FULLTEXT DEL 2 AV 4
Årsredovisning 2023
Funds
Each EQT fund, being composed of one or more Limited Partnerships
(or the equivalent) is managed by a general partner and/or a manager
(jointly “Fund Manager”). The Fund Manager is normally a direct or
indirect subsidiary of EQT AB. The authority and powers of the Fund
Manager are defined in the Limited Partnership Agreement (or similar).
Determining whether or not a Fund Manager should consolidate
its managed funds is based on judgments of whether the Fund Manager
is acting as a principal or an agent to the fund for accounting purposes.
The assessment of the EQT AB Group’s expected level of return is based
on the funds’ performance, i.e. the variable returns. Should a fund gen-
erate variable return EQT AB Group would be entitled to between two
and seven percent of the variable return, which is not considered to meet
the control criterion in IFRS on link between power and return. Instead,
EQT AB Group is considered to be an agent in relation to the fund
investors, for accounting purposes and, accordingly the funds are not
consolidated.
DISCONTINUED OPERATIONS AND DISPOSAL GROUPS HELD FOR SALE
Discontinued operations consist of the business segment Credit.
“Net income for the period from discontinued operations” is presented
as a single amount after tax at the end of the Consolidated income
statement. Comparative figures are restated.
From the date of classification as held for sale, assets and liabilities
related to the disposal group are presented as a single current asset item
and a single current liability item on the balance sheet, labelled “Assets
classified as held for sale” and “Liabilities directly associated with assets
classified as held for sale” . Comparative figures are not restated. At the
time of classification of assets as held for sale, the assets are recognized
at the lowest of their carrying amount and fair value less cost to sell.
However, financial assets are exempted and are measured according
to the accounting policies applicable to assets that are not classified
as a holding for sale.
REVENUE
The EQT AB Group’s revenue is generated from fund management
services, carried interest and investment income.
The parties of agreements of fund management services comprise the
EQT AB Group and the investors of each fund. Accordingly, the group of
investors of each fund are identified as the customer of the EQT AB Group
for accounting purposes. EQT AB Group is the recipient of the revenue.
For fund management services there is only one single performance
obligation for each fund and its investors. The performance obligation
comprises identifying and evaluating investment and divestment oppor-
tunities, providing support on structuring, fund management and moni-
toring and reporting on an ongoing basis over the life of each fund. The
different activities are considered interrelated and part of the same
obligation to perform fund management services for the benefit of the
investors. EQT AB Group is entitled to consideration consisting of fixed
fees based on either committed capital or the cost of invested capital,
and variable profit sharing fully dependent on the performance of the
relevant fund and the fund’s underlying investments.
The integrated revenue model of management fees and carried
interest and investment income are described in more detail below.
The following describes the types of contracts, the services included
in the performance obligations and when performance obligations
are satisfied which determines the timing of revenue recognition.
Management fees
The performance obligation of the EQT AB Group is to manage and
support the funds, through the Fund Managers, on an ongoing basis.
To manage and support on an ongoing basis represents a series of
distinct services that increments on an ongoing basis and together is
treated as one single performance obligation. Management fees
are recognized over time over the life of each fund.
The management fee is based on agreements over the life of each
fund, generally with the term of 10–12 years occasionally subject to one
or more 12 months’ extension periods.
The fee charged is normally based on commitments until the termi-
nation of the commitment period and thereafter based on the total cost
of investments not yet realized or written off. If any investments remain
after the term date management fees are charged on the total acqui-
sition cost of such investments but at a lower rate for each six-month
period until the agreed extension period expires.
Typically the fees during the commitment and divestment period are
payable half-yearly in advance and adjusted in the following half-year
period, should any triggering events have occurred. Examples of trig-
gering events include launch of a successor fund, commencement of the
divestment period/end of commitment period and multiple closings
in funds in fundraising.
Carried interest
Carried interest is a share of profits that the EQT AB Group receives
through its holdings in the Special Limited Partners as variable consider-
ation fully dependent on the performance of the relevant fund and the
development of the fund’s underlying investments. The EQT AB Group
is entitled to an agreed share of accumulated profits exceeding agreed
thresholds (“hurdles”) over the expected life of each individual fund.
Recognition of carried interest is normally assessed based on a
three-step model:
• Hurdle assessment; the total hurdle is determined by the sum of total
accumulated drawdowns paid by the Limited Partners (“LPs”) and
total accrued minimum return attributable to the LPs (the “Preferred
return”) as of the reporting date.
• Total discounted value assessment; the fair value of unrealized
investments is determined as of the reporting date. The unrealized fair
value will be adjusted, in accordance with established precautionary
principles, to the extent that carried interest revenue should only be
recognized once it is highly probable that the revenue would not result
in a significant reversal of cumulative revenue recognized at final
realization of the fund. The fund’s other assets/liabilities and any total
proceeds from realized investments as of reporting date are then
added to the equation, and thus constitutes the total discounted value
of the fund.
• Carried interest recognition assessment; if the total discounted value
exceeds the total hurdle, carried interest revenue is recognized.
Revenue is only recognized to the extent it is highly probable that the
revenue would not result in significant revenue reversal of any accumulated
revenue recognized on final fund settlement. The reversal risk is managed
through adjustments of current fair values of unrealized investments
through discounts of normally 30 to 50 percent. The discount applied is
based on the assessed risk level for each fund. The discount applied is
reviewed semi-annually.
Carried interest is normally either payable on a whole fund basis, in
installments at the time of realization of investments, or in combinations
of the two. Payment is further subject to satisfaction of certain tests
relating to claw backs i.e. repayment requirements on final settlement
of the fund.
See Note 3 for further information of significant judgments used in
the process of applying the accounting policies on revenue recognition
of carried interest.
Investment income
Investment income consists primarily of changes in fair value of the
EQT AB Group’s underlying fund investments. Changes in fair value are
recognized in the income statement. Capital gains on realized invest-
ments are normally distributed within 3–5 days of an exit. For further
information on accounting policies for financial instruments, see
Note 2 “Financial instruments” .
Note 2 cont.
EQT Annual and Sustainability Report 2023 / Page 61Notes
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 63 =====
Cost of obtaining a contract
The EQT AB Group, on a selective basis, makes use of placement agents
or other local representatives/agents in certain jurisdictions, where its
own personnel is not authorized to market the funds. The fee is capi-
talized as a non-current assets representing cost of obtaining contract.
The cost of obtaining the contracts is expected to be recovered over the
fund commitment period. The benefit of the cost is primarily considered
to be attributable to the period when the fund investments are carried
out. Therefore, the useful life of the asset is the commitment period which
is expected to be between three to six years. The asset is amortized on
a straight-line basis.
FINANCIAL INCOME AND FINANCIAL EXPENSES
Financial income comprises primarily translation gains. Financial income
also comprises interest on bank balances. Financial expense comprises
translation losses and interest on interest-bearing liabilities and finance
lease liabilities. Other financial income and expenses are insignificant.
FINANCIAL INSTRUMENTS
The EQT AB Group’s financial assets consist of financial investments,
accounts receivable and other receivables and cash and cash
equivalents. Financial liabilities comprise accounts payable, short
and long-term interest-bearing liabilities and other financial liabilities.
Cash and cash equivalents consist of on-demand deposits with
credit institutions.
Recognition and initial measurement
Accounts receivable are initially recognized when issued. All other
financial assets and financial liabilities are initially recognized when
the EQT AB Group becomes a party to the contractual provisions
of the instrument.
Financial assets (other than accounts receivable) and financial liabil-
ities are initially measured at fair value plus, for assets or liabilities not
sub sequently measured at fair value through the income statement,
transaction costs that are directly attributable to their acquisition or
issue. Accounts receivable are initially measured at the transaction price.
Classification and subsequent measurement of financial assets
and financial liabilities
Financial assets
A financial asset is initially classified into one of three measurement
categories. The classification depends on how the asset is managed
(business model) and the characteristics of the asset’s contractual cash
flows. The measurement categories for financial assets are as follows:
• Fair value through profit or loss (FVPL)
• Fair value through other comprehensive income (FVOCI)
• Amortized cost (AC)
Financial assets are measured at amortized cost if both of the f ollowing
conditions are met:
• The financial asset is held within a business model whose objective
is to realize the cash flows from the financial assets by holding the
financial assets and collecting its contractual cash flows over the
life of the assets and
• The contractual terms of the financial asset give rise to cash flows that
are solely payments of principal and interest on the principal amount
outstanding.
Financial assets measured at amortized cost include accounts receivable,
other long-term as well as short-term receivables and cash and cash
equivalents.
Financial assets are measured at FVOCI if both of the following conditions
are met:
• The financial asset is held within a business model whose objective is
to realize the cash flows from the financial assets both by collecting
the contractual cash flows and selling financial assets and
• The contractual terms of the financial asset give rise to cash flows that
are solely payments of principal and interest on the principal amount
outstanding.
The EQT AB Group does currently not have any financial assets measured
at FVOCI.
A financial asset shall be measured at FVPL unless it is measured
at amortized cost or at FVOCI.
Financial assets measured at FVPL currently include Financial
investments.
Financial liabilities
Financial liabilities are either measured at amortized cost or at FVPL.
All of the EQT AB Group’s financial liabilities are measured at amortized
cost using the effective interest rate method.
Impairment of financial assets
A loss allowance is recognized to reflect the expected credit losses on
financial assets not recognized at FVPL. For accounts receivable and
contract assets, the loss allowance is measured at an amount equal to
the expected losses under the entire lifetime of the accounts receivable
and the contract assets. For other receivables and bank balances the loss
allowance is measured at an amount equal to the 12 month expected
credit losses, as long as there has been no significant increase in credit
risk since initial recognition.
The 12 month expected credit losses are the portion of the expected
credit losses that result from default events that are possible within 12
months after the reporting date or a shorter period if the expected life
of the instrument is less than 12 months. If there is a significant increase in
credit risk, a loss reserve is instead recognized to reflect the expected
credit losses under the entire lifetime of the asset.
Credit losses are measured as the present value of all cash shortfalls,
i.e. the difference between the cash flows due to the entity in accordance
with the contract and the cash flows that the EQT AB Group expects to
receive. Expected credit losses are discounted using the effective interest
rate of the asset.
The loss allowance is deducted from the gross carrying amount
of the assets in the balance sheet.
Impairment of financial assets measured at amortized cost are
reversed if the expected losses decrease.
Financial guarantee contracts
Financial guarantee contracts are contracts that require the issuer to
make specified payments to reimburse the holder for a loss that it incurs
because a specified debtor fails to make payment when it is due in
accordance with the original or modified terms of a debt instrument.
Financial guarantee contracts are initially measured at fair value and
subsequently at the higher of i) the amount initially recognized less, when
appropriate, the cumulative amount of income recognized in accor-
dance with the principles of IFRS 15 Revenue from Contracts with Cus-
tomers, and ii) the amount of the expected credit loss allowance deter-
mined in accordance with IFRS 9 Financial Instruments.
Fair value measurement
Fair value is the price that would be received on sale of an asset or paid
to transfer a liability in an orderly transaction between market partici-
pants at the measurement date in the principal market or, in its absence,
the most advantageous market to which EQT AB Group has access at
that date.
When appropriate, the EQT AB Group measures the fair value of an
instrument using the quoted price in an active market for that instrument.
A market is regarded as active if transactions for the asset or liability take
place with sufficient frequency and volume to provide pricing
information on an ongoing basis.
If there is no quoted price in an active market, the EQT AB Group uses
valuation techniques that maximize the use of relevant observable inputs
and minimize the use of unobservable inputs. The chosen valuation
Note 2 cont.
EQT Annual and Sustainability Report 2023 / Page 62Notes
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 64 =====
technique incorporates all of the factors that market participants would
take into account in pricing a transaction.
INTANGIBLE ASSETS
Goodwill
As from the acquisition date, goodwill acquired in a business combi-
nation is allocated to each cash-generating unit (CGU) or group of
cash-generating units of the EQT AB Group expected to benefit from the
synergies of the combination. Goodwill is measured at cost less accumu-
lated impairment losses. Impairment test is undertaken annually in the
fourth quarter or more frequently if events or changes in circumstances
indicate potential impairment loss, see below. Expenditures for internally
generated goodwill are recognized in the income statement as expenses
when incurred.
Other intangible assets
Other intangible assets constitutes acquired customer contracts, investor
relationships, licenses and trademarks and are accounted for at cost less
accumulated amortization and any accumulated impairment losses.
IMPAIRMENT
At each reporting date, the EQT AB Group reviews its assets to determine
whether there is any indication of impairment.
Impairment of Property, plant and equipment and Intangible assets
Impairment tests are performed as soon as any indications of
impairment losses arise for individual assets or cash-generating units.
Goodwill , the recoverable amount is estimated at least annually,
irrespective of any indication of impairment or not.
If an asset does not generate largely independent cash inflows and
its fair value less cost of disposal cannot be used, the assets are grouped
together into the smallest group of assets that generates cash inflows
from continuing use that are largely independent of the cash inflows
of other assets or cash-generating units.
In assessing value in use, the estimated future cash flows after tax are
discounted to their present value using an after tax discount rate that
reflects current market assessments of the time value of money and the
risks specific to the asset or cash-generating unit. An impairment loss is
recognized if the carrying amount of an asset or cash-generating unit
exceeds its recoverable amount. Impairment losses are recognized in
the income statement. Any impairment loss to be recognized for a
cash-generating unit is allocated primarily to goodwill and secondly
pro rata to other assets of the cash- generating unit.
EQUITY
Purchase of treasury shares
Acquisitions of treasury shares are recognized as a reduction of equity.
Proceeds from the sale of treasury shares are recognized as an increase
in equity. Any transaction costs are recognized directly in equity.
EMPLOYEE BENEFITS
Short-term employee benefits
Short-term employee benefits are estimated and are expensed as
the related service is provided. A liability is recognized for the amount
expected to be paid if the EQT AB Group has a present legal or
constructive obligation to pay this amount as a result of past service
provided by the employee and the obligation can be estimated reliably.
Defined contribution plans
Defined contribution plans comprise the pension-plans in which the EQT
AB Group’s obligation is limited to the fees the EQT AB Group undertakes
to pay. In that case, the size of the employee’s pension depends on the
fees paid by the EQT AB Group to the plan or to an insurance company
and the return on capital invested. Consequently, it is the employee who
carries the actuarial risk (the compensation will be lower than expected)
and the investment risk (that the invested assets will be insufficient to
provide the expected benefits). Obligations for contributions to defined
contribution plans are expensed as the related service is provided.
Defined benefit plans
Defined benefit plans are plans for post-employment benefits other than
defined contribution plans, where the employer is obligated to pay future
pensions to the retiree on a certain benefit level.
Termination benefits
Termination benefits are expensed at the earliest of:
• When the EQT AB Group can no longer withdraw the offer of those
benefits and
• When the EQT AB Group recognizes costs for a restructuring program
including the terminations.
Benefits expected to be settled within 12 months of the reporting date are
recognized as current liabilities. Benefits not expected to be settled within 12
months of the reporting date are recognized at present value as long-term
liabilities.
Share-based payments
The share incentive program with separate annual grants during five
years is recognized as an equity- settled share-based payment. In each
tranche, participants may earn a bonus during an initial performance
year, for the sole purpose of investing in shares in EQT AB following said
performance year. The shares cannot be sold during the following
three-year period. No vesting conditions apply during this period. The
expense is for each tranche recognized over the initial performance year,
with a corresponding amount recognized directly in equity. Expense for
social security charges is recognized in an equivalent manner, with a
corresponding entry as a liability.
During 2023, in addition to the share program, an employee stock
option plan was implemented with an annual grant for the years 2023–
2027, the options are granted free of charge, where the first perfor-
mance year is 2023 with a subsequent three-year holding period.
Like the share program, it is classified as an equity settled plan and
an expense is recognised for the performance period of one year except
for new hires and future leaders employed during the year, who have
a service requirement also during the holding period.
Note 2 cont.
EQT Annual and Sustainability Report 2023 / Page 63Notes
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 65 =====
Note 3 Use of judgments and estimates
The management of the EQT AB Group makes estimates and assumptions
concerning the future as well as exercises judgment in applying the
accounting principles when preparing financial statements. Estimates and
judgments are continually evaluated and the assessments are based on
historical experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances. The
resulting accounting estimates will, by definition, seldom equal the related
actual results. The sources of uncertainty in the assessments given below
refer to those that entail a risk that the value of assets or liabilities may have to
be significantly adjusted during the following year, together with significant
judgments in the application of the EQT AB Group’s accounting policies.
IMPAIRMENT TEST OF GOODWILL
When calculating the recoverable amount of cash-generating units,
several assumptions about future circumstances and estimates of
parameters have been made. Changes to these assumptions and
estimates could affect the carrying amount of goodwill (see Note 11).
A declining growth rate and reduced operating margin would result in
a lower recoverable amount. The reverse applies if the calculation of the
recoverable amount is based on a higher growth rate or margin. Were
future cash flows to be discounted at a higher rate of interest, the recov-
erable amount would be lower. Conversely, the recoverable amount
would be higher with a lower discount rate. The impairment test for the
period did not give rise to any impairment in respect of goodwill.
CARRIED INTEREST
Carried interest is a share of profits that the EQT AB Group receives
through its holdings in the Special Limited Partners as variable consider-
ation fully dependent on the performance of the relevant fund and the
development of the fund’s underlying investments. The EQT AB Group
is entitled to an agreed share of accumulated profits exceeding agreed
thresholds (“hurdles”) over the expected life of each individual fund.
Estimates are needed to assess the risk that achieved earnings will
be reversed before realization, due to risk of lower future overall perfor-
mance of the fund, considering the remaining exposure of unrealized
investments and time until winding up of the fund.
