairment of assets, and investments in associates and joint ventures
if there is an indication that an asset is impaired, the asset’s recoverable
amount is measured (see below). The recoverable amount of goodwill, other
intangible assets with an indefinite useful life and intangible assets not yet
available for use is also measured annually, irrespective of whether there
is any indication of impairment. if an asset does not generate independent
cash inflows and its fair value less costs to sell cannot be used, it is tested
for impairment as part of the cash-generating unit to which it belongs, i.e. the
smallest identifiable group of assets which generates cash inflows that are
largely independent of the cash inflows from other assets or groups of assets.
an impairment loss is recognised when the recoverable amount of an asset
or a cash-generating unit is less than its carrying amount. an impairment
loss is recognised in profit or loss for the year. when an impairment loss is
recognised for a cash-generating unit (group of units), the impairment loss
is initially allocated to reduce the carrying amount of any goodwill allocated
to the cash-generating unit (group of units). it is then allocated to the other
assets of the unit (group of units) pro rata on the basis of each asset’s
carrying amount.
The recoverable amount of an asset or a cash-generating unit is the higher
of its fair value less costs to sell and its value in use. in measuring value in
use, the discount rate used for cash flow projections reflects the risk-free rate
of interest and the risks specific to the asset.
Impairment of financial assets
The Company assesses at each reporting date whether there is any objective
evidence that a financial asset or group of financial assets may be impaired.
objective evidence is the occurrence of one or more events with an adverse
effect and which indicate that the cost of the investment may not be
recovered. For investments in equity instruments classified as available-forsale
financial assets, a significant and prolonged decline in fair value below
cost is also objective evidence of impairment.
The Company classifies receivables as doubtful debts when they have been
due for payment for 60 days or more. impairment losses on receivables are
determined on the basis of historical loss experience with similar receivables.
impaired receivables are recognised at the present value of estimated future
cash flows. However, cash flows relating to short-term receivables are not
discounted.
equity instruments classified as available for sale are considered impaired
and an impairment loss is recognised if there is a significant or prolonged
decline in the fair value below cost. The Company considers a decline in
excess of 20 percent to be significant, and a period of nine months or more
to be prolonged.
when an impairment loss is recognised for an equity instrument classified
as available for sale, the cumulative profit or loss previously recognised
in equity is reclassified to profit or loss via other comprehensive income.
The amount of the cumulative loss reclassified from equity, via other
comprehensive income, to profit or loss is the difference between the
acquisition cost and current fair value, less any impairment loss on that
financial asset previously recognised in profit or loss.
impairment losses on available-for-sale financial assets are recognised in
profit or loss for the year under net financial items.
Reversal of impairment
impairment losses recognised for assets covered by ias 36 are reversed if
there is an indication that the impairment loss no longer exists and there has
been a change in the estimates used to determine the asset’s recoverable
amount. However, goodwill impairment is never reversed. an impairment loss
is only reversed to the extent that any increase in the carrying amount of the
asset does not exceed the carrying amount that would have been determined
(net of amortisation or depreciation) had no impairment loss been recognised
for the asset.
HL DispLay ÅrsreDovisning 2007
49

5 0
50
notes HL Display annual report 2009
impairment losses on loans and receivables carried at amortised cost are
reversed if objective evidence of impairment no longer exists and full payment
is expected from the customer.
impairment losses recognised in profit or loss for an investment in an
equity instrument classified as available for sale are not reversed through
profit or loss but in other comprehensive income. The asset’s revalued
amount is the value on which subsequent revaluations will be based. These
are recognised in other comprehensive income. if the fair value of an
interest- bearing instrument classified as available for sale increases and this
can be objectively related to an event occurring after an impairment loss was
recognised, the impairment loss is reversed and the amount of the reversal is
recognised in profit or loss.
Dividends
Dividends are recognised as a liability in the parent company when the
dividend has been adopted by the annual general meeting.
earnings per share
Calculation of earnings per share is based on profit for the year attributable
to owners of parent and the weighted average number of shares outstanding
during the year. when calculating the earnings per share after dilution, profit/
loss and the average number of shares are adjusted in order to take into
consideration the effects of diluted, potential ordinary shares which have
arisen from employee share option programmes.
employee benefits
Defined contribution pension plans
Defined contribution pension plans are plans under which the Company’s
legal or constructive obligation is limited to the amount that it agrees to contribute
to the fund. obligations under defined contribution pension plans are
recognised as an expense as incurred. The employee bears the actuarial risk
(i.e. that pension payments will be lower than expected) and the investment
risk (i.e. that the invested assets will not be sufficient to provide the expected
pension payments). The company’s commitments concerning contributions
into defined contribution plans are recognised as an expense in the income
statement as they are earned by employees through the employment period.
Defined benefit pension plans
HL Display has defined benefit for employees in norway, austria, switzerland
and France. The group’s net obligation under these plans is calculated
separately for each plan by estimating current and past service costs. These
benefits are discounted to the net present value, and the fair value of plan
assets is deducted. The discount rate is the market rate for government
bonds with a corresponding term. The calculation is performed by a qualified
actuary using the projected unit Credit Method.
The ‘corridor’ rule is applied. This means the portion of actuarial gains
and losses that falls outside 10 percent of the higher of the present value of
the benefit obligation and the fair value of plan assets is recognised in profit
or loss the income statement over the average remaining service period.
otherwise, actuarial gains and losses are not recognised.
when the calculation leads to an asset for the group, the recognised value
of the asset is limited to the net result of unreported actuarial losses and
unreported costs of employment during prior periods and the present value of
future repayments from the plan or reduced future payments into the plan.
when the benefits in a plan are improved, the proportion of increased
benefits relating to the employees’ employment during earlier periods is
recognised as an expense in the income statement on a straight-line basis,
allocated over the average period until the benefits have been earned in full.
if the benefits have been earned in full, an expense is recognised directly in
the income statement.
Termination benefits
The Company recognises termination benefits only when it is demonstrably
committed to terminating the employment of employees before the normal
retirement date and has produced a detailed formal plan.
Short-term benefits
The Company recognises the undiscounted amount of short-term employee
benefits when the related services are rendered. provisions are recognised
for anticipated costs of profit-sharing and bonus payments when the group
has a valid legal or constructive obligation to make such payments as a
HL DispLay ÅrsreDovisning 2007
result of services rendered by employees, and the amount can be reliably
estimated.
Share-based payments
an employee share option programme enables employees to acquire
shares in the company. The fair value of the granted options is recognised
as employee expenses with an equivalent increase in equity. The fair value
is calculated at the grant date and distributed over the vesting period. The
fair value of the granted options is calculated using the Black & scholes
model, taking into account the conditions that applied at the grant date.
The recognised expense is the equivalent of the fair value of the estimated
number of vested options. This expense is adjusted in subsequent periods in
order to reflect the actual number. However, no adjustment is made when a
decrease is due to the fact that the share price does not achieve the required
level for the vested options.
social security contributions relating to employee share options are
recognised during the financial periods in which the services are rendered.
provisions for social security contributions are based on the fair value of the
options at the reporting date. The fair value is calculated using the same
formula as when the options were issued.
provisions
a provision is recognised when the group has a present obligation (legal or
constructive) as a result of a past event and it is probable that an outflow of
resources will be required to settle the obligation, and a reliable estimate can
be made of the amount of the obligation.
Restructuring
a provision for restructuring is recognised when the group has established
and approved a formal restructuring plan, and the restructuring has either
commenced or been publicly announced. no provision is made for future
operating costs.
Onerus contract
a provision for an onerous contract is recognised when unavoidable costs
of meeting the obligations under the contract exceed the economic benefits
expected to be received under it.
non-current assets held for sale and discontinued operations
The reason why a non-current asset (or disposal group) is classified as a held
for sale is that its reported value will be recovered primarily through the sale
and not through utilisation.
a discontinued operation is a part of a company’s operations that
represents an independent business segment or a significant business
operation within a geographical region, or is a subsidiary that has been
acquired for the sole purpose of being resold. an operation is classified as
discontinued with effect from the date of disposal, or earlier if it meets the
criteria for classification as held for sale.
Contingent liabilities
a contingent liability is recognised when a possible obligation arises from
past events whose existence will be confirmed only by the occurrence or
non-occurrence of one or more uncertain future events, or when there is an
obligation which is not recognised as a liability or provision because it is not
probable that an outflow of resources will be required to settle the obligation.
events after the reporting date
information will be provided concerning significant, non-adjusting events that
have occurred after the reporting date, but prior to the point in time when
the financial statements are signed. if significant events have occurred,
information will be provided in the Directors’ report or in a separate note.
The parent Company’s accounting policies
The parent Company’s annual financial statements have been prepared in
accordance with the swedish annual accounts act (1995:1554) and the
swedish Financial reporting Board’s recommendation rFr 2.1 accounting for
Legal entities.
in addition, statements concerning listed companies issued by the swedish
Financial reporting Board have been applied. rFr 2.1 requires the parent
Company, as a legal entity, to prepare its annual financial statements in
compliance with all the iFrs and iFriC interpretations endorsed by the eu

HL Display annual report 2009 notes 51
to the extent possible within the framework of the swedish annual accounts
act and the swedish act on safeguarding of pension obligations, and taking
into account the relationship between tax expense (income) and accounting
profit. The recommendation also specifies exceptions and additions to the
standards issued by the iasB and iFriC.
The accounting policies described below have been applied consistently to
all periods presented in the parent Company’s financial statements.
Financial guarantees
The parent Company’s financial guarantee agreement consists of sureties
for the benefit of subsidiaries and joint ventures. Financial guarantees mean
that a company undertakes to reimburse the owner of a debt instrument for
losses this owner may have incurred due to the fact that a debtor has not
performed under the contractual agreement. For the reporting of financial
guarantee agreements the parent Company applies one of the exemptions
from the regulations permitted by swedish Financial accounting standards
Council as compared with the regulations in ias 39. This exemption concerns
the financial guarantee agreement established for the benefit of subsidiaries,
joint ventures and associates. The parent Company reports financial
guarantee agreements as warranty provisions in the Balance sheet when the
Company has an obligation and an outflow of resources will be required to
settle the obligation.
Group contributions and shareholders contributions
HL Display recognises group contributions and shareholder contributions in
accordance with statement uFr 2 issued by the swedish Financial reporting
Board. shareholder contributions are recognised directly in the recipient’s
equity and are capitalised in the issuer’s shares and participating interests to
the extent that impairment is not required.
group contributions are reported in accordance with financial substance.
This means group contributions aimed at minimising the group’s total tax
are recognised directly in retained earnings, net of the current tax effect of
the transaction. group contributions which are comparable with a dividend
are recognised as a dividend. in this case, group contributions received and
their current tax effect are recognised in the income statement, while group
contributions paid and their current tax effect are recognised in retained
earnings. group contributions which are comparable with a shareholder
contribution are recognised directly in the recipient’s retained earnings,
taking into account the current tax effect. The issuer reports the group
contribution and its current tax effect as an investment in group companies
to the extent that impairment is not required.
Leased assets
in the parent Company, all leases are classified and reported as operating
leases.
Income tax expenses
untaxed reserves are recognised inclusive of deferred tax liability in the
parent Company. in the consolidated financial statements, untaxed reserves
are divided into deferred tax liability and equity.
noTe 2 FInanCIaL InsTrumenT anD managemenT oF
FInanCIaL exposures
management of financial exposures
Financial exposures
HL Display is exposed to various types of financial exposures in its
operations. Financial exposure occurs when changes in foreign exhange
rates, changes in interest rate levels as well as refinancing and credit risks
affect the group’s net income, cash flow and value. Financing and financial
exposures are centrally managed, within the framework established and
governed by the Board of Directors, by HL Display’s CFo and the Treasury
function, acting in the separate legal entity HL Financial services aB. The
overall objectives of HL Finanical services aB, acting as the in-house bank
for the HL Display group, are to ensure costefficient financing of the group,
manage interest rate and foreign exchange exposures, as well as ensuring an
efficient cash mangement structure for the HL Display group. The treasury
function identifies, evaluates and hedges financial exposures in close cooperation
with the operating entities of HL Display. This is done according to
the financial policy of the group, which is annually reviewed and approved by
the Board of Directors of HL Display aB. The policy contains written principles
covering overall risk management as well as specific areas, such as foreign
exchange rate risk, interest rate risk, credit risk, financing risk, permitted
financial instruments and investment of excess liquidity. HL Display uses
derivatives to hedge portions of these exposures in accordance with the
financial policy. HL Display aB applies hedge accounting for derivatives,
when it is considered appropriate, in order to reduce volatility in net income
and cash flows, caused by changes in foreign exchange rates and market
interest rates.
Financing and financing risk
Financing risk is defined as the risk that financing of HL Display’s capital
requirements or refinancing of outstanding debt may become difficult or
expensive to arrange. The policy of HL Display is that non-current assets
shall be financed by equity and medium- and long term debt. in order to
ensure financing of the acquisition of ppe Limited as well as potential future
acquisitions, a credit agreement of MseK 382 in total, was arranged in
December 2009. The financing consists of a three year Term loan of MgBp
22 with annual repayments and interest payments and a three year revolving
Credit-facility amounting to MseK 70, not utilised at the time of acquisition.
in addition, previously uncommitted overdraft facilities were renegotiated into
a 364-days committed overdraft of MseK 60, which was not utilised as per
December 31 2009.
The financing agreement is preconditioned to certain financial covenants
such as net debt to eBiTDa and equity to Total assets.
at the end of the period, the group has further commited facilities
amounting to MseK 75 and aqcuired facilities amounting to MseK 37.
Bank credit facilities Credit
nominal facility whereof
KseK maturity Currency amount Dec 31 2009 unutilised
Bank loan 2012 gBp 22,000 252,670 –
Bank loan 2011 pLn 2,000 5,000 –
Bank loan 2011 gBp 947 10,876 –
Bank loan 2012 gBp 636 7,303 –
overdraft facility 2010 seK 39,000 39,000 39,000
overdraft facility 2010 eur 2,000 20,706 20,706
overdraft facility 2010 pLn 800 2,000 2,000
overdraft facility n.a. gBp 1,100 12,634 12,634
overdraft facility n.a. gBp 1,500 17,228 17,228
overdraft facility n.a. gBp 150 1,723 1,723
”revolving” credit facility 2012 seK 70,000 70,000 70,000
”revolving” credit facility n.a. usD 500 3,606 3,606
”revolving” credit facility n.a. sgD 10,000 51,350 18,019
other bankloans n.a. – – 554 –
Total 494,095 184,915
HL DispLay ÅrsreDovisning 2007
51

