engcon

Quarterly Report • Aug 23, 2022

INTERIM REPORT JANUARY – JUNE 2022

Continued healthy growth and stable profitability

Second quarter 2022

• Order intake increased 20 per cent to SEK 519 million (431); organic order growth was 16 per cent.
• Net sales increased 35 per cent to SEK 534 million (395); organic net sales growth was 31 per cent.
• Operating profit increased 19 per cent to SEK 99 million (83) and the operating margin was 18.5 per cent (21.0).
• Profit for the period increased 32 per cent to SEK 82 million (62).
• Basic and diluted earnings per share amounted to SEK 0.47 (0.37).

Significant events during the second quarter

• Price increases for customers were announced on new orders as of 1 April 2022 in addition to the annual price adjustments that came into effect on 1 January.
• A third generation tiltrotator system was launched at various trade shows.
• At an Extraordinary General Meeting on 9 May, an extra dividend of SEK 90 million was approved, which was paid at the end of May.

January–June 2022

• Order intake increased 29 per cent to SEK 1,103 million (852); organic order growth was 25 per cent.
• Net sales increased 29 per cent to SEK 981 million (759); organic net sales growth was 25 per cent.
• Operating profit increased 21 per cent to SEK 190 million (157) and the operating margin was 19.4 per cent (20.7).
• Profit for the period increased 31 per cent to SEK 156 million (119).
• Basic and diluted earnings per share amounted to SEK 0.93 (0.70).
• In June, Rototilt Group AB filed a lawsuit regarding an alleged infringement of patented sensor technology in the Q-safe locking system. engcon has contested the claim.
• On 17 June, engcon's class B shares were listed on Nasdaq Stockholm.

Financial performance indicators for the Group¹

organic net sales growth was 31 per cent.				organic net sales growth was 25 per cent.
• Operating profit increased 19 per cent to SEK 99 million				• Operating profit increased 21 per cent to SEK 190 million
(83) and the operating margin was 18.5 per cent (21.0).				(157) and the operating margin was 19.4 per cent (20.7).
• Profit for the period increased 32 per cent to SEK 82 million (62).		million (119).		• Profit for the period increased 31 per cent to SEK 156
• Basic and diluted earnings per share amounted to				• Basic and diluted earnings per share amounted to
SEK 0.47 (0.37).		SEK 0.93 (0.70).
Significant events during the second quarter
• Price increases for customers were announced on new orders as of 1 April 2022 in addition to the annual price adjustments that came into effect on 1 January.				• In June, Rototilt Group AB filed a lawsuit regarding an alleged infringement of patented sensor technology in the Q-safe locking system. engcon has contested the claim.
• A third generation tiltrotator system was launched at various trade shows.		Nasdaq Stockholm.		• On 17 June, engcon's class B shares were listed on
• At an Extraordinary General Meeting on 9 May, an extra
dividend of SEK 90 million was approved, which was paid at the end of May.
Financial performance indicators for the Group¹
	2022	Q2 2021	Δ%	2022	Jan-Jun 2021	Δ%	Jan-Dec 2021
Order intake, SEK million
Net sales, SEK million	519 534	431 395	20 35	1,103 981	852 759	29 29	1,967 1,488
Gross profit, SEK million	227	167	36	408	321	27	626
Gross margin, %	42.5	42.3	n/a	41.6	42.3	n/a	42.1
Operating profit, SEK million		99 83	19	190	157	21	325
Operating margin, %	18.5	21.0	n/a	19.4	20.7	n/a	21.8
Profit/loss for the period from continuing operations, SEK million	82	62	32	156	119	31	269
Earnings per share, before and after dilution, SEK	0.47	0.37	28	0.93	0.70	33	1.64
Return on capital employed, %	57.5	n/a	n/a	57.5	n/a	n/a	47.8
Equity/assets ratio, %	31.5	53.4	n/a	31.5	53.4	n/a	60.5
¹ For more information, see the financial definitions and alternative performance measures section on page 19 and Note 6 Discontinued operations.

CEO'S COMMENTS

Our new tiltrotator system is taking important steps forward in the sustainability field, applying smart technology to reduce energy consumption and is adapted for the electrification of excavators.

With a successful listing on Nasdaq Stockholm in June, engcon achieved an important milestone for the future. We broadened and strengthened our ownership structure and are welcoming all new shareholders to be part of our continued journey to change the world of digging. Our business model and longterm growth potential have received a very positive reception by all stakeholders.

We noted continued healthy demand and profitability in the second quarter despite an uncertain business environment. A strong order book will provide the basis for stable earnings for the quarters ahead. In the longer term, we take a confident view of a global market that is evolving and that is expected to post strong growth.

Continued healthy order intake and stable profitability

In the second quarter, our customers' investment appetite remained high, resulting in organic order intake growth of 16 per cent. Geographically, North America accounted for the largest percentage increase, while we noted a certain slowdown in the Nordic region due to such factors as a larger share of orders in earlier quarters. The order book for the quarters ahead is significantly higher than on the corresponding date last year, creating healthy conditions to be able to deliver on our financial targets. Net sales for the quarter increased by 31 per cent organically and operating profit improved by 19 per cent with contributions from all geographical markets. Expenses for the listing and the change of group-wide business systems had a marginal impact on the operating margin for the quarter and for the six-month period.

The gross margin was stable and price increases introduced at the start of the year as well as in early April offset somewhat the higher prices of raw materials, components and shipping. We anticipate that the price increases will gradually reach full effect in the next two quarters. The availability of certain components increased during the quarter, and even if deliveries cannot yet be optimised, we are seeing a reduction in lead times, which is positive.

Third generation innovative tiltrotator system

During the quarter, engcon launched a third generation tiltrotator, which is designed for even smarter, smoother and more efficient digging. Our new tiltrotator system is taking important steps forward in the sustainability field, applying smart technology to reduce energy consumption and is adapted ready for the electrification of excavators. The third generation tiltrotator is being presented at trade shows in 2022 and production will begin in the first quarter of 2023.

Following the restrictions in recent years due to the pandemic, we are looking forward to forthcoming trade shows and other events that provide us with the opportunity to meet our customers and end users, which is a key aspect of spreading awareness of our products and brand.

Value-creating global growth

engcon delivered a good quarter despite an uncertain business environment. However, record-high energy prices and the subsequent consequences may affect demand from our customers. Since engcon does not have any exposure to Russia or Ukraine, the conflict has not led to any direct impact on our operations. In the long term, we see continued healthy growth for resource-efficient digging, and our ambition is to continue to strengthen our position as an industry-leading innovator of tiltrotators.

One of our strengths is our committed employees and our ability to manage changing conditions by rapidly adapting our organisation and cost base. Another strength is our innovative capability and robust focus on developing the solutions of the future through strategic partnerships with excavator manufacturers and close relationships with end customers. We also have a long history of profitable and capitalefficient growth. All in all, we are well equipped to deliver on our financial targets and our long-term plan for continued value-creating growth globally.