Management of the EQT AB Group needs to make assumptions and
use estimates when determining whether or not revenue should be rec-
ognized including the timing and measurement of revenue from carried
interest. Revenue should only be recognized to the extent it is highly
probable that the revenue would not result in significant reversal of any
accumulated revenue recognized on final settlement. The reversal risk
is managed through adjustments of current fair values of unrealized
investments through discounts of normally 30 to 50 percent. The discount
applied is based on the assessed risk level for each fund. The discount
applied is reviewed semi-annually.
The carrying amount of the net contract asset related to carried
interest at 31 December 2023 was EUR 896.1m (EUR 915.0m), see Note 5.
INVESTMENT INCOME
Investment income consist primarily of changes in fair value of the EQT
AB Group’s underlying fund investments. Determining the fair value for
the investments require subjective assessment with varying degrees of
judgement regarding e.g. liquidity, pricing assumptions, the current eco-
nomic and competitive environment and the risks affecting the specific
financial asset. The valuation is determined based on management’s
judgment about the assumptions to reflect what market participants
would use in pricing the asset. The valuation techniques applied by the
EQT AB Group for valuing the financial investments are applied consis-
tently, and only change if deemed necessary to reflect a representative
fair value.
The carrying amount of financial investments at 31 December 2023
was EUR 730.7m (EUR 668.4m), see Note 18.
NON-CONSOLIDATED SPECIAL ENTITIES
According to IFRS 10 Consolidation, an investor that has control over
only specified and ring-fenced assets and liabilities within a legal entity,
should, for consolidation purposes, treat portions of the entity as a
deemed separate entity, a so called “silo” . The silo concept means that
the EQT AB Group only consolidates the silo and not the whole entity. The
specified assets of one silo is not available to meet obligations of other
parts of the legal entity. Each silo’s assets are the only source of payment
for specified obligations of the silo. Silos that are not directly or indirectly
controlled by EQT AB are not considered to be subsidiaries and are
accordingly not consolidated.
EQT AB is an indirect investor in each EQT fund, typically through
separate entities, one separate entity for each EQT fund. These indirectly
owned entities have different shareholders with different economic
rights and responsibilities. In general, these entities have different share
classes, one share class tracking carried interest related movements and
one share class tracking management fee related movements. The man-
agement fee share class is 100 percent held by the EQT AB Group and
consolidated in full. The carried interest related share class tracks invest-
ments and proceeds from the EQT AB Group’s investments in the funds,
via its holding in the Special Limited Partners, see Note 2 “Sub sidiaries
and control” .
Note 4 Operating segments
The CEO of EQT AB Group has been identified as the chief operating
decision maker. EQT AB Group is divided into operating segments based
on how the CEO reviews and evaluates the operation. The operating seg-
ments correspond to the internal reporting used to assess performance
and to allocate resources.
EQT’s operations are divided into two business segments: Private
Capital and Real Assets. The operations of both business segments
consist of providing investment management services in the private
investment markets. The investment management services comprise
i.a. structuring and investment advice, investment management and
monitoring as well as reporting and administrative services.
The business segment Private Capital consists of the strategies EQT
Ventures, EQT Life Sciences, EQT Healthcare Growth, EQT Growth, EQT
Private Equity, EQT Private Capital Asia, EQT Future and EQT Public
Value. The business segment Real Assets consists of the strategies EQT
Value-Add Infrastructure, EQT Active Core Infrastructure and EQT Exeter.
The CEO assesses the operating segments based on the line items pre-
sented below, primarily on revenue and Gross segment results. Segment
revenues has been adjusted by removing the fair value adjustment of
acquired contractual rights to carried interest. Accordingly, the acquired
contractual right to carried interest reflects the sellers carrying amount
adjusted to EQT AB Group’s accounting policies, i.e. the accrued income
excluding the fair value uplift made at the acquisition date in the consoli-
dated accounts of EQT AB Group. The difference between the carrying
amount and fair value of accrued carried interest is primarily due to the
constraint requirements of IFRS 15 of variable performance-based
income reflected through the application of the Group’s prudent revenue
recognition model for carried interest. Expenses directly incurred by each
respective business segment are included in Gross segment result,
whereas items reported under Central have not been allocated to any
business segment. Central consists of EQT AB Group Management, Client
Relations and Capital Raising, Fund Operations, EQT Digital and other
specialist teams such as HR and Group Finance.
Reconciliations consist of revenue adjustments (see above) as well as
items affecting comparability. Items affecting comparability in 2022
relate to an adjustment of the part of the considerations subject to
lock-up and transaction and integration costs as well as amortization
of identified surplus values in relation to performed acquisitions. The part
of the considerations subject to lock-up is treated as a personnel expense
from an accounting perspective and recorded in the income statement
over the lock-up period. Items affecting comparability in 2023 relate to
an adjustment of the part of the considerations subject to lock-up,
EQT Annual and Sustainability Report 2023 / Page 64Notes
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 66 =====
integration cost as well as amortization of identified surplus values in
relation to performed acquisitions and the non-cash portion of equity
incentive program cost. The part of the considerations subject to
lock-up is treated as a personnel expense from an accounting per-
spective and recorded in the income statement over the lock up period.
GEOGRAPHICAL AREAS
EQT AB Group’s business of providing fund management services
cannot reliably and fairly be reviewed by geographical areas. The EQT
AB Group’s fund investors may often be located in multiple jurisdic-
tions and the funds through which the fund investors invest are located
in a few centers where fund management services are provided,
principally Luxembourg.
Note 4 cont.
January–December 2023
EUR m
Private
Capital
Real
Assets Central
Total
adjusted
Items affecting
comparability
Revenue
adjustment
IFRS
reported
Total revenues 1,255.9 836.7 38.2 2,130.8 –46.4 2,084.4
Personnel expenses –658.8 –46.5 –705.3
Acquisition related personnel expenses – –436.4 –436.4
Other operating expenses –245.6 –4.0 –249.7
Total operating expenses –296.9 –226.3 –381.2 –904.4 –486.9 – –1,391.4
Gross segment result1) / EBITDA2) 958.9 610.4 –342.9 1,226.4 –486.9 –46.4 693.1
Margin, % 76.4% 73.0% 57.6% 33.2%
Depreciation and amortization –54.1 –54.1
Amortization of acquisition related intangible assets – –364.1 –364.1
EBIT 1,172.3 –851.1 –46.4 274.9
Net financial income and expense –35.5 –35.5
Income taxes –117.4 17.3 –100.2
Net income for the period from continuing operations 1,019.4 –833.8 –46.4 139.2
Net income for the period from discontinued operations – –9.3 –9.3
Net income 1,019.4 –843.1 –46.4 129.9
1) Gross segment result relate to the segments Private Capital and Real Assets.
2) EBITDA relates to Central, Total adjusted and IFRS reported.
January–December 2022
EUR m
Private
Capital
Real
Assets Central
Total
adjusted
Items affecting
comparability
Revenue
adjustment
IFRS
reported
Total revenues 747.1 779.1 10.3 1,536.5 –39.2 1,497.3
Personnel expenses –491.5 –10.0 –501.5
Acquisition related personnel expenses – –200.8 –200.8
Other operating expenses –215.5 –73.5 –288.9
Total operating expenses –218.5 –207.5 –281.1 –707.0 –284.2 – –991.2
Gross segment result1) / EBITDA2) 528.6 571.7 –270.8 829.5 –284.2 –39.2 506.1
Margin, % 70.8% 73.4% 54.0% 33.8%
Depreciation and amortization –43.8 –43.8
Amortization of acquisition related intangible assets – –153.6 –153.6
EBIT 785.6 –437.7 –39.2 308.7
Net financial income and expense –45.6 –45.6
Income taxes –85.8 –1.1 –86.9
Net income for the period from continuing operations 654.2 –438.8 –39.2 176.2
Net income for the period from discontinued operations – 0.1 0.1
Net income 654.2 –438.7 –39.2 176.3
1) Gross segment result relate to the segments Private Capital and Real Assets.
2) EBITDA relates to Central, Total adjusted and IFRS reported.
EQT Annual and Sustainability Report 2023 / Page 65Notes
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 67 =====
Note 5 Revenue
MANAGEMENT FEES
The EQT AB Group earns management fees for fund management ser-
vices, typically based on agreements over the life of each fund, generally
with a term of 10–12 years. Management fee is a recurring revenue and
the fees are predominately based on the committed capital during the
commitment period and the cost of invested capital during the
divestment period.
The management fee is payable half-yearly in advance and adjusted
in the following half-year period should any triggering events occur.
Examples of triggering events include launch of a successor fund, com-
mencement of the divestment period/end of commitment period and
multiple closings in funds in fundraising.
For further information of the EQT AB Group’s management fee, see
Note 2 “Management fees” .
CARRIED INTEREST
Carried interest is a share of profits that the EQT AB Group receives
through its holdings in the Special Limited Partners as variable consider-
ation fully dependent on the performance of the relevant fund. Carried
interest is either payable at the end of the life of the fund or paid as
installments at the time of realized investments within each fund, or
a combination thereof.
For further information of the EQT AB Group’s carried interest,
see Note 2 “Carried interest” .
INVESTMENT INCOME
Investment income consists primarily of changes in fair value of the EQT
AB Group’s underlying fund investments. Changes in fair value are rec-
ognized in the income statement. Capital gains on realized investments
are normally distributed within 3–5 days of an exit.
CONTRACT ASSETS AND CONTRACT LIABILITIES
Contract assets are reported within Accrued but yet not paid carried
interest and Other prepaid expenses and accrued income. Contract lia-
bilities are reported within Accrued expenses and prepaid income, see
Note 17.
Deferred income and accrued income are reported as contract assets
and contract liabilities, respectively. The EQT AB Group presents contract
assets and liabilities relating to carried interest and manage ment fee sep-
arately. The contract asset and liability regarding management fee arise
from timing differences between the time of generating the revenues and
payment. The timing difference is mainly related to the beginning of the
life of a fund, before the final close of a fund, or after the end of the
commitment period of the fund.
Specifications of changes in contract assets and contract liabilities
related to carried interest
2023 2022
EUR m
Contract
assets
Contract
liabilities
Contract
assets
Contract
liabilities
Opening balance 915.0 – 472.9 –
Revenue recognized during the
period 95.8 162.9
Realization of carried interest –114.7 –190.3
Acquisition of entitlement – 512.9
Translation differences 0.0 –43.4
Closing balance 896.1 – 915.0 –
Specifications of changes in contract assets and contract liabilities
related to management fee
2023 2022
EUR m
Contract
assets
Contract
liabilities
Contract
assets
Contract
liabilities
Opening balance 41.0 –23.6 33.6 –9.6
Transfers from contract assets
recognized at the beginning
of the period to receivables –41.0 –33.6
Revenue recognized that
was included in the contract
liability balance at the
beginning of the period 23.6 9.6
Revenue recognized during
the period not yet invoiced/
not yet chargeable 126.6 41.0
Payment in advance during
the period for performance
obligations not yet performed –16.9 –23.6
Closing balance 126.6 –16.9 41.0 –23.6
Cost of obtaining a contract
EUR m 2023 2022
Opening balance 15.2 15.1
Additions 11.0 7.2
Depreciation -8.3 –7.2
Total changes net 2.7 0.0
Closing balance 17.8 15.2
LONG-TERM CONTRACTS
Management fee is normally calculated on the underlying EQT funds’
committed capital during the commitment period, between 3–6 years,
depending on fund duration. After the commitment period has ended,
the investment cost is used as basis for calculating management fee.
During this period, management fee is based on the respective fund’s
remaining invested capital measured at cost. In addition to management
fees, the EQT AB Group may be entitled to carried interest via its holdings
in Special Limited Partners as a variable consideration based on the per-
formance of the fund and its underlying investments. The life of a fund is
uncertain, and is depending on the progress of the fund management
work, market development and both investment and divestment oppor-
tunities arising. The life of a fund is normally 10–12 years.
Carried interest is dependent on the performance of the investments,
including volatility in the market, resulting in a large number of possible
outcomes. Timing and magnitude of future revenue is therefore con-
sidered uncertain and cannot be reliably estimated. Accordingly, no such
disclosures are provided. Disclosures of commitments are presented in
Note 18.
CLIENTS
EQT AB Group has a broad client base where no single client comprises
more than 10 percent of revenue.
Note 6 Other operating expenses
EUR m 2023 2022
External services and consultants1) 107.1 165.7
IT expenses and Office expenses 53.2 42.7
Administrative expenses1) 89.4 80.5
Total other operating expenses 249.7 288.9
1) Summary of items affecting comparability
In 2023 items affecting comparability of EUR 3.3m (External services and consultants)
and EUR 0.5m (Administrative expenses) relates to integration costs as a result of per-
formed acquisitions.
In 2022 items affecting comparability of EUR 61.2m (External services and consultants)
and EUR 11.8m (Administrative expenses) relates to transaction and integration costs as a
result of performed acquisitions.
EQT Annual and Sustainability Report 2023 / Page 66Notes
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 68 =====
Note 7 Employees, senior executives
and board of directors
GUIDELINES FOR REMUNERATION TO THE CEO AND
OTHER SENIOR EXECUTIVES DURING 2023
At the annual shareholders’ meeting held on 30 May 2023, it was
resolved to adopt the following guidelines for remuneration and other
terms of employment for the CEO and other senior executives.
Guidelines for executive remuneration
The CEO and other members of the Executive Committee (executive
management) fall within the provisions of these guidelines. To the
extent a Board member conducts work for EQT, in addition to the
board work, consulting fees and other compensation for such work
may be paid. The guidelines are forward-looking, i.e. they are appli-
cable to remuneration agreed, and amendments to remuneration
already agreed, after adoption of the guidelines by the Annual Share-
holders’ Meeting 2023. These guidelines do not apply to any remuner-
ation separately decided or approved by the shareholders’ meeting.
EQT has a clear remuneration philosophy (including for variable
cash) applicable across the whole group which also governs the
remuneration to the Executive Committee and links compensation to
EQT AB Group’s business strategy, sustainability, long-term interests
and long-term value growth for its shareholders.
Most important is to incentivize fund performance and ensure
aligned interest with our limited partners in the EQT funds, EQT AB’s
shareholders as well as EQT’s long term approach. EQT is a perfor-
mance driven organization focused on long-term value creation in
line with our culture. Team performance and individual performance
are important – therefore we reward both. Performance is key to our
success and we award higher performance with higher compen-
sation. To be able to achieve the business goals, EQT needs to be able
to attract and retain world class talent suitable for each role. To
achieve this, EQT applies market competitive total compensation.
EQT compensates locally based on geography and in line with local
practice and regulations, taking into account, to the extent possible,
the overall purpose of these guidelines. The principles in these guide-
lines enable EQT AB to offer the Executive Committee a competitive
total remuneration. For more information regarding the EQT AB
Group’s business strategy, please see EQT AB’s webpage,
www.eqtgroup.com.
Share-related incentive programs
The EQT Share program was resolved by the shareholders’ meeting
and is therefore excluded from these guidelines. The EQT Share
program included members of the Executive Committee in EQT AB.
The performance criteria used to assess the outcome of the EQT
Share program are distinctly linked to the EQT AB Group’s business
strategy, sustainability, long-term interests and value growth for its
shareholders. These performance criteria comprise financial targets,
inter alia, revenue growth and EBITDA, and in addition thereto the
general competitiveness as well as the individual meeting or
exceeding EQT AB’s highly set expectations on adding value to the
EQT platform. The participants will invest a variable amount
(financed by EQT) in C shares after a performance year, whereupon
a three-year (approximately) holding period follows. For more infor-
mation regarding the EQT Share program, including the criteria
which the outcome depends on, please see EQT AB’s remuneration
report, available on eqtgroup.com/shareholders/.
The Board has proposed to the Annual Shareholders’ Meeting 2023
to adopt a new EQT Share program and an incentive program con-
sisting of employee stock options (the “EQT Option Program”).1) These
incentive programs will be resolved upon by the Annual Shareholders’
Meeting 2023 and are therefore excluded from these guidelines. The
new EQT Share program will be similar to the current EQT Share
program. The EQT Option Program will consist of five annual grants
of employee stock options. The employee stock options will be
granted free of charge to the participants. The exercise period will be
approximately three years after the date of grant. Each employee
stock option entitles the participant to acquire one ordinary share in
EQT at a price corresponding to the price per ordinary share as of the
date of grant. More information is included in the proposal presented
in the notice to the Annual Shareholders’ Meeting 2023.
Type of remuneration, etc.
The remuneration shall be on market terms and may consist of the fol-
lowing components: fixed remuneration, variable cash remuneration,
pension benefits and other benefits. The shareholders’ meeting may –
irrespective of these guidelines – resolve on, among other things,
share-related or share price-related remuneration.
Fixed remuneration
The fixed remuneration, i.e. base salary, should be competitive and
reflect responsibility and performance.
Variable remuneration
The satisfaction of criteria for awarding variable cash remuneration,
within the EQT Bonus program, shall be measured over a period of one
year. The variable cash remuneration may amount to no more than
200 percent of the annual base salary.
The EQT Bonus program consists of a performance assessment
of the business as well as an individual performance assessment.
Important business performance factors determining the size of the
bonus is the success of the underlying business measured by business
performance in the funds (investments and exits as well as portfolio
and fund performance), business profitability, fundraising, sustain-
ability as well as organizational development. The individual perfor-
mance is assessed versus agreed targets as well as meeting,
exceeding or not meeting high set individual performance expecta-
tions for the individual in the current role.
To which extent the criteria for awarding variable cash remuner-
ation has been satisfied shall be evaluated/determined when the
measurement period has ended. The remuneration committee shall
be responsible for the evaluation so far as it concerns variable remu-
neration to the CEO. For variable cash remuneration to other members
of the Executive Committee, the CEO shall be responsible for the eval-
uation. For financial objectives, the evaluation shall be based on the
latest financial information made public by EQT AB.