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notes HL Display annual report 2009
ConT. noTe 2 FInanCIaL InsTrumenT anD managemenT oF FInanCIaL exposures
Interest-bearing liabilities Carrying
nominal amount
amount Dec. 31
KseK maturity Currency Interest rate currency 2009
non-current interest-bearing liabilities to credit institutes:
Long term bankdebt 2012 gBp 1.95% 17,700 203,284
Long term bankdebt 2011 pLn 4.90% 2,000 5,000
Long term bankdebt 2011 gBp 1.75% 947 10,876
Long term bankdebt 2012 gBp Fixed/6.50% 636 7,303
other non-current interest-bearing liabilities 1) varied gBp Floating 3,000 34,614
Total non-current interest-bearing liabilities 261,077
1) additional purchase price ppe acquisition.
Current interest-bearing liabilities Carrying
nominal amount
amount Dec. 31
KseK maturity Currency Interest rate currency 2009
short term interest-bearing liabilities to credit institutes:
Bank debt maturing within 12 months 2010 gBp 1.95% 4,300 49,386
Drawn amount revolving Credit 2010 sgD 1.30% 6,491 33,331
other current bank debt 2010 – 554
other current interest-bearing liabilities 2010 – 7,816
Total current interest-bearing liabilities 91,087
Total interest-bearing liabilities 352,164
maturity of financial liabilities – undiscounted cash flows
2009 2008
KseK < 1 years 1-5 years > 5 years Total < 1 years 1-5 years > 5 years Total
interest-bearing liabilities 91,087 261,077 – 352,164 38,559 61,780 – 100,339
interest payments 6,300 8,208 – 14,508 3,520 3,979 – 7,499
Derivatives – – – – 8,887 – – 8,887
accounts payables 101,944 – – 101,944 78,614 – – 78,614
Total 199,331 269,285 – 468,616 129,580 65,759 – 195,339
The table shows the future cash flows including interest payments at the closing exchange rate, related to financial liabilities. The variable interest rates, current
at December 31, 2009, are expected to remain at the same levels until the loan’s maturity. Derivatives at 2009-12-31 constituted a net receivable amounting
to KseK 3,527 maturing within 1 year.
Interest rate risk
interest rate risk is defined as the risk that the value and/or cashflow related
to financial instruments varies due to fluctuations in market interest rates.
at the end of the financial year, December 31, 2009, the interest-bearing
liabilities in the group amounted to KseK 352,164 (100,339), of which
long-term KseK 261,077 (61,780). interest rate fixing on third party debt is
variable – as per December 31 2009 – 3 months floating. The composition
of the duration on debt and related derivatives should be a balance between
floating interest rates in order to reduce interest expense over time and fixed
interest rates to increase the stability of interest expense. The balance is
dependent on the yield curve and on HL Display’s ability to manage negative
interest rate scenarios.
a three-month floating interest rate has been chosen considering the
above mentioned factors and a good availability of cash, which results in a
high degree of self-financing and a relatively low interest rate risk. as per
December 31 2009, the equity to assets ratio was 44 percent and interestbearing
net debt was KseK 138,737 (net liquidity 120,434).
weigthed average interest rate on long term interest-bearing debt was 2,27
percent as per December 31 2009 and 1,30 percent on short term debt. an
overall change in interest rates on borrowings and financial investments by
one percentage point would effect interest income expense by approximately
KseK 1,400. at the end of the financial year, December 31, 2009, HL Display
had no outstanding interest rate derivatives.
Credit and Counterparty risk
Financial Credit risk
Credit risk may arise when the group invests liquid funds, and in terms
of counterparty risk when the group enters into contracts for financial
instruments provided by banks. The financial policy of HL Display stipulates
HL DispLay ÅrsreDovisning 2007
permitted counterparties for which maximum credit exposure as well as the
lowest permitted creditrating is defined. The objective of HL Display is to
transact with banks that have a high long term creditrating, minimum “a” by
the creditrating institutes standard & poor’s/Moody’s, and are participating
in the financing of the group. The group’s liquid funds are managed centrally
within the treasury function and are invested in short-term bank deposits.
as per the balance sheet date, liquid assets of HL Display amounted to KseK
213,427 isDa’s (international swaps and Derivatives association) Master
agreement is used to settle counterparty risk regarding derivative transactions.
Credit risk related to customer receivables
Credit risk also arises when there is a risk of customers not fulfilling their
payment commitments to the group. HL Display’s bad debt losses have
historicaly been very low. The majority of the customers are large, well
established companies that are financially sound and widely spread in several
geographical markets. no customer accounts for more than 5 percent of
the group’s total turnover. HL Display manages the risk of bad debts by well
defined routines for credit control, debt collection and invoicing interest on
overdue receivables. as per December 31 2009, there was no significant
concentration of credit risk. The maximum exposure is apparent from the
carrying value of outstanding accounts receivable. The provision for bad
debts was KseK 8,758 (8,327). see note 25 ”Trade receivables”. Based on
historical data, the group assesses that no impairment of trade receivables
that are not yet overdue is necessary by the end of the reporting period. no
significant customer credits have been renegotiated. in some markets and for
customers with low credit ratings or insufficient credit history a prepayment
policy is applied to reduce counterparty risk. Credit insurance is not used
since it has not been found justified.

HL Display annual report 2009 notes 53
Liquidity risk
Liquidity risk is defined as the risk of HL Display not being able to fulfill its
obligation to repay its liabliaities in time or at a reasonable cost. The Treasury
function is responsible for managing this risk. in order to reduce the liquidity
risk, HL Display aim to have an available ”liquidity reserve” corresponding
to at least 10 percent of the turnover of the group. ”Liquidity reserve” is
in this context defined as cash and bank, financial investments which may
be converted to cash within two banking days, as well as unutilized credit
facilities. The policy of HL Display is to invest in highly liquidy instruments
and bank deposits. By pooling seK, eur and gBp on a group level and daily
reporting of bank balances from the major group companies worldwide,
HL Financial services has good control of the total liquidity in the group.
The credit rating institute soliditet has rated the parent company’s
creditworthiness as aaa. as per December 31 2009, liquid assets amounted
to KseK 213,427 (220,773), which corresponds to 16 percent of net turnover.
in addition, HL Display had KseK 184,915 of unutilised credit facilities.
HL Display has ensured long term financing until 2012.
Foreign exchange exposure
HL Display is exposed to fluctuations in the foreign exchange rates related to
its international operations and structure. exposures arise both in cash flows
in various currencies, ”transaction exposure”, as well as in translation of net
income and net assets of foreign group companies into seK, ”translation
exposure”. The overall objective of HL Display´s management of foreign
exchange exposures is to reduce volatility derived from fluctuations in
foreign exchange rates, in income statement and balance sheet, as well as
protecting the value of future cash flows in foreign currencies.
Transaction exposure
Transaction exposure arises in terms of cash flows from purchases and sales
in foreign currencies. The overall objective of HL Display´s management
of transaction exposures is to reduce volatility in income statement and to
protect the value of future cash flows. in order to concentrate transaction
exposure to as few entities as possible, sales companies are invoiced in
their respective local currencies. Third party distributors are invoiced in
seK. approximately 87 percent of the turnover of HL Display take place in
countries other than sweden. The most important inflows are in eur, gBp,
ruB, noK and sgD. production is primarily located in sweden but also in the
uK and China.
The financial policy of HL Display stipulates the following hedge levels for
transaction exposure:
Hedge as per
Hedge level December
policy as a 31 2009
average net exposure percentage (percentage)
Forecasted net exposure 1-6 months 70-100 70
Forecasted net exposure 7-12 months 30-70 50
Forward contracts with the purpose of hedging forecasted net cash flows in
foreign currency are classified as cash flow hedges. in line with HL Display’s
financial policy forecasted net cash flows in eur, gBp and sgD were
hedged at December 31 2009. The market value of outstanding hedges of
transaction exposures amounted to KseK 3,527 (-8,887) as per December
31 2009. These hedges are expected to be realised within the coming
12 months. The change in market value during the financial year of KseK
12,414, is recorded in other comprehensive income. Hedge accounting is
applied and have been efficient during 2009. Foreign exchange differences
related to currency hedges of KseK -4,021 have been recorded in operating
profit/loss under net sales.
outstanding cash flow hedges, average contracted rated and fair value as
per December 31 2009
Currency
hedge vs. nom. amount Contracted positive negative
seK (thousands loc. curr.) forward rate value value
eur -6,505 10.60 2,788 -490
gBp -2,360 11.89 1,147 -52
sgD -2,439 5.16 281 -148
The group’s transaction exposure is divided among the following currencies:
12 months net exposure vs. seK in KseK
value 2009 2008
eur 80,435 130,210
gBp 53,599 44,975
noK 44,260 44,737
ruB 33,333 51,080
sgD 18,652 23,961
Translation exposure
Fluctuations in foreign exchange rates affect the income statement and
balance sheet of the HL Display group as net investments and financial
statements of foreign group companies are consolidated into the functional
currency (seK) – translation exposure.
Currency impact related to translation exposure is recorded in recognised
in other comprehensive income and in 2009 the amount was negative
KseK 14,998 (positive 22,385). The consolidated net income is normally
not hedged. equity in foreign currencies may be hedged, when deemed
appropriate according to individual assessment, by raising long term financing
in currencies representing significant net assets. as per December 31
2009, net investment in gBp was 95 percent hedged by arranging long term
financing in gBp. Hedge accounting is applied for hedging of net investment.
Foreign net investments of the group are primarily distributed in the
following currencies:
Hedged by long
KseK net investments term financing
Currency 2009 2008 2009 2008
gBp 284,116 22,630 270,851 –
eur 120,344 183,345 – 54,678
noK 18,440 12,260 – –
sgD 9,592 -1,570 – –
ruB 9,051 8,984 – –
Exposure in Display’s net income
a change in the eur rate vs. seK by 10 öre, would, in the current structure,
have an impact of KseK 2,005 on HL Display’s net income. in the short term
the impact related to foreign exchange movements are reduced by hedges.
Valuation principles etc.
Financial instruments in the categories receivables and other financial liabilities
have been valued at acquisition cost.There is no indication that the
reported value differs substantially from the fair value in the group or in the
parent company since the loans have a variable interest-rate fixing and was
taken as late as December 17 2009. Forward contracts with the purpose
of hedging the transaction exposure of the group, are valued at fair value
through discounting of the difference between the agreed forward ratio and
the ratio that could be received at the end of the reporting period for the
remainder of the contract period. The discounting is made at risk-free interest
based on government bonds.
The table below presents valuation techniques used to assess fair value on financial instruments reported at fair value on Dec 31
Instruments with published valuation techniques based on valuation techniques based on
price quotations in an active market observable quoted prices unobservable prices
KseK Level 1 Level 2 Level 3 Total
Assets
Forward contracts – -6,460 – -6,460
Liabilities
Forward contracts – 113,436 – 113,436
see note 1 for further information on valuation and classifications techniques.
HL DispLay ÅrsreDovisning 2007
53

5 4
54
notes HL Display annual report 2009
noTe 3 DIsTrIBuTIon oF InCome
Income per each significant type of income
group parent Company
KseK 2009 2008 2009 2008
Net Sales
product sales 1,337,942 1,500,878 – –
installations and
other services 22,474 34,761 77,834 101,254
Total sales 1,360,416 1,535,639 77,834 101,254
of the parent company’s net sales, KseK 77,824 (100,958) relates to
consultancy services sold to group companies.
noTe 4 segmenT reporTIng
The group’s operations are divided into operating segments based on the
components of the business that the chief operating decision maker reviews.
This is referred to as the management approach.
The group’s business is organised in such a way as to allow group
management to monitor and review the results, return and cash flows
generated by the group’s geographical regions. each region has a manager
who is responsible for day-to-day operations and maintaining regular contact
with group management with regard to the operating segment’s performance
and its resource requirements. as group management reviews the results
and performance, and decides on resource allocation on the basis of the
regions in which the group engages in business, these represent the
group’s operating segments.
operating segments
HL DispLay ÅrsreDovisning 2007
The group engages in business in the following regions:
– nordic, Baltic & uK – operations in sweden, norway, Denmark, Finland,
iceland, Latvia, estonia, Lithuania, uK, ireland
– Middle europe – operations in austria, switzerland, germany, poland,
slovenia, serbia
– southern europe – operations in France, spain, Belgium, netherlands,
portugal, italy, greece, Malta
– Central/eastern europe – operations in russia, ukraine, Hungary,
Czech republic, slovakia, romania, Bulgaria, Turkey, Kazakhstan, israel
– asia/australia – operations in China, Hong Kong, india, indonesia,
Korea, Malaysia, singapore, Thailand, Taiwan, australia/new Zealand
– other sales
group nordic, Baltic & uK middle europe southern europe
KseK 2009 2008 2009 2008 2009 2008
external net sales 399,736 469,877 219,719 227,831 408,690 443,950
The segment’s operating profit 57,941 55,913 28,627 25,684 39,448 41,313
adjustment to legal result
net financial items
profit before tax
Central/eastern europe asia/australia other sales group
KseK 2009 2008 2009 2008 2009 2008 2009 2008
external net sales 188,812 237,716 133,861 131,034 9,598 25,231 1,360,416 1,535,639
The segment’s operating profit 19,093 32,680 9,577 2,067 – – 154,686 157,657
adjustment to legal result -68,471 -27,399
net financial items -2,072 5,899
profit before tax 84,143 136,157
The operating segments’ operating profit includes directly attributable items
and items that can be allocated to segments in a reasonable and reliable
way. operating profits per segment are monitored and reviewed based on
calculated costs while the group report according to iFrs. The difference
between calculated cost and actual results under iFrs is referred to as
adjustment to legal result. sales between segments are negible.
internal prices for transactions between the group’s operating segments
are defined on arms’ length terms, i.e. between independent, knowledgeable
and willing parties.
The group’s total sales are attributable to one product group, namely
in-store communication and merchandising products. The group does not
have one individual customer accounting for 10 percent or more of sales.
geographical areas
group external income non-current assets
KseK 2009 2008 2009 2008
France 275,357 279,347 6,119 7,655
sweden 180,868 246,120 101,480 99,815
norway 110,983 121,309 41 57
uK 99,928 110,562 4,240 7,002
russia 79,277 114,313 139 199
other countries 614,003 663,988 355,062 65,975
Total 1,360,416 1,535,639 467,081 180,703
revenue from external customers has been allocated to individual countries
based on the country where the customer is located.