Krister Blomgren President and CEO

GROUP'S FINANCIAL PERFORMANCE

engcon Group's operations are conducted and reported as a single segment. As further disclosures, order intake and net sales are reported based on the Group's geographic regions: Nordic region, Europe, Americas and Asia-Oceania, which includes the rest of the world.

Net sales by geographic market region in Q2

Order intake by quarter, SEK million

Group

GROUP'S FINANCIAL PERFORMANCE
Group
		Q2			Jan-Jun		Jan-Dec
	2022	2021	Δ%	2022	2021	Δ%	2021
Order intake, SEK million	519	431	20	1,103	852	29	1,967
Net sales, SEK million	534	395	35	981	759	29	1,488
Gross profit, SEK million Gross margin, %	227 42.5	167 42.3	36 n/a	408 41.6	321 42.3	27 n/a	626 42.1
Operating profit, SEK million	99	83	19	190	157	21	325
Operating margin, %	18.5	21.0	n/a	19.4	20.7	n/a	21.8
		Q2			Jan-Jun		Jan-Dec
Order intake by geographic market region			Δ%	2022	2021	Δ%	2021
					497	10	1,172
SEK million	2022	2021					573
Nordic region Europe	244	261	-7	545
Americas	174 49	122 25	43 96	372 93	264 55	41 69	124
Asia-Oceania	33	23	43	58	36	61	98
Total excl. foreign exchange	500	431	16	1,068	852	26	1,967

Order intake by geographic market region

GROUP'S FINANCIAL PERFORMANCE
Group
		Q2			Jan-Jun		Jan-Dec
Order intake by geographic market region
		Q2			Jan-Jun		Jan-Dec
SEK million	2022	2021	Δ%	2022	2021	Δ%	2021
Nordic region	244	261	-7	545	497	10	1,172
Europe	174	122	43	372	264	41	573
Americas	49	25	96	93	55	69	124
Asia-Oceania	33	23	43	58	36	61	98
Total excl. foreign exchange	500	431	16	1,068	852	26	1,967
Foreign exchange effect	19	-	-	35	-	-	-
Total	519	431	20	1,103	852	29	1,967
Net sales by geographic market region
		Q2			Jan-Jun		Jan-Dec
SEK million	2022	2021	Δ%	2022	2021	Δ%	2021
Nordic region	306	245	25	575	460	25	853
Europe	147	103	43	256	216	19	442
Americas	38	27	41	67	49	37	115
Asia-Oceania Total excl. foreign exchange	27 518	20 395	35 31	55 953	34 759	62 25	78 1,488

Net sales by geographic market region

reported based on the
Group's geographic regions:
Nordic region, Europe,
Americas and Asia-Oceania,
which includes the rest of the world.
	Order intake by geographic market region
			Q2			Jan-Jun		Jan-Dec
16%
Organic order growth
Net sales by geographic market region in Q2	Net sales by geographic market region
			Q2			Jan-Jun		Jan-Dec
	SEK million	2022	2021	Δ%	2022	2021	Δ%	2021
	Nordic region	306	245	25	575	460	25	853
	Europe	147	103	43	256	216	19	442
Nordic region, 59%	Americas	38	27	41	67	49	37	115
Europe, 28% Americas, 7%	Asia-Oceania	27	20	35	55	34	62	78
Asia-Oceania, 6%	Total excl. foreign exchange	518	395	31	953	759	25	1,488
	Foreign exchange effect	16	-	-	28	-	-	-
	Total	534	395	35	981	759	29	1,488
	Of total net sales, Sweden accounted for SEK 205 million (176).
	Order intake and net sales
Order intake by quarter, SEK	Second quarter 2022
	Order intake during the quarter amounted to SEK 519 million (431), an increase of 20
	per cent, corresponding to organic order intake growth of 16 per cent.
	Order growth remained healthy during the quarter, with the largest percentage
774	increase noted in the Americas. Order intake for the Nordic region was somewhat
	weaker due to such factors as a higher amount of orders placed during the end of 2021
584	and in the first quarter of 2022.
519 431	Net sales during the quarter amounted to SEK 534 million (395), an increase of 35
341	per cent, corresponding to organic net sales growth of 31 per cent.
	All geographic regions recorded healthy net sales growth, with the largest
	percentage increase during the quarter noted in Europe. Net sales in Europe were
	higher in the second quarter as the result of improved delivery capacity compared with
Q2-21 Q3-21 Q4-21 Q1-22 Q2-22	the first quarter.

Order intake and net sales

Second quarter 2022

Net sales by quarter, SEK million

EBIT SEK million and EBIT margin by quarter

January–June 2022

Order intake during the period amounted to SEK 1,103 million (852), an increase of 29 per cent, corresponding to organic order intake growth of 26 per cent.

All geographic regions recorded healthy order growth during the period, with the largest percentage increase noted in the Americas and Asia-Oceania. The increase in the Nordic region was also healthy considering the market's maturity and the amount of orders placed at the end of 2021.

Net sales during the period amounted to SEK 981 million (759), an increase of 29 per cent, corresponding to organic net sales growth of 25 per cent.

Net sales in Europe were higher in the period as the result of improved delivery capacity compared with the corresponding period of the preceding year. Other geographic regions reported healthy net sales growth, with the largest percentage increase during the period noted in Asia-Oceania.

Earnings and net financial items

Second quarter 2022

Gross earnings during the quarter amounted to SEK 227 million (167), an increase of 36 per cent. The gross margin was stable and amounted to 42.5 per cent (42.3) and was positively impacted by two price adjustments that came into force on 1 January and 1 April 2022, respectively, and that are expected to have full impact in the second half of 2022. The price adjustments offset increased costs of goods sold attributable to higher costs for components, raw materials and freight. 359 370 447 534 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22

EBIT for the quarter amounted to SEK 99 million (83), an increase of 19 per cent. The operating margin was 18.5 per cent (21.0).

Increased net sales improved operating profit. The operating margin was somewhat lower compared with the year-on-year quarter and was impacted by higher costs related to the company's listing of SEK 11 million (0), and the change of group-wide business system of SEK 6 million (1) that is expected to be completed in 2023.

The effect of the fair value of derivative instruments amounted to SEK -16 million (1) for the quarter.

Net financial items for the quarter amounted to SEK 9 million (-4). Profit before tax for the quarter amounted to SEK 108 million (79).