The Executive Committee partly consists of owners of EQT AB.
Owners that owned above 1.5 percent of the shares of EQT AB at IPO
or at relevant acquisition may not be comprised by the EQT Bonus
program, i.e. variable cash remuneration, nor any of the relevant
share-related incentive programs. Therefore, total remuneration for
part of the Executive Committee consists of base salary, pension
benefits and other benefits.
Pension
All members of the Executive Committee shall be covered by defined
contribution pension plans, for which pension premiums shall be
based on the members’ base salary and paid by the company during
the period of employment. For current members of the Executive Com-
mittee pension contributions shall be based on base salary and follow
contribution levels in accordance with local market practice, except for
the application of a cap. For Sweden, this means that it shall be com-
parable to the old BTP-plan with a contribution cap for base salary
exceeding 40 Income base amounts. The pension premiums shall
amount to no more than 25 percent of the annual base salary.
Other benefits
Other benefits, such as insurances (health, life, travel), sports contri-
butions or occupational health services, should be payable to the
extent this is considered to be in line with market conditions in the
1) The Annual Shareholders’ Meeting 2023 adopted the EQT Share and EQT Option Programs. The guidelines for executive remuneration has been updated
accordingly and the updated proposal for the Annual Shareholders’ Meeting 2024 can be found in the Board of directors’ report.
EQT Annual and Sustainability Report 2022 / Page 67Notes
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 69 =====
market concerned. Premiums and other costs relating to such benefits
may amount to no more than 25 percent of the annual base salary.
Recommendation to invest in EQT AB shares
The Board recommends each Executive Committee member (who do
not already have such holding) to acquire, over a three-year period,
EQT AB shares or similar instruments corresponding to at least one
year’s base salary, before taxes and excluding other remuneration.
Termination of employment and terms for severance pay for the CEO
A twelve month notice period will apply if notice is given by the CEO
or EQT AB. The CEO’s employment terms include a non-competition
clause. If used, this would entitle the employee to an additional com-
pensation corresponding to a maximum of twelve months’ salary,
however, reduced by any remuneration paid by a new employer.
Termination of employment and terms for severance pay
for senior executives
In the event of notice being given by the EQT AB Group, a notice
period of nine months applies, while in the event of notice being given
by the senior executive a period of notice of six months applies. The
senior executives’ employment terms also include a non-competition
clause. If used, this entitles the employee to an additional compen-
sation corresponding to a maximum of nine months’ salary, however,
reduced by any remuneration paid by a new employer. Base salary
during the notice period and severance pay may not together exceed
an amount corresponding to the base salary for eighteen months.
When termination is made by the executive, the notice period may
not exceed six months, without any right to severance pay.
Salary and employment conditions for employees taken into account
during preparations of these guidelines
In the preparation of the Board’s proposal for these remuneration
guidelines, salary and employment conditions for employees of the
EQT AB Group have been taken into account by including information
on the employees’ total income, the components of the remuneration
and increase and growth rate over time, in the remuneration commit-
tee’s and the Board’s basis of decision when evaluating whether the
guidelines and the limitations set out herein are reasonable.
The decision-making process to determine, review and implement
the guideline
The Board has established a remuneration committee. The commit-
tee’s tasks include preparing the Board’s decision to propose guide-
lines for executive remuneration. The Board shall prepare a proposal
for new guidelines at least every fourth year and submit it to the
shareholders’ meeting. The guidelines shall be in force until new
guidelines are adopted by the shareholders’ meeting. The remuner-
ation committee shall also monitor and evaluate programs for
variable remuneration for the Executive Committee, the application
of the guidelines for executive remuneration as well as the current
remuneration structures and compensation levels in the EQT AB
Group. The current members of the remuneration committee are
independent of EQT AB and its Executive Committee. The CEO and
other members of the Executive Committee do not participate in the
Board’s processing of and resolutions regarding remuneration-
related matters in so far as they are affected by such matters.
Deviation from the guidelines
The Board may temporarily resolve to deviate from the guidelines,
in whole or in part, if in a specific case there may be special cause for
the deviation and a deviation should be necessary to serve the EQT
AB Group’s business strategy, sustainability, long-term interests and
long-term value growth for its shareholders, or to ensure the EQT AB
Group’s financial viability. As set out above, the remuneration com-
mittee’s tasks include preparing the Board’s resolutions in remunera-
tion-related matters. This includes any resolutions to deviate from
the guidelines.
Description of material changes to the guidelines and how the views
of shareholders’ have been taken into consideration
Compared to the guidelines previously adopted, the Board has
included a recommendation to Executive Committee members to
acquire shares or similar instruments in EQT. The recommendation
has been made to further align the interests of the Executive
Committee members with the shareholders’ interests.
PROPOSED GUIDELINES FOR EXECUTIVE REMUNERATION
(REMUNERATION POLICY)
For future remuneration policy to be approved by the annual share-
holders’ meeting 2024, see the proposal in the Board of directors’
report.
Salary and remunerations to employees
EUR m 2023 2022
Salaries, bonuses and remunerations 1,021.8 603.4
Pension expenses, defined contribution plans 19.5 16.5
Social security expenses 53.6 44.2
1,094.9 664.0
Other personnel related expenses 46,8 38.2
Personnel expenses 1) 1,141.7 702.3
1) Whereof EUR 436.4m (EUR 200.8m) relates to personnel expenses as a result of
performed acquisitions, see Note 26.
Average number of employees
2023
whereof
women
whereof
men 2022
whereof
women
whereof
men
USA 388 38% 62% 333 37% 63%
Sweden 360 46% 54% 323 46% 54%
UK 208 52% 48% 160 52% 48%
Luxembourg 144 50% 50% 107 48% 52%
China, Hong Kong 108 54% 46% 43 55% 45%
Germany 102 41% 59% 100 40% 60%
Singapore 72 43% 57% 40 41% 59%
The Netherlands 45 37% 63% 47 42% 58%
Japan 41 34% 66% 20 40% 60%
Australia 37 27% 73% 24 36% 64%
Spain 30 34% 66% 23 31% 69%
France 29 37% 63% 26 42% 58%
China, Shanghai 28 48% 52% 8 53% 47%
Switzerland 26 44% 56% 21 52% 48%
Denmark 21 64% 36% 23 57% 43%
South Korea 21 39% 61% 15 36% 64%
India 21 24% 76% 4 21% 79%
Italy 18 47% 53% 16 42% 58%
Norway 10 39% 61% 10 32% 68%
Finland 7 27% 73% 7 29% 71%
Poland 4 25% 75% 3 14% 86%
Ireland 3 33% 67% 1 0% 100%
Mexico 2 0% 100% 1 0% 100%
Brazil 1 0% 100% 1 0% 100%
Austria 1 30% 70% 1 100% 0%
Belgium 1 0% 100% 1 0% 100%
Total 1,727 44% 56% 1,359 43% 57%
Note 7 cont.
EQT Annual and Sustainability Report 2022 / Page 68Notes
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 70 =====
Board and senior executives split by gender
Proportion of women 2023 2022
Board (parent company) 29% 38%
Senior executives 33% 27%
The EQT AB Group’s executive committee consisted of twelve persons in
2023, Suzanne Donohoe joined in January. In January 2024 Masoud
Homayoun joined. The executive committee consisted of eleven persons
in 2022. The senior executives are employed by different companies in
the EQT AB Group.
REMUNERATION TO THE MEMBERS OF THE BOARD OF DIRECTORS
Fees and other remuneration to the members of the Board, including
the chairperson, are resolved by the annual shareholders’ meeting. At
the annual shareholders’ meeting held on 30 May 2023, it was
resolved that EUR 295,800 shall be paid to the chairperson of the
Board and EUR 134,640 to each of the other board members who are
not employed by the company. In addition, EUR 40,000 will be paid to
the chairpersons of the audit committee, remuneration committee
and sustainability committee, respectively, and remuneration to each
of the other members of the relevant committees should be EUR
20,000 each. The board members are not entitled to any benefits
following termination of their assignments as board members. The
meeting further resolved that the compensation to the Board shall
be paid in shares in EQT AB.
Salaries and other remunerations and pension expenses for
the board of directors and senior executives
EUR m 2023 2022
Salaries, bonuses and remunerations 12.6 8.7
(whereof bonuses) 5.6 2.0
Equity incentive programs 10.3 1.7
Pension expenses 0.5 0.4
23.4 10.9
Note 7 cont.
EQT Annual and Sustainability Report 2022 / Page 69Notes
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 71 =====
Salaries and other remunerations to senior executives and board of directors
2023
EUR m
Base salary,
board fee Bonus
Pension
expenses
Other
benefits
Equity 1)
incentive
programs Total
Chairperson of the board (Conni Jonsson)
Remuneration from parent company 0.3 – – – – 0.3
Remuneration from subsidiaries 0.1 – 0.0 0.0 – 0.1
Board member (Marcus Wallenberg)
Remuneration from parent company 0.2 – – – – 0.2
Remuneration from subsidiaries – – – – – –
Board member (Margo Cook)
Remuneration from parent company 0.2 – – – – 0.2
Remuneration from subsidiaries – – – – – –
Board member (Johan Forssell)
Remuneration from parent company 0.2 – – – – 0.2
Remuneration from subsidiaries – – – – – –
Board member (Diony Lebot)
Remuneration from parent company 0.2 – – – – 0.2
Remuneration from subsidiaries – – – – – –
Board member (Nicola Kimm)
Remuneration from parent company 0.1 – – – – 0.1
Remuneration from subsidiaries – – – – – –
Note 7 cont.
2023
EUR m
Base salary,
board fee Bonus
Pension
expenses
Other
benefits
Equity 1)
incentive
programs Total
Board member (Gordon Orr)2)
Remuneration from parent company 0.2 – – – – 0.2
Remuneration from subsidiaries – – – – – –
Board member (Brooks Entwistle)
Remuneration from parent company 0.2 – – – – 0.2
Remuneration from subsidiaries – – – – – –
CEO (Christian Sinding)
Remuneration from parent company 0.2 – – – – 0.2
Remuneration from subsidiaries 0.4 – 0.0 0.0 – 0.4
Other senior executives
(11 persons)
Remuneration from parent company 0.7 0.9 0.2 0.0 2.8 4.6
Remuneration from subsidiaries 4.1 4.7 0.2 0.1 7.6 16.6
Total 6.9 5.6 0.5 0.1 10.3 23.4
Remuneration from parent company 2.4 0.9 0.2 0.0 2.8 6.2
Remuneration from subsidiaries 4.5 4.7 0.3 0.1 7.6 17.2
1) The renumeration relates to amounts awarded in relation to the EQT Share Program and the EQT Option Program. Awarded amounts for
2023 will be settled using options implying that the full value of the renumeration is a non-cash cost for the Group.
2) Gordon Orr have during 2023 provided consultancy services to EQT in addition to his assignment as board member. Remuneration for such
consultancy services are included in the column “Base salary, board fee” . For further information, see Note 23.
EQT Annual and Sustainability Report 2022 / Page 70Notes
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 72 =====
2022
EUR m
Base salary,
board fee Bonus
Pension
expenses
Other
benefits
Equity
incentive
programs Total
Chairperson of the board (Conni Jonsson)
Remuneration from parent company 0.4 – – – – 0.4
Remuneration from subsidiaries 0.1 – 0.0 – – 0.1
Board member (Marcus Wallenberg)
Remuneration from parent company 0.2 – – – – 0.2
Remuneration from subsidiaries – – – – – –
Board member (Margo Cook)
Remuneration from parent company 0.2 – – – – 0.2
Remuneration from subsidiaries – – – – – –
Board member (Johan Forssell)
Remuneration from parent company 0.2 – – – – 0.2
Remuneration from subsidiaries – – – – – –
Board member (Diony Lebot)
Remuneration from parent company 0.2 – – – – 0.2
Remuneration from subsidiaries – – – – – –
Board member (Nicola Kimm)
Remuneration from parent company 0.2 – – – – 0.2
Remuneration from subsidiaries – – – – – –
Board member (Edith Cooper)1)
Remuneration from parent company 0.1 – – – – 0.1
Remuneration from subsidiaries – – – – – –
Board member (Gordon Orr)1)
Remuneration from parent company 0.3 – – – – 0.3
Remuneration from subsidiaries – – – – – –
Board member (Brooks Entwistle)
Remuneration from parent company 0.1 – – – – 0.1
Remuneration from subsidiaries – – – – – –
Note 7 cont.
2022
EUR m
Base salary,
board fee Bonus
Pension
expenses
Other
benefits
Equity
incentive
programs Total
CEO (Christian Sinding)
Remuneration from parent company 0.4 – – – – 0.4
Remuneration from subsidiaries 0.1 – 0.0 0.0 – 0.2
Deputy CEO (Caspar Callerström)2)
Remuneration from parent company 0.2 – 0.0 0.0 – 0.3
Remuneration from subsidiaries – – – – – –
Other senior executives
(10 persons)
Remuneration from parent company 0.8 1.0 0.2 0.0 1.2 3.2
Remuneration from subsidiaries 3.2 1.0 0.1 0.0 0.5 4.9
Total 6.6 2.0 0.4 0.0 1.7 10.9
Remuneration from parent company 3.2 1.0 0.2 0.0 1.2 5.7
Remuneration from subsidiaries 3.4 1.0 0.2 0.0 0.5 5.2
1) Gordon Orr and Edith Cooper have during 2022 provided consultancy services to EQT in addition to their assignment as board members.
Remuneration for such consultancy services are included in the column “Base salary, board fee” . For further information, see Note 23.
2) Deputy CEO until 11 October 2022.
REMUNERATIONS TO SENIOR EXECUTIVES AND
OTHER EMPLOYEES
EQT Board and its remuneration committee resolves
on remuneration in the form of equity-based
incentive programs. The remuneration committee
further resolves on the remuneration for the Exec-
utive Committee. EQT AB Group has an internal Com-
pensation Committee that establishes and approves
remuneration in the form of levels of salary, bonus,
pension and other benefits for employees in EQT.
The total remuneration may consist of base salary,
bonus, equity-based incentive programs, pension
and other benefits. The bonus is related to annual
achievement on both group wide and individual
targets. Target achievement of bonus is determined
in the beginning of the subsequent year. Most
employees are part of the EQT Bonus program.
Variable remuneration for CEO and senior executives
CEO Christian Sinding has not been part of the EQT
Bonus program. Most executive committee members
are entitled to variable remuneration through the
EQT Bonus program.
EQT INCENTIVE PROGRAMS
EQT 2019 Share program
The last grant of the EQT Share Program (established
in 2019) was done in March of 2023. Each annual
grant consisted of amounts to be converted to class C
shares in EQT AB. All class C shares allotted are
subject to a three-year holding period, with no
vesting conditions, after which the class C shares are
converted into ordinary shares. The class C shares
carry the same economic rights as ordinary shares in
the company and carry one-tenth (0.1) vote each.
EQT Annual and Sustainability Report 2022 / Page 71Notes
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 73 =====
EQT 2023 Share program
The EQT Share Program (established in 2023) consists of ordinary
shares in EQT AB. The Program is divided into five separate annual
grants, each subject to a one-year performance period and a
three-year holding period. Depending on the achievement of certain
performance targets during the performance year, an amount may
be awarded which after the performance period is settled in the total
number of outstanding shares in EQT AB that corresponds to the
amount awarded. With certain limited exceptions, no vesting condi-
tions apply during the three-year holding period. Based on the
number of shares as of 31 December 2022, the maximum dilution for
the EQT Share Program is one percent in total. EQT intends, over time,
to repurchase shares to offset the dilution related to the EQT Share
Program1).
EQT 2023 Option program
The EQT Option Program (established in 2023) consists of options
which upon exercise entitle the option holders to acquire ordinary
shares in EQT AB. The Program is divided into five separate annual
grants, each subject to a one-year performance period and a
three-year holding period. Depending on the achievement of certain
performance targets during the performance year, an amount may
be awarded which after the performance period is settled in the
number of options that corresponds to the amount awarded. With
certain limited exceptions, no vesting conditions apply during the
three-year holding period. The option exercise period commences
after the holding period. Based on the number of shares as of 31
December 2022, the maximum dilution for the EQT Option Program is
four percent in total. EQT intends, over time, to repurchase shares to
offset the dilution related to the EQT Option Program1).
EQT share program (2019) summary2)
Performance
period Grant year
Shares
granted
Dilution impact
from shares
granted
2020 2021 348,106 0.04%
2021 2022 385,499 0.04%
2022 2023 496,056 0.05%
Total 1,229,661 0.13%
EQT share program (2023) summary (indicative)3)
Performance
period Grant year
Shares to be
granted
Dilution impact
from shares to
be granted
2023 2024 679,983 0.06%
EQT option program (2023) summary (indicative)4)
Performance
period Grant year
Options to be
granted
Max dilution -
options
2023 2024 3,825,939 0.24%
PERFORMANCE TARGETS AND COST
EQT 2023 Share Program
Performance in relation to targets for Adjusted Revenue growth,
Adjusted EBITDA margin and a sustainability assessment has resulted in
a gross share grant level of EUR 34.1m, of which EUR 16.7m was cash cost.
EQT 2023 Option Program
The granting of options is based on participants’ individual fulfillment
of targets in the performance framework including (i) Building and
developing cross-platform collaboration, (ii) Responsible and appro-
priate cost management, (iii) Growth from a business line focused
management to firm wide leadership, (iv) Tangible contribution to the
sustainability goals of the company, (v) Developing new business
areas for EQT. Total grant level recognized in 2023 was EUR 24 .7 m of
which none was cash cost.