HL Display annual report 2009 notes 55
noTe 5 aCQuIsITIons
on 21 December 2009, the group acquired 100 percent of the shares in
ppe Ltd for a cash purchase consideration of MgBp 28.1 (MseK 323),
with a potential MgBp 5.0 (MseK 57) earn-out payment. The acquisition
strengthens HL Display in the important brand manufacturers segments by
means of access to expertise in customised merchandising solutions.
HL Display also gains capacity in multi-material production, in other words
production of products with parts made of materials such as plastic, metal
and wood. The company is consolidated with effect from 31 December 2009.
For 11 months of 2009 (abbreviated financial year), ppe reported net sales of
MseK 304 and eBiTa of MseK 31, after adjustment to comparable principles.
During the year, 50 percent of the shares in HL China were acquired for
MseK 4 in cash, increasing the ownership share to 100 percent.
aggregate fair value of acquired
assets and liabilities * Carrying
Carrying Fair value amount in
KseK amount adjustments group
Acquired assets and liabilities
intangible assets 14,976 -9,211 5,765
property, plant & equipment 97,953 -1,068 96,885
Financial assets 965 – 965
inventories 29,645 -1,413 28,232
operating receivables 50,777 – 50,777
Cash & cash equivalents 7,534 – 7,534
Total assets 201,850 -11,692 190,158
non-current provisions
non-current interest-bearing liabilities 18,181 – 18,181
other non-current liabilities 2,136 – 2,136
Current interest-bearing liabilities 7,741 – 7,741
Current operating liabilities 49,620 – 49,620
Total provisions and liabilities 77,678 – 77,678
net identifiable assets
and liabilities 124,172 -11,692 112,480
non-controlling interest 3,624
goodwill 199,334
Contingent consideration -57,425
purchase consideration, cash ** 258,013
Less: Cash & cash equivalents
in acquired operation 7,534
net effect on cash 265,547
* reported values are preliminary. The acquisition was completed December
21, 2009 and it has not been possible to definitively determine all values.
** including acquisition costs about MseK 11.
goodwill consists primarily of knowledge about the segment brand
manufacturers and expertise in customized merchandising solutions.
intangible assets relates to acquired brand with an estimated useful life of
four years.
noTe 6 oTHer operaTIng InCome
group parent Company
KseK 2009 2008 2009 2008
exchange rate gains on
receivables/liabilities of
an operative nature 3,882 3,153
royalty income 1,131 428 1,131 428
rental income 2,065 1,053 2,065 1,053
Capital gain on sale of
non-current assets 2,254 241 – –
government grants – 72 – 72
other 1,874 935 – –
Total 11,206 5,882 3,196 1,553
noTe 7 oTHer operaTIng expenses
group parent Company
KseK 2009 2008 2009 2008
exchange rate losses on
receivables/liabilities of
an operative nature -3,243 -6,848 -666 –
impairments/disposals
non-current assets -4,362 -227 – –
provision for dispute -4,500 – – –
other -4,462 -2,251 –
Total -16,567 -9,326 -666 –
noTe 8 empLoyees, personneL expenses anD remuneraTIon
To senIor exeCuTIves
expenses for employee benefits
group
KseK 2009 2008
salaries and remuneration etc. 304,276 321,911
pension costs defined benefit
plans see note 32 1,351 2,035
pension costs defined contribution plans 1) 16,697 15,379
other social security contributions 70,601 77,622
Total 392,925 416,947
1) including premiums to alecta.
average number of which of which
of employees 2009 men 2008 men
Parent Company
sweden 55 64% 45 67%
Total for parent Company 55 64% 45 67%
subsidiaries
nordic region 362 71% 391 67%
western europe 218 54% 237 54%
eastern europe 130 47% 143 47%
asia/australia 140 58% 158 61%
north america – n/a 9 78%
Total in subsidiaries 851 61% 938 61%
group total 906 61% 983 62%
2009 2008
proportion proportion
gender distribution in the executive management of women of women
Parent Company
The Board 22% 13%
senior management 17% 14%
Group total
The Board 29% 13%
senior management 24% 15%
salaries, other remuneration and social security expenses
2009 2008
salaries and social salaries and social
KseK remuneration security exp remuneration security exp
Parent Company 1) 33,932 12,578 38,403 13,215
(of which pension cost) 4,817 5,080
Subsidiaries 270,344 76,071 283,508 81,821
(of which pension cost) 13,231 12,334
Group total 2) 304,276 88,649 321,911 95,036
(of which pension cost) 18,048 17,414
1) of the parent company’s pension costs KseK 2,335 (2,292) relates to
senior executives. The company’s outstanding pension commitments to
these people amount to – (–).
2) of the group’s pension costs, KseK 5,206 (3,531) relates to senior
executives. The company’s outstanding pension commitments to these
people amount to KseK 59 (62).
HL DispLay ÅrsreDovisning 2007
55

5 6
56
notes HL Display annual report 2009
ConT. noTe 8 empLoyees, personneL expenses anD remuneraTIon
To senIor exeCuTIves
salaries and other remuneration per country and senior executives etc and
other employees
2009 2008
senior senior
executives other executives other
KseK etc employees etc employees
Parent Company
sweden 13,998 19,934 18,285 20,118
(of which bonus, etc) 1,706 173 1,895 1,058
parent Company total 13,998 19,934 18,285 20,118
(of which bonus, etc) 1,706 173 1,895 1,058
social security expenses 4,750 7,828 6,292 6,923
Subsidiaries
nordic region 7,675 125,796 7,813 137,091
(of which bonus, etc) 416 1,660 500 3,308
western europe 12,563 75,016 8,471 75,350
(of which bonus, etc) 810 4,173 173 5,214
eastern europe 7,907 21,446 5,826 25,726
(of which bonus, etc) 541 2,008 938 2,360
asia/australia 5,583 14,360 2,688 17,074
(of which bonus, etc) 20 2,314 – 2,578
north america – – 416 3,054
(of which bonus, etc) – – 37 214
subsidiaries, total 33,728 236,617 25,214 258,295
(of which bonus, etc) 1,787 10,155 1,648 13,674
group total 47,726 256,551 43,499 278,413
(of which bonus, etc) 3,493 10,328 3,543 14,732
For information on employee benefits after the end of employment, see note
32 post-employment benefits.
option schemes, number of options and subscription prices
HL DispLay ÅrsreDovisning 2007
senior executives comprise the Board (7 people excl Ceo), the group
management team (7 people), area Managers (6 people), and chief
executives in the group companies (34 people).
Total absence through illness as a percentage of normal working hours
parent Company 2009 2008
Men 0.9% 0.9%
women 3.8% 2.6%
age -29 3.5% 2.3%
age 30-49 2.1% 1.4%
age 50- 0.4% 2.1%
Long-term absentees 2.0% 0.9%
Total 2.0% 1.6%
share-based benefits
HL Display aB has through a wholly owned subsidiary, HL Financial services
aB, 2007 and 2009 issued debentures with detachable warrants sold on
senior executives within the group. The purpose of offering warrants is to
promote long-term commitment to the company and to encourage senior
executives to become future shareholders in the company. The term of
the warrants is approximately three years, which the Board wishes to be
acknowledged as an aim to gain warrant holders’ long-term commitment to the
company’s future. The options have been issued on commercial terms, defined
in accordance with the Black & scholes model, and the purchase price was
paid in cash. The purchase price was subsidized at 50 percent (for the warrants
issued 2007) and 40 percent (for the warrants issued 2009) over three years.
as allocations have been carried out according to market conditions and no
benefit has been gained from these programmes on the balance sheet date,
no accounting consequences according to iFrs 2 have arisen.
There was also an employee stock options programme issued in 2006 and
aimed at the Ceo as part of his remuneration agreement when entering upon
office. This programme is reported in accordance with iFrs 2.
number of proportion of
number of employee share capital if proportion of votes subscription
year of implementation warrants stock options fully subscribed if fully subscribed price exercise period
2006 287,252 0.97% 0.47% 39.25 1) 2009-03-31 - 2011-03-31
2007 2) 256,000 – 0.83% 0.40% 56.50 2010-03-01 - 2010-04-30
2009a 3) 325,000 – 1.05% 0.50% 33.95 2012-02-01 - 2012-03-31
2009B 3) 325,000 1.05% 0.50% 50.69 2012-02-01 - 2012-03-31
Total 906,000 287,252 3.90% 1.87%
1) Corrected for share split (4:1) 2008-04-28.
2) at the end of the reporting period 196,000 warrants had been acquired by employees.
3) at the end of the reporting period, all warrants in scheme 2009a had been acquired by employees but none from 2009B.
option schemes per employment category
schemes from this year schemes from previous years
warrants employee stock options warrants
2009/2012 acquisition 2006/2011 2007/2010 acquisition
KseK Quantity price Quantity Quantity price
The Ceo, gérard Dubuy 162,500 2.39 287,252 80,000 8.25
other senior executives 162,500 2.39 – 36,000 8.25
Total 325,000 287,252 116,000
remuneration to senior executives
Principles
The Chairman of the Board and Board members are paid a fee in accordance
with the decision of the annual meeting of shareholders. employees’
representatives and persons operative in the company do not receive a
Board fee. remuneration to the Ceo and other senior executives consists
of a basic salary, variable compensation (bonus), pension and company car.
remuneration to the Ceo also includes an employee stock options scheme
as well as a partly subsidised warrant scheme. The other senior executives
are the six people who, together with the Ceo, have constituted group
management. For the composition of group management, see page 77.
severance payment
There is a mutual period of notice of 6 months in force between HL Display
and the Ceo. if the company cancels the Ceo’s employment contract,
severance pay to the equivalent of 24 monthly salaries will be paid. There is
a mutual period of notice of 3-12 months in force between the company and
other senior executives in the group.
Loans to senior executives
There are no loans to senior executives.

HL Display annual report 2009 notes 57
remuneration and other benefits to senior executives, parent company 2009
Basic salary/ Flexible other pension Financial
KseK Board fee benefits benefits expense instruments Total
The Chairman of the Board, anders remius 250 250
susanna Campbell 150 150
stig Karlsson 165 165
Mats-olof Ljungkvist 195 195
Åke Modig 165 165
anna ragén 150 150
Lars-Åke rydh 165 165
The Ceo, gérard Dubuy 3,805 494 511 466 107 5,383
other senior executives (6 people) 8,080 777 649 1,729 11,235
Total (14 people) 13,125 1,271 1,160 2,195 107 17,858
remuneration and other benefits to senior executives, parent company 2008
Basic salary/ Flexible other pension Financial
KseK Board fee benefits benefits expense instruments Total
The Chairman of the Board, anders remius 250 250
Jan-ove Hallgren 150 150
stig Karlsson 175 175
Mats-olof Ljungkvist 190 190
Åke Modig 150 150
anna ragén 150 150
Lars-Åke rydh 150 150
The Ceo, gérard Dubuy 3,282 676 83 328 294 4,663
Former deputy Ceo, Kent Hertzell 1) 4,539 94 190 1,133 5,956
other senior executives (5 people) 5,971 280 315 1,324 7,890
Total (14 people) 15,007 1,050 588 2,785 294 19,724
1) including severance payment.
Comments on the tables
The reported values relates to expensed remuneration. other benefits include company car, allowances and subsidy of warrants. The Ceo, the deputy Ceo and
other senior executives have defined contribution pension plans. The Ceo has previously had a defined benefit pension plan. The retirement age for all senior
executives is 65. The pension expense relates to the expense that affected the profit/loss for the year. For further information about pensions, see note 32.
The Chairman of the Board has not received any remuneration other than the Board fee.
preparation and decision-making process
remuneration to the Ceo for the financial year 2009 was decided by the
Board after being prepared by the remuneration commmittee. remuneration
to other senior executives has been decided by the Ceo in consultation with
the remuneration commmittee. The remuneration commmittee has developed
principles for decision on salary and other remuneration to senior executives
in the group later adopted by the agM as described below. For information
about the composition of the remuneration commmittee, see page 73.
guidelines for remuneration to senior executives
At the Annual General Meeting 2009-04-02 the following guidelines were
decided (main contents).
an important part of HL Display’s strategy is to attract and retain key
employees. The remuneration offered to holders of senior positions in the
company forms a vital component of this strategy.
it is the Board’s perception that a fixed salary, combined with flexible,
performance- related remuneration, is an effective means of attracting
employees and guiding performance towards the objectives that the Board
has defined for the company. By also offering long-term co-ownership in the
company, the Board wishes to promote long-term commitment that makes it
easier for the company to retain its key employees.
The three components of fixed salary, flexible performance-related
remuneration and co-ownership shall be viewed as a whole, although the
three elements are defined on the basis of different principles.
– The fixed salary shall reflect the employee’s area of responsibility and the
complexity of the position.
– The flexible performance-related remuneration shall always be linked to
measurable targets. For 2009 the Ceo will be able to achieve a maximum
of 50 percent of the fixed annual salary. For other senior executives the
maximum is 25 percent of the fixed annual salary.
– Long-term co-ownership for employees aims to encourage employees to
share the vision of the company’s owners. it is therefore an important
principle of such a scheme that there is an opportunity to share in the
increased value of the company’s shares, while also involving a personal
risk for those who are participating. another important principle is that the
transaction values defined in such schemes are produced objectively using
generally accepted methods. The long term incentive programs to acquire
warrants were approved by the shareholders at the general meeting 2007.
The acquired warrants are subsidized and 50 percent of the premium
will be paid back in equal installments during a three year period after a
deduction of 58 percent for standard tax.
Proposal to the Annual General Meeting 2010-04-22 (main contents).
an important part of HL Display’s strategy is to attract and retain key
employees. The remuneration offered to holders of senior positions in the
company forms a vital component of this strategy.
it is the Board’s perception that a fixed salary, combined with flexible,
performance- related remuneration, is an effective means of attracting
employees and guiding performance towards the objectives that the Board
has defined for the company. By also offering long-term co-ownership in the
company, the Board wishes to promote long-term commitment that makes it
easier for the company to retain its key employees.
The three components of fixed salary, flexible performance-related
remuneration and co-ownership shall be viewed as a whole, although the
three elements are defined on the basis of different principles.
– The fixed salary shall reflect the employee’s area of responsibility and the
complexity of the position.
– The flexible performance-related remuneration shall always be linked to
measurable targets. For 2010 the Ceo will be able to achieve a maximum
of 50 percent of the fixed annual salary. For other senior executives the
maximum is 25 percent of the fixed annual salary.
– Long-term co-ownership for employees aims to encourage employees to
share the vision of the company’s owners. it is therefore an important
principle of such a scheme that there is an opportunity to share in the
increased value of the company’s shares, while also involving a personal
risk for those who are participating. another important principle is that the
transaction values defined in such schemes are produced objectively using
generally accepted methods. The long term incentive programs to acquire
warrants were approved by the shareholders at the general meeting 2007
and 2009. The acquired warrants are subsidized and 50 percent of the
premium (2007 program) or 40 percent of the premium (2009 program)
will be paid back in equal installments during a three year period after a
deduction of 58 percent for standard tax.
The Board is entitled to make exceptions from the guidelines considering
special circumstances.
HL DispLay ÅrsreDovisning 2007
57

5 8
58
notes HL Display annual report 2009
noTe 9 Lease agreemenTs
Lease agreements in which the company is the lessee
Lease payments that cannot be terminated amounts to:
Lease of machinery and equipment
operating leases
group parent Company
KseK 2009 2008 2009 2008
Lease payments 11,702 17,968 2,621 6,615
Minimum lease payments
Fall due for payment:
within one year 15,067 16,262 2,175 5,490
Between one year and five years 13,828 19,331 1,756 4,433
Later than five years 750 870 – –
Total 29,645 36,463 3,931 9,923
Lease of properties and premises
operating leases
group parent Company
KseK 2009 2008 2009 2008
Lease payments 34,662 38,728 1,454 1,263
Minimum lease payments
Fall due for payment:
within one year 33,413 34,824 2,255 813
Between one year and five years 59,078 75,349 4,510 4,510
Later than five years 46,969 52,395 – –
Total 139,460 162,568 6,765 5,323
all leasing agreements in the group are classified as operational.
noTe 10 CosT oF operaTIons per Type oF CosT
group
KseK 2009 2008
Cost of goods/services sold -693,151 -776,269
non-production staff costs -291,439 -305,184
Cost of premises -31,020 -36,641
Communication costs -14,386 -15,574
Depreciation -35,580 -36,123
other operating expenses -219,831 -241,472
Total -1,285,407 -1,411,263
HL DispLay ÅrsreDovisning 2007
noTe 11 FInanCIaL InCome
group
KseK 2009 2008
interest income 1) 2,445 5,173
net exchange rate changes – 7,244
other financial income 372 377
Financial income 2,817 12,794
1) interest income is largely attributable to bank deposits.
parent Company
profit/loss from participations
in group companies
KseK 2009 2008
Dividends 100,500 158,644
impairment losses – -5,244
Total 100,500 153,400
parent Company
profit/loss from
other securities and receivables Interest income
that are non-current assets and similar profit items
KseK
interest income,
2009 2008 2009 2008
group companies 6,440 6,479 – –
interest income, others 144 431 335 58
net exchange rate changes – 972 – –
Total 6,584 7,882 335 58
noTe 12 FInanCIaL expenses
group
KseK 2009 2008
interest expenses 1) -3,241 -6,277
net exchange rate loss -669 –
other financial expenses -979 -618
Financial expenses -4,889 -6,895
1) interest expenses are largely attributable to bank loans valued at
amortised cost.
parent Company
Interest expenses and
similar profit items
KseK 2009 2008
interest expenses, group companies -241 -227
interest expenses, others -566 -20
net exchange rate changes 39 –
Total -768 -247
noTe 13 approprIaTIons To unTaxeD reserves
parent Company
KseK 2009 2008
Computer systems, excess depreciation 1,070 –
property, plant and equipment, excess depreciation -646 -898
Tax allocation reserve, provision -3,120 -18,407
Tax allocation reserve, reversal – 6,919
Total -2,696 -12,386