Income tax for the quarter was SEK -26 million (-17). The effective tax rate for the quarter amounted to 24.0 per cent (21.5). 2.5%

Total earnings for continuing and discontinued operations after tax for the quarter amounted to SEK 82 million (62). For more information, see note 5. 2.1% 2.1% 2.0% 1.9%

January–June 2022

Gross earnings during the period amounted to SEK 408 million (321), an increase of 27 per cent. The gross margin was 41.5 per cent (42.3) and was impacted by increased costs of goods sold attributable to higher costs for components, raw materials and freight. A positive influencing factor was the two price adjustments that came into force on 1 January and 1 April 2022, respectively, and that are expected to have full impact in the second half of 2022. 77 91 99 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22

EBIT for the period amounted to SEK 190 million (157), an increase of 21 per cent. The operating margin was 19.4 per cent (20.7).

Increased net sales improved operating profit. The operating margin was impacted by higher costs for sold goods and costs for the build-up of local sales organisations, costs of SEK 16 million (0) related to the company's listing, and the change of groupwide business system of SEK 10 million (3) that is expected to be completed during 2023.

The effect of the fair value of derivative instruments amounted to SEK -16 million (0) for the period.

Net financial items for the period amounted to SEK 11 million (-3). Profit before tax for the period amounted to SEK 201 million (154).

Income tax for the period was SEK -45 million (-35). The effective tax rate for the quarter amounted to 23.7 per cent (23.0).

Total earnings for continuing and discontinued operations after tax for the period amounted to SEK 156 million (121).

Investments and depreciation/amortisation

Cash flow¹

Financial position and return

Investments in intangible and tangible assets and right-of-use assets amounted to
SEK 19 million (15) for the quarter and SEK 52 million (17) for the period. The
investments were mainly attributable to machinery and development costs for the third
generation tiltrotator. Depreciation and amortisation of tangible and intangible assets
amounted to SEK 10 million (7) for the quarter and SEK 19 million (12) for the period.
Cash flow¹
Cash flow from operating activities amounted to SEK 92 million (53) for the quarter and
SEK 97 (94) for the period, which was mainly attributable to improved profitability was
also influenced by increased capital tied up in inventory.
Cash flow from investing activities amounted to SEK -11 million (-4) for the quarter
and SEK -23 million (-7) for the period. The investments were mainly attributable to
machinery and development costs for the third generation tiltrotator.
Cash flow from financing activities amounted to SEK -111 million (-140) for the
quarter and SEK -267 million (-145) for the period. The change was primarily
attributable to the dividend paid.
Total cash flow from operations amounted to SEK -30 million (-91) for the quarter
and SEK -193 million (-58) for the period.
Financial position and return
	30 Jun	30 Jun	31 Dec
	2022	2021	2021
Total borrowing, SEK million	68	86	75
Bank overdraft facilities, SEK million	186	n/a	n/a
Total lease liabilities, SEK million	78	49	47
Cash and cash equivalents, SEK million	-29	-152	-228
Net debt (+) / Net cash (-), SEK million	303	-17	-106
Equity, SEK million	334	552	613
Equity/assets ratio, %	31.5	53.4	60.5
Return on capital employed, %	57.5	n/a	47.8
The strong order intake and disruptions in the supply chain resulted in greater
purchases of various components during the period to ensure deliveries. This resulted
in an increase in inventory, which amounted to SEK 393 million at the end of the period compared with SEK 303 million on 31 December 2021. The strong net sales resulted in

The strong order intake and disruptions in the supply chain resulted in greater purchases of various components during the period to ensure deliveries. This resulted in an increase in inventory, which amounted to SEK 393 million at the end of the period compared with SEK 303 million on 31 December 2021. The strong net sales resulted in an increase in accounts receivable from SEK 208 million to SEK 298 million.

The increase in net debt and reduction in equity, as well as a lower equity/assets ratio was attributable to the dividend paid. The Group had unutilized credit facilities of SEK 132 million at the end of the quarter compared with SEK 80 million on 31 December 2021. The Group's existing credit facility amounted to a total of SEK 318 million.

¹ Cash flow pertains to continuing and discontinued operations.

SIGNIFICANT EVENTS

On 17 June 2022, trading commenced for engcon's class B shares on Nasdaq Stockholm.

Second quarter

• Price increases for customers were announced on new orders as of 1 April 2022 in addition to the annual price adjustments that came into effect on 1 January.
• A third generation tiltrotator system was launched at various trade shows. Manufacturing will begin in early 2023.
• At an Extraordinary General Meeting on 9 May, an extra dividend of SEK 90 million was approved, which was paid at the end of May.
• In June, Rototilt Group AB filed a lawsuit regarding an alleged infringement of patented sensor technology in the Q-safe locking system. engcon has contested the claim. For more information, see page 7.
• On 31 May, engcon announced its intention to list its class B share on Nasdaq Stockholm. Interest in the offering was considerable and the first day of trading was 17 June.

FINANCIAL TARGETS AND DIVIDEND POLICY

Net sales growth

• engcon's objective is to exceed the growth in existing markets¹ through organic growth.

Profitability

• engcon's targets an operating margin (EBIT margin) in excess of 20 per cent measured over a business cycle.

Capital efficiency

• engcon will continue to achieve an industry-leading capital effiency. Return on capital employed (ROCE) to exceed 40 per cent measured over a business cycle.

Capital structure

• engcon will maintain a strong capital structure supporting further expansive organic growth and dividends to shareholders. that supports further expansive organic growth and dividends to shareholders. Equity to assets ratio to be above 35 per cent.

Dividend policy

• engcon will pay approximately 50 per cent of net profit in dividends. The dividend proposal will consider engcon's long-term development potential, financial position and investment needs.
• ¹ The focus market is estimated to increase with a compound annual growth rate of approximately 19 per cent during the period 2021 to 2026, according to the Strategy& (PwC) market report 2022.

OTHER INFORMATION

Risks and uncertainties

engcon is, by way of its operations, exposed to various risks that may give rise to variations in earnings and cash flow. Significant risks and uncertainties include industry and market risks, operational risks and financial risks. Risks and uncertainties are consistent with the description contained in the 2021 Annual Report, pages 22-24 and pages 57-60, with the addition of what is stated below. The Annual Report is available from engcon AB, Godsgatan 6, SE-833 36 Strömsund, Sweden.

Although the prevailing global situation had no major impact on engcon's operations during the period, engcon, like most companies, may be affected going forward. The uncertainty related to the war in Ukraine, the COVID-19 pandemic and the prevailing external and economic situation with increased inflation and announced interest-rate hikes could entail further disruptions to the supply chain, with longer lead times as a consequence, and could result in continued rising prices for raw materials, energy, components and freight, as well as reduced demand.

The Board and Group management continue to closely monitor developments and the potential effects these could lead to. Two price increases were announced in 2022, on 1 January and 1 April, respectively, to offset the increased costs.

Lawsuit

In lawsuit filed in June 2022, Rototilt Group AB has alleged that engcon has infringed upon a patent owned by Rototilt and has claimed damages of approximately SEK 120 million. The alleged infringement relates to sensor technology in the Qsafe locking system.