Non-cash cost
The total non-cash cost for the EQT 2023 Option Program and 2023
Share Program amounts to EUR 42.1m.
Dilution
Assuming a share price corresponding to year end 2023 of
SEK 285, 679,983 shares3) and 3,825,939 options4) would be granted,
respectively, in 2024. As a result, the dilution impact from the Share
Program would be 0.06%. The Option Program will only be dilutive in
case the EQT AB share price at exercise is above the share price at
grant. The exercise price is capped at 4x the share price at grant.
Given the net strike mechanics, any gain above the share price at
grant and up to the cap will be settled in shares. As such, dilution in
relation to the Option Program is capped at 75% of the number of
options granted, or 0.24%.
1) EQT intends, over time, to repurchase shares to offset the dilution related to the
EQT Share Program and EQT Option Program. During 2023 EQT has completed
a repurchase of 1.8m shares.
2) Shares granted and subject to holding period at year end stemming from grants
2021–2023 are C shares not yet converted to ordinary shares. Dilution metrics
calculated based on share count at IPO (952,983,900).
3) Indicative figures assuming a share price corresponding to year end 2023 of SEK 285 .
To be granted in March 2024. Dilution metrics calculated based on share count as of
31 December 2022 (1,186,127,535).
4) Indicative figures assuming a share price of SEK 285 (year end 2023) and a corre-
sponding option value of SEK 72 . To be granted in March 2024. Dilution metrics
calculated based on share count as of 31 December 2022 (1,186,127,535).
Other benefits
EQT AB Group offers all employees a variety of non-monetary
benefits, such as occupational health service, health insurance, life
insurance, employee fitness programs and sports contributions.
Certain investments by senior executives
Certain members of the board of EQT AB and senior executives of
EQT AB Group, including the CEO of EQT AB, have invested in various
carried interest and employee co-investment schemes related to the
EQT funds. The returns (in the form of investment income and capital
appreciation) are fully dependent on the performance of the relevant
fund and the fund’s underlying investments.
Pension terms
The EQT AB Group has defined contribution plans that generally
follows a specific table for level of contributions based on age and/or
income level. Wherever possible, the contributions are only made on
base salary up to locally set caps. Payments to these plans are made
on a continuous basis according to the rules of each plan. The
expenses for defined contribution plans in 2023 amounted to
EUR 19.5m (EUR 16.5m).
The chairperson of the board, Conni Jonsson, has a defined benefit
pension plan which has been secured through a trust. The defined
benefit plan consists partly of a guaranteed amount corresponding
to the accumulated amount of historical contributions and partly of
a variable amount corresponding to the fair value of the trust’s net
assets in excess of the guaranteed amount. If the fair value of the
trust’s net assets is lower than the guaranteed amount EQT AB Group
is obliged to contribute the difference. As of 31 December 2023, EQT
AB Group’s part of the fair value of the trust’s net assets, converted to
euro, amounted to EUR 2.3m (EUR 3.0m) and the guaranteed amount
amounted to EUR 0.6m (EUR 0.8m). From January 2018, there have
been no further contributions to the trust.
Note 7 cont.
EQT Annual and Sustainability Report 2022 / Page 72Notes
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 74 =====
Note 8 Audit fees and expenses
EUR m 2023 2022
KPMG
Audit services 2.2 2.0
Tax consultancy 0.1 0.1
Other services – 0.1
Other auditors
Audit services – 0.1
Audit services refer to the legally required examination of the annual
report and the book-keeping, the board of director’s and the CEO’s
management and any other audit examinations or agreed-upon proce-
dures determined by contract. This includes other work assignments
which rest upon the Company’s auditor to conduct, and advising or
other support justified by observations in the course of the audit.
Note 10 Income taxes
EQT AB Group has operations in different jurisdictions. Each jurisdiction
has its own tax legislation and regulations. Constant changes of the
income tax rules and the interpretation of the legislation create expo-
sures regarding income taxes. The complexity of rules related to
income taxes in different jurisdictions and the accounting for these
require management’s involvement in judgments and estimates.
These estimates might differ from the actual outcome.
EQT AB Group has documented guidelines, processes and controls
for managing both income taxes and other taxes. Through these pro-
cesses the Group ensures that tax risks are identified and mitigated
through tax risk identification processes.
Taxes recognized in the income statement
EUR m 2023 2022
Current tax expense (–)/tax income (+)
Current tax expense / income for the year –115.4 –72.0
Tax attributable to prior years –0.1 –0.5
–115.5 –72.5
Deferred tax expense (–)/tax income (+)
Deferred tax related to temporary differences 15.3 –14.4
15.3 –14.4
Total reported income tax –100.2 –86.9
Reconciliation of effective tax rate
EUR m 2023 2022
Profit before income tax 239.4 263.1
Tax at parent company’s statutory
rate 20.6% –49.3 –54.2
Effect of:
Foreign tax rates1) –42.7 –9.9
Non-deductible expenses –105.5 –70.5
Non-taxable income2) 81.4 61.1
Change in non-recognized tax losses 16.7 –10.2
Tax attributable to prior years –0.1 –0.5
Other –0.7 –2,6
Reported effective tax –100.2 –86.9
Recognized deferred tax assets and liabilities
Change in deferred tax in temporary differences
2023
EUR m
Deferred
tax asset
Deferred
tax liability
Property, plant and equipment 2.2 0.0
Intangible assets 60.2 360.8
Other 7.8 0.0
Tax loss carry-forward 22.0 –
92.1 360.8
2022
EUR m
Deferred
tax asset
Deferred
tax liability
Property, plant and equipment 2.2 0.5
Intangible assets 91.9 404.9
Other 4.2 0.0
Tax loss carry-forward 12.1 –
110.2 405.3
The change in deferred tax in the balance sheet amounts to EUR 26.5m
(EUR –425.9m). The part of the change not recorded in the income
statement predominantly relates to FX effects.
1) The effect of foreign tax rates is comprised of EUR –14.7m relating to tax rates
applied in subsidiary jurisdictions deviating from the parent company statutory tax
rate and EUR –28.0m relating to tax rates applied in purchase price accounting
deviating from the parent company statutory tax rate.
2) Non-taxable income includes income that is not subject to taxation and income/
entities not recognized for tax purposes under the normal corporate income tax
regime of the relevant jurisdiction, e.g. dividends and capital gains subject to local
participation exemption regimes.
Note 9 Financial income and expenses
EUR m 2023 2022
Interest income 37.5 8.5
Translation gains 13.4 23.4
Other financial income 0.1 0.1
Financial income 51.1 32.0
Interest expenses –57.1 –43.8
Translation losses –23.9 –29.4
Other financial expenses –5.5 –4.5
Financial expenses –86.5 –77.7
Net financial income and expenses –35.5 –45.6
All interest income and expenses from financial assets and financial
liabilities are measured at amortized cost.
EQT Annual and Sustainability Report 2022 / Page 73Notes
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 75 =====
Note 11 Intangible assets
EUR m Goodwill
Capitalized
deve lopment costs
Intangible assets
related to acquired
businesses
Other intangible
assets
Accumulated cost
Opening balance 1.1.2023 2,172.2 12.1 3,835.9 101.4
Additions 42.6 – – 0.5
Translation difference –82.2 – –127.3 0.0
Closing balance 31.12.2023 2,132.6 12.1 3,708.6 101.9
Accumulated amortization and impairment
Opening balance 1.1.2023 – –12.1 –212.2 –100.4
Amortization – – –364.1 0.0
Translation difference – – 14.3 –0.4
Closing balance 31.12.2023 – –12.1 –562.0 –100.9
Carrying amount 2,132.6 – 3,146.6 1.1
Accumulated cost
Opening balance 1.1.2022 836.1 12.1 773.3 108.0
Additions 1,362.9 – 3,274.8 0.2
Translation difference –26.7 – –212,1 –6.8
Closing balance 31.12.2022 2,172.2 12.1 3,835.9 101.4
Accumulated amortization and impairment
Opening balance 1.1.2022 – –12.1 –57.3 –106.2
Amortization – – –153.6 –1.4
Translation difference – – –1.4 7.2
Closing balance 31.12.2022 – –12.1 –212.2 –100.4
Carrying amount 2,172.2 – 3,623.7 1.0
The Group’s intangible assets arise primarily from acquired businesses,
see Note 26. These acquired intangible assets consist largely of goodwill
but also trademark, contracts and investor relations. For information on
amortization, see the accounting policies in Note 2.
Goodwill
Goodwill is mainly attributable to performed acquisitions, see Note 26,
but also a small portion relating to the acquisition of EQT Partners AB,
including subsidiaries, in 2007. Goodwill is tested for impairment at the
lowest level within the EQT AB Group where goodwill is monitored for
internal management purposes, which is the Real Asset segment and
Private Capital segment respectively.
Amortization principles
The amortization is made, applying the straight-line method, over the
estimated useful life, unless the useful life is indefinite. Goodwill and
other intangible assets with indefinite useful life or development assets
that are not yet ready for use, are reviewed for impairment annually or
more frequently if there are indications of any potential impairment
from events or changes in circumstances. Intangible assets and deter-
minable useful lives are amortized from the point in time they are
available for the intended use.
Estimated useful life:
Investor relationships 15 year
Software 3 years
Trademark 5-8 years
Development costs 5 years
Customer contracts Remaining term of contracts,
between 4–15 years
Amortization methods and useful lives are reviewed at each reporting
date and adjusted if appropriate.
Impairment test of units containing goodwill
The recoverable amount was based on its value in use. The value in use
was determined by discounting the expected future cash flows gen-
erated from the continuing use of the operation’s net operating assets.
The following discount rates and long-term growth rates were used:
Private Capital 31.12.2023 31.12.2022
Discount rate post-tax, % 9.9 –
Discount rate pre-tax, % 11.2 –
Annual cash flow growth beyond year 5, % 2.0 –
Real Assets 31.12.2023 31.12.2022
Discount rate post-tax, % 8.8 8.8
Discount rate pre-tax, % 9.9 9.9
Annual cash flow growth beyond year 5, % 2.0 2.0
The discount rate used in the impairment test is the post-tax WACC,
assuming no debt financing (i.e. equal to the cost of equity). The cost of
equity has been calculated according to the Capital Asset Pricing Model
(CAPM) and is based on the risk-free interest rate with addition of the
market risk premium multiplied with the assumed beta value (based on
beta values of similar quoted companies) and a size premium.
Cash flows were projected for a period of five years, assuming
constant annual growth thereafter. The cash flow forecasts are based
on the budget for the following year and the long term forecast for
years two to five. The operating profit forecast was based on future
outcomes taking into account past experiences. Terminal growth rate,
assumed from year six and onwards, is applied to an assumed stable
cash flow in year five.
The impairment test resulted in a value in use higher than the car-
rying amount with significant headroom. Management believes that
any reasonable possible change in any of the key assumptions would
not cause the carrying value of goodwill to exceed the recoverable
amounts.
EQT Annual and Sustainability Report 2022 / Page 74Notes
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 76 =====
Note 13 Accounts receivable and other current
assets
EUR m 2023 2022
Expenses to be recharged 71.5 23.8
Drawdown receivable 67.8 57.2
Other receivables on fund 104.3 122.4
Other receivables 100.1 147.0
Total other current assets 343.7 350.4
Note 12 Property, plant and equipment
Owned assets
EUR m Equipment
Leasehold
improvement
Acquisition cost
Opening balance 1.1.2023 16.3 57.8
Additions 3.3 19.8
Disposals –0.8 –2.6
Translation difference –0.5 –0.3
Closing balance 31.12.2023 18.3 74.8
Depreciation
Opening balance 1.1.2023 –10.1 –20.3
Depreciation –3.0 –9.0
Disposals 0.5 0.8
Translation difference 0.3 0.3
Closing balance 31.12.2023 –12.3 –28.2
Carrying amount 6.0 46.6
Acquisition cost
Opening balance 1.1.2022 13.2 41.6
Additions 4.1 17.0
Disposals –1.1 –0.7
Translation difference 0.1 –0.2
Closing balance 31.12.2022 16.3 57.8
Depreciation
Opening balance 1.1.2022 –9.4 –14.0
Depreciation –1.7 –6.2
Disposals 1.1 0.0
Translation difference –0.1 –0.1
Closing balance 31.12.2022 –10.1 –20.3
Carrying amount 6.2 37.5
Right-of-use assets
EUR m
Office
premises
Opening balance 1.1.2023 126.8
Depreciation –33.7
Other changes, net 25.8
Closing balance 31.12.2023 118.9
Opening balance 1.1.2022 115.9
Depreciation –27.4
Other changes, net 38.3
Closing balance 31.12.2022 126.8
Total Property, plant and equipment
EUR m 2023 2022
Equipment 6.0 6.2
Leasehold improvement 46.6 37.5
Office premises 118.9 126.8
Carrying amount 171.5 170.5
Depreciation principles
Depreciation is made over the asset’s estimated useful life using the
straight-line method. Leased assets are also depreciated over the
asset’s useful life or, if shorter, the term of the lease considering any
extension or termination options, that are judged to be reasonably
certain to be used, see Note 2 “Leases” .
The estimated useful life:
Equipment 3–5 years
Leasehold improvements 3–10 years
Depreciation methods, useful lives and residual values are reviewed
at each reporting date and adjusted if appropriate.
EQT Annual and Sustainability Report 2022 / Page 75Notes
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 77 =====
Note 14 Equity
Shares
2023 2022
Ordinary shares
Issued per 1 January 1,185,028,524 986,280,140
Converted C shares 365,406 –
New share issue 59,306,376 198,748,384
Buy-back –61,106,376 –
Issued per 31 December – paid 1,183,593,930 1,185,028,524
Total numbers of C shares outstanding 1,229,661 1,099,011
Total number of outstanding shares 1,184,823,591 1,186,127,535
All ordinary shares carry one vote and class C shares carry 0.1 vote. The
class C shares carry the same economic rights as ordinary shares.
During the year EQT completed a repurchase of 1.8m shares, with
the objective of over time offsetting the dilution impact from EQT’s
Incentive Programs. In the fourth quarter, EQT increased the number
of ordinary shares held in treasury with 59.3 million ordinary shares
through a share issuance. The new shares are expected to be
delivered to participants in EQT’s Share and Option Programs,
depending on the outcomes of the long-term programs.
EQT currently holds 61,106,376 ordinary shares in treasury, which
are not entitled to dividends or votes at shareholders’ meetings.
Excluding shares held in treasury by EQT, there are 1,184,823,591
outstanding shares in EQT.
During 2023 (based on performance 2022), and in line with the EQT
incentive programs, 496,056 of the class C shares has been allocated
to participants in the programs and is hence outstanding as of 31
December 2023.
During 2023, EQT cancelled 7,068,423 class C shares held by EQT.
Since 24 September 2019, EQT’s ordinary shares are listed on
Nasdaq Stockholm Large Cap.
DIVIDEND DISTRIBUTION TO THE OWNERS
OF THE PARENT COMPANY
The Board of directors proposes a dividend to the shareholders of
SEK 3.60 per share for the fiscal year 2023. The dividend is proposed
to be paid out in two equal installments, SEK 1.80 with record date 29
May 2024 and SEK 1.80 with record date 2 December 2024.
The Board of directors of EQT AB has adopted a dividend policy
which aims to generate a steadily increasing annual dividend per
share.
EQUITY MANAGEMENT
The EQT AB Group maintains a financial position that supports
the confidence of investors, creditors and the market, and provides
a basis for continued development of business operations, and that
the long-term returns generated to the shareholders are satisfactory.
RESTRICTIONS ON TRANSFERABILITY
At the time of the listing of EQT AB in 2019, and in relation to various
subsequent acquisitions (including Exeter, Life Science Partners and
BPEA), certain current and former employees have agreed, with
certain exceptions, to not, without the prior written consent from EQT
AB, sell or transfer their respective share holdings in EQT AB during
a certain period of time (lock-up undertaking).
In addition to the restriction on selling or transferring the share-
holding, the acquisition related lock-up undertakings also generally
include vesting conditions under a “leaver put option clause” or
a share forfeiture mechanism.
The shares within the previous EQT share program (adopted by the
shareholders 2019) constitute non-listed class C shares, with rights to
receive dividends and with 0.1 vote, that will be held for three years
before being converted into ordinary shares that can be traded.
The ordinary shares allocated to participants within the current
EQT Share Program (adopted by the shareholders 2023) are subject
to a holding period of three years following each relevant time of allo-
cation. During such holding period, the shares can not be transferred
or disposed.
Other than the above there are no restrictions on the transferability
of the EQT AB shares due to statutory provisions, the articles of asso-
ciation or, as far as the Company is aware, any agreement.
An overview of the expiry of various lock-up undertakings can be found below.
2023 2024 2025 2026 2027 2028
#of shares released (in millions) Feb Sep Feb Sep Feb Sep Feb Sep Feb Sep Feb Sep
IPO 64 98 100 87 63 63
Exeter 7 14
LSP 2 2 4
BPEA 16 29 29 29 29 29
Total – 87 2 143 – 129 – 120 – 93 – 93
% of number of shares 7.0% 0.2% 11.5% – 10.3% – 9.6% – 7.4% – 7.4%
EQT Annual and Sustainability Report 2022 / Page 76Notes
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 78 =====
Note 18 Financial instruments and financial risks
FINANCIAL RISK MANAGEMENT FRAMEWORK
The EQT AB Group conducts a risk management framework to mit-
igate and control EQT AB Group’s financial risks in a cost-efficient
manner. The financial risk management is covered in the EQT AB
Group Finance Policy. The policy is reviewed yearly, and any new
version must be approved by EQT AB Group’s Board of directors who
has the ultimate responsibility for the establishment and control
mechanisms of the Group’s risk management. The EQT AB Group
is exposed to the following financial risks:
• Credit risk
• Liquidity risk
• Market risks (interest rate risk, currency risk, revaluation risk
of holdings in EQT funds)
CREDIT RISK
Credit risk arises from the potential financial loss in the event a counter-
party to EQT AB Group is unable to fulfil its obligations towards the EQT
AB Group. This relates primarily to receivables and contract assets, cash
held at bank accounts, any derivative instruments outstanding with a
positive fair value and any financial guarantees. The credit risk expo-
sures are regularly reviewed to assess exposures and concentrations of
risks in accordance with procedures set out in EQT AB Group’s Treasury
Guidelines.