HL Display annual report 2009 notes 59
noTe 14 Taxes
group parent Company
KseK 2009 2008 2009 2008
Current tax expense
Current income tax for the year -24,888 -38,249 -8,075 -17,845
Current income-tax related to previous years -831 -1,808 -1,605 -1,670
Total -25,719 -40,057 -9,680 -19,515
Deferred tax cost (-)/tax income (+)
Deferred tax relating to temporary differences -395 1,680 – –
Deferred tax income relating to tax loss carryforwards recognised during the year 1,752 878 2,097 –
Deferred tax expense relating to the use of tax loss carryforwards recognised in prior years -1,573 -2,341 – –
Total -216 217 2,097 –
Total tax expense in the income statement -25,935 -39,840 -7,583 -19,515
Tax expense/income taken directly to equity
Current tax relating to expense/income taken directly to equity (group contributions) – – 3,984 1,135
reconciliation between profit/loss before taxes and tax expense group parent Company
KseK 2009 2008 2009 2008
profit/loss before taxes 84,143 136,157 71,315 111,637
Tax according to swedish tax rate, 26.3% (28%) -22,130 -38,124 -18,756 -31,258
adjustment for other tax rates outside sweden 773 2,179 – –
adjustment of previous years’ current tax -831 -1,808 -1,605 -1,670
Tax effect of reassessment of tax loss carryforwards due to
changed estimates, tax rates and exchange rates 1,111 1,470 2,097 –
Tax effect of deficits for which tax assets were not taken into account -1,389 -1,367 – –
Tax effect of non-taxable dividends – – 12,265 15,215
withholding tax on dividends from subsidiaries -1,077 -1,248 -1,077 –
Tax effect of impairment loss of shares in subsidiaries – – – -1,468
Tax effect of other non-taxable or non-deductible items -2,392 -942 -507 -334
Current tax expense -25,935 -39,840 -7,583 -19,515
Tax attributable to comprehensive income
group 2009 2008
Before after Before after
KseK tax Tax tax tax Tax tax
Translation differences for the year from
translation of foreign operations -16,551 1,553 -14,998 22,385 – 22,385
Cash flow hedges 10,558 928 11,486 -9,467 – -9,467
other comprehensive income -5,993 2,481 -3,512 12,918 – 12,918
group
Changes in deferred tax 2009 2008
opening balance -7,825 -8,042
This year’s acquisitions 873 –
posted in equity -1,216 –
posted in the income statement -216 217
Closing balance -8,384 -7,825
HL DispLay ÅrsreDovisning 2007
59

6 0
60
notes HL Display annual report 2009
ConT. noTe 14 Taxes
The deferred tax assets and liabilities in the balance sheet relates to the following:
group group parent Company
Deferred tax assets and liabilities 2009 2009 2008 2008 2009 2008
KseK receivables Liabilities receivables Liabilities receivables receivables
intangible assets – – – – – –
Tangible assets 360 9,083 378 9,868 – –
inventory 6,108 – 7,473 – – –
Current receivables 610 – 463 – – –
operating liabilities 2,819 – 2,367 – – –
pensions 749 75 1,519 – – –
Tax losses carry forward 5,242 – 2,966 – 2,097 –
other items 186 15,300 301 13,424 – –
Deferred tax receivable/liability 16,074 24,458 15,467 23,292 2,097 –
netting -503 -503 -1,266 -1,266 – –
Tax receivable/liability 15,571 23,955 14,201 22,026 2,097 –
other items consist primarily of tax deductions (tax allocation and the like) that are not attributable to a particular balance sheet item. in the group deferred
tax assets totalling KseK 1,827 (1,907) have been reported, relating to tax loss carryforwards in companies that have reported losses in the last two financial
years. These are companies where group contributions and other tax-balancing measures can be used, as well as newly started companies where growth in
revenue is prioritised ahead of profitability during a market development phase.
in the group deferred tax assets of KseK 13,963 (29,778) were not recognised for tax loss carryforwards. There are no time restrictions or legal obstacles
to the potential utilisation of these tax loss carryforwards. no recognised tax loss carryforward have a limited asset-right.
noTe 15 earnIngs per sHare
Before dilution after dilution
seK 2009 2008 2009 2008
earnings per share 1.88 3.11 1.88 3.11
The calculation of the numerators and denominators used in the above
calculations is specified below.
earnings per share before dilution
Calculation of the earnings per share for 2009 was based on the profit for
the year attributable to the parent company’s shareholders, totalling KseK
58,208 (96,254) and a weighted average number of outstanding shares in
2009, totalling 30,939,088 (30,939,088).
earnings per share after dilution
Calculation of the earnings per share after dilution for 2009 was based on
the profit for the year attributable to the parent company’s shareholders,
totalling KseK 58,208 (96,254) and a weighted average number of
outstanding shares in 2009, totalling 30,939,088 (30,939,088). weighted
average number of outstanding shares has been calculated as follows:
weighted average number of outstanding shares,
after dilution 2009 2008
weighted average number of shares
during the year, before dilution 30,939,088 30,939,088
effect of issued warrants – –
weighted average number of shares
during the year, after dilution 30,939,088 30,939,088
Instruments that can have a potential dilution effect and changes after
the year-end
in 2009 the company had an outstanding warrant scheme, the subscription
price of which (56.50 and seK 33.95 per share) exceeded the average
price of the shares (seK 29.38 per share). These warrants are therefore
not considered to have a dilution effect and have been excluded from the
calculation of the profit/loss per share after dilution. The employee option
scheme also lacked dilution effect in 2009 and 2008. if, in future, the stock
exchange price of outstanding shares in HL Display rises to a level above the
subscription prices, these warrants will cause dilution.
HL DispLay ÅrsreDovisning 2007
noTe 16 parTICIpaTIons In JoInT venTures
group
The group has 50 percent holdings in the joint venture companies HL Trion
aB and Trion HL LLC, whose primary operations involve production in the field
of wire-bending and extrusion respectively.
The group’s share of average number of employees in HL Trion aB was 6,
and in Trion HL LLC 0.
The group’s financial statements include the items below, which constitute
the group’s ownership of the joint venture companies’ assets, liabilities,
income and expenses.
KseK 2009 2008
net sales 14,493 22,858
expenses -17,185 -26,970
profit/loss before taxes -2,693 -4,112
non-current assets 814 6,891
Current assets 1,121 6,188
Total assets 1,935 13,079
Current liabilities 2,992 7,379
non-current liabilities 210 1,659
Total liabilities 3,202 9,038
net assets/net liabilities -1,267 4,041
noTe 17 InvesTmenT CommITmenTs
in 2009 the group entered into agreements to acquire non-current assets to
the order of KseK 14,221 (8,014). it is expected that these commitments
will be settled during the following financial year.
There are no committed investments in the parent company.

HL Display annual report 2009 notes 61
noTe 18 InTangIBLe asseTs
Accumulated acquisition cost
group parent Company
Computer systems acquired Computer systems
KseK developed in-house market assets goodwill Total developed in-house
opening balance 1 January 2008 28,609 767 23,411 52,787 12,169
other investments 412 – 4,287 4,699 274
acquisitions – 274 – 274 –
sales and disposals -429 47 – -382 –
exchange rate differences for the year 1,173 186 6,097 7,456 –
Closing balance 31 December 2008 29,765 1,274 33,795 64,834 12,443
opening balance 1 January 2009 29,765 1,274 33,795 64,834 12,443
other investments 1,240 – – 1,240 –
acquisitions – 5,767 199,475 205,242 986
sales and disposals -480 – – -480 -374
reclassification -11 2168 – 2,157 –
exchange rate differences for the year -541 -105 -2,269 -2,915 –
Closing balance 31 December 2009 29,973 9,104 231,001 270,078 13,055
Accumulated amortisation and impairment losses
opening balance 1 January 2008 -17,058 -380 – -17,438 -2,143
sales and disposals 429 – – 429 –
Depreciation for the year -3,312 -49 – -3,361 -2,738
exchange rate differences for the year -974 -184 -525 -1,683 –
Closing balance 31 December 2008 -20,915 -613 -525 -22,053 -4,881
opening balance 1 January 2009 -20,915 -613 -525 -22,053 -4,881
reclassification -83 -1,529 – -1,612 –
sales and disposals 385 – – 385 374
Depreciation for the year -3,662 -381 – -4,043 -3,011
exchange rate differences for the year 475 104 278 857 –
Closing balance 31 December 2009 -23,800 -2,419 -247 -26,466 -7,518
Carrying amounts
1 Januari 2008 11,551 387 23,411 35,349 10,026
31 December 2008 8,850 661 33,270 42,781 7,562
1 Januari 2009 8,850 661 33,270 42,781 7,562
31 December 2009 6,173 6,685 230,754 243,612 5,537
Amortisation is included in the following items in the income statement:
group parent Company
KseK 2009 2008 2009 2008
selling expenses -2,767 -2,303 -1,990 -1,808
administrative expenses -1,261 -1,050 -1,003 -911
research and development expenses -11 -9 -20 -18
Total -4,039 -3,362 -3,013 -2,737
Intangible assets
Computer systems are defined as systems that lead to improved products
or processes. in accordance with ias 38 expenses for these are activated.
a useful life of four years is applied. acquired market assets include
brands and value of customer relations. a useful life of four to five years is
applied. The result of impairment testing shows that there are no significant
value declines in intangible assets, hence, no impairment loss have been
implemented.
Impairment tests of goodwill
goodwill has an indefinite useful life. Carrying value of goodwill totals MseK
231. This includes MseK 199 that relates to the acquisition of ppe Ltd in
great Britain that was carried out in December 21 and is consolidated from
December 31 2009, why no impairment is assessed. The reported goodwill
value for Display Team oy, MseK 23, has been tested for impairment
based on the group’s cash-flows related to the acquired product groups. The
remainder of the reported goodwill value has been impairment tested by the
end of the reporting period based on cash flows from the acquired companies
and the recoverable amounts were in excess of the carrying amounts.
research and development
expenses for production, material and product development up until a
decision is taken to finally develop the product are reported as expenses for
research and development in the income statement. when a development
decision has been made, expenses are activated in accordance with ias 38
intangible assets. as product development activities after this point almost
exclusively consist of constructing the necessary production equipment
to manufacture the product, expenses are then activated as tangible
fixed assets.
HL DispLay ÅrsreDovisning 2007
61

6 2
62
notes HL Display annual report 2009
noTe 19 properTy, pLanT anD eQuIpmenT
group parent Company
Buildings machinery and
rebuilding of
other party’s machinery and
KseK
Accumulated acquisition cost
and land equipment property Total equipment
opening balance 1 January 2008 7,715 452,353 15,018 475,086 1,081
purchases during the year – 27,162 614 27,776 3,011
reclassification 287 96 – 383 –
sales – -18,013 -58 -18,071 -129
exchange rate differences 1,883 13,212 -311 14,784 –
Closing balance 31 December 2008 9,885 474,810 15,263 499,958 3,963
Opening balance 1 January 2009 9,885 474,810 15,263 499,958 3,963
acquired 65,593 127,647 – 193,240 –
purchases during the year – 37,237 126 37,363 3,085
reclassification – -3,052 -45 -3,097 –
sales – -66,633 -169 -66,802 -714
exchange rate differences -2,952 -8,980 49 -11,883 –
Closing balance 31 December 2009 72,526 561,029 15,224 648,779 6,334
Accumulated depreciation and impairment losses
opening balance 1 January 2008 -2,529 -327,539 -6,659 -336,727 -760
Depreciation during the year -469 -31,470 -823 -32,762 -277
reclassification -287 74 58 -155 –
sales – 16,795 – 16,795 129
exchange rate differences -1,439 -8,019 271 -9,187 –
Closing balance 31 December 2008 -4,724 -350,159 -7,153 -362,036 -908
opening balance 1 January 2009 -4,724 -350,159 -7,153 -362,036 -908
acquired – -97,423 – -97 423 –
Depreciation during the year -448 -30,253 -841 -31,542 -643
reclassification – 2 151 4 2,155 –
sales – 57,586 101 57,687 707
exchange rate differences 262 5,631 -45 5,848 –
Closing balance 31 December 2009 -4,910 -412,467 -7,934 -425,311 -844
Carrying amounts
1 Januari 2008 5,186 124,814 8,359 138,359 321
31 December 2008 5,161 124,651 8,110 137,922 3,055
1 Januari 2009 5,161 124,651 8,110 137,922 3,055
31 December 2009 67,616 148,562 7,290 223,468 5,490
Depreciation and impairment losses are distributed to the following rows in
the income statement
group Depreciation
KseK 2009 2008
Cost of goods sold/services -24,481 -25,428
selling expenses -2,500 -2,597
administrative expenses -4,374 -4,543
other operating expenses -187 -194
Total depreciation and impairments for property,
plant and equipment -31,542 -32,762
HL DispLay ÅrsreDovisning 2007
parent Company Depreciation
KseK 2009 2008
administrative expenses -321 -138
other operating expenses -322 -139
Total depreciation and impairments for property,
plant and equipment -643 -277