In consultation with experts in the field of patent law engaged by engcon as well as with the company's legal advisors, engcon has assessed that no patent infringement has taken place and thus no provision for this has been made in the accounts. In April 2022, engcon appealed the decision to grant the patent in question to the European Patent Office (EPO) and requested that the patent be declared invalid. Processing of this matter in the EPO is ongoing.

Employees

The average number of full-time employees at year-end amounted to 376 (314), of whom 22 per cent (19) were women and 78 per cent (81) men.

Extraordinary General Meeting 2022

An Extraordinary General Meeting was held on 9 May 2022 at the company's Head Office in Strömsund, Sweden. The Extraordinary General Meeting, in accordance with the Board's proposal, decided that an extra dividend of SEK 90 million be distributed, which was paid at the end of May.

Seasonal variations

Seasonal variations have little impact on engcon's operations and diminish successively on account of sales in several markets, which contributes to a more even earnings trend over the course of the year. The fourth quarter is normally characterised by a higher order intake, partly as an effect of forthcoming price increases.

Share capital and shareholders

The company's registered share capital at 30 June 2022 amounted to SEK 21,250,320, distributed among 35,344,778 class A shares and 116,443,222 class B shares. The shares have a quotient value of SEK 0.14 per share. Each Class A share represents ten votes and each Class B share one vote. On 30 June 2022, there were 3,553 shareholders in the company. The company's largest shareholder on 30 June 2022 was the company's founder, Stig Engström, through the company Ommapo Förvaltning AB, which controlled 37.4 per cent of the capital and 67.7 per cent of the votes. The second largest shareholder was Monica Engström through the company Monen Holding AB, which controlled 33.8 per cent of the capital and 23.0 per cent of the votes. Following these, Nordstjernan, Capital Group, Svolder AB, Formica Capital AB and Handelsbanken Fonder were engcon's largest shareholders. For more information, see www.engcongroup.com.

Parent Company

The Parent Company's net sales amounted to SEK 16 million (16) for the quarter and SEK 30 million (29) for the period.

Operating loss for the quarter amounted to SEK -20 million (-6) and SEK -33 million (-15) for the period. Net profit/loss for the quarter amounted to SEK -18 million (153) and SEK -30 million (145) for the period.

Amounts and dates

Amounts are presented in SEK million unless otherwise indicated. All comparative figures pertain to the same period of the preceding year. Rounding differences may occur.

SIGNING OF THE REPORT

The Board of Directors and CEO give their assurance that this interim report provides a true and fair account of the company's and the Group's operations, financial position and earnings, and that it describes the significant risks and uncertainties faced by the company and those companies that form the Group. This interim report has not been reviewed by the company's auditors.

engcon AB

Strömsund, 23 August 2022

Annika Bäremo Chairman

Anna Stålenbring Board member

Monica Engström Board member

Bob Persson Board member

Stig Engström Board member

Krister Blomgren CEO

For more information, please contact:

Krister Blomgren, President and CEO +46 70 529 92 65 krister.blomgren@engcon.se

Jens Blom, CFO +46 76 147 45 77 jens.blom@engcon.se

Anne Vågström, Head of Communications and IR +46 76 126 40 84 anne.vagstrom@engcon.se

Audiocast Q2 presentation

engcon will present the report via an audiocast on 23 August at 10.00 a.m. CEST.

To participate, use this link: https://tv.streamfabriken.com/engconq2-2022

To participate via phone: SE: +46 8 505 163 86 UK: +44 20 319 84884 US: +1 412 317 6300 PIN: 1622091#

The presentation is available at www.engcongroup.com

Financial calendar 2022/2023

Interim Report January – September, 27 October 2022

Year-end Report 2022, 22 February 2023

Annual and Sustainability Report 2022, week beginning 27 March 2023

Publication

This interim report comprises such information that engcon AB is obligated to publish in accordance with the EU Market Abuse Regulation and the Securities Market Act. This information was published through the auspices of the persons named above on 23 August 2022 at 8.00 a.m. CEST.

CONDENSED CONSOLIDATED INCOME STATEMENT

			CONDENSED CONSOLIDATED INCOME STATEMENT
	Q2		Jan-Jun		Jan-Dec
SEK million	2022	2021	2022	2021	2021
Continuing operations
Net sales	534	395	981	759	1,488
Cost of goods sold	-307	-228	-573	-438	-862
Gross profit	227	167	408	321	626
Selling costs	-57	-41	-111	-80	-165
Administrative costs	-48	-24	-78	-46	-84
Research and development costs		-8 -18	-14	-33	-63
Fair value, derivatives	-16	1	-16	-	-
Other operating income and operating expenses	1	-2	1	-5	11
Operating profit	99	83	190	157	325
Profit/loss from financial items
Share of profits of associated companies	-	-	-	-	1
Financial income	11	-	14	1	17
Financial expenses	-2	-4	-3	-4	-2
Profit/loss before tax	108	79	201	154	341
Income tax	-26	-17	-45	-35	-72
Profit/loss for the period from continuing operations	82	62	156	119	269
Profit/loss from discontinued operations	-	-	-	2	44
Total profit/loss for the period	82	62	156	121	313
Profit/loss for the period from continuing operations:
Attributable to:
Parent Company shareholders Non-controlling interest	72 10	57 6	141 15	107 13	249 20
Total profit/loss for the period:
Attributable to:
Parent Company shareholders	72	56	141	107	293
Non-controlling interest	10	7	15	15	20
Earnings per share, continuing operations (SEK)
Before dilution	0.47	0.37	0.93	0.70	1.64
After dilution	0.47	0.37	0.93	0.70	1.64
Earnings per share, total, incl. discontinued operations (SEK)
Before dilution	0.47	0.36	0.93	0.70	1.93
After dilution	0.47	0.36	0.93	0.70	1.93

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONDENSED CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
	Q2		Jan-Jun		Jan-Dec
SEK million	2022	2021	2022	2021	2021
	82	62	156	121	313
Total profit/loss for the period
Other comprehensive income
Items that may be reversed to profit or loss:
Exchange-rate differences upon translation of foreign
operations	4	1	5	3	3
Comprehensive income for the period	86	63	161	124	316
Attributable to:
Parent Company shareholders	76	56	146	109	295
Non-controlling interest	10	7	15	15	21