The book value of financial assets represents the EQT AB Group’s
maximum exposure to credit risks. At 31 December 2023 financial
assets amounted to EUR 3,245.0m (EUR 2,668.8m). The financial
guarantees are further described below under heading Financial
guarantees.
Receivables and contract assets
The Group’s exposure to credit risk from receivables and contract
assets is defined by the characteristics of the individual counter-
parties, primarily consisting of EQT funds. Credit risks are reviewed on
a regular basis and there are no significant credit risks identified as of
the balance sheet date, nor have there been any during the reporting
period.
The Group regularly reviews expected credit losses for receivables
and contract assets, primarily based on historical losses. The Group
has historically not suffered any material losses from receivables and
contract assets and there are no receivables post due at the balance
sheet date (none). The expected credit loss at the balance sheet date
is therefore considered insignificant (insignificant).
Cash and cash equivalents
The financial credit risk exposure mainly arises from cash deposits
held on bank accounts. EQT AB Group’s Treasury Guidelines stipulates
which banks that are approved for cash deposits and relationships
are closely monitored by the Group’s Treasury department. The
minimum official credit rating for a counterparty, in terms of deposits,
is BBB (S&P, or S&P equivalent). As of 31 December 2023, the Group
held cash and cash equivalents of EUR 1,114.0m (EUR 644.9m).
Expected credit losses are assessed on a regular basis primarily
based on external credit ratings for the counterparties and infor-
mation about historical losses. The EQT AB Group has historically not
suffered any losses from cash and cash equivalents. As of 31
December 2023, the expected credit losses is considered insignificant
and reflects the short maturities of the deposits and the credit quality
of counterparties reflected in the external credit ratings (insignif-
icant).
Distribution of cash and cash equivalents by credit rating of counter-
parties:
Credit rating 31.12.2023
A+ 81%
A– 18%
BBB 1%
Total 100%
Credit rating 31.12.2022
A+ 79%
A– 21%
BBB 0%
Total 100%
Financial guarantees
The EQT AB Group has guaranteed to cover certain carried interest
claw-back obligations related to the EQT VIII, EQT IX, EQT X, EQT
Growth, EQT Future, EQT Infrastructure IV, EQT Infrastructure V and
EQT Infrastructure VI funds. Under the limited partnership agreement
of each applicable fund vehicle, an assessment will be made at termi-
nation of the fund to determine if there has been an overpayment of
carried interest to the Special Limited Partner (being the recipient of
carried interest). Any overpayment of carried interest will in the first
Note 17 Accrued expenses and prepaid income
EUR m 2023 2022
Accrued personnel expenses 263.5 195.8
Accrued consultancy fees 25.7 38.1
Other accrued expenses 157.1 160.0
Prepaid income 74.1 104.7
520.5 498.6
Note 16 Other liabilities
EUR m 2023 2022
Other current liabilities
Drawdown 6.4 2.8
Other 107.8 91.9
114.2 94.8
Note 15 Interest bearing liabilities
For more information regarding the EQT AB Group’s exposure to
interest risks and foreign currency risks, in respect of interest-bearing
liabilities, see Note 18.
EUR m 2023 2022
Non-current liabilities
Lease liabilities1) 91.2 100.1
Bond loan2) 2,020.9 2,017.4
2,112.1 2,117.5
Current liabilities
Short-term loans – –
Loans from credit institutions – –
Current portion of lease liabilities1) 34.3 31.4
34.3 31.4
1) Lease liabilities, for further information, see Note 19.
2) Bond loan, for further information, see Note 18.
EQT Annual and Sustainability Report 2022 / Page 77Notes
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 79 =====
Note 18 cont.
instance be satisfied by a return of amounts which are placed into
escrow to cover a claw-back scenario. In the unlikely event that
amounts held in escrow would be insufficient to cover the claw-back
liability, then the guarantee may be called upon to cover the balance.
At 31 December 2023, no carried interest had been generated, nor
paid, from EQT IX, EQT X, EQT Growth, EQT Future, EQT Infrastructure
IV, EQT Infrastructure V or EQT Infrastructure VI (none). EQT VIII has
generated and paid EUR 104.1m in carried interest (EUR 75.2m). As of
31 December 2023, it is estimated that EQT AB Group does not have
any exposure related to these guarantees (none).
For the benefit of a working capital facility for a number of carry
schemes, the EQT AB Group has issued a guarantee of EUR 50.0m
(EUR 100.0m) to the financial institutions providing this facility.
According to the terms of this guarantee, the EQT AB Group will pay to
the financial institution the relative amount due under the facility
agreement if a carry scheme is in default on debt repayment, i.e. the
maximum exposure to credit risk, at 31 December 2023 amounts to
EUR 50.0m (EUR 100.0m).
In order to facilitate certain individuals’ financing, through loans
from a financial institution, of investments in carry schemes related to
funds raised since 2015, the EQT AB Group has issued guarantees to
the relevant financial institution. According to the terms of these
guarantees, the EQT AB Group will pay to the lender any amounts due
under the loan agreements due to the individuals being in default on
debt repayment. In addition, the individuals have entered into agree-
ments with the EQT AB Group, by which they have agreed to reim-
burse the EQT AB Group for any amount that the EQT AB Group has
paid to the lender under the guarantee. The total amount covered by
the guarantees, i.e. the maximum exposure to credit risk, at 31
December 2023 amounts to EUR 28.9m (EUR 34.6m).
The amounts related to financial guarantees has not had any
significant effect on the EQT AB Group’s financial position at 31
December 2023 and has not affected the EQT AB Group’s profit
or loss for 2023.
LIQUIDITY RISK
The EQT AB Group’s liquidity risk relates to its ability to meet obliga-
tions associated with liabilities and commitments that are settled by
cash payments. The EQT AB Group manages its liquidity risk by
ensuring sufficient liquidity to meet its obligations when due under
both normal as well as stressed conditions. The Group performs cash
forecasting, updated at least on a monthly basis. On 21 December
2020, EQT signed a five-year EUR 1 billion revolving credit facility
(RCF). The RCF is not limited to a specific currency, it can be utilized in
both EUR and USD, by both EQT AB and EQT Treasury AB. On 25 April
2022 the RCF was increased to EUR 1.5 billion. As of 31 December 2023
the RCF was undrawn. On 14 May 2021, EQT AB issued a EUR 500m
sustainability-linked bond with a maturity of 10 years. The annual
coupon rate is 0.875 percent. On 6 April 2022, EQT AB issued a EUR
750m sustainability-linked bond with a maturity of 6 years and a
coupon rate of 2.375 percent, and also a EUR 750m sustainabili-
ty-linked bond with a maturity of 10 years and a coupon rate of 2.875
percent. The bonds further increased the EQT AB Group’s financial
flexibility and are used for corporate purposes, supporting the EQT
AB Group’s growth initiatives and long-term strategy. Both the RCF
and the bonds are linked to ESG-related objectives, meaning that the
interest rates of the bonds and the RCF are increased if the targets
are not achieved, and the interest rate of the RCF is lowered if the
targets are met. It underscores EQT’s approach to sustainability as
an integral part of the EQT AB Group’s business model and the EQT
funds’ portfolio companies. Cash and cash equivalents as of 31
December 2023 amounted to EUR 1,114.0m (EUR 644.9m).
Distribution of remaining contractual cash flows of the EQT AB
Group’s financial liabilities:
Carrying
amount Expected maturity
EUR m 31.12.2023 Total 2024 2025 After 2025
Interest-bearing
liabilities 2,020.8 2,286.1 43.8 43.8 2,198.5
Accounts payable 12.2 12.2 12.2 – –
Other liabilities 72.9 72.9 72.9 – –
Accrued expenses 179.3 179.3 179.3 – –
Leasing liabilities 125.5 130.4 31.3 28.4 70.7
Remaining
commitments 527.9
Total 2,410.6 3,208.8 339.5 72.2 2,269.2
Carrying
amount Expected maturity
EUR m 31.12.2022 Total 2023 2024 After 2024
Interest-bearing
liabilities 2,017.4 2,329.7 43.8 43.8 2,242.1
Accounts payable 15.8 15.8 15.8 – –
Other liabilities 59.3 59.3 59.3 – –
Accrued expenses 194.3 194.3 194.3 – –
Leasing liabilities 131.5 141.3 30.0 28.3 83.0
Remaining
commitments 1,057.2
Total 2,418.2 3,797.6 343.1 72.1 2,325.1
Translation into EUR of amounts denominated in foreign currency has
been done using the exchange rate at the end of the reporting period.
Accounts payables have a maturity of less than one year. Other
payables include drawdown notices issued by the Special Limited
Partners in the funds, normally with payment terms of 10 days.
At 31 December 2023, the EQT AB Group had remaining commit-
ments to invest in multiple EQT funds and fund related vehicles of a total
amount of EUR 527.9m (EUR 1,057.2m). The commitments are called
over time, normally between one to five years following the com-
mitment.
INTEREST RATE RISK
The EQT AB Group’s interest rate risk, related to fluctuations in market
interest rates with potential impact on the EQT AB Group’s net financial
income, is limited as the Group’s only long-term interest-bearing debt
as of 31 December 2023 are the sustainability-linked bonds with 6- and
10-year fixed coupon rates, subject to ESG-related objectives. Should
the EQT AB Group be exposed to interest rate risk, the EQT AB Group
Finance Policy allows for use of derivatives to manage the risk.
As of 31 December 2023 the EQT AB Group’s interest rate risk
mainly relates to interest rates received/paid on cash deposits, which
normally do not exceed the National bank rate for the relevant cur-
rency. Changes in cash deposits interest rates will affect the Group’s
interest income. lf all interest rates on cash deposits would increase by
25 basis points, the EQT AB Group’s annual interest income would
increase by EUR 2.8m (EUR 1.6m), assuming the same level of cash
deposits as of the balance sheet date.
EQT AB Group is not exposed to significant cash flow risk due to
changes of market interest rates in its lease liabilities, even if cash-
flows are subject to index adjustments for certain contracts.
FOREIGN CURRENCY RISK
The Group’s foreign currency risk relates to potential changes in
exchange rates with impact on the Group’s income statement and/or
the value of its assets and liabilities.
The Group’s income is primarily denominated in EUR and/or USD
and its expenses are primarily denominated in EUR, GBP, SEK and
USD. Expenses are also denominated in AUD, BRL, CHF, CNY, CZK,
DKK, HKD, INR, JPY, KRW, NOK, PLN and SGD. In most subsidiaries, the
income and expenses are denominated in the same currency as the
functional currency of the entity and does therefore not create any
currency effects in the Group’s income statement. The Group’s pre-
sentation currency is EUR. Income and expenses denominated in EUR
are therefore not directly affected by changes in exchange rates.
However, when income and expenses arise in entities with a func-
tional currency other than EUR, the Group’s operating profits will be
EQT Annual and Sustainability Report 2022 / Page 78Notes
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 80 =====
Classification of financial assets and liabilities in measurement categories
Distribution of carrying amounts of financial assets and financial liabilities by measurement categories stipulated by IFRS 9.
31.12.2023, EUR m
Fair value through
profit or loss
Financial assets
at amortized cost
Financial liabilities
at amortized cost Total
Financial assets
Investments 730.7 0.0 730.7
Other long-term assets 0.0 16.7 16.7
Accounts receivable 0.0 0.0
Other current assets 343.7 343.7
Accrued income 1,039.9 1,039.9
Cash and cash equivalents 1,114.0 1,114.0
Total financial assets 730.7 2,514.3 – 3,245.0
Financial liabilities
Interest-bearing liabilities 2,020.8 2,020.8
Accounts payable 12.2 12.2
Other liabilities 72.9 72.9
Accrued expenses 179.3 179.3
Total financial liabilities – – 2,285.1 2,285.1
31.12.2022, EUR m
Fair value through
profit or loss
Financial assets
at amortized cost
Financial liabilities
at amortized cost Total
Financial assets
Investments 668.4 0.0 668.4
Other long-term assets 20.6 19.8 40.4
Accounts receivable 0.0 0.0
Other current assets 350.4 350.4
Accrued income 964.7 964.7
Cash and cash equivalents 644.9 644.9
Total financial assets 689.0 1,979.8 – 2,668.8
Financial liabilities
Interest-bearing liabilities 2,017.4 2,017.4
Accounts payable 15.8 15.8
Other liabilities 59.3 59.3
Accrued expenses 194.3 194.3
Total financial liabilities – – 2,286.7 2,286.7
Note 18 cont.
affected by changes in exchange rates in the period between initial
recognition of revenue or expense and settlement.
The exposure to foreign currency risk is primarily related to the
parent company, EQT AB, and the subsidiary EQT Partners AB, both with
the functional currency SEK. The currency risk arises as the majority of
the income in these entities is denominated in EUR and the expenses are
in SEK. In 2023, EUR 349.8m (EUR 283.8m) of income in these two entities
(99 percent of total income) were denominated in EUR.
In 2023, currency effects of EUR –0.8m (EUR 2.0m) were recognized in
the Group’s operating profit.
The Group’s exposure to foreign currency risk at the balance sheet
date is primarily related to receivables, cash balances and liabilities
held in currencies other than the functional currency of the entity. This
exposure primarily arises in the parent company, EQT AB and in the
subsidiaries, EQT Partners AB and BPEA EQT Holdings AB, due to
receivables, cash balances and liabilities in EUR and USD. A strength-
ening/weakening of the EUR and USD by 5 percent against SEK at 31
December 2023 would affect the value of those assets, liabilities and
the Group’s income statement by approximately EUR +/–112.7m
(holding all other factors constant) (EUR+/–94.8m). The sensitivity
presented reflect the balances at the balance sheet date.
The Group is also exposed to currency risk when translating the
balance sheets and income statements of the parent company and
the subsidiaries with a functional currency other than EUR into the
presentation currency of the Group. The balance sheets are trans-
lated using the exchange rate at the balance sheet date and the
income statements are translated using the average exchange rate
for the period. The translation effect is recognized in other compre-
hensive income and accumulated in equity for the Group. The trans-
lation effect recognized in other comprehensive income in 2023 was
EUR –229.7m (EUR –273.1m).
Generally, the exposure to foreign currency risk is not hedged.
However, EQT AB Group’s Finance Policy allows forward contracts
to be used to buy future needs of foreign currencies in advance.
No speculative trading with currencies is allowed according to
the EQT AB Group Finance Policy.
REVALUATION RISK
The EQT AB Group is exposed to revaluation risk in the form of
changes in the Net Asset Value (NAV) for financial investments held by
the EQT AB Group classified at fair value through profit or loss. The
risk of changes in NAV is a natural consequence of the EQT AB Group’s
business and the risk is not hedged in any way. The effect of changes
in the NAV on the EQT AB Group’s profit or loss is presented below
under the heading “Sensitivity analysis of fair values” .
EQT Annual and Sustainability Report 2022 / Page 79Notes
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 81 =====
EQT AB has issued sustainability-linked bonds (classified as an inter-
est-bearing liability in the balance sheet) with fixed coupon rates linked
to ESG-related objectives. Fair value as of 31 December 2023 amounted
to EUR 1,791.1m (carrying amount EUR 2,000.0m). For EQT AB Group’s
other financial assets and liabilities (accounts receivables, other current
assets, accrued income, cash, deposits, accounts payables, other liabil-
ities and accrued expenses) the carrying amounts are considered rea-
sonable approximations of their fair values. This also holds for other
long-term assets and interest-bearing liabilities since these carry
variable interest and therefore the fair value is not significantly
affected by changes in the market interest rates.
FAIR VALUE MEASUREMENT
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market partici-
pants at the measurement date in the principal, or in its absence, the
most advantageous market to which the EQT AB Group has access to
at that date. The fair value of a liability reflects its non-performance
risk.
The EQT AB Group measures fair values using the following fair
value hierarchy that reflects the significance of the inputs used in
making the measurements:
• Quoted prices (unadjusted) in active markets for identical assets
or liabilities (level 1).
• Inputs – other than quoted prices included within level 1 – that are
observable for assets or liabilities, either directly (that is, as prices)
or indirectly (that is, derived from prices) (level 2).
• Inputs for assets or liabilities that are not based on observable
market data (that is, unobservable inputs) (level 3).
EQT AB Group measure investments in investment programs at fair
value in the balance sheet. The fair values for these investments at 31
December 2023 was EUR 730.7m (EUR 668.4m) and is calculated using
inputs that are not based on observable market data and are therefore
classified as level 3 in the fair value hierarchy. There has not been any
transfers between levels in the fair value hierarchy during the periods
presented.
Part of the purchase price in relation to the sale of business
segment Credit was variable and dependent on the size of future
funds. Depending on the size of the future funds the variable compen-
sation (earn-out) could range between EUR 0 and EUR 50m. EQT AB
Group measured the earn-out to fair value in the balance sheet.
During 2023 the earn-out has been settled resulting in a payment
of EUR 11.2m.
LEVEL 3 FAIR VALUES (FINANCIAL INVESTMENTS)
The table below shows a reconciliation of level 3 fair values for
financial investments.