HL Display annual report 2009 notes 63
noTe 20 InvesTmenTs In group CompanIes
Corporate Capital number Carrying amount, KseK
Directly owned reg. office identity number share, % votes, % of shares 31-12-2009 31-12-2008
Display Team oy espoo 0865289-8 100 100 100 – 25,652
HL Display Belgium n.v. antwerp 0431.244.677 100 100 1,000 283 283
HL Display Bulgaria eooD sofia 200041077 100 100 200 97 97
HL Display Ceská republika s.r.o prague 65410394 100 100 1 26 26
HL Display Deutschland gmbH Langenfeld HrB2713 100 100 1 2,614 2,614
HL Display d.o.o. Ljubljana 47556722 100 100 1 93 93
HL Display d.o.o. Beograd Beograd sr103831628 100 100 1 5 5
HL Display españa s.L Madrid B83488213 100 100 3,814 1,267 1,267
HL Display Falun aB Falun 556545-6976 100 100 1,000 100 100
HL Display France sas Tours rCsB377988704 100 100 2,500 268 268
HL Display g Ltd györ 08-09-018176 100 100 1 20 –
HL Display Hungaria Budapest 01-09-667938 100 100 1 487 487
HL Display inc. wilkes-Barre 23-2869204 100 100 1 1 1
HL Display Latvia sia riga 50003303821 100 100 100 1,522 1,522
HL Display Lesjöfors aB Filipstad 556439-7429 100 100 5,000 2,513 2,513
HL Display Ltd sti istanbul 428930-376512 100 100 200 1,707 1,707
HL Display nordic aB Falkenberg 556446-0557 100 100 1,500 3,383 3,383
HL Display norge a/s asker 955437071 100 100 1,100 5,598 5,598
HL Dislplay Middle east FZCo Dubai 133882 100 100 1 744 –
HL Display ooo Moscow 7701211771 100 100 1 832 832
HL Display pictoria aB Filipstad 556654-4952 100 100 1,000 100 100
HL Display polska sp.zo.o warszawa 521-04-17-996 100 100 200 236 236
HL Display product supply aB Falkenberg 556738-6577 100 100 1,000 100 100
HL Display regional service Center Bergen op Zoom 20085397 100 100 1,671 100 100
HL Display srL Bukarest ro14633525 100 100 2,500 103 103
HL Display schweiz ag aarau CH-4003018955-6 100 100 100 543 543
HL Display (asia) pte Ltd. singapore 200004486H 100 100 1 576 576
HL Display slovensko s.r.o. Bratislava 36547662 100 100 1 1,134 1,134
HL Display soumi oy Helsinki Fi21185753 100 100 100 27,633 1,981
HL Display sundsvall aB sundsvall 556124-0481 100 100 1,500 11,125 11,125
HL Display (suzhou) Co., Ltd suzhou qi Du su no. 016307 100 100 1 19,074 16,320
HL Display sverige aB stockholm 556351-9528 100 100 1,000 50 50
HL Display (uK) Ltd Kirmington 2187037 100 100 10,000 935 935
HL Display uK Holding Ltd Harlow 07098667 100 100 1,000 50,482 –
HL Display ukraine Kiev 09867 100 100 100 223 223
HL Display österreich gmbH wienna Fn140307i 100 100 1 327 327
HL Financial services aB stockholm 556435-0832 100 100 500 128 128
sCi L’eclipse Tours rCs414745026 100 100 100 14 14
Total 134,443 80,443
Indirectly owned
HL Design sasu saint avertin rCs484754379 100 100 37,000
HL Display (shanghai) Co Ltd shanghai prC 310230757570910 100 100 2
HL Display Hong Kong Ltd Hong Kong 783 663 100 100 2
HL Display india pvt Ltd Mumbai 05MH2006FTC164731 100 100 10,000
HL Display Karlskoga aB Karlskoga 556457-7202 100 100 1,000
HL Display Korea Co Ltd seoul 110111-3042176 100 100 16,800
HL Display Malaysia sdn Bhd Kuala Lumpur 569116-0 100 100 2
HL Display nederland Bv Bergen op Zoom 30152867 100 100 200
HL Display shipley Ltd shipley 256682 100 100 1,000
HL Display Taiwan Ltd Taipei 27578266 100 100 1
HL Display Thailand Ltd Bangkok 10454600434 100 100 1
pT. HL Display indonesia Jakarta 0904.5.51.20945 100 100 100
ppe Ltd Harlow 10133443 100 100 54,443
p.p.H Moulders Ltd Harlow 2265584 100 100 1,000
The point of sales Centre Ltd Harlow 0944685 100 100 8,100
ppe Merchandising
solutions europe B.v rotterdam 1085986 100 100 1,000
acquisition cost parent Company
KseK 2009 2008
opening balance 123,885 119,726
Capital contributions paid 2,754 3,080
newly started/acquired companies 51,246 1,079
Closing balance 31 December 177,885 123,885
accumulated impairment losses
opening balance -43,442 -38,198
impairment losses – -5,244
Closing balance 31 December -43,442 -43,442
Carrying amount 134,443 80,443
HL DispLay ÅrsreDovisning 2007
63

6 4
64
notes HL Display annual report 2009
noTe 21 InvesTmenTs In assoCIaTeD CompanIes
anD JoInT venTures
parent Company
acquisition cost
KseK 2009 2008
opening balance 12,147 12,147
sales -2,000 –
Closing balance 31 December 10,147 12,147
The parent company’s directly owned holding in associated companies and
joint venture companies
2008 voting and
Joint venture company, corp. reg. capital share Carrying
no. and registered office as a % amount
Associated companies
optimus KB, 916620-1450, stockholm – 5,000
Joint ventures – directly owned
HL Trion aB, 556539-1637, Filipstad 50% 7,147
Joint ventures – indirectly owned
Trion HL LLC 50% –
Total 12,147
2009 voting and
Joint venture company, corp. reg. capital share Carrying
no. and registered office as a % amount
Associated companies
optimus KB, 916620-1450, stockholm – 3,000
Joint ventures – directly owned
HL Trion aB, 556539-1637, Filipstad 50% 7,147
Joint ventures – indirectly owned
Trion HL LLC 50% –
Total 10,147
The group’s holding refer to participations in optimus KB.
noTe 22 oTHer non-CurrenT reCeIvaBLes
group parent Company
KseK 2009 2008 2009 2008
Deposits 2,224 2,329 – –
other 92 – – –
Total 2,316 2,329 – –
noTe 23 parenT Company reCeIvaBLes From group CompanIes
acquisition cost Current receivables
from group companies
KseK 2009 2008
opening balance 367,560 326,532
increases 49,200 55,926
redemptions -50,211 -14,898
Closing balance 31 December 366,549 367,560
acquisition cost non-current receivables
from group companies
KseK 2009 2008
opening balance – –
increases 203,284 –
Closing balance 31 December 203,284 –
at the year-end the parent company had no receivables from associated
companies or joint ventures.
HL DispLay ÅrsreDovisning 2007
noTe 24 InvenTorIes
group
KseK 2009 2008
raw materials and
consumables 42,002 28,587
work in progress 5,621 1,369
Finished goods and
goods for resale 131,860 157,151
work in progress on
behalf of third parties 235 57
Total 179,718 187,165
selling expenses for the group include impairment losses of inventories to
the order of MseK 12 (6). The parent company has no inventories.
noTe 25 TraDe reCeIvaBLes
Trade receivables are reported after taking into account anticipated bad debt
losses that amounted to KseK 8,758 (8,327) in the group. There were no
trade receivables in the parent company.
age analysis, overdue not impaired trade receivables
Dec 31 2009 Dec 31 2008
Trade receivables not yet due 154,072 184,985
overdue trade receivables 0 - 30 days 58,012 43,197
overdue trade receivables > 30 days - 90 days 32,755 29,791
overdue trade receivables > 90 days - 180 days 8,120 10,958
overdue trade receivables > 180 days - 360 days 4,715 6,346
overdue trade receivables > 360 days 7,081 4,075
allowance for credit losses -8,758 -8,327
Total 255,997 271,025
allowance account for credit losses Dec 31 2009 Dec 31 2008
opening balance -8,327 -4,042
Bad debt losses 178 383
provision for anticipated bad debt losses -4,252 -5,872
Cancelling of previous year’s provisions 3,335 1,204
exchange rate differences 308
Closing balance -8,758 -8,327
noTe 26 prepaID expenses anD aCCrueD InCome
group parent Company
KseK 2009 2008 2009 2008
prepaid expenses:
rents 4,826 5,790 – 115
leasing expenses 353 1,382 – 1,109
insurance expenses 976 1,569 – 600
iT support
and communication 1,085 4,250 1,085 2,313
accrued interest income 238 494 144 293
other 22,681 11,553 2,721 1,235
Total 30,158 25,038 3,950 5,665
noTe 27 oTHer CurrenT asseTs
The items other current receivables consists of derivates used for hedge
accounting valued at fair value amounting to 3,527 (-8,887).
withholding tax concerning dividends from foreign subsidiaries of KseK
2,291 (3,561) is included in the parent company’s other current assets.

HL Display annual report 2009 notes 65
noTe 28 CasH anD CasH eQuIvaLenTs
group
KseK 2009 2008
Cash and bank balance 95,784 102,164
Credit balance in group account 117,643 118,609
Total according to statement of cash flows 213,427 220,773
noTe 29 eQuITy
The group
For a specification of the group’s equity, see the financial report on page 42.
share capital
as at 31 December 2009 the registered share capital amounted to seK
38,673,860, comprising 30,939,088 ordinary shares, 3,652,096 of which
are class a and 27,286,992 class B. The group has not issued preference
shares. Holders of ordinary shares are entitled to a dividend as decided
subsequently and are entitled to vote at the annual general Meeting of
shareholders with one vote per share for class a shares and 1/10 vote
per share for class B shares.
Cash flow hedge reserve
The cash flow hedge reserve of KseK 2,599 constitutes the effective
proportion of the cumulative net change in fair value of a cash flow hedging
instrument attributable to hedging transactions that have not yet occurred.
retained earnings
retained earnings include profits earned in the parent company and its
subsidiaries, associated companies and joint ventures. previous allocations
to the statutory reserve are included in this equity item.
Dividend
after closing date the Board has proposed the following dividend. This
dividend has yet to be confirmed and there are no income tax consequences.
KseK 2010 1) 2009 2008
Dividend, KseK 42,696 42,696 42,541
Dividend per share, seK 1.38 1.38 1.38
1) according to the Board of Directors’ proposal.
parent Company
For a specification of the parent company’s equity, see the financial report on
page 45.
restricted equity
restricted equity may not be reduced through dividends.
Statutory reserve
The purpose of the statutory reserve has been to restrict a portion of the net
profit each year of dividend distribution.
unrestricted equity
Retained earnings
retained earnings comprises the previous year’s unrestricted equity after any
dividend distributions. Together with the profit/loss for the year, it constitutes
total unrestricted equity, i.e. the amount available for dividend distribution to
the shareholders.
noTe 30 unTaxeD reserves
parent Company
KseK 2009 2008
accumulated excess depreciation/amortisation
Computer systems
opening balance 1 January 2,074 2,460
amortisation for the year in excess of plan -1,070 -386
Closing balance 31 December 1,004 2,074
Property, plant and equipment
opening balance 1 January 614 -670
amortisation for the year in excess of plan 646 1,284
Closing balance 31 December 1,260 614
Tax allocation reserves
appropriations in conjunction with taxation 2005 2,656 2,656
appropriations in conjunction with taxation 2007 10,974 10,974
appropriations in conjunction with taxation 2008 17,413 17,413
appropriations in conjunction with taxation 2009 18,407 18,407
appropriations in conjunction with taxation 2010 3,120 –
Closing balance 31 December 52,570 49,450
Total untaxed reserves 54,834 52,138
noTe 31 InTeresT-BearIng LIaBILITIes
see note 2 for information about the company’s contractual terms in
respect of interest-bearing liabilities, as well as more information about
the company’s exposure to interest rate risk and risks of exchange rate
fluctuations.
group
KseK 2009 2008
non-current liabilities
Bank loans 226,463 61,261
other interest-bearing liabilities 34,614 519
Total 261,077 61,780
Current liabilities
short-term element of bank loans 83,270 36,827
other interest-bearing liabilities 7,817 1,732
Total 91,087 38,559
Interest-bearing liabilities 352,164 100,339
Terms and repayment period – group
For information about pledged assets, see note 36.
HL DispLay ÅrsreDovisning 2007
65

6 6
66
notes HL Display annual report 2009
noTe 32 posT-empLoymenT BeneFITs
Defined benefit pension plans
The group has five defined benefit plans providing remuneration to employees
after they retire. in defined benefit plans the payment made to employees
and former employees is based on the salary at retirement and the number
of years worked. The group bears the risk for ensuring that the promised
payments are made.
KseK 2009 2008
present value of wholly or partly funded obligations 10,010 7,267
Fair value of managed assets -5,891 -4,392
net wholly or partly invested obligations 4,119 2,875
present value of unfunded obligations 2,780 2,535
present value of net obligations 6,899 5,410
unreported actuarial profits (+) and losses (-) -1,783 -339
net amount in balance sheet
relating to defined benefit plans 5,116 5,071
The net amount KseK 5,116 (5,071) is reported in the item pension
provisions and accrued expenses KseK 5,116 (4,367) and prepaid income
KseK – (704) in the consolidated balance sheet. Managed assets consists
of investment in mixed funds with the following allocation: 55 (59) percent in
bonds, 15 (16) percent in shares, 21 (16) percent in real estate, and 9 (9)
percent other.
The net amount is per country:
KseK 2009 2008
France 1,603 1,500
norway 2,140 2,043
switzerland 492 702
austria 881 826
Total 5,116 5,071
Changes in the defined benefit obligations:
KseK 2009 2008
obligations to defined benefit plans as per 1 January 9,802 9,931
Fees paid in 380 -1,909
Current service costs plus interest cost 1,372 2,175
actuarial gains (+) and losses (-) 59 -1,453
exchange rate differences 1,177 1,058
obligations to defined benefit plans
as per 31 December 12,790 9,802
Changes in fair value of managed assets:
KseK 2009 2008
Managed assets’ fair value 1 January 4,392 5,981
reclassification 12 –
Contribution from employer 1,577 711
payments – -2,010
expected return on managed assets 229 251
actuarial gains (+) and losses (-) -427 -1,458
exchange rate differences 108 917
Fair value of managed assets 31 December 5,891 4,392
expense reported to the income statement for defined benefit plans:
KseK 2009 2008
Current service cost 1,045 1,830
administration cost 141 98
interest cost 322 345
expected return on managed assets -227 -238
actuarial profits (-) and losses (+) 70 –
Total expense 1,351 2,035
Cost of defined contribution plans 16,697 15,379
Total cost of remuneration after
end of employment 18,048 17 414
HL DispLay ÅrsreDovisning 2007
The expense is reported in the following rows in the income statement
KseK 2009 2008
Cost of goods sold 7,005 5,305
selling expenses 7,943 9,423
administrative expenses 2,226 2,087
research and development costs 874 599
Total 18,048 17,414
assumptions for defined benefit plans
The most significant actuarial assumptions as at the year-end (expressed
as averages)
KseK 2009 2008
Discount rate 31 December 3.31% 3.43%
expected return on managed assets 31 December 4.75% 4.38%
Future salary increase 2.63% 2.63%
Future increase in pensions 1.38% 2.00%
expected remaining service, years 18.1 18.9
Commitments for retirement pensions and family pensions for salaried
employees in sweden are secured through an insurance policy with alecta.
according to a statement issued by the swedish Financial reporting Board,
uFr 3, this is a defined benefit plan involving several employers. For the
financial year 2009 the company did not have access to information that
enabled it to report this plan as a defined benefit plan. The iTp pension plan
that is secured through an insurance policy with alecta is therefore reported
as a defined contribution plan. This year’s charges for pension policies
arranged with alecta total KseK 3,162 (1,918). alecta’s surplus can be
distributed to those arranging the insurance and/or the insured parties. at
the end of 2009 alecta’s surplus in the form of the collective consolidation
level totalled 141 (112) percent. The collective consolidation level
comprises the market value of alecta’s assets as a percentage of insurance
commitments, calculated according to alecta’s insurance calculation
assumptions, which do not correspond with ias 19.
Historical information
KseK 2009 2008 2007 2006 2005
present value of benefitbased
obligations -12,790 -9,802 -9,931 -4,564 -3,524
Fair value of
managed assets 5,891 4,393 5,981 1,206 942
Deficit in plan -6,899 -5,409 -3,950 -3,358 -2,582
experience-based adjustments concerning managed assets amounted to
KseK 229 (251) for 2009. experience-based adjustments concerning the
reported obligations amounted to KseK 414 (740). actual return on managed
assets amounted to KseK -198 (-1,208).
The estimated payments regarding defined benefits plans for the next year
amounts to KseK 463 (447).
Defined contribution plans
in defined contribution plans the company pays fixed contributions to a
separate legal entity and has no obligation to make any further payments.
The group’s profit/loss is charged with expenses in line with earnings.
group parent Company
KseK 2009 2008 2009 2008
payments to defined
contribution plans 16,697 15,379 4,817 5,080

