Claes Wedin, our Senior Vice President of Finance, IR and IT, responds to questions about the past stock exchange year.
2018 was the strongest fiscal year ever for VBG Group. Sales rose 16% and operating profit, or EBIT, rose 19% in relation to the preceding year. Looking at the share trend, however, the share price fell to SEK 126.80 during the year, compared to the 2017 closing price of SEK 132.00. This situation is not unique to VBG Group in the stock market; over a longer period, shares have been valuated and trended based on geopolitical and macroeconomic aspects rather than the companies’ performance and profitability trends. For us as a company, it is therefore important to continue describing our operations and providing the capital market and our shareholders with updated information regarding which market factors and industry indicators impact the Group both positively and negatively.
In 2018, the total return for VBG Group’s Series B shares was –1.5%. The negative return is attributable to our share price trend during the year, which however was compensated by a competitive dividend yield. Our dividend policy says that the company normally will pay out 30% of the net profits to the shareholders; the proposed dividend for the 2018 financial year corresponds to 41.2%. Additionally, if we look at the latest five-year period, we have had a total return of 56.1%, which should be regarded as stable, long-term healthy returns for the shareholders.
The VBG Group ownership structure is stable, and it creates security and a long-term perspective for the Group going forward while being a contributing factor to the excellent performance we have seen historically. VBG Group has a number of major institutional owners; the ten largest own just over 75% of the shares and hold approximately 90% of the votes. The other institutions own nearly 15% of the shares. It is the private shareholders, however, who own just under 10% that account for the overwhelming portion of the share transactions taking place in the stock market and who thereby have a crucial influence on the share price. Our free-float of shares is thus low, which naturally has an effect on the liquidity in the share. At year end, we had a total of 4,308 shareholders.