EUR m 2023 2022
Opening balance 668.4 477.9
Net change in fair value 22.5 5.9
Acquisitions – 124.2
Investments 208.3 86.6
Divestments –168.6 –26.2
Closing balance 730.7 668.4
Net change in fair value is included in “Carried interest and
investment income” in the income statement as investment income.
FAIR VALUE FOR FINANCIAL INVESTMENTS
Financial investments disclosed as level 3 financial instruments pri-
marily consist of investments in EQT funds. The fair value of EQT AB
Group’s financial investments in EQT funds are based on the net asset
value after taking all assets and deducting all liabilities and provi-
sions, in line with Invest Europe Investor Reporting Guidelines. The
valuation processes and techniques described below therefore
relates to the most significant processes and techniques for valuing
the underlying holdings of the funds.
EQT AB Group applies the International Private Equity and Venture
Capital Valuation Guidelines (IPEV Guidelines) when determining the
fair values for the holdings in the EQT funds. Determining the fair
value require subjective assessment with varying degrees of
judgment regarding what market participants would use in esti-
mating the value of an asset including valuation methodology, pricing
assumptions, the current economic and competitive environment and
the risks affecting the specific asset. The use of multiple valuation
techniques is encouraged.
For certain investments, primarily within real estate, the EQT AB
Group is making use of external valuation agents. ExternaI valuers
within real estate operate under the Royal Institute of Chartered Sur-
veyors (RICS) Valuation – Global Standards, which incorporate the
International Valuation Standards as published by the International
Valuation Standards Council (IVSC).
The valuation principles applied by the EQT AB Group are applied
consistently from period-to-period, and only changed if deemed
necessary to reflect a representative fair value.
EQT AB Group applies control processes to ensure that the fair
value of the financial assets reported in the consolidated financial
statements are in accordance with applicable accounting standards
and determined on a reasonable basis. This include ensuring that the
valuations are consistent with the IPEV Guidelines, where relevant,
and ensure that the valuations are supported by underlying docu-
mentation.
The following valuation techniques are applied by the EQT AB
Group to determine fair values of investments in line with IFRS 13.
Valuation based on earnings multiples
EQT AB Group applies earnings multiples to determine the fair value
for investments with revenues, maintainable profits and/or main-
tainable positive cash flows. The earnings multiples applied are
derived from multiples from a basket of publicly traded companies
(a peer group) and multiples from comparable transactions. For this
purpose, the EQT AB Group normally uses the EV/EBITDA multiple. If
another earnings multiple is more suitable for a specific investment,
it should be used instead, and the reason for doing so should be
properly motivated and documented.
The multiples for publicly traded companies used by EQT AB Group
should be from the date when the valuation is performed. Each indi-
vidual company in the peer group is evaluated for every valuation
date to determine if the company is appropriate from a financial,
geographic and operational standpoint. In addition, assessments
are made in order to determine whether there exist any additional
companies appropriate to include in the peer group.
The multiples for comparable transactions should not be more
than 18 months old. In cases where there are no comparable trans-
actions at hand it is considered whether relevant to include a basket
of comparable transactions from a wider definition of the industry
in which the investment operates in. As investments may be realized
through trade sale (majority basis) as well as through stock listing
(minority basis), all transactions may be considered in the valuation,
without applying a minority discount.
Earnings figures are adjusted for exceptional or non-recurring
items, the impact of discontinued activities and acquisitions and
forecast downturns in profits. The valuation process and all changes
to the peer group, the comparable transactions and any earnings
adjustments are documented and approved by EQT management.
Valuation based on discounted cash flows
In the absence of significant revenues, profits or positive cash flows,
methods such as the earnings multiple are generally inappropriate.
The discounted cash flow technique (DCF) is flexible in the sense that
it can be applied to any stream of cash flows or earnings. In the
context of private equity valuation, this flexibility enables the valu-
ation technique to be applied in situations that other techniques
may be incapable of addressing.
Note 18 cont.
EQT Annual and Sustainability Report 2022 / Page 80Notes
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 82 =====
Discounted cash flow techniques imply that expected cash flow
amounts are discounted to a present value at a rate that represents
the time value of money and reflects the risks of the specific
instrument. The discount rate is based on current market conditions
and the expected return from the investment.
Valuation based on quoted prices
Investments quoted on an active market are measured at the latest
available quoted price for the individual asset on the measurement
date. Blockage discounts that reflect the quantity of the investment
held or any other discounts are not applied.
Unobservable inputs to valuation techniques
When measuring fair value, the EQT AB Group uses non-observable
market inputs in its valuation techniques. Significant unobservable
inputs include: EBITDA multiples (based on budgeted/forward-
looking EBITDA and EBITDA multiples of comparable listed com-
panies for an equivalent period), credit ratings, discount rates, capi-
talization rates, physical and geographic location of assets, price/
book as well as price/earnings ratios and enterprise value/sales
multiples. A significant portion of the investments is measured
at EBITDA multiples. EBITDA multiples used show wide ranges.
SENSITIVITY ANALYSIS OF FAIR VALUES
From an EQT AB Group perspective, financial investments are nor-
mally measured at fair value applying the adjusted net asset values of
the investment programs. A reasonable possible change of 10 percent
in the adjusted net asset value would affect the fair value of the
investments at 31 December 2023 with EUR 73.1m (EUR 68.8m). The
effect would be recognized in the income statement.
Although the EQT AB Group believes that its estimates of fair values
are appropriate, the use of different methodologies and different
unobservable inputs in the underlying investments of the investment
programs, could lead to different measurements of fair value. Due to
the number of unobservable input factors used in the valuation of the
investment programs’ direct investments and their broad range, in
particular concerning the earnings multiples, a sensitivity analysis
on these underlying unobservable input factors does not result in
meaningful outcomes.
Note 18 cont.
Note 19 Leases
AS A LESSEE
The EQT AB Group’s leases mainly consist of office premises. The
carrying amount of the right-of-use assets for the year can be found
in Note 12. The lease liabilities are presented in the balance sheet
and a maturity analysis of the lease liabilities is presented in Note 18.
Amounts recognized in income statement
EUR m 2023 2022
Interest on lease liabilities 3.5 2.8
Depreciation on right-of-use assets 33.7 27.4
37.2 30.2
EQT AB Group recognizes short-term leases and low value leases
directly in the income statement. The leasing amounts for short-term
leases and low value leases that have been expensed during 2022–2023
is not significant.
Amounts recognized in the statement of cash flows
EUR m 2023 2022
Total cash outflow for leases 35.1 17.1
Right-of-use asset in the balance sheet
EUR m 2023 2022
Additions in the right-of-use asset1) 35.1 41.3
1) Additions in the right-of-use asset consists of both renewals of lease contracts and
lease contracts added through acquisitions.
Office premises leases
EQT AB Group leases office premises for its office space. The leases
of office space typically run for a period of 3–10 years. Some leases of
office premises contain extension options exercisable by the EQT AB
Group up to 6 months before the end of the contract period. Where
practicable, the EQT AB Group seeks to include extension options in
the leases to provide operational flexibility. The extension options
held are exercisable only by the EQT AB Group and not by the lessors.
The EQT AB Group assesses at lease commencement whether it is
reasonably certain to exercise the extension options. This assessment
is based on all relevant facts and circumstances that exist at the com-
mencement date. EQT AB Group reassesses whether it is reasonably
certain to exercise the options if there is a significant event or signif-
icant change in circumstances within its control.
Some leases provide for additional rent payments that are based
on changes in local price indices. Some also require the EQT AB
Group to make payments that relate to the property taxes levied
on the lessor and is generally determined annually.
EQT Annual and Sustainability Report 2022 / Page 81Notes
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 83 =====
Note 20 Cash flow specifications
Transactions that do not involve payments
EUR m 2023 2022
Acquisition of assets through lease 30.4 27.8
Reconciliation of debts arising from financing activities
EUR m Lease liabilities Short-term loan
Interest-bearing
liabilities1)
Total debt arising
from financing
activities
Opening balance 1.1.2023 131.5 – 2,017.4 2,148.9
Cash flows incl interest –35.1 – –43.2 –77.3
Non-cash changes
Accrued interest 3.5 – 45.3 49.1
Other 25.6²) – 1.3 25.6
Closing balance 31.12.2023 125.5 – 2,020.8 2,146.4
EUR m Lease liabilities Short-term loan
Interest-bearing
liabilities1)
Total debt arising
from financing
activities
Opening balance 1.1.2022 117.9 – 496.1 614.0
Acquisition 23.9 23.9
Cash flows incl interest –17.1 –23.9 1,480.4 1,439.4
Non-cash changes
Accrued interest 2.8 32.4 35.3
Other 27.8²) 8.5 36.3
Closing balance 31.12.2022 131.5 – 2,017.4 2,148.9
1) Interest-bearing liabilities, for further information, see Note 18.
2) Other mainly relates to acquisition of assets through lease.
Unutilized credit facilities
EUR m 2023 2022
Unutilized credit facilities 1,500.0 1,500.0
On 21 December 2020, EQT signed a five-year EUR 1 billion revolving
credit facility (RCF). The RCF is not limited to a specific currency, it can
be utilized in both EUR and USD, by both EQT AB and EQT Treasury AB.
On 25 April 2022 the RCF was increased to EUR 1.5 billion.
Note 22 Events after the reporting period
EQT introduced the new Healthcare Growth Strategy, a dedicated
healthcare buyout strategy.
On 27 February 2024, EQT announced that EQT X had reached its
hard cap with fee-generating assets under management of 21.7bn.
Note 21 Pledged assets and contingent liabilities
EQT AB Group has no pledged assets or contingent liabilities as of
31 December 2023 (none).
EQT Annual and Sustainability Report 2023 / Page 82Notes
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 84 =====
Transactions with related parties
EURm
Sales of goods,
services
and assets
Purchases
of goods
and services
Receivables
as per 31 Dec
Liabilities
as per 31 Dec
Related parties
Board members and senior executives 2023 0.9 0.0 – –
Board members and senior executives 2022 0.9 0.1 0.0 –
Note 23 Related parties
Expenses for salaries, other remuneration and pensions for the EQT
AB Group’s senior executive management and the Board of directors
in EQT AB are presented in Note 7. Apart from what is stated in Note 7
there are certain transactions that have occurred between the EQT
AB Group and its related parties and these are specified in the table
below.
Description of transactions
In April 2019, the Company entered into a consultancy agreement with
the Company’s board member Gordon Orr. In accordance with this
consultancy agreement, Gordon Orr shall – in parallel to his
assignment as a member of the Board of directors – provide consul-
tancy services as an EQT Advisor to support EQT’s administration of
the EQT Network. Gordon Orr is entitled to an annual fixed retainer of
EUR 35,000 for the provision of these consultancy services. The con-
sultancy agreement was initially entered into for a fixed period until
30 June 2020 but is automatically prolonged on a yearly basis in
accordance with the terms of the agreement. Both EQT AB and the
consultant may terminate the consultancy agreement with one
month’s notice. The above was also applicable to the previous board
member Edith Cooper, however, she declined re-election as a board
member in connection to the AGM during 2022. Her consultancy
agreement was simultaneously terminated as well, as a result of this
she only received EUR 17,500 during 2022 for the period 1 January
2022 – 30 June 2022.
In addition to Gordon Orr’s original assignment, he was also
involved in a set up for an APAC Investment Advisor Committee during
2022 and received a fee of EUR 60,000 for this purpose.
Apart from above, EQT AB Group has invoiced a company controlled
by a board member for administrative services during 2023 and 2022.
The total amount of these transactions amounted to EUR 0.1m
(EUR 0.1m).
During 2023, EQT AB Group has paid EUR 764,606 (EUR 825,362),
amount converted from SEK, in pension to the chairperson of the
board, Conni Jonsson. However, EQT AB Group has historically made
contributions to a pension trust so in conjunction with the payment
from EQT AB Group to Conni Jonsson, EQT AB Group also invoiced the
corresponding amount to the pension trust. Thus, the payments of the
pension were during 2023 and 2022 cost neutral for EQT AB Group.
There has been no other significant transactions between EQT AB
Group and its related parties during the period.
EQT Annual and Sustainability Report 2023 / Page 83Notes
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 85 =====
Note 24 Subsidiaries
Group companies
Registered
office
Percentage held
Name Corporate reg. no 31.12.2023 31.12.2022
EQT Partners AB Sweden 556233-7229 100% 100%
EQT Partners Spain, S.L.U. Spain B01597822 100% 100%
EQT Partners Netherlands B.V. Netherlands 77321227 100% 100%
LSP Bioventures Inc. USA 4148549 0% 100%
EQT Partners Denmark ApS Denmark 41073381 100% 100%
EQT Partners AG Switzerland CHE-113.618.871 100% 100%
EQT Partners AS Norway 940532981 100% 100%
EQT Partners Australia Pty Ltd Australia 638432318 100% 100%
EQT Partners Australia II Pty Ltd Australia 638488623 100% 100%
EQT Partners Japan K.K. Japan 0104-01-158103 100% 100%
EQT Partners Korea Co., Ltd. South Korea 110111-8167854 100% 100%
EQT Partners GmbH Germany HRB 127746 100% 100%
EQT Partners Belgium B.V. Belgium 0843.203.083 100% 100%
EQT Partners Inc. USA 4401345 100% 100%
EQT Partners Oy Finland 1098042-8 100% 100%
EQT Partners Singapore Pte. Ltd. Singapore 200906516Z 0% 100%
EQT Partners Asia Limited Hong Kong 10199637 100% 100%
EQT Partners Shanghai Limited China 310000400514790 100% 100%
EQT Partners Limited UK 6590781 100% 100%
EQT Partners UK Advisors LLP UK OC338685 100% 100%
EQT Partners UK Advisors II LLP UK OC397306 100% 100%
EQT Partners S.R.L. Italy 10552820960 100% 100%
EQT Partners SAS France 85392898400014 100% 100%
EQT Partners Asia Pte. Ltd. Singapore 200004783Z 100% 100%
BPEA EQT Australia Pty. Ltd. Australia 631649600 0% 100%
BPEA EQT, Inc. USA 5833323 0% 100%
EQT Partners India Private Limited India U74140MH2009
PTC216794
100% 100%
EQT Partners Capital Limited Hong Kong 2629750 100% 100%
EQT Partners Hong Kong Limited Hong Kong 645312 100% 100%
BPEA EQT K.K. Japan 0104-01-063874 0% 100%
EQT Partners Beijing Limited China 91110105MA01N
0FP32
100% 100%
BPEA EQT Limited Beijing Rep Office China 110000400201823 100% 100%
BPEA EQT Limited Shanghai WFOE China 91310000MA1FYJ
229F
100% 100%
Registered
office
Percentage held
Name Corporate reg. no 31.12.2023 31.12.2022
BPEA EQT Limited Shanghai Rep Office China 310115500100121 100% 100%
PT BPEA Private Advisors Indonesia AHU-AH.01.03-
0376884
100% 100%
EQT Exeter Advisors Sweden AB Sweden 559296-3507 100% 100%
EQT Exeter Advisors Netherlands B.V. Netherlands 83321047 100% 100%
EQT Exeter Advisors Spain S.L. Spain B88285325 100% 100%