HL Display annual report 2009 notes 67
noTe 33 oTHer CompreHensIve InCome anD CHanges In reserves
anD non-ConTroLLIng InTeresT
non-
group Translation Hedging controlling
KseK reserve reserve interest
opening balance, 1 Jan 2008 – 580 2,841
Translation differences for the year 21,665 – –
Changes in fair value of
cash flow hedges – -9,467 –
profit for the year attributable
to non-controlling interest – – 783
Closing balance, 31 Dec 2008 21,665 -8,887 3,624
Translation differences for the year -14,998 – –
Changes in fair value of
cash flow hedges – 11,486 –
acquisition of non-controlling interest – – -3,624
Closing balance, 31 Dec 2009 6,667 2,599 –
Translation reserve
The translation reserve includes all exchange differences arising on
translation of the financial statements of foreign operations which present
their reports in a currency other than that used for presentation of the
group’s financial reports. The parent Company and group present their
financial reports in swedish kronor.
Hedging reserve
The hedging reserve covers the effective portion of the accumulated net
change in fair value of a cash flow hedging instrument attributable to hedge
transactions which have not yet occurred.
noTe 34 LIaBILITIes To group anD assoCIaTeD CompanIes,
JoInT venTures
as at year-end, the parent company’s non-current liabilities to group
companies amounted to KseK 253,766 (–). The parent company’s current
liabilities to group companies amounted to KseK 27,964 (14,900). There
were no liabilities to associated companies or joint ventures.
noTe 35 aCCrueD expenses anD prepaID InCome
group parent Company
KseK 2009 2008 2009 2008
accrued social
security expenses 17,772 21,690 3,566 4,495
accrued holiday pay 25,131 25,004 5,045 4,204
accrued salaries & wages 22,461 28,568 3,084 5,432
Customer bonuses 10,750 12,384 – –
prepaid income 7,518 5,167 – –
other accrued expenses 56,471 41,653 6,953 5,271
Total 140,103 134,466 18,648 19,402
noTe 36 pLeDgeD asseTs anD ConTIngenT LIaBILITIes
group parent Company
KseK 2009 2008 2009 2008
pledged assets
For own liabilities and provisions
Corporate mortgages 350 350 – –
Total pledged assets 350 350 – –
Contingent liabilities
securities for the benefit
of subsidiaries – – 301,739 106,010
guarantees issued for
the benefit of subsidiaries – – 49,992 107,508
Total contingent liabilities – – 351,731 213,518
HL Display aB has, to seB, undertaken that no company in the group will
provide guarantees for loans or that the parent company will transfer the
ownership of its shares or control of subsidiaries that have credits in
this bank without the permission of the bank. in addition, the Company
guarantees to fulfill certain financial covenants relating to the net debt/
eBiTDa, and for equity in relation to total assets.
noTe 37 sTaTemenT oF CasH FLows
For a compilation of the group’s and the parent company’s cash and cash
equivalents, see note 28.
adjustments for items not included in cash flow
group parent Company
KseK 2009 2008 2009 2008
Disposal of non-current
assets 2,108 227 8 –
Costs concerning
share-based benefits 107 294 107 294
pension provisions 1,120 77 – –
Changes in provisions -357 375 – –
Translation difference 527 11,246 – –
provision for bonus -822 3,303 -822 3,302
severance pay -2,243 3,175 -2,243 3,175
reserve Trion industries 4,500 – – –
Total 4,940 18,697 -2,950 6,771
For information about acquisitions made during the year, see note 5.
noTe 38 reLaTeD parTy TransaCTIons
related parties
The chairman of the board anders remius owned indirectly shares in XLenT
Consulting aB until q2 2009. The relation ended when the shares were sold
in q2 2009. During 2009, XLenT Consulting aB has invoiced the group’s
companies KseK 3,445 (14,392) for service rendered. The invoices concern
work carried out on management, development and support of the group’s iT
network and erp system.
of the parent company’s revenue, KseK 77,824 (100,958) relates to
consultancy services sold to group companies.
Transactions with key people in a managerial position
The company’s Board members and their immediate family members
represent 79.1 (79.2) percent of votes in the company. There are no loans
to Board members. For further information, see note 8.
HL DispLay ÅrsreDovisning 2007
67

6 8
68
notes HL Display annual report 2009
noTe 39 Fees To auDITors
group parent Company
KseK 2009 2008 2009 2008
Kpmg
audit engagement 4,215 3,481 1,010 593
audit related counselling 177 410 89 208
other engagements 266 – – –
Total Kpmg 4,658 3,891 1,099 801
other auditors
audit engagement 407 533 – –
other engagements 3 627 – –
Total other auditors 410 1,160 – –
audit engagement and audit related counselling relate to the audit of the
annual accounts and bookkeeping as well as the Board’s and the Ceo’s
administration, other tasks that are the duty of the company’s auditor as
well as advice or other activities arising from observations during such
an audit or the performance of such other tasks. anything else is reported
as other engagements.
noTe 40 evenTs aFTer THe BaLanCe sHeeT DaTe
no significant events after the balance sheet date have occurred in the group
or the parent Company. The financial statements were approved for issuing by
the Board of the parent company on 10 March 2010.
The Board of Directors and the Managing Director certify that the
annual accounts have been prepared in accordance with generally
accepted accounting principles and that the consolidated accounts
have been prepared in accordance with the international set of
accounting standards referred to in regulation (eC) no 1606/2002
of the european parliament and of the Council of 19 July 2002, on
the application of international accounting standards. The annual
accounts and the consolidated accounts give a true and fair view
of the position and profit or loss of the Company and the group.
The administration report for the Company and the group gives a
fair review of the development and performance of the business,
HL DispLay ÅrsreDovisning 2007
stockholm, 10 March 2010.
anders remius
Chairman
position and profit or loss of the Company and the group, and
describes the principal risks and uncertainties that the Company
and the companies in the group face.
The annual accounts and the consolidated accounts as reported
above have been approved for publication by the Board on March
10, 2010. The consolidated income statements, statement of
comprehensive income, and statement of financial position for the
group, as well as the income statements and balance sheets of
the parent company will be submitted for adoption at the annual
meeting of shareholders on april 22, 2010.
Åke Modig anna ragén susanna Campbell Mats-olof Ljungkvist
Member of the Board Member of the Board Member of the Board Member of the Board
Lars-Åke rydh stig Karlsson Magnus Jonsson Kent Mossberg
Member of the Board Member of the Board Member of the Board, Member of the Board,
employee repr. employee repr.
gérard Dubuy
Member of the Board,
Managing Director and Ceo
our auditor’s report was submitted on 10 March 2010.
KpMg aB
Åsa wirén Linder Mattias Johansson
authorised authorised
public accountant public accountant
auditor in charge Joint auditor
noTe 41 ImporTanT esTImaTes anD evaLuaTIons
Company management has discussed with the audit Committe
developments, the selection of and information in respect of the group’s
important accounting principles and estimates, as well as the application of
these principles and estimates.
regarding the establishment of the acquisition analysis, impairment
testing of goodwill, capitalization of deferred taxes and the assessment of
the obsolescence of stock are regularly evaluated and estimates about future
events made. on the balance sheet date no uncertainties exist which present
a significant risk of material adjustment of the reported amounts of assets
and liabilities within the next fiscal year.
noTe 42 DeTaILs oF THe parenT Company
HL Display aB is a swedish-registered limited liability company with its
registered office in stockholm. The parent company’s shares are quoted on
the nasdaq oMX stockholm small Cap list. The address of head office is
Cylindervägen 18, 131 26 nacka strand, sweden. The consolidated financial
statements for 2009 comprise the parent company and its subsidiaries,
together referred to as the group. The group also includes owned holdings
in associated companies and joint ventures.

HL Display annual report 2009 audit report 69
auDiT reporT
To the annual general Meeting of the shareholders of HL Display aB
(publ). Corporate identity number 556286-9957
we have audited the annual accounts, the consolidated accounts,
the accounting records and the administration of the Board of
Directors and the Managing Director of HL Display aB (publ) for the
year 2009. The annual accounts and the consolidated accounts of
the company are included in the printed version of this document
on pages 38-68. The Board of Directors and the Managing Director
are responsible for these accounts and the administration of the
company as well as for the application of the annual accounts
act when preparing the annual accounts and the application of
international financial reporting standards iFrss as adopted by the
eu and the annual accounts act when preparing the consolidated
accounts. our responsibility is to express an opinion on the annual
accounts, the consolidated accounts and the administration based
on our audit.
we conducted our audit in accordance with generally accepted
auditing standards in sweden. Those standards require that we
plan and perform the audit to obtain reasonable assurance that
the annual accounts and the consolidated accounts are free of
material misstatement. an audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in
the accounts. an audit also includes assessing the accounting
principles used and their application by the Board of Directors and
the Managing Director and significant estimates made by the Board
of Directors and the Managing Director when preparing the annual
accounts and the consolidated accounts as well as evaluating the
stockholm, 10 March 2010
KpMg aB
Åsa wirén Linder Mattias Johansson
authorised authorised
public accountant public accountant
auditor in charge Joint auditor
overall presentation of information in the annual accounts and
the consolidated accounts. as a basis for our opinion concerning
discharge from liability, we examined significant decisions, actions
taken and circumstances of the company in order to be able to
determine the liability, if any, to the company of any Board member
or the Managing Director. we also examined whether any Board
member or the Managing Director has, in any other way, acted in
contravention of the Companies act, the annual accounts act or
the articles of association. we believe that our audit provides a
reasonable basis for our opinion set out below.
The annual accounts have been prepared in accordance with the
annual accounts act and give a true and fair view of the company’s
financial position and results of operations in accordance
with generally accepted accounting principles in sweden. The
consolidated accounts have been prepared in accordance with
international financial reporting standards iFrss as adopted by the
eu and the annual accounts act and give a true and fair view of the
group’s financial position and results of operations. The statutory
administration report is consistent with the other parts of the
annual accounts and the consolidated accounts.
we recommend to the annual general Meeting of shareholders
that the income statements and balance sheets of the parent
company, and the income statements and the statement of
financial position for the group, be adopted, that the profit of the
parent company be dealt with in accordance with the proposal in
the statutory administration report and that the members of the
Board of Directors and the Managing Director be discharged from
liability for the financial year.
HL DispLay ÅrsreDovisning 2007
69

7 0
70
statement by the Chairman HL Display annual report 2009
sTaTeMenT By THe CHairMan
Dear shareholders,
For many years, HL Display’s communication has been permeated
by transparency and openness. it is our aim that shareholders
should find it easy to form a clear idea of our current operations
and position. This is perhaps even more important in the present
situation, with market trends so difficult to predict. it is our hope
that on reading the annual report, you will obtain a clear picture of
our business and how it is run.
our Board discussions were largely focused on two areas in
2009. The first of these concerned the economic slowdown and
how HL Display’s strategies and business operations should be
adapted to the situation. The radically changed market climate
placed major pressure on company management and brought with it
a great deal of hard work and many difficult decisions. The Board’s
role here was to act as mentor, advising management on which
scenarios required adaptive measures.
secondly, much work was devoted to the area of acquisitions and
evaluation of potential acquisition candidates. For a long time there
has been a consensus on the Board about the type of acquisitions
we are seeking. while we are keen to make acquisitions which
strengthen our offering, it is also important with acquisitions that
could consolidate our market position. The instruction was not to
go ”bargain-hunting” for companies in difficulties, but to identify
acquisition candidates which would strengthen HL Display’s position.
The acquisition of ppe fulfils these criteria. The acquisition
strengthens our offering to the brand manufacturers segment, and
we shall also be able to exploit this added strength globally. The
acquisition also strengthens our uK market position. This is an
important market where we have not yet achieved the success we
HL DispLay ÅrsreDovisning 2007
would have liked. ppe has achieved growth during the recession,
showing healthy margins. in other words, this important acquisition
is the right one for HL Display.
it is my belief that we have a well composed Board at present.
our members represent different sectors and bring a range
of experience and skills which combine to ensure optimum
development for HL Display in the future.
My belief is also shared by the rest of the Board, as was evident
in the evaluation conducted during the year. Departing from the
practice of previous years, i decided to conduct the evaluation of
the Board’s work myself, based on structured interviews with all
the Board members. it was of immense value to me to have a very
open discussion with Board members about the Board’s work and
associated aspects.
even though the market situation affected our sales, the Board
is nevertheless satisfied with the measures implemented in the
Company, both regarding strategies and streamlining of operations.
The common vision is a long-term focus on creating added value
for shareholders. Cost-effectiveness measures are very much a
balancing act. it is all about streamlining without losing value. There
is life after the recession and HL Display should be well equipped
to exploit the opportunities when the market returns to more
normal levels.
anders remius,
Chairman of the Board

HL Display annual report 2009 Corporate governance report 2009 71
CorporaTe governanCe reporT
For HL DispLay aB
How HL Display is managed
Auditor
Shareholders’
General Meeting
Board of Directors
CEO
Group management Area Managers
Subsidiaries
HL Display is listed on nasdaq oMX stockholm and applies the
swedish Code of Corporate governance in accordance with the
current regulatory framework. in 2009, HL Display noted one
derogation from the Code’s rules. This has been reported in detail
in the section below. HL Display’s corporate governance report has
not been reviewed by the Company’s auditors.
Derogations from the Code
Rule 1.5 of the Code
HL Display has deviated from the Code in that the Company’s Ceo
gérard Dubuy, who is French, addresses the annual general meeting
in english. although the presentation is available in swedish, it is not
simultaneously interpreted, which is a requirement under rule 1.5.
HL Display has applied this procedure since gérard Dubuy took
up his position as Ceo in 2006. it is the Board’s opinion that this
arrangement works well, particularly in the absence of any views
or wishes from shareholders regarding simultaneous interpretation
of the Ceo’s address to the annual general meeting. nor has the
Board received any indications of shareholders being unable to
understand or follow gérard Dubuy’s address to the meeting.
accordingly, the Board does not see any justification for simultaneous
interpretation and its associated costs at the present time.
shareholders’ meeting
shareholders’ influence in the Company is exercised at the
shareholders’ meeting (annual general meeting or extraordinary
general meeting), which is HL Display’s highest decision-making
body. The notice convening a shareholders’ general meeting is
inserted as an announcement in post- och inrikes Tidningar and
svenska Dagbladet. The notice of meeting is also sent out as a
Nomination Committee
Audit Committee
Remuneration Committee
Internal control
environment
external control instruments
The external control instruments that affect the
management of HL Display consist primarily
of the swedish Companies act, the swedish
annual accounts act, the Listing agreement with
nasdaq oMX and the swedish Code of Corporate
governance.
Internal control instruments
The internal control instruments that affect the
management of HL Display consist primarily
of the articles of association, which are defined
by the shareholders’ general meeting, and
the control documents that are defined by the
Board of Directors. These include the rules of
procedure for the Board, instructions for the
Ceo, instructions for Committees appointed by
the Board (audit Committee and remuneration
Committee), Finance policy, Code of Conduct,
equal opportunity policy, subsidiary guide Book
etc.
press release and posted on the Company’s website. shareholders
wishing to attend and vote at a shareholders’ meeting must be
listed in the register of shareholders five working days before the
meeting, and must notify the Company of their intention to attend
the meeting, also indicating the number of advisors they are bringing,
by 4.00 p.m. on the date specified in the notice of the meeting.
shareholders who are unable to attend have the opportunity to be
represented by a proxy.
The annual general meeting (agM) is held in nacka or in
stockholm, normally in april. The shareholders elect the Board
members and Chairman of the Board, appoint the auditor, decide
on amendments to the articles of association, adopt the income
statement, balance sheet and distribution of the Company’s profit,
decide on discharge from liability for the Board members and Ceo,
decide on Board fees and define the principles for remuneration of
the Ceo and management group. Decisions at the shareholders’
general meeting are normally made by a simple majority, except
in cases where the swedish Companies act prescribes a higher
proportion of shares and votes at the shareholders’ general
meeting in order for a proposal to be adopted.
The agM covering the 2008 financial year was held on 2
april 2009 in nacka strand. in addition to the points referred to
above, the agM voted unanimously in favour of a warrant issue in
accordance with the Board’s proposal.
The notice convening the meeting was published on 4 March.
all other documentation relevant to the agM was published on
HL Display’s website on 19 March 2009. at its meeting held on 31
March 2009, the Board decided to propose to the agM a change
to the conditions of the warrant programme. under the Board’s
proposal, the subscription price for the shares which warrant holders
HL DispLay ÅrsreDovisning 2007
71