CONDENSED CONSOLIDATED BALANCE SHEET

CONDENSED CONSOLIDATED BALANCE SHEET
	30 Jun	30 Jun
SEK million	2022	2021	31 Dec 2021
Assets
Fixed assets
Goodwill	20	20	20
Other intangible assets	16	4	-
Right-of-use assets	78	51	49
Property plant and equipment	146	182	149
Participations in associates and joint ventures	-	15	-
Other non-current receivables	4	9	5
Derivatives	-	-	-
Deferred tax receivables	9	-	2
Total non-current assets	273	281	225
Current assets
Inventories	393	312	303
Accounts receivable	298	229	208
Current tax assets	4	3	3
Other receivables	62	32	24
Prepaid expenses and accrued income	-	24	22
Cash and cash equivalents Total current assets	29	152	228
Total assets	786 1,059	752 1,033	788 1,013
Equity and liabilities
Share capital	21	1	21
Other contributed capital	6	-	6
Translation reserve	9	3	4
Retained earnings including profit for the year	261	516	560
Equity attributable to Parent Company shareholders Non-controlling interest	297	520	591
Total equity	37 334	32 552	22 613
Non-current liabilities
Borrowings	8	12	8
Deferred tax asset	-	12	-
Lease liabilities	60	38	36
Provisions product warranty	30	22	23
Total non-current liabilities	98	84	67
Current liabilities
Trade payables	148	148	94
Current tax liabilities	72	36	61
Lease liabilities	18	11	11
Borrowings	60	74	67
Overdraft facility	186	-	-
Derivatives	15	-	-
Other liabilities	44	37	34
Accrued expenses and deferred income	84	91	66
Total current liabilities	627	397	333
Total interest bearing debt	725	481	400
Total equity and liabilities	1,059	1,033	1,013
The balance sheet for 2021 includes assets and liabilities for discontinued operations.
Rounding may entail that columns/rows do not tally.
Interim Report January – June 2022 11

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONDENSED CONSOLIDATED STATEMENT OF CHANGES
IN EQUITY SEK million	Share capital	Other contributed capital		Retained earnings including profit for the year		Non controlling interest	Total equity
2021		1 -	-8	538	531	30	561
Profit/loss for the period	-	-	-	107	107	14	121
Other comprehensive income	-	-	11	-15	-4	-	-4
Total comprehensive income	-	-	11	92	103	14	117
Transactions with shareholders:
Cash dividend	-	-	-	-118	-118	-12	-130
Total transactions with
shareholders	-	-	-	-118	-118	-12	-130
Closing balance 30 June	1	-	3	516	520	32	552
Profit/loss for the period	-	-	-	186	186	6	192
Other comprehensive income	-	-	1	3	3	-	3
Total comprehensive income	-	-	1	189	189	6	195
Transactions with shareholders:
Cash dividend	-	-	-	-124	-124	-16	-140
Total transactions with
shareholders	-	-	-	-124	-124	-16	-140
Bonus issue	20	-	-	-20	-	-	-
Employee share option programme	-	6	-	-	6	-	6
Closing balance 31 December 2021	21	6	4	560	- 591	22	- 613
SEK million	Share capital	Other contributed capital		Retained earnings including profit for the year		Non controlling interest	Total equity
Opening balance
1 January 2022	21	6	4	560	591	22	613
Profit/loss for the period	-	-	-	141	141	15	156
Other comprehensive income	-	-	5	-	5	-	5
Total comprehensive income	-	-	9	141	146	15	161
Transactions with shareholders: Cash dividend	-	-	-	-440	-440	-	-440
Total transactions with
shareholders	-	-	-	-440	-440 -	-	-440 -
Closing balance 30 June 2022	21	6	9	261	297	37	334

Transactions with shareholders:
Total transactions with
					-		-
Closing balance
		Other contributed capital		Retained earnings including profit for the year		Non controlling interest	Total equity
Opening balance
1 January 2022	21	6	4	560	591	22	613
Profit/loss for the period	-	-	-	141	141	15	156
							5
Other comprehensive income	-	-	5	-	5	-
Total comprehensive income	-	-	9	141	146	15	161
Transactions with shareholders:
Cash dividend Total transactions with shareholders	- -	- -	- -	-440 -440	-440 -440 -	- -	-440 -440 -

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
	Q2		Jan-Jun		Jan-Dec
SEK million	2022	2021	2022	2021	2021
Operating profit	99	83	190	157	325
Discontinued operations, operating profit/loss	-	-	-	2	9
Adjustments for non-cash items:
Amortisation and depreciation	10	9	19	18	38
Provision	4	-	7	2	3
Translation difference	-1	-	5	3	3
Other adjustments	16	-	16	1	-
Interest received	14	-	18	-	5
Interest paid	-1	-2	-2	-3	-4
Income tax paid	-9	-16	-39	-27	-48
Cash flow from operating activities before changes in
working capital	132	74	214	153	331
Changes in working capital
Decrease/(increase) in inventories	-26	-57	-90	-94	-132
Decrease/(increase) in trade receivables	21	27	-90	-48	-56
Decrease/(increase) in other receivables	-1	-1	-11	-20	-13
Increase/(decrease) in trade payables	-15	3	54	55	16
Increase/(decrease) in other liabilities	-19	7	20	45	29
Cash flow from operating activities	92	53	97	92	175
Investing activities
Acqusition of intangible assets	-9	-	-17	-	-
Acquisition of tangible assets	-2	-4	-6	-7	-12
Sale of financial assets	-	-	-	-	5
Cash flow from (-used in) investing activities	-11	-4	-23	-7	-7
Financing activities
Borrowings	-14	-	186	-	87
Loan repayments	-7	-7	-13	-12	-90
New issue	-	-	-	-	6
Dividends to shareholders	-90	-133	-440	-133	-163
Cash flow from financing activities	-111	-140	-267	-145	-160
Cash flow for (-used in) the period	-30	-91	-193	-60	8
Cash and cash equivalents at beginning of period	60	242	228	209	209
Exchange rate fluctuations in cash and cash equivalents	-1	-	-6	1	11
Cash and cash equivalents at end of period	29	152	29	152	228

CONDENSED PARENT COMPANY INCOME STATEMENT

CONDENSED PARENT COMPANY INCOME STATEMENT
	Q2		Jan-Jun		Jan-Dec
SEK million	2022	2021	2022	2021	2021
Net sales	16	16	30	29	49
Cost of goods sold	-	-	-1	-2	-2
Gross profit	16	16	29	27	47
Selling costs	-4	-7	-11	-16	-21
Administrative costs	-31	-7	-48	-12	-34
Research and development costs	-2	-7	-4	-13	-28
Other operating income and operating expenses	1	-	1	-
Operating profit					1
	-20	-6	-33	-15	-35
Profit/loss from financial items
Profit/loss from participations in Group companies	-	-	-	-	274
	3	159	4	160	6
	-1	-	-1	-	-
Income after financial items	-18	153	-30	145	245
Appropriations	-	-	-	-	286
Profit/loss before tax	-18	153	-30	145	531
Income tax	-	-	-	-	-53
Profit/loss for the period	-18	153	-30	145	478