EQT Exeter Advisors France SAS France 819960634 100% 100%
EQT Exeter Australia Pty Ltd Australia 659318975 100% 100%
EQT Exeter Japan K.K. Japan 0104-01-089160 67% 67%
JLML 11 GK Japan 0104-03-021462 100% 100%
EQT Exeter Korea Limited South Korea 465-81-00642 75% 75%
EQT Exeter Advisors Germany GmbH Germany HRB 101640 100% 100%
EQT Exeter Advisors Belgium B.V. Belgium 0781.995.192 100% 100%
Exeter Asia Pacific Advisors SGP, LLC USA 4250923 100% 100%
EQT Exeter Asia Pacific Advisors Pte. Limited Singapore 202100784Z 100% 100%
EQT Exeter China Ventures Limited Hong Kong 71631486 100% 100%
EQT Exeter Management advisors (Shanghai) Co Ltd China 91310000 100% 100%
EQT Exeter Advisors Austria GmbH Austria FN551349H 100% 100%
EQT Exeter Advisors Italy S.r.l. Italy 11641590960 100% 100%
EQT Exeter Advisors Poland Sp. z o.o. Poland 0000587835 100% 100%
EQT Exeter Advisors UK Limited UK 13306870 100% 100%
EQT Exeter Advisors Ireland Limited Ireland 653468 100% 100%
EQT Exeter Advisors Czech Republic spol. s r. o. Czech Republic 11889756 100% 100%
Exeter UK Advisor, LLP UK OC396135 100% 100%
Exeter Europe (UK), Ltd UK 09284690 100% 100%
EQT Services (UK) Limited UK 07936651 100% 100%
EQT Services Netherlands B.V. Netherlands 851645768 0% 100%
EQT Corporate Services Netherlands B.V. Netherlands 74993097 100% 100%
EQT Treasury AB Sweden 559227-5647 100% 100%
EQT Holdings AB Sweden 559244-1462 100% 100%
EQT Lightspeed S.à r.l. Luxembourg B246446 100% 100%
EEAKLV Limited South Korea 110114-0295277 100% 100%
EQT Exeter China Investments 1 Pte. Ltd. Singapore 202217730H 100% 100%
EQT Exeter Supply Chain (Changzhou) Company
Limited
China 91320411MAB
QC28C0W
100% 100%
EQT Annual and Sustainability Report 2023 / Page 84Notes
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 86 =====
Registered
office
Percentage held
Name Corporate reg. no 31.12.2023 31.12.2022
EQT Holdings III AB Sweden 559289-1864 100% 100%
EQT Holdings S.à r.l. Luxembourg B244018 100% 100%
EQT Growth (General Partner) S.à r.l. Luxembourg B249692 100% 100%
EQT Infrastructure V (General Partner) S.à r.l. Luxembourg B243962 100% 100%
EQT IX (General Partner) S.à r.l. Luxembourg B238938 100% 100%
EQT IX GP LLC USA 3167396 100% 100%
EQT Future (General Partner) S.à r.l. Luxembourg B252846 100% 100%
EQT X (General Partner) S.à r.l. Luxembourg B255058 100% 100%
EQT Ventures III (General Partner) S.à r.l. Luxembourg B258957 100% 100%
EQT Active Core Infrastructure (General Partner) S.à r.l.Luxembourg B260249 100% 100%
EQT Infrastructure VI (General Partner) S.à r.l. Luxembourg B265893 100% 100%
BPEA EQT Mid-Market Growth GP, S.à r.l. Luxembourg B272128 100% 100%
ENXF Holdings (General Partner) S.à r.l. Luxembourg B277211 100% 0%
EQT Healthcare Growth (General Partner) S.à r.l. Luxembourg B268189 100% 100%
EQT Transition Infrastructure (General Partner) S.à r.l. Luxembourg B275352 100% 0%
Exeter Europe GP, LLC USA 5610896 100% 100%
Exeter Europe, LP USA 5610898 100% 100%
Exeter Europe Value Venture III GP S.à r.l. Luxembourg B216344 100% 100%
Exeter Europe Value Venture III Feeder GP S.à r.l. Luxembourg B220583 100% 100%
Exeter Europe Industrial Core GP S.à r.l. Luxembourg B238532 100% 100%
Exeter Europe Logistics Value Fund IV GP S.à r.l. Luxembourg B249708 100% 100%
EPIP MF GP S.à r.l. Luxembourg B223215 100% 100%
EPIP MF II GP S.à r.l. Luxembourg B237012 100% 100%
EPIP II GP S.à r.l. Luxembourg B245662 100% 100%
EGIP GP S.à r.l. Luxembourg B195412 100% 100%
EGIP II GP S.à r.l. Luxembourg B191498 100% 100%
EQT Exeter China Logistics Fund GP S.à r.l. Luxembourg B256221 100% 100%
EQT Exeter ELC II (General Partner) S.à r.l. Luxembourg B266601 100% 100%
EQT Exeter Japan 1 GP S.à r.l. Luxembourg B270547 0% 100%
EQT Exeter Asia Pacific Logistics Value Fund II GP S.à r.l.Luxembourg B277597 100% 0%
EQT Life Sciences Group B.V. Netherlands 863653698 100% 100%
LSP Health Economics Fund Management B.V. Netherlands 858137501 100% 100%
LSP V Management B.V. Netherlands 854065155 100% 100%
LSP HEF 2 Management B.V. Netherlands 858137501 100% 100%
LSP 6 Management B.V. Netherlands 858491783 100% 100%
LSP Dementia Fund Management B.V. Netherlands 862010469 100% 100%
LSP 7 Management B.V. Netherlands 862751007 100% 100%
Registered
office
Percentage held
Name Corporate reg. no 31.12.2023 31.12.2022
EQT Health Economics 3 Management B.V. Netherlands 865324281 100% 0%
LSP Advisory B.V. Netherlands 819117481 100% 100%
EQT Procurement S.à r.l. Luxembourg B201525 100% 100%
EQT Exeter Holdings US, Inc. USA 5402675 100% 100%
TA XII-B EPG-A Blocker Corp. USA 7134374 0% 100%
TA XII-B EPG-B Blocker Corp. USA 7134379 0% 100%
TA XII-B EPG-C Blocker Corp. USA 7134384 0% 100%
Exeter Property Group, LLC USA 4207665 100% 100%
Exeter Big Box AM Platform, LLC USA 5854337 100% 100%
Exeter Big Box Asset Manager, LLC USA 5854341 100% 100%
Exeter Property Group II, LLC USA 5758542 100% 100%
Exeter FeeCo I, LLC USA 6912131 100% 100%
EQT Exeter US GP Solutions, LLC USA 7399251 100% 0%
Exeter Property Group Advisors, LLC USA 4214673 100% 100%
Exeter Big Box Property Manager, LLC USA 5854344 100% 100%
Exeter Property Group Advisors II, L.P. USA 5758350 100% 100%
Exeter US Advisor, LLC USA 5610899 100% 100%
EQT Exeterfeeco Mexico S. de R. L. de C. V. Mexico 2018078689 100% 100%
EQT Exeter Brazil Platform, LLC USA 3065333 100% 100%
EQT Exeter Brazil Ventures, LLC USA 7961465 100% 100%
EQT Exeter Brasil Investimentos Ltda. Brazil 3523622040-2 100% 100%
Exeter China Ventures, LLC USA 7713778 100% 100%
EQTE Brokerage LLC USA 6939462 100% 100%
EQT Netherlands Management B.V. Netherlands 60593733 0% 100%
BPEA EQT Holdings AB Sweden 559374-8691 100% 100%
BPEA GP III Limited Cayman Islands 137871 100% 100%
BPEA Hong Kong Growth Fund GP Limited Hong Kong 3074863 100% 100%
BPEA Private Equity GP IV Limited Cayman Islands 192622 100% 100%
BPEA Private Equity GP V Limited Cayman Islands 244752 100% 100%
BPEA Private Equity GP VI Limited Cayman Islands 288217 100% 100%
BPEA Private Equity GP VII Limited Cayman Islands 332034 100% 100%
BPEA Private Equity GP VII S.à r.l. Luxembourg B222407 100% 100%
BPEA Private Equity GP VIII Limited Cayman Islands 373499 100% 100%
BPEA Private Equity GP VIII S.à r.l. Luxembourg B254359 100% 100%
BPEA General Partner Limited Cayman Islands 355832 100% 100%
BPEA TFO Partnership GP Limited Cayman Islands 317126 100% 100%
BPEA Asia Real Estate GP Limited Cayman Islands 268444 100% 100%
Note 24 cont.
EQT Annual and Sustainability Report 2023 / Page 85Notes
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 87 =====
Registered
office
Percentage held
Name Corporate reg. no 31.12.2023 31.12.2022
EQT Management SG Pte. Ltd. Singapore 2021226838H 100% 100%
EQT Holdings B.V. Netherlands 54467861 100% 100%
EQT Holdings II B.V. Shareclass AS/ASE1) Netherlands 55502903 100% 100%
EQT Infrastructure II GP B.V. Netherlands 54468701 100% 100%
EQT Holdings III B.V. Shareclass AS1) Netherlands 56497490 100% 100%
EQT Mid Market Immigration GP B.V. Netherlands 71283730 100% 100%
EQT Mid Market GP B.V. Netherlands 55314295 100% 100%
EQT Holdings PVF Coöperatief U.A. Netherlands 71843647 100% 100%
EQT Holdings VII B.V. Shareclass AS1) Netherlands 63039818 100% 100%
EQT VII (General Partner) LP UK SL019045 100% 100%
EQT Holdings Real Estate B.V. Shareclass AS1) Netherlands 63243687 100% 100%
EQT Real Estate I (General Partner) LP UK SL020800 100% 100%
EQT Holdings Ventures B.V. Shareclass AS1) Netherlands 63191334 100% 100%
EQT Ventures (GP) SCS Luxembourg B196905 100% 100%
EQT Holdings MMUS B.V. Shareclass AS1) Netherlands 63039729 100% 100%
EQT Mid Market US GP B.V. Netherlands 62863223 100% 100%
EQT Holdings Mid Market Asia III Coöperatief U.A. Netherlands 72183128 100% 100%
EQT Mid Market Asia III GP B.V. Netherlands 64683869 100% 100%
EQT Holdings MM Europe B.V. Shareclass AS1) Netherlands 65104153 100% 100%
EQT Mid Market Europe GP B.V. Netherlands 64683796 100% 100%
EQT Holdings Infrastructure III B.V. Shareclass AS1) Netherlands 66262844 100% 100%
EQT Infrastructure III (GP) SCS Luxembourg B207350 100% 100%
EQT Holdings VIII Coöperatief U.A. Netherlands 70951098 100% 100%
EQT VIII (GP) SCS Luxembourg B215860 100% 100%
EQT Holdings Infrastructure IV Coöperatief U.A. Netherlands 72203498 100% 100%
EQT Infrastructure IV (GP) SCS Luxembourg B225827 100% 100%
EQT Holdings Ventures II Coöperatief U.A. Netherlands 74791478 100% 100%
EQT Ventures II (GP) SCS Luxembourg B233027 100% 100%
EQT Holdings Real Estate II Coöperatief U.A. Netherlands 72225521 100% 100%
EQT Real Estate II (GP) SCS Luxembourg B226491 100% 100%
EQT Investment Verwaltungs-GmbH Germany HRB 194327 100% 100%
EQT Active Core Infrastructure GmbH & Co. KG Germany HRA 114883 97% 97%
EQT Active Core Infrastructure Side Car GmbH & Co. KG Germany HRA 117622 98% 0%
EQT Equity Investment GmbH & Co. KG Germany HRA 103524 97% 97%
EQT Equity Kiwi Investments GmbH & Co. KG Germany HRA 110788 97% 97%
EQT Future GmbH & Co. KG Germany HRA 114368 97% 97%
EQT Growth GmbH & Co. KG Germany HRA 114254 97% 97%
Note 24 cont.
Registered
office
Percentage held
Name Corporate reg. no 31.12.2023 31.12.2022
BPEA Asia Real Estate GP II Limited Cayman Islands 325315 100% 100%
BPEA Real Estate GP II S.à r.l. Luxembourg B222040 100% 100%
BAKPDC3 Pte. Ltd. Singapore 201708595C 100% 100%
EQT Fund Management S.à r.l. Luxembourg B167972 100% 100%
EQT Infrastructure II (GP) Limited UK SC416498 100% 100%
EQT Mid Market (GP) Limited UK SC436969 100% 100%
EQT VII Floss (General Partner) S.à r.l. Luxembourg B219445 0% 100%
EQT VII Co-Investment (General Partner) S.à r.l. Luxembourg B217579 100% 100%
EQT Co-Investment (GP) S.à r.l. Luxembourg B209598 100% 100%
EQT VII International Holdings B.V. Netherlands 69473129 100% 100%
EQT VII Luxembourg (General Partner) S.à r.l. Luxembourg B214397 100% 100%
EQT VII Netherlands (General Partner) B.V. Netherlands 68608195 100% 100%
EQT Real Estate Limited UK SC504628 100% 100%
EQT Ventures (General Partner) S.à r.l. Luxembourg B196578 100% 100%
EQT Mid Market US (General Partner) Limited UK SC500973 100% 100%
EQT Mid Market Asia III (General Partner) Limited UK SC521109 100% 100%
EQT Mid Market Europe (General Partner) Limited UK SC521108 100% 100%
EQT Infrastructure III (General Partner) S.à r.l. Luxembourg B207225 100% 100%
EQT VIII (General Partner) S.à r.l. Luxembourg B215816 100% 100%
EQT Management S.à r.l. Luxembourg B145067 100% 100%
EQT Luxembourg Management S.à r.l. Luxembourg B217192 100% 100%
EQT RA Management S.à r.l. Luxembourg B240358 100% 100%
EQT Infrastructure II (General Partner) S.à r.l. Luxembourg B244690 100% 100%
EI II GP C.V. Netherlands 78485266 100% 100%
EQT Mid Market (General Partner) S.à r.l. Luxembourg B244691 100% 100%
EMM GP C.V. Netherlands 78485622 100% 100%
EQT Public Value (General Partner) S.à r.l. Luxembourg B225269 100% 100%
EQT Mid Market US (General Partner) S.à r.l. Luxembourg B243106 100% 100%
EMMUS GP C.V. Netherlands 78484804 100% 100%
EQT Mid Market Asia III (General Partner) S.à r.l. Luxembourg B243105 100% 100%
EMMASIA III GP C.V. Netherlands 78484316 100% 100%
EQT Mid Market Europe (General Partner) S.à r.l. Luxembourg B243128 100% 100%
EMMEU GP C.V. Netherlands 78484030 100% 100%
EQT Infrastructure IV (General Partner) S.à r.l. Luxembourg B225708 100% 100%
EQT Ventures II (General Partner) S.à r.l. Luxembourg B232970 100% 100%
EQT Real Estate II (General Partner) S.à r.l. Luxembourg B225704 100% 100%
EQT Exeter Services Luxembourg S.à r.l. Luxembourg B229258 100% 100%
EQT Annual and Sustainability Report 2023 / Page 86Notes
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 88 =====
Registered
office
Percentage held
Name Corporate reg. no 31.12.2023 31.12.2022
EQT Healthcare Growth GmbH & Co. KG Germany HRA 117587 98% 0%
EQT Infrastructure III Investment GmbH & Co. KG Germany HRA 106439 97% 97%
EQT Infrastructure IV GmbH & Co. KG Germany HRA 109499 97% 97%
EQT Infrastructure IV Side Car GmbH & Co. KG Germany HRA 111708 97% 97%
EQT Infrastructure V GmbH & Co. KG Germany HRA 112378 97% 97%
EQT Infrastructure VI GmbH & Co. KG Germany HRA 116470 98% 98%
EQT Infrastructure VI Side Car GmbH & Co. KG Germany HRA 117225 98% 98%
EQT Infrastructure VI Soteria Side Car GmbH & Co. KG Germany HRA 117789 98% 0%
EQT Investment GmbH & Co. KG Germany HRA 98727 97% 97%
EQT Leverage Employee GP GmbH & Co. KG Germany HRA 117586 98% 0%
EQT Mid Market Asia III GmbH & Co. KG Germany HRA 106294 97% 97%
EQT Mid Market Europe GmbH & Co. KG Germany HRA 105565 97% 97%
EQT Mid Market Investment GmbH & Co. KG Germany HRA 96874 97% 97%
EQT Mid Market US GmbH & Co. KG Germany HRA 103658 97% 97%
EQT Public Value GmbH & Co. KG Germany HRA 109578 97% 97%
EQT Ventures II GmbH & Co. KG Germany HRA 110584 97% 97%
EQT Ventures Investment GmbH & Co. KG Germany HRA 104817 97% 97%
EQT VIII GmbH & Co. KG Germany HRA 107356 97% 97%
EQT VIII Side Car GmbH & Co. KG Germany HRA 110252 97% 97%
EQT IX GmbH & Co. KG Germany HRA 111687 97% 97%
EQT IX Side Car GmbH & Co. KG Germany HRA 113956 97% 97%
EQT X GmbH & Co. KG Germany HRA 115219 98% 98%
EQT X Side Car GmbH & Co. KG Germany HRA 116468 98% 98%
EQT HC Holdings I B.V. Netherlands 58187898 100% 100%
EQT HC Holdings II B.V. Netherlands 58188177 100% 100%
White Mill Two AG Switzerland CHE-195.379.514 100% 100%
1) The EQT AB Group controls only specified and ring-fenced assets and liabilities within the legal entity (a silo), see Note 2 regarding
non-consolidated special entities.
Note 24 cont.
INTERESTS IN UNCONSOLIDATED STRUCTURED ENTITIES
Silos not controlled and accordingly not consolidated by the EQT AB
Group consists of investments in EQT funds and carried interest facili-
tated through silo entities. The EQT AB Group has economic interests
relating to transactions with unconsolidated silos with reference to the
Group’s carried interest.
The EQT AB Group’s investments relating to carried interests are
recognized in the balance sheet as “Financial investments” , measured
at fair value and changes in fair value are recognized as Investment
income in the income statement. Disclosures of the investments are
presented in Note 18. Carried interest is recognized in the income
statement. Contract assets relating to carried interest are recognized
as “Prepaid expenses and accrued income” and separately disclosed
in Note 5.
The EQT AB Group’s maximum risk exposure relating to these silos
are represented by the amount recognized in the balance sheet.
INVESTMENT ENTITY
From an IFRS 10 perspective EQT AB Group is considered an
investment entity.
In accordance with IFRS 10 an investment entity is an entity whose
business purpose is to invest funds solely for returns from capital
appreciation, investment income or both and evaluate the perfor-
mance of its investments on a fair value basis. As an investment entity
EQT AB is exempt from consolidating subsidiaries that are invest-
ments and measures them at fair value through profit or loss instead.
Subsidiaries that serve in a supporting function such as investment
services continue to be consolidated in accordance with IFRS 10 and
those that are not providing investment services will be recognized at
fair value instead of being consolidated.
EQT Annual and Sustainability Report 2023 / Page 87Notes
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 89 =====
Note 26 Business combination
BEAR LOGI
As of 27 January 2022 EQT completed the acquisition of Bear Logi.
Bear Logi, founded in Tokyo, Japan in 2009, is a value-add logistics
investment manager focused on acquisitions, development, con-
struction and leasing, with extensive knowledge of the Japanese and
Korean logistics markets, with around 25 employees by the time of
closing. To date, Bear Logi has invested capital based on single asset
funding, and will as part of EQT Exeter create a fund-setup within
logistics properties similar to EQT Exeter’s existing structure in the
US and Europe.
Bear Logi generated approximately USD 1m in revenues during
2021. The transaction did not have a material impact on EQT AB’s
financial numbers and did not add any fee-generating assets under
management to EQT AB at closing.
Total upfront consideration amounted to USD 8.7m with a right
to potential earn-out payments if certain revenue and fundraising
targets are met. The earn-out payments are conditioned to continued
employment at the date of vesting why this from an accounting per-
spective will be recorded as personnel expenses over the vesting
period of 3–6 years.
Total transaction costs amounted to EUR 1.1m whereof EUR 0.0m
are included in other operating expenses during 2023.