7 2
72
Corporate governance report 2009 HL Display annual report 2009
are entitled to subscribe for and the purchase price for the warrants
would be determined in april 2009 for half the options. The price for
the remainder would be determined in February 2010. information
about the changed proposal regarding the allocation principles and
the rationale behind the change was published on the Company’s
website on 1 april and reported to the agM. The meeting voted
unanimously in favour of the warrant issue and the decision has
been registered with the swedish Companies registration office.
The agM was attended by 14 shareholders, representing 73 percent
of the share capital and 87 percent of the voting power. The minutes
from the agM are available for download on HL Display’s website.
The date and venue of the agM for the 2009 financial year were
published on 21 october 2009. under ‘Corporate governance’ on
HL Display’s website, shareholders can find out how to submit
business for consideration by the meeting and what the submission
deadline is.
extraordinary general meeting
if there is reason to convene a shareholders’ meeting before the
next agM, the shareholders are called to an extraordinary general
meeting. HL Display had one (1) extraordinary general meeting in
2009. at this meeting, held on 25 February 2009, it was resolved
to change the article of association regarding the registered office
to reflect the new address of the head office in nacka. The meeting
also decided that future shareholders’ meetings may be held either
in nacka or in stockholm. The minutes from the extraordinary general
meeting are available for download on HL Display’s website.
nomination committee
The agM decides how the nomination committee will be appointed.
The 2009 agM decided that the Chairman of the Board would
appoint the nomination committee in consultation with the
Company’s major shareholders. The appointment is based on the
following criteria. The nomination committee should consist of
at least four members, one of whom is Chairman of the Board. a
member who is familiar with the Company’s major owners is elected
as chairman of the nomination committee. However, the Chairman
aTTenDanCe oF THe BoarD memBer,
parTICIpaTIon In CommITTees,
anD remuneraTIon
HL DispLay ÅrsreDovisning 2007
audit
Committee
of the Board may not serve as chairman of the committee.
if an appointed member leaves the nomination committee,
the Company’s major shareholders must consult to appoint a
replacement. The present nomination committee serves until a new
nomination committee is appointed.
HL Display’s present nomination committee consists of Johan
Lannebo, representing Lannebo Fonder (Chairman), anders remius,
Chairman of the Board of HL Display, arne Karlsson, Ceo of ratos
and representing ratos, and adam gerge, representing Didner &
gerge. The composition of the nomination committee was published
on HL Display’s website on 4 september 2009.
The nomination committee’s tasks are as follows:
– evaluate the composition and work of the Board;
– make proposals to the agM regarding the election of the Board
and Chairman of the Board;
– make proposals to the agM regarding the election of auditors
(if relevant), in consultation with the Company’s audit committee;
– make proposals to the agM regarding remuneration of the Board
and auditors; and
– make proposals to the agM regarding a chairman for the agM.
The nomination committee has held 4 meetings since its election.
a report on the work of the nomination committee will be submitted
to the 2010 agM. The members of the nomination committee does
not receive any compensation.
Board
HL Display’s Board has the ultimate responsibility for the governance
of the Company’s affairs between the agMs. The Board appoints the
Ceo, who is also Managing Director, and makes decisions on issues
concerning the strategic direction of the business and the Company’s
overall organisation. Members of the Board are appointed by the
agM of shareholders for a one-year term until the end of the following
agM. in accordance with the Code, the Chairman of the Board is also
appointed by the agM. in 2009, there were eight meeting-elected
Board members. There were also two permanent employee
representatives with one deputy.
remuneration
Committee
attendance at
Board meetings
attendance
at committee
meetings
Total
remuneration
anders remius Chairman of the Board – Chairman 14 of 14 4 av 4 250,000 seK
gérard Dubuy Board member and Ceo – – 14 of 14 – –
susanna Campbell Board member
from april 2, 2009
– – 10 of 14 – 150,000 seK
Jan-ove Hallgren Board member until april 2, 2009 – Member 5 of 14 1 av 4 –
Åke modig Board member – Member 14 of 14 3 av 4 165,000 seK
stig Karlsson Board member Member – 12 of 14 4 av 6 165,000 seK
mats-olof Ljungkvist Board member Chairman Member 12 of 14 10 av 10 195,000 seK
anna ragén Board member – – 14 of 14 – 150,000 seK
Lars-Åke rydh Board member Member – 14 of 14 6 av 6 165,000 seK
Kent mossberg Board member * – – 12 of 14 – –
magnus Jonsson Board member * – – 12 of 14 – –
Henrik smedlund Deputy member * – – 0 of 14 – –
* appointed by the employees
1,240,000 seK

HL Display annual report 2009 Corporate governance report 2009 73
Independence of Board members
The only member elected by the shareholders’ general meeting who is
an employee of HL Display is Ceo, gérard Dubuy. all other members
elected by the meeting are considered to be independent of the
Company. anders remius (remius and family), stig Karlsson (ratos)
and susanna Campbell (ratos) are not independent of the Company’s
largest owners. other members elected by the shareholders’ general
meeting – Mats-olof Ljungkvist, Åke Modig, anna ragén and Lars-Åke
rydh – are considered independent of major shareholders. The
composition of the Board is shown in the table below.
Further information about the Board members can be found on
page 76.
work of the Board of HL Display
The Chairman of the Board organises and manages the work of
the Board to ensure it is undertaken in accordance with current
laws, rules and regulations. it is also the Chairman of the Board’s
responsibility to ensure an annual evaluation is made of the
Board’s work and to provide the nomination committee with the
results of this evaluation. The Chairman of the Board monitors the
business on an ongoing basis in dialogue with the Ceo and ensures
the Board receives the information and documentation it requires to
perform its tasks.
The Board’s work is regulated by a set of specially drawn up rules
of procedure. in essence, the rules of procedure mean the Board is
responsible for the Company’s strategy and organisation, as well as
the administration of the Company’s affairs.
The Board regularly assesses the financial position of the
Company and group. information is reported on a monthly basis to
allow the Board to perform its duty of evaluation pursuant to current
legislation, listing rules and good board practice.
The Board normally deals with matters of significant importance
to the group, such as:
– strategic plans
– Budgets and forecasts
– acquisitions, sales and closures of companies or operations
– purchases, sales and write-downs of other significant assets
The Board held 14 Board meetings in the 2009 financial year. The
Board normally sets the meeting dates for the coming calendar year
at the october Board meeting. some Board meetings are planned to
coincide with interim and annual reports. The Board’s work follows
an annual presentation plan with special topics and fixed decisionmaking
points.
The Board meeting agenda normally includes the following items:
– review of the previous meeting’s minutes and action list
– Ceo’s status report
– Financial overview
– reporting from committees
– any other business
The Ceo attends all Board meetings, except where there is a
conflict of interest, such as when the Ceo’s remuneration is being
decided or the Ceo’s work is being evaluated. it is the explicit
wish of the Board to invite members of HL Display’s management
group or other parts of the organisation to Board meetings
in order to give the Board in-depth information about their specific
area. This took place at 5 meetings in 2009, and the Board gained
information about areas such as product product development,
logistics and purchasing. representatives from HL Display’s
auditors took part in one meeting in 2009.
important matters dealt with in 2009 included:
– investments
– organisation
– updating of group instructions and policies
– Monitoring of cost control and investments
– Capital structure
– incentive schemes
– acquisitions
Committee work on behalf of the Board
The Board has established committees which, in accordance with
the Board’s instructions, deal with certain defined matters and
prepare these for Board decisions. The Board currently has two
committees: the remuneration committee and the audit committee.
Remuneration Committee
The remuneration committee prepares matters relating to
remuneration and terms of employment for Company management,
and makes proposals for guidelines on remuneration of the Ceo
and senior executives, which the Board submits for a decision by
the agM. it is also the remuneration committee’s responsibility to
monitor remuneration trends with comparable players to ensure the
Company offers a competitive level of remuneration.
The Ceo’s remuneration is decided by the Board. remuneration
of other senior executives is decided by the Ceo in consultation
with the remuneration committee.
The remuneration committee, which is appointed by the Board,
consists of the Chairman of the Board and two Board members who
are independent of the Company and its management. in 2009,
the remuneration committee consisted of Chairman of the Board
anders remius (Chairman) and members Åke Modig and Mats-olof
Ljungkvist. The remuneration committee met on 4 occasions in
2009. Minutes were taken at all the meetings.
Audit Committee
it is the audit committee’s task to support the Board’s efforts
to guarantee high quality in three primary areas: internal control,
financial reporting and external auditing. The committee ensures
efficient internal control systems are in place and a correct
assessment of the Company’s financial position has been
made. The committee also reviews interim and year-end reports
before they are submitted to the Board and deals with all critical
accounting matters, such as valuation and assessments.
The audit committee is also an important communication channel
between the Board and the Company’s auditors. The committee’s
tasks include assisting the nomination committee in preparing for
the election of auditors and recommending remuneration of auditors,
as well as maintaining dialogue with the auditors about the audit.
in 2009, the audit committee consisted of Board members Matsolof
Ljungkvist (Chairman), stig Karlsson and Lars-Åke rydh. The
audit committee met on 6 occasions in 2009. Minutes were taken
at all the meetings. The Company’s auditor participated in all the
meetings.
evaluation of the Board
The Chairman of the Board is responsible for ensuring the work of
the Board is evaluated annually and the results of the evaluation
are made available to the nomination committee. in 2009,
Chairman of the Board anders remius conducted the evaluation.
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Corporate governance report 2009 HL Display annual report 2009
This took the form of structured interviews, dealing with the areas
such as the Board’s composition, its working procedures and
responsibilities and the Chairman’s work. The survey was compiled
and presented to the Board and to the nomination committee.
Chief executive officer
HL Display’s Chief executive officer, gérard Dubuy, is in charge
of day-to-day, operational business. a written set of instructions
defines the division of responsibilities between Board and Ceo. The
Ceo reports to the Board and presents a special Ceo’s report at
each Board meeting, with information about how the business is
performing on the basis of defined strategies and decisions made
by the Board. Further information about the Ceo can be found on
page 77.
group management
HL Display’s group management consists of 8 members who
have day-to-day responsibility for different parts of the business.
group management has 7 scheduled meetings during a year. More
information about the members of group management can be
found on page 77.
management of subsidiaries
HL Display has five area Managers, each responsible for his/her
own region, with between two and seven sales companies. The
area Managers report directly to Ceo gérard Dubuy. each area
Manager is fully responsible for results and sales in his/her own
region. The division of responsibilities between area Managers and
the Country Managers responsible for the day-to-day operation in
the sales companies is stipulated in the subsidiary guide Book,
an internal framework with guidelines concerning all aspects of the
subsidiary operations. The groups production units and logistics
centers are ultimately managed by the group operations and on
Chain management.
remuneration of the Board and senior executives
Remuneration of the Board
in accordance with the nomination committee’s proposal, the
2009 agM adopted Board fees of seK 250,000 for the Chairman
of the Board and seK 150,000 for each of the other non-executive
directors. payment for committee work is as follows: seK 30,000 is
paid to the committee chairman and seK 15,000 to the committee
members. However, the Chairman of the Board is not entitled to any
extra compensation for committee work. see the table on page 72
for further information about remuneration of Board members.
guidelines for remuneration to senior executives
At the Annual General Meeting 2009-04-02 the following guidelines
were decided (main contents).
an important part of HL Display’s strategy is to attract and retain key
employees. The remuneration offered to holders of senior positions in the
company forms a vital component of this strategy.
it is the Board’s perception that a fixed salary, combined with flexible,
performance-related remuneration, is an effective means of attracting
employees and guiding performance towards the objectives that the Board
has defined for the company. By also offering long-term co-ownership in the
company, the Board wishes to promote long-term commitment that makes
it easier for the company to retain its key employees.
The three components of fixed salary, flexible performance-related
remuneration and co-ownership shall be viewed as a whole, although the
three elements are defined on the basis of different principles.
HL DispLay ÅrsreDovisning 2007
– The fixed salary shall reflect the employee’s area of responsibility and the
complexity of the position.
– The flexible performance-related remuneration shall always be linked to
measurable targets. For 2009 the Ceo will be able to achieve a maximum
of 50 percent of the fixed annual salary. For other senior executives the
maximum is 25 percent of the fixed annual salary.
– Long-term co-ownership for employees aims to encourage employees to
share the vision of the company’s owners. it is therefore an important
principle of such a scheme that there is an opportunity to share in the
increased value of the company’s shares, while also involving a personal
risk for those who are participating. another important principle is that the
transaction values defined in such schemes are produced objectively using
generally accepted methods. The long term incentive programs to acquire
warrants were approved by the shareholders at the general meeting 2007.
The acquired warrants are subsidized and 50 percent of the premium will
be paid back in equal installments during a three year period after a
deduction of 58 percent for standard tax.
Proposal to the Annual General Meeting 2010-04-22
(main contents).
an important part of HL Display’s strategy is to attract and retain key
employees. The remuneration offered to holders of senior positions in the
company forms a vital component of this strategy.
it is the Board’s perception that a fixed salary, combined with flexible,
performance-related remuneration, is an effective means of attracting
employees and guiding performance towards the objectives that the Board
has defined for the company. By also offering long-term co-ownership in the
company, the Board wishes to promote long-term commitment that makes it
easier for the company to retain its key employees.
The three components of fixed salary, flexible performance-related
remuneration and co-ownership shall be viewed as a whole, although the
three elements are defined on the basis of different principles.
– The fixed salary shall reflect the employee’s area of responsibility and the
complexity of the position.
– The flexible performance-related remuneration shall always be linked to
measurable targets. For 2010 the Ceo will be able to achieve a maximum
of 50 percent of the fixed annual salary. For other senior executives the
maximum is 25 percent of the fixed annual salary.
– Long-term co-ownership for employees aims to encourage employees to
share the vision of the company’s owners. it is therefore an important
principle of such a scheme that there is an opportunity to share in the
increased value of the company’s shares, while also involving a personal
risk for those who are participating. another important principle is that the
transaction values defined in such schemes are produced objectively using
generally accepted methods. The long term incentive programs to acquire
warrants were approved by the shareholders at the general meeting 2007
and 2009. The acquired warrants are subsidized and 50 percent of the
premium (2007 program) or 40 percent of the premium (2009 program)
will be paid back in equal installments during a three year period after a
deduction of 58 percent for standard tax.
The Board is entitled to make exceptions from the guidelines considering
special circumstances.
Information about the auditor
The agM elects the auditor following a proposal by the nomination
committee. at the 2008 agM, the audit firm KpMg aB was elected
as auditor for the next four-year period. The auditor in charge is
authorised public accountant Åsa wirén-Linder. Further information
about the auditor can be found on page 77.
The 2009 agM decided that the auditor will be paid against
approved invoice. Further information about remuneration of
auditors can be found in note 39.
it is the auditor’s task, on behalf of shareholders, to audit
HL Display’s annual accounts and bookkeeping, as well as the
Board’s and the Ceo’s administration of the Company. The chief
auditor also submits an audit report to the agM. shareholders have
the opportunity to put questions to the auditor at the meeting.