CONDENSED PARENT COMPANY BALANCE SHEET

	30 Jun	30 Jun	31 Dec
SEK million	2022	2021	2021
Assets
Fixed assets
Other intangible assets	7	-	-
Property plant and equipment	4	3	3
Investments in group companies	82	107	81
Participations in associates and joint ventures	-	5	-
Receivables from Group companies	-	-	4
Other non-current receivables	2	8	3
Total non-current assets	95	123	91
Current assets
Inventories	3	2	3
Receivables from Group companies	313	180	494
Other receivables	3	1	2
Prepaid expenses and accrued income	4	3	3
Cash and cash equivalents	-	90	166
Total current assets	323	276	668
Total assets	418	399	759
Equity and liabilities Restricted equity
Share capital	21	1	21
Total restricted equity	21	1	21
Non-restricted equity
Share premium reserve
Retained earnings	67	61	66
	-25	14	-61
Profit/loss for the period	-30	145	478
Total non-restricted equity	13	220	483
Total equity	34	221	504
Non-current liabilities
Untaxed reserves	1	1	1
Total non-current liabilities	1	1	1
Current liabilities
Trade payables	9	3	7
Current tax liabilities	53	-	53
Overdraft facility	220	-	-
Liabilities to Group companies	81	158	180
Other liabilities	2	2	1
Accrued expenses and deferred income	17	14	13
Total current liabilities	383	177	254
Total interest bearing debt	384	178	255
			759

NOTES TO THE ACCOUNTS

NOTE 1. ACCOUNTING POLICIES

engcon's consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) as approved by the EU. This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting and applicable rules in the Swedish Annual Accounts Act. The Parent Company's interim report has been prepared in accordance with the Swedish Annual Accounts Act and Recommendation RFR 2 Financial Reporting for Legal Entities of the Swedish Financial Reporting Board. Disclosures according to IAS 34 are provided in the notes and elsewhere in the interim report. The

NOTE 2. KEY ASSESSMENTS AND ESTIMATES

The preparation of financial statements requires management to make assessments and estimates in addition to the assessments that impact the application of the accounting policies and the recognised amounts of assets, liabilities, revenue and expenses. Actual outcomes may differ

accounting policies applied in the preparation of this interim report apply to all periods and correspond with the accounting policies presented in engcon's 2021 Annual Report, Note 2 Accounting policies. No new and revised standards and interpretations that came into force on 1 January 2022 are deemed to have any material impact on engcon's financial statements.

From 1 January 2022, lease liabilities are divided into long and short-term components, and the comparison periods were restated. At 31 December 2021, SEK 11 million was reclassified from long-term to short-term lease liabilities.

from these estimates. The assessments and sources of uncertainty in the estimates correspond with those presented in the most recent annual report. For more details on key assessments and estimates, refer to the 2021 Annual Report, Note 3 and to page 7 of the section on risks and uncertainties.

NOTE 3. FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value of the Group's financial instruments, which are measured at fair value on a recurring basis.

Receivables

The company has a loan receivable amounting to SEK 2 million (4) to a French counterpart that does not solely include contractual cash flows in the form of repayment and interest and is therefore categorised at fair value through profit or loss. However, the loan will be repaid within four years. The instrument is to be considered as level 2, since it is measured through calculation of discounted cash flows with interest and the credit margin as per the balance sheet date.

Derivatives

The company holds currency futures that are measured at fair value at level 2 through profit or loss. At 30 June, there was a receivable amounting to SEK 0 million (0) and a liability amounting to SEK 15 million (0). The measurement method is discounting of contractual cash flows with interest and currency on the balance sheet date.

No transfers were made between level 1 and level 2 during the current or prior years.

The company is of the opinion that the carrying amount is a reasonable approximation of the fair value of all financial instruments.

NOTE 4. EARNINGS PER SHARE

NOTE 4. EARNINGS PER SHARE
		Q2		Jan-Jun	Jan-Dec
	2022	2021	2022	2021	2021
Continuing operations:
Profit/loss for the period from continuing operations attributable
to shareholders of the Parent Company, SEK million	72.0	57.0	141.0	107.0	249.0
Right of preference, SEK million Profit/loss for the period from continuing operations attributable		- -0.8	-	-0.8	-0.8
to shareholders of the Parent Company, adjusted, SEK million	72.0	56.2	141.0	106.2	248.2
Average number of ordinary shares outstanding	151,788,000	151,788,000	151,788,000	151,788,000	151,788,000
Basic and diluted earnings per share, SEK	0.47	0.37	0.93	0.70	1.64
Total (incl. discontinued operations):
Total profit/loss for the period attributable to shareholders of the Parent Company, SEK million		72.0 56.0	141.0	107.0	293.0
		- -0.8	-	-0.8	-0.8
Right of preference, SEK million Total profit/loss for the period attributable to shareholders of the			141.0	106.2	292.2
Parent Company, adjusted, SEK million	72.0	55.2		151,788,000	151,788,000
Average number of ordinary shares outstanding	151,788,000	151,788,000	151,788,000
Basic and diluted earnings per share, SEK	0.47	0.36	0.93	0.70	1.93
During the period, former preference shares were converted		share = (profit/loss for the period – dividend on preference
to ordinary shares. Since no capital was raised in conjunction		shares)/average number of ordinary shares outstanding. On
with this, the number of ordinary shares were adjusted		24 November 2021, an Extraordinary General Meeting was
retroactively, which had an immaterial effect on earnings per share. In earlier periods, earnings per share before and after		held, which resolved to implement a share split (14,000:1). The table above shows the number of shares and values after

During the period, former preference shares were converted to ordinary shares. Since no capital was raised in conjunction with this, the number of ordinary shares were adjusted retroactively, which had an immaterial effect on earnings per share. In earlier periods, earnings per share before and after dilution were affected by the dividend on preference shares. Formula for calculation of earnings per share: earnings per

share = (profit/loss for the period – dividend on preference shares)/average number of ordinary shares outstanding. On 24 November 2021, an Extraordinary General Meeting was held, which resolved to implement a share split (14,000:1). The table above shows the number of shares and values after the split was completed and comparative data have been updated correspondingly.

NOTE 5. SEGMENT REPORTING AND ALLOCATION OF REVENUE

Geographical market regions

• Nordic region Sweden, Denmark, Norway and Finland
• Europe Europe excluding the Nordic region
• Americas North America and South America
• Asia-Oceania Japan, South Korea, Australia, New Zealand and Rest of the world

Net sales by geographic region, continuing operations

Operating segments are accounted for in a way that is consistent with the internal reports submitted to the chief operating decision maker. Group management and the CEO have been identified as the chief operating decision makers for assessment of the Group's earnings and position, as well as making strategic decisions. Group management and the CEO monitor the financial development in the Group as a unit. Accordingly, only one segment is recognised, which corresponds with the Group's income statement. The reason that the Group is monitored as a segment is that earnings measures are only monitored at total level, since production			regions: • • • •	Geographical market regions Europe – Europe excluding the Nordic region Americas – North America and South America Zealand and Rest of the world			The Group's sales are divided into four geographical market Nordic region – Sweden, Denmark, Norway and Finland Asia-Oceania – Japan, South Korea, Australia, New Internal sales are conducted between the production companies and the local sales companies, as well as between the local sales companies. Sales and installations are mainly
and other overall costs are central for the Group and not distributed among the geographical market regions. Only the regions' sales and order intake in volume are monitored at a level lower than the operating segment.				conducted through resellers and our own local sales companies.
Net sales by geographic region, continuing operations
SEK million	2022	Q2 2021	Δ%	2022	Jan-Jun 2021	Δ%	Jan-Dec 2021
Nordic region	306	245	25	575	460	25	853
Europe	147	103	43	256	216	19	442
Americas
	38	27	41	67	49	37	115
Asia-Oceania	27	20	35	55	34	62	78
Total excl. foreign exchange Foreign exchange effect	518 16	395 -	31 -	953 28	759 -	25 -	1,488 -

NOTE 6. DISCONTINUED OPERATIONS

NOTE 6. DISCONTINUED OPERATIONS
At an Extraordinary General Meeting on 24 November 2021, a					International AB was remeasured in the Group, resulting in a
resolution was passed on a distribution in kind of 100 per cent					positive effect of SEK 36 million for full-year 2021. Details of
of the Group's holding in Mähler International AB, which					the assets and liabilities distributed and the calculation of
accounted for 10 per cent of the Group's net sales during					profit or loss from the distribution in kind are reported below.
2021. The distribution was carried out in order to streamline					The result from the discontinued operations, which was
the Group's operations. In accordance with IFRIC 17, Mähler		included in earnings for 2021, is specified below.
	Q2		Jan-Jun		Jan-Dec
SEK million	2022	2021	2022	2021	2021
Net sales	-	25	-	57	137
Expenses	-	-25	-	-55	-127
Profit/loss before tax	-	-0	-	2	10
Income tax	-	-	-	-	-2
Profit on disposal of discontinued operations	-	-	-	-	36

NOTE 7. INCENTIVE PROGRAMS

At an Extraordinary General Meeting in 2021, the Board resolved to introduce a long-term incentive program in the form of a warrant program for employees in the engcon Group. The purpose of the program is to encourage broadbased share ownership amongst the company's employees, facilitate recruitment, maintain competent employees, increase the alignment of interests between the employees and the company's shareholders and increase motivation to reach or exceed the company's financial targets. As of 30 June, 231 employees were participating in the warrant program. A total of 1,517,880 warrants were

NOTE 8. RELATED-PARTY TRANSACTIONS

The company's principal owners, Ommapo Förvaltning AB and Monen Holding AB, which are also principal owners of Mähler International AB, had transactions with engcon AB during the quarter through Mähler International AB. The value of the transactions amounted to SEK 5.5 million (4.3) issued, of which 1,336,785 were subscribed for. Each warrant entitles the holder to subscribe for one share in engcon at an agreed future price. Warrants are conditional on a vesting period of five years. To participate in this program, employees encompassed by the program pay a premium that is based on the fair value of allotted warrants that are measured in accordance with the Black & Scholes model. Therefore, for this program, no cost is recognised during the vesting period since employees have paid the fair value.

and mainly comprised products. In addition to these transactions, Ommapo Förvaltning AB delivered services to engcon AB for KSEK 180 (119) and Monen Holding AB delivered services for KSEK 10 (13). All transactions were conducted at market value.

NOTE 9. EVENTS AFTER THE BALANCE SHEET DATE

No significant events occurred after the balance sheet date

QUARTERLY OVERVIEW

QUARTERLY OVERVIEW
	2022		2021
	Q2	Q1	Q4	Q3	Q2	Q1
Income statement
Net sales, SEK million	534	447	370	359	395	364
Gross profit, SEK million	227	181	147	158	167	154
Gross margin, %	42.5	40.5	39.7	44.0	42.3	42.3
Operating profit, SEK million	99	91	77	91	83	74
Operating margin, % Profit/loss for the period from continuing operations,	18.5	20.4	20.8	25.3	21.0	20.3
SEK million	82	74	75	74	63	57
Balance sheet
Non-current assets, SEK million	273	260	225	274	281	274
Other current assets, SEK million	757	750	560	659	600	566
Cash and cash equivalents, SEK million	29	60	228	180	152	242
Total assets, SEK million	1,059	1,070	1,013	1,113	1,033	1,082
Equity, SEK million	334	338	613	629	552	621
Interest-bearing liabilities, SEK million	332	344	122	130	135	130
Non-interest-bearing liabilities, SEK million	393	388	278	354	346	331
Total equity and liabilities, SEK million	1,059	1,070	1,013	1,113	1,033	1,082
Cash flow
Cash flow from operating activities, SEK million	92	5	40	36	53	40
Cash flow from investing activities, SEK million	-11	-12	1	-1	-4	-3
Cash flow from financing activities, SEK million	-111	-156	-3	-8	-140	-5
Cash flow for the period, SEK million	-30	-163	38	27	-91	32
Key performance indicators
Order intake, SEK million	519	584	774	341	431	421
Net sales growth, %	19.5	22.8	n/a	n/a	n/a	n/a
Net debt (+) / Net cash (-), SEK million	303	284	-106	-50	-17	-112
Net debt/Net cash through EBITDA	0.7	n/a	n/a	n/a	n/a	n/a
Equity/assets ratio, %	31.5	31.6	60.5	56.5	53.4	57.4
Return on capital employed, %	57.5	50.5	47.8	n/a	n/a	n/a
Interest coverage ratio, multiple	388.0	n/a	n/a	n/a	n/a	n/a
Average number of full-time employees	376	366	345	345	314	304
Share data
Basic and diluted earnings per share (continuing				0.48
operations), SEK	0.47	0.48	0.49		0.41	0.37

ALTERNATIVE PERFORMANCE MEASURES AND FINANCIAL DEFINITIONS

Estimates¹

ALTERNATIVE PERFORMANCE MEASURES AND
FINANCIAL DEFINITIONS
This interim report contains references to a number of earnings measures (performance measures). Some of these					comprise a complement to assist investors and company management in analysing the operations. Below is a report on
performance measures are defined in IFRS, while others are alternative performance measures that are not recognised in accordance with applicable frameworks for financial reporting or other legislation. These alternative performance measures		their use.			the reconciliation of alternative performance measures and definitions of performance measures with a motivation for
Estimates¹
	Q2		Jan-Jun		Jan-Dec
	2022	2021	2022	2021	2021
Equity/asset ratio Equity, SEK million	334	552	334	552	613
Total assets, SEK million	1,059	1,033	1,059	1,033	1,013
Equity/assets ratio, %	31.5	53.4	31.5	53.4	60.5
Gross margin
Gross profit, SEK million	227	167	408	321	626
Net sales, SEK million	534	395	981	759	1,488
Gross margin, %	42.5	42.3	41.6	42.3	42.1
Operating margin Operating profit, SEK million
Net sales, SEK million	99	83	190	157	325
Operating margin, %	534 18.5	395 21.0	981 19.4	759 20.7	1,488 21.8
Net debt (-) / Net cash (+)
Non-current borrowing (+), SEK million	8	12	8	12	8
Current borrowing (+), SEK million	60	74	60	74	67
Non-current lease liabilities (+), SEK million	60	38	60	38	36
Current lease liabilities (+), SEK million	18	11	18	11	11
Bank overdraft facilities (+), SEK million	186	n/a	186	n/a	n/a
Cash and cash equivalents (-), SEK million	-29	-152	-29	-152	-228
Net debt (+) / Net cash (-), SEK million	303	-17	303	-17	-106
EBITDA
Operating profit, RTM, SEK million	388	n/a	388	n/a	341
Interest expenses, RTM, SEK million	1	n/a	1	n/a	2
Depreciations, RTM, SEK million EBITDA	39 428	n/a n/a	39 428	n/a n/a	32 375
Net debt (+) / Net cash (-) /EBITDA
Net debt (+) / Net cash (-), SEK million	303	n/a	303	n/a	-106
Operating profit, SEK million	428	n/a	428	n/a	375
Net debt (+) / Net cash (-), SEK million/EBITDA	0.7	n/a	0.7	n/a	-0.3
Interest coverage ratio, multiple
Operating profit, RTM, SEK million	358	n/a	358	n/a	325
Financial income, RTM, SEK million	30	n/a	30	n/a	17
Summa	388	n/a	388	n/a	342
Interest expense, past 12 months, SEK million	1	n/a	1	n/a	2
Interest coverage ratio, multiple	388	n/a	388	n/a	171
¹ The performance measures for 2021 include assets and liabilities for discontinued operations.
Interim Report January – June 2022		20

Estimates (continued)¹

Estimates (continued)¹
	Q2 2022	2021	Jan-Jun 2022	2021	Jan-Dec 2021
Organic growth in order intake
Net sales for the preceding period	431	421	851	n/a	1,114
Change in net sales, organic %	16.0	n/a	25.5	n/a	n/a
Change in net sales, currency, %	4.4	n/a	4.1	n/a	n/a
Order intake for the preceding period	519	431	1,103	851	1,967
Change in order intake, %	20.4	2.4	29.6	n/a	76.6
Net sales and organic net sales growth
Net sales for the preceding period	447	364	759	n/a	1,077
Change in net sales, organic %	19.4	n/a	25.6	n/a	n/a
Change in net sales, currency, %	0.1	n/a	3.6	n/a	n/a
Net sales for the current period	534	395	981	759	1,488
Change in net sales, %	19.5	8.5	29.2	n/a	38.2
Return on capital employed
Profit/loss before tax, past 12 months, SEK million	388	n/a	388	n/a	341
Interest expense, past 12 months, SEK million Profit/loss before tax plus interest expenses, past 12 months,	1	n/a	1	n/a	2
SEK million	389	n/a	389	n/a	343
Capital employed at the beginning of the period, SEK million	687	n/a	687	n/a	699
Capital employed at the end of the period, SEK million	666	687	666	687	735
Capital employed, average, SEK million	677	n/a	677	n/a	717
Return on capital employed, %	57.5	n/a	57.5	n/a	47.8
Capital employed
Balance sheet total, SEK million	1,059	1,033	1,059	1,033	1,013
Less: non-interest-bearing liabilities
Deferred tax liabilities, SEK million	n/a	-12	n/a	-12	n/a
Provisions for product warranties, SEK million	-30	-22	-30	-22	-23
Accounts payable, SEK million	-148	-148	-148	-148	-94
Current tax liabilities, SEK million	-72	-36	-72	-36	-61
Derivatives, SEK million	-15	n/a	-15	n/a	n/a
Other liabilities, SEK million	-44	-37	-44	-37	-34
Accrued expenses and deferred income, SEK million	-84	-91	-84	-91	-66
Capital employed, SEK million	666	687	666	687	735

Definitions

Key performance indicators	Definition	Explanation
Return on capital employed	Pre-tax profit plus interest expenses as a percentage of average capital employed, rolling 12 months.	Return on capital employed is a profitability measure used to put earnings in relation to the capital required to conduct operations.
EBITDA	Operating profit before interest and taxes and amortisation of intangible assets and depreciation of tangible assets.	EBITDA is used to facilitate comparisons and assessments of the company's cash flow.
Gross margin	Gross profit divided by net sales.	Gross margin is used to measure product profitability.
Average number of employees	Average number of full-time employees during the reporting period.	Non-financial performance measure.
Net debt (+) / Net cash (-)	Defined as interest-bearing debt minus cash and cash equivalents and certain other financial assets. Interest-bearing debt includes liabilities to credit institutions and lease liabilities.	To ensure that engcon has a stable financing structure and can meet its financial commitments in accordance with its loan agreements.
Net debt (+) / Net cash (-) through EBITDA	Defined as interest-bearing debt minus cash and cash equivalents and certain other financial assets through EBITDA. Interest-bearing debt includes liabilities to credit institutions and lease liabilities.	To ensure that engcon has a stable financing structure and can meet its financial commitments in accordance with its loan agreements.
Order intake	Total order intake during the period calculated in the same way as net sales.	Order intake provides an indication of the current demand for the Group's products and services, which becomes apparent in net sales with varying delays.
Organic net sales growth	Change in net sales as a percentage of net sales during the comparative period in the preceding year for the companies that were part of the Group for the entire comparative period and the current period, excluding translation effects from exchange-rate differences.	Relevant measure for the assessment of the company's capacity to create growth through volume, price and product/service offering in operating activities.
Organic growth in order intake	Organic growth in order intake is growth in order intake excluding translation effects from exchange-rate differences, as well as acquisitions and divestments.	It provides an understanding for the Group's order intake, which is driven by changes in volume, price and product/service offering.
Earnings per share	Earnings per share for the period, in SEK, attributable to the Parent Company shareholders, in relation to the weighted average number of shares before and after dilution.	Performance measures in accordance with IFRS.
Interest coverage ratio	EBIT plus financial income through interest expenses.	To ensure that engcon has a stable financing structure and can meet its financial commitments in accordance with its loan agreements.
Operating profit (EBIT)	Earnings before interest and taxes.	Enables comparisons of profitability regardless of capital structure or tax situation.
Operating margin (EBIT margin)	Operating profit divided by net sales.	The EBIT margin is used to measure operational profitability.