LSP
As of 28 February 2022 EQT completed the acquisition of Life Sciences
Partners (LSP), a leading European life sciences venture capital firm
with, by the time of closing, approximately EUR 2.2bn of fee-gener-
ating assets under management (FAUM) and a team of 34
employees. LSP, headquartered in Amsterdam, the Netherlands,
was a venture capital firm that invested in innovative companies
with strong scientific and clinical rationale across several life sciences
strategies. It was founded in 1998 and was one of Europe’s largest and
most experienced life sciences investment firms. LSP strengthened
EQT’s position as one of the leading and most active private market
investors in the healthcare sector. LSP generated approximately EUR
37m in revenues and approximately EUR 24m in EBITDA (excluding
carried interest) during 2021. EQT acquired 100 percent of the LSP
management company and 20 percent of the right to carried interest
in selected LSP funds. In addition, EQT AB are entitled to 35 percent
of the carried interest of future funds, which is in line with existing
EQT practice.
The total consideration was EUR 365.8m, comprising new EQT AB
publicly traded shares EUR 228.3m (corresponding to 7,548,384
shares) and cash EUR 112.0m, a liability taken over of EUR 23.9m and
potential earn-out of EUR 1.6m. Of the total consideration, EUR 74.2m
in shares to management are subject to vesting conditions under a
“Leaver put option clause“ , meaning that if the management person
becomes a bad leaver, such as voluntary resignation or termination
for cause, the person will need to return the unvested shares to EQT
for nil consideration. The Leaver put option arrangement have from
an accounting perspective been separated from the business combi-
nation. The consideration has initially been accounted for as a pre-
payment and will be recorded as employee expenses over the vesting
period of 2–4 years. The purchase consideration for the business
combination was EUR 291.6m.
The transaction was subject to customary closing conditions,
including antitrust, regulatory and certain fund investor clearances.
The fair value of the shares is calculated with reference to the
quoted price of the EQT AB shares at the date of acquisition, which
was SEK 320.90 per share.
Total transaction costs (including M&A insurance) amounted to
EUR 5.1m whereof EUR 0.0m are included in other operating expenses
during 2023.
Total consideration
EURm
Shares issued, at fair value 228.3
Cash consideration 112.0
Liability taken over 23.9
Fair value of cash based earn-out 1.6
Total consideration 365.8
Employment linked consideration (Shares issued, at fair value) –74.2
Purchase consideration for the business combination 291.6
Note 25 Earnings per share
EUR 2023 2022
Earnings per share, before dilution 0.110 0.171
– of which continued operations 0.117 0.171
Earnings per share, after dilution 0.109 0.171
– of which continued operations 0.117 0.171
The calculation of earnings per share has been based on the net income
attributable to the shareholders and the weighted average number of
shares outstanding. The amounts used in the numerator and denomi-
nator are presented below together with some additional information.
Net income attributable to ordinary shareholders and outstanding
class C shares, basic and diluted
EUR m 2023 2022
Net income attributable to shareholders, basic 129.9 176.3
Net income attributable to shareholders,
diluted 129.9 176.3
Weighted average number of shares, basic and diluted
Number of shares 2023 2022
Weighted average number of shares, basic 1,185,754,323 1,031,955,891
Number of dilutive class C shares 679,983 638,590
Weighted average number of shares, diluted 1,186,434,306 1,032,594,481
EQT Annual and Sustainability Report 2023 / Page 88Notes
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 90 =====
ASSETS ACQUIRED AND LIABILITIES ASSUMED
The fair values of the identifiable assets and liabilities as at the date
of acquisition were:
EURm
Fair value recognized
on acquisition
Investor contracts 131.3
Investor relationships 77.4
Trademark and trade name 0.0
Right of use assets 2.7
Tangible fixed assets 0.1
Deferred tax asset 0.0
Receivables 0.9
Other current assets 1.5
Cash and cash equivalents 2.8
Interest bearing liabilities –4.5
Lease liabilities –2.7
Deferred tax liability – Intangibles –53.9
Current liabilities –7.9
The fair values of the identifiable assets
and liabilities 147.8
Goodwill 143.8
Purchase consideration for the business
combination 291.6
Analysis of cash flows on acquisition
EURm
Cash consideration
(included in cash flows from investing activities) –112.0
Deferred payment
(included in cash flows from investing activities) 16.4
Net cash acquired
(included in cash flows from investing activities) 2.8
Transaction costs of the acquisition
(included in cash flows from operating activities) –5.0
Net cash flow on acquisition –97.8
The earn-out is conditional upon LSP’s Dementia fund reaching a target
level of capital raised. There is an additional earn-out which is included
in the row Cash consideration, relating to LSP’s LSP 7 fund capital raising,
because the fundraising target had been met at the acquisition date.
The goodwill mainly comprises assembled work force, the oppor-
tunity to attract new investors and the platform to develop future
business opportunities and funds. Goodwill is allocated entirely
to the segment Private Capital.
Goodwill will not be tax deductible.
The Group measured the acquired lease liabilities using the
present value of the remaining lease payments at the date of acqui-
sition. The right-of-use assets were measured at an amount equal
to the lease liabilities.
During 2022 LSP contributed EUR 40.9m of revenue and EUR 28.0m
to profit before tax from continuing operations of the Group. If the
combination had taken place at the beginning of 2022, revenue from
continuing operations would have been EUR 1,506.2m and profit
before tax from continuing operations for the Group would have
been EUR 268.8m.
RCG
As of 10 June 2022, EQT completed the acquisition of Redwood Capital
Group (RCG), a residential core plus and value-add investment
manager headquartered in Chicago, Illinois, USA. RCG was founded
in 2007 and is deeply experienced in all operating areas, including
acquisition, asset management, construction management and
property management. RCG has successfully executed 79 multifamily
investments in high-growth US markets, including 48 realized invest-
ments that achieved in excess of 2x equity returns across more than
22,000 units. Investments comprise deal-by-deal joint ventures on
behalf of multiple institutional clients, including global fund sponsors,
insurance companies and family offices.
22 employees joined EQT Exeter as of closing. The transaction was
not deemed to have a material impact on EQT AB’s financial numbers
and did not add any fee-generating assets under management
(FAUM) to EQT AB at closing.
Total upfront cash consideration amounted to USD 34.3m with a
right to potential earn-out payments if certain fundraising targets are
met.
Total transaction costs amounted to EUR 2.3m whereof EUR 0.0m
are included in other operating expenses during 2023.
BPEA
As of 18 October 2022, EQT completed the acquisition of Baring
Private Equity Asia (BPEA), a leading private market investment firm
in Asia with approximately EUR 22bn of FAUM at the time of closing.
Operating since 1997, BPEA has built a platform with deep sec-
tor-based expertise and a value-driven active ownership approach.
It invests in mid to large-cap companies in Asia, mainly focused on
Private Equity, but also Real Estate and more recently Growth. With
10 regional offices, BPEA combines local execution with a Pan-Asian
reach, mirroring EQT’s local-with-locals approach.
The combination represented a step-change in EQT’s global reach
with immediate Pan-Asian presence at scale and with its thematic
investment approach, supporting companies from early stage to
maturity, EQT will continue to scale and expand its range of strategies
across its European, North American, and Asian core markets and
deliver for its clients.
EQT acquired 100% of the BPEA management company, the BPEA
general partner entities which control the BPEA funds, and the right
to carried interest in selected existing funds (including 25% in BPEA VI
and 35% in BPEA VII). EQT will invest in and be entitled to 35% of the
carried interest in all future funds, starting with BPEA VIII, in line with
existing EQT practice.
The total consideration was EUR 5,052.5m, comprising new EQT AB
shares EUR 3,603.0m (corresponding to 191,200,000 shares) and cash
EUR 1,449.5m. Of the total consideration, EUR 765.6m in shares to
management are subject to vesting conditions under a “Leaver put
option clause” , meaning that if the management person becomes a
bad leaver, such as voluntary resignation or termination for cause, the
person will need to return the unvested shares to EQT for nil consider-
ation. The Leaver put option arrangement has from an accounting
perspective been separated from the business combination. The con-
sideration has initially been accounted for as a prepayment and will
be recorded as personnel expenses over the vesting period of 1–4
years. The purchase consideration for the business combination is
EUR 4,286.9m.
The fair value of the shares is calculated with reference to the
quoted price of the EQT shares at the date of acquisition, which was
SEK 207.30 per share.
Transaction costs (including M&A insurance) of EUR 57,2m whereof
EUR 0.0m are included in other operating expenses during 2023.
Total consideration
EURm
Share issued, at fair value 3,603.0
Cash consideration 1,449.5
Total consideration 5,052.5
Employment linked consideration (shares issued, at fair value) –765.6
Purchase consideration for the business combination 4,286.9
Note 26 cont.
EQT Annual and Sustainability Report 2023 / Page 89Notes
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 91 =====
ASSETS ACQUIRED AND LIABILITIES ASSUMED
The fair values of the identifiable assets and liabilities as at the date
of acquisition were:
EURm
Fair value recognized
on acquisition
Investor contracts 1,854.5
Investor relationships 1,074.9
Trademark and trade name 136.6
Contingent carried interest 512.9
Right of use assets 27.8
Tangible fixed assets 2.9
Financial investments 123.2
Cash and cash equivalents 126.3
Other receivables 65.4
Deposits, prepayments 2.4
Deferred tax liability - Intangibles –390.6
Deferred liabilities –104.4
Lease liabilities, short and long term –27.8
Current liabilities –235.0
The fair values of the identifiable assets
and liabilities 3,169.0
Goodwill 1,117.8
Purchase consideration for the business
combination 4,286.9
Analysis of cash flows on acquisition
EURm
Total cash consideration
(related to cash flows from investing activities) –1,449.5
Net cash acquired
(included in cash flows from investing activities) 126.3
Transaction costs of the acquisition
(included in cash flows from operating activities) –56.9
Transaction costs attributable to issuance of shares
(included in cash flow from financing activities) –0.1
Net cash flow on acquisition –1,380.2
Trademarks and trade names relate to BPEA.
The goodwill mainly comprises assembled work force, the oppor-
tunity to attract new investors and the platform to develop future
business opportunities and funds. Goodwill is allocated entirely to the
segments Private Capital and Real Assets.
Goodwill will not be tax deductible.
The Group measured the acquired lease liabilities using the
present value of the remaining lease payments at the date of acqui-
sition. The right-of-use assets were measured at an amount equal to
the lease liabilities.
If the combination had taken place at the beginning of 2022,
revenue from continuing operations would have been EUR 1,800.5m,
EBITDA would have been EUR 712.0m and profit before tax from
continuing operations for the Group would have been EUR 461.7m.
If the combination had taken place at the beginning of 2022,
adjusted revenue from continuing operations would have been EUR
1,864.3m, adjusted EBITDA would have been EUR 1,059.9m and profit
before tax from continuing operations for the Group would have been
EUR 964.5m.
Note 26 cont.
EQT Annual and Sustainability Report 2023 / Page 90Notes
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 92 =====
Parent company income statement
1 January – 31 December
SEK m Note 2023 2022
Net sales 2 2,091.8 1,678.9
Other operating income 3 0.0 23.7
Total revenue 2,091.8 1,702.6
Personnel expenses 5 –585.5 –505.7
Other external costs 6, 7 –1,192.7 –1,296.1
Other operating expenses 4 –7.2 –
Depreciation and amortization 12, 13 –11.5 –9.5
Operating profit/loss 294.9 –108.6
Profit/loss from financial items
Profit/loss from participation in subsidiaries 8 5,097.9 4,021.6
Interest income and similar profit/loss items 9 320.2 350.5
Interest expense and similar profit/loss items 10 –759.7 –2,675.9
Profit/loss after financial items 4,953.3 1,587.7
Group contribution 257.9 1,154.1
Profit/loss before tax 5,211.3 2,741.8
Income taxes 11 115.2 –0.2
Net income 5,326.5 2,741.6
Net income corresponds to total comprehensive income.
EQT Annual and Sustainability Report 2023 / Page 91Parent company financial statements
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 93 =====
Parent company balance sheet
SEK m Note 31.12.2023 31.12.2022
ASSETS
Non-current assets
Intangible assets
Trademarks 12 - –
- –
Property, plant and equipment
Leasehold improvements 13 52.1 54.4
Equipment 13 3.5 4.6
55.6 59.0
Financial assets
Participation in subsidiaries 14 89,920.6 83,037.6
Long-term loans, subsidiaries 5,970.4 6,180.6
Other securities held as non-current assets 15 14.3 13.8
Deferred tax assets 11 116.4 -
Other long-term receivables 17 4.8 5.4
96,026.5 89,237.4
Total non-current assets 96,082.1 89,296.4
Current assets
Current receivables
Accounts receivable 7.3 22.8
Receivables from subsidiaries 1,788.3 6,909.8
Current tax assets 58.6 58.1
Other receivables 256.4 392.8
Prepaid expenses and accrued income 18 146.7 106.4
2,257.3 7,489.9
Cash and bank 19 215.1 84.0
Total current assets 2,472.4 7,573.9
TOTAL ASSETS 98,554.5 96,870.3
SEK m Note 31.12.2023 31.12.2022
EQUITY AND LIABILITIES
Equity 20
Restricted equity
Share capital 125.3 119.4
125.3 119.4
Non-restricted equity
Share premium reserve 60,051.5 60,487.8
Profit or loss brought forward –1,901.6 –1,555.5
Net income 5,326.5 2,741.6
63,476.4 61,673.9
Total equity 63,601.7 61,793.3
Non-current liabilities
Interest-bearing liabilities 21 22,423.6 22,451.3
Long-term loans, subsidiaries 10,683.1 11,059.0
Total non-current liabilities 33,106.7 33,510.3
Current liabilities
Accounts payable 50.1 29.9
Liabilities to subsidiaries 1,178.2 761.0
Tax liabilities – –
Other liabilities 170.8 252.0
Accrued expenses and prepaid income 22 447.0 523.8
Total current liabilities 1,846.1 1,566.7
Total liabilities 34,952.8 35,077.0
TOTAL EQUITY AND LIABILITIES 98,554.5 96,870.3
EQT Annual and Sustainability Report 2023 / Page 92Parent company financial statements
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 94 =====
Parent company statement of changes in equity
Restricted equity Non-restricted equity
SEK m
Share
capital1)
Share
premium
reserve
Retained
earnings
incl. profit
for the year
Total
equity
Opening balance at 1.1.2023 119.4 60,487.8 1,186.1 61,793.3
Net income – – 5,326.5 5,326.5
Transactions with owners
Dividend – – –3,557.2 –3,557.2
Share issue 6.0 – – 6.0
Cancelling of C shares –0.7 – – –0.7
Bonus issue 0.7 – – 0.7
Equity incentive programs – – 469.5 469.5
Repurchase of own shares /and or participations – –436.4 – –436.4
Total 6.0 –436.4 –3,087.6 –3,518.0
Closing balance at 31.12.2023 125.3 60,051.5 3,424.9 63,601.7
1) The share capital amounts to SEK 125,335,166.
Restricted equity Non-restricted equity
SEK m
Share
capital1)
Share
premium
reserve
Retained
earnings
incl. profit
for the year
Total
equity
Opening balance at 1.1.2022 99.5 18,451.3 1,359.0 19,909.8
Net income – – 2,741.6 2,741.6
Transactions with owners
Dividend – – –3,053.5 –3,053.5
Share issue 19.9 42,036.6 – 42,056.4
Equity incentive programs – – 139.0 139.0
Total 19.9 42,036.6 –2,914.5 39,141.9
Closing balance at 31.12.2022 119.4 60,487.8 1,186.1 61,793.3
1) The share capital amounts to SEK 119,369,201.
EQT Annual and Sustainability Report 2023 / Page 93Parent company financial statements
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 95 =====
Parent company statement of cash flows
SEK m 2023 2022
Cash flows from operating activities
Operating profit (EBIT) 294.9 –108.6
Adjustments:
Depreciation and amortization 11.5 9.5
Foreign currency exchange differences 7.2 –23.7
Other non-cash adjustments 31.5 10.2
Increase (–) /decrease (+) in account receivables and other receivables 2,543.3 6,506.3
Increase (+) /decrease (–) in account payables and other payables –292.5 –5,662.5
Dividends received 1,983.7 3,843.5
Income taxes paid –1.6 3,8
Net cash from operating activities 4,578.0 4,578.4
Cash flows from investing activities
Investment in subsidiaries/Group contributions paid –79.6 –827.1
Investment in subsidiaries – –16,862.9
Divestment of subsidiaries 56.1 0.7
Acquisition of property, plant and equipment –8.1 –8.0
Investment in non current assets –0.4 –4.9
Divestment of non current assets 0.7 0.9
Interest received 37.4 76.7
Final earn-out divestment Credit 131.2 –
Net cash from investing activities 137.2 –17,624.8
Cash flows from financing activities
Dividends paid –3,557.2 –3,053.5
Proceeds from borrowings – 15,435.8
Interest paid –515.6 –26.5
Purchase of own shares and/or participations –430.4 –
Net cash flows from financing activities –4,503.3 12,355.8
Net increase/decrease in cash and cash equivalents 211.9 –690.6
Cash and cash equivalents at the beginning of the period 84.0 80.0
Foreign currency exchange differences on cash and cash equivalents –80.8 694.6
Cash and cash equivalents at the end of the period 215.1 84.0
EQT Annual and Sustainability Report 2023 / Page 94Parent company financial statements
Contents
Download print optimized PDF
Introduction to EQT 3
Reflections on 2023 and beyond 8
Private markets and EQT 15
Strategy 22
EQT AB – the listed entity and
revenue model 27
EQT Playbook 31
People 45
Financial statements 50
Board of directors’ report 52
Consolidated financial statements
with notes 56
Parent company financial statements
with notes 91
Proposal for the distribution
of net income 100
Signatures of the board of directors
and the CEO 101
Managing risks 102
Auditor’s report 109
Sustainability notes 113
Corporate governance 144
Additional information 158
===== SIDA 96 =====