HL Display annual report 2009 Corporate governance report 2009 75
THe BoarD’s reporT on
inTernaL ConTroL over
FinanCiaL reporTing
in accordance with the swedish Companies act and the swedish
Code of Corporate governance, the Board is responsible for internal
control. This description has been prepared in accordance with the
Code and is therefore confined to internal control regarding financial
reporting.
The description is not part of the formal annual accounts.
HL Display’s internal control process shall allow a reasonable
guarantee of the quality and accuracy of financial reporting. it shall
also ensure financial reports are prepared in accordance with the
law, relevant accounting standards and other requirements for
listed companies in sweden.
internal controls are normally described in accordance with
internal Control - integrated Framework issued by Coso (Committee
of sponsoring organizations of the Treadway Commission).
This framework describes internal controls with the following
components: control environment, risk assessment, control
activities, information & communication and monitoring.
Control environment
The basis of internal control regarding financial reporting includes
the organisational and system structure, decision-making paths
and division of responsibility, which are clearly documented and
communicated in control documents, policies and manuals.
The Board has adopted a set of rules of procedure to regulate
the Board’s responsibility and the Board’s work in committees.
The Board has also appointed an audit committee, which has the
task of ensuring that defined principles for financial reporting and
internal controls are observed, and that ongoing relations are
maintained with the Company’s auditors. in order to maintain an
effective control environment and good internal controls, the Board
has delegated the practical responsibility to the Ceo and drawn up
a set of instructions for the Ceo.
in order to guarantee the quality of financial reporting, the
Company has produced a number of internal control instruments,
consisting primarily of the Finance policy, information policy and
Controller guidelines. guidelines have also been defined for
business ethics issues, with a view to clarifying and reinforcing
the group’s philosophy and values. These include the Code of
Conduct and the equal opportunity policy.
Risk assessment
The audit committee is responsible for ensuring significant financial
risks and risks of errors in financial reporting are identified and
actioned. every year a risk assessment is conducted in which risks
relating to financial reporting are identified. The risk assessment is
checked with the auditor. The risk assessment may, for example,
include processes that are essential to the group’s financial
performance and position, newly launched or acquired entities,
as well as geographically remote operations.
Control activities
Control activities are designed to ensure accuracy and completeness
of financial reporting. procedures and measures have been formulated
to deal with significant risks relating to financial reporting which
have been identified in the risk assessment.
HL Display’s Controller function is organised in accordance with
the matrix organisation used to manage the group. each area has a
Financial Controller who monitor financial reporting and a Business
Controller who monitor operations.
at function level (production, logistics etc), Business Controllers
also monitor financial reporting against defined objectives.
The group’s control activities are carried out both on an overall
level and a more detailed level. For example, there are monthly
follow-up meetings between the production companies’ Managing
Directors and Controllers and the group’s operations Director.
The Company’s five area Managers constantly monitor the sales
companies and report back to the Ceo on a monthly basis. in
addition, the regional Controllers report to the corporate finance
department on a monthly basis.
The area Managers also visit each sales company manager 3-4
times a year to discuss current issues, deal with the results and
financial position and check that authorisation procedures are
being observed.
The Board monitors operations by means of monthly report
package containing detailed financial information, together with
the Ceo’s comments on the business performance, results and
financial position. Measures and activities aimed at improving
internal controls are regularly implemented.
Information & communication
The Board has defined an information policy specifying what will be
communicated, who will communicate it and how the information
will be issued, in order to ensure correctness and completeness of
external information. To ensure effective, correct dissemination of
information, both internally and externally, there are guidelines and
procedures on how financial information is communicated between
management and other employees.
information and communication on internal policies, guides and
manuals with a bearing on financial reporting can be found on
HL Display’s intranet, HL net. HL Display’s Controller guidelines
is a central control document which is published on the intranet and
regularly updated with amendments.
Monitoring
internal controls are constantly monitored. The Company’s financial
position is dealt with at each Board meeting, prior to which the
Board receives detailed monthly reports on the financial position and
business performance. The Board’s monitoring of the internal control
over financial reporting is conducted mainly by the audit committee.
The audit committee goes through every interim report and
discusses its contents with the Financial Director and the auditors.
The external auditors annually monitor certain aspects of internal
control within the framework of their audit. The auditors report the
results of their audit to the audit committee and group management.
HL Display has no separate internal audit function. The local or
regional controllers employed at the subsidiaries have a specific
responsibility to report non-conformances to their contact person
in the corporate finance and controller organisation. if a risk of nonconformances
is identified, central resources can also be used. The
corporate finance and controller organisation was restructured and
reinforced in 2009, with a clear division of responsibilities between
reporting and control. This strengthens control and monitoring of
business operations and financial reporting. Consequently, the
Board does not consider there to be any need for an independent
internal audit function.
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76
Board of Directors HL Display annual report 2009
BoarD oF DireCTors
anders remius gérard Dubuy stig Karlsson Åke modig
Born: 1947.
Chairman of the Board.
Chairman of the Board since 2006,
member of the Board since 1982.
education: Financial qualification.
Holding: 3,516,856 shares,
of which 1,607,616 a-shares.
not independent in relation to major owners.
Kent mossberg magnus Jonsson Henrik smedlund
Born: 1957.
employee representative.
Member of the Board since 1995.
position: property Manager.
education: engineering qualification.
Holding: 5,320 shares.
HL DispLay ÅrsreDovisning 2007
Born: 1961.
Ceo of HL Display aB.
Member of the Board since 2006.
education: Master of science in
economics and Business administration.
Holding: 13,200 shares.
287,252 employee options.
242,500 warrants.
not independent in relation to the company.
Born: 1969.
employee representative.
Member of the Board since 1998.
position: Machine operator.
education: structural engineering qualification.
Holding: –
Born: 1952.
Member of the Board since 2001.
position: industrial advisor, ratos aB.
education: Master of science in economics
and Business administration.
other appointments: Chairman of the Board in
Haglöfs aB and Diab aB. Member of the Board
in Lindab aB, eDB Business partner asa and
Lagerstedt och Krantz aB.
Holding: –
not independent in relation to major owners.
mats-olof Ljungkvist anna ragén Lars-Åke rydh susanna Campbell
Born: 1951.
Member of the Board since 2007.
education: Master of science in economics
and Business administration.
other appointments: Chairman of the Board
in Hermods aB and Twentyfourseven aB.
Member of the Board in Biovitrum aB, sBC
sveriges Bostadsrätts Centrum aB, swegro aB,
Tema arkitekter aB, swedsec aB, Catella Capital
aB, amplion aB and JLT risk solutions aB.
Holding: 8,000 shares.
independent member.
Born: 1965.
Member of the Board since 2008.
position: entrepreneur, Ceo of
Tennstar Holding aB.
education: Financial and technical
university qualification.
other appointments: Chairman of the Board
in Fintl ytbehandlingsfabrik aB.
Board member of örebo Läns Flygplats aB.
Holding: 4,000 shares
independent member.
Born: 1953.
Member of the Board since 2008.
education: Master of engineering.
other appointments: Chairman of the Board
in nefab aB, san sac aB, plastprint aB and
schuchardt Maskin aB. Board member of
nolato aB, oeM international aB and
Handelsbanken region east sweden.
Holding: 2,000 shares.
independent member.
Born: 1976.
employee representative.
Deputy member.
position: Machine operator.
education: Financial qualification.
Holding: –
Born: 1945.
Member of the Board since 2006.
education: Master of science in economics
and Business administration.
Harvard Business school (isMp).
other appointments: Chairman of the Board in
engelhardt & Co aB, Magnificent solutions aB
and Björneruds gård aB. Member of the Board
in spendrups Bryggeri aB, ColopLus aB and
ecoclean a/s.
Holding: –
independent member.
Born: 1973.
Member of the Board since 2009.
position: investment Director ratos aB.
education: Master of science in economics
and Business administration.
other appointments: Member of the Board in
Haglöfs and arcus gruppen.
Holding: -
not independent in relation to major owners.

HL Display annual report 2009 senior executives 77
senior eXeCuTives
gérard Dubuy per sundqvist xavier volpato Håkan eriksson
Born: 1961.
Managing Director.
employed since: 1995.
education: M. sc. economics.
Holding: 13,200 shares. 287,252 options.
242,500 warrants.
Born: 1966.
Financial Director.
employed since: 2009.
education: M. sc. economics.
Holding: 37,500 warrants.
Born: 1969.
operations Director.
employed since: 2007.
education: M. sc. economics. and MBa.
Holding: –
staffan Forslund Birger nilsson elisabeth Tylstedt marc Hoeschen
Born: 1949.
Human resources Director.
employed since: 2000.
education: B. sc. economics.
Holding: 49,500 warrants.
Åsa wirén Linder
Född 1968.
auditor in charge and authorised
public accountant (Far srs).
other assignments: auditor in charge in
iBs aB, pricer aB and Tilgin aB.
Born: 1961.
Development Director.
employed since: 1999.
education: M. sc. economics.
Holding: 13,200 shares. 49,500 warrants.
auditor
KpMg aB stockholm.
auditors since 2004.
realected at the agM 2008
for the next four-year period.
Born: 1964.
iT Manager.
employed since: 2007.
education: B. sc. economics.
Holding: 12,500 warrants.
Born: 1966.
Marketing Director.
employed since: 1992.
education: M. sc. engineering.
Holding: 800 shares. 49,500 warrants.
Born: 1967.
group supply Chain Manager.
employed since: 2009.
education: M. eng. and MBa.
Holding: –
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78
History HL Display annual report 2009
HisTory
HL Display’s history started in Borlänge, sweden, in 1954 by Harry
Lundvall. His first product for shops was a plate stand made of
shaped metal wire. in due course, by hotbending plastic he also
produced an item for displaying the price next to the product.
In 1969 Harry’s son Åke westberg took over the business, which
was at the time turning over about seK two million and
had five employees.
In 1975 Åke westberg obtained a patent for the shelf edge strip
that he had developed. The HL Datastrip is the product for which
HL Display is still best known, and it remains an important part of
the product range. The patent was the breakthrough for HL Display.
The largest swedish retail chains recognised the benefits of Åke’s
solution, and they soon became major customers.
In 1977 Åke westberg’s daughter Lis remius and her husband
anders remius started a sales company that mainly sold products
from HL Display’s product range.
In 1986 Lis and anders remius bought HL Display from the
investment company parcon, which had acquired the company
from Åke westberg in 1982. They recognised a potential in
HL Display that they wanted to develop themselves, including
the establishment of sales companies in other countries.
International expansion began in 1987. sales abroad had
previously been channelled through direct sales and distributors,
but now HL Display set up its own sales companies in Belgium
and the uK. sales companies were then set up in germany in
1989, and in norway and France in 1990.
at the turn of the year 92/93 the company completed its first
company acquisition, with the purchase of Jegab Display. since
then HL Display has acquired a number of smaller companies,
which have strengthened the product range or added expertise within
a specific field of production technology.
In 1993 HL Display was listed on the stockholm stock exchange.
From the mid-1990s international expansion continued in line
with the rapid growth of the retail trade. sales companies were
established in poland, austria, the Czech republic, Latvia, russia
and Turkey. in 1996 a partnership was set up with Trion industries
as a means of entry into the american market. international
expansion continued in line with the rapid growth of the retail trade.
In 2000 and 2001 the number of sales companies in eastern
europe was augmented with new ones in ukraine, slovenia and
slovakia. During 2000 HL Display also began to look further to the
east, towards southeast asia. Many of the company’s customers,
such as Carrefour, already had a presence in several major asian
markets. it was therefore natural for HL Display to have its own
HL DispLay ÅrsreDovisning 2007
presence in these markets. The first asian company was launched
in 2000 in singapore, and it now serves as the hub of HL Display’s
activities in the region.
In 2002 and 2003 expansion continued apace in asia, with new
companies being established in Hong Kong, Malaysia, Taiwan,
Thailand and China.
In 2005 HL Display was awarded the title public Company of the
year by the financial newspaper Dagens industri and the swedish
shareholders’ association.
at the 2006 annual general Meeting anders remius was succeeded
by gèrard Dubuy as Ceo of HL Display. anders remius’ commitment
to the company continues, now as the Chairman of the Board.
in 2006 production started up at HL Display’s factory in China,
situated in suzhou, to the northwest of shanghai. Local production
is a very important step to increase competitiveness in the region.
During 2007 HL Display made two acquisitions in Finland;
Display Team, a leading supplier of merchandising solutions to
brand manufacturers, and sooni, HL Display’s previous distributor
in Finland.
In 2008, HL Display acquired its Bulgarian distributor. The 2007
annual report won the nasdaq oMX’s competition for the best
annual report, small Cap company class.
In 2009 the British company ppe Ltd. was acquired, which is
HL Display’s biggest acquisition so far. a sales company was
started in Dubai as a first entry into the Middle east market.
a regional logistics centre was opened in Hungary.

FinanCiaL inForMaTion
HL Display will publish financial information on the
following dates during 2010:
annual report 2009 week 13
annual general Meeting, Factory, nacka strand 22/04/2010
interim report 3 month 2010 22/04/2010
interim report 6 month 2010 21/07/2010
interim report 9 month 2010 29/10/2010
www.hl-display.com
all relevant financial information about HL Display is available on
the company’s website, www.hl-display.com, under the “investors”
tab. The website also provides a comprehensive overview of the
company. interim reports are available in swedish and in english.
The website also includes an archive of monthly and interim reports
dating back to 1997 and an archive of annual reports dating back
to 1996. Financial information can be ordered by using the order
form available on the website. it is also possible to subscribe to
information from the company.
Distribution of annual report
HL Display prints and distributes the annual report to all
shareholders.
Ir Contact
yvonne Cedergren
phone: +46-8-683 73 48
email: yvonne.cedergren@hl-display.com
press releases in 2009
21/12/2009 HL Display acquires British ppe Ltd.
25/11/2009 HL Display opens sales company in the Middle east
12/11/2009 HL Display brings new technology to the shelf
21/10/2009 interim report January-september 2009
16/07/2009 interim report January-June 2009
20/04/2009 interim report January-March 2009
06/04/2009 HL Display aB (publ) gives notice
03/04/2009 annual general Meeting HL Display aB (publ) 2009
02/04/2009 HL Display aB (publ) revises the sales forecast
10/03/2009 annual report 2008 HL Display aB (publ)
26/02/2009 extraordinary general Meeting HL Display aB (publ)
05/02/2009 HL Display aB (publ) appoints per sundqvist as Financial Director
27/01/2009 extraordinary general meeting 25/02/2009
22/01/2009 year-end report 2008 HL Display (publ)
produced by ir stockholm and HL Display
Design: John Blomqvist
photography: Magnus Fond
printing: wassberg+skotte Tryckeri
HL DispLay ÅrsreDovisning 2007
79

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HL DIspLay aB • P.O. BOX 1118 • CYLINDERVÄGEN 18 • 131 26 NACKA STRAND • SWEDEN • TEL +46 8 683 73 00 • FAX +46 8 683 73 01
www.hl-display.com
HL DispLay ÅrsreDovisning 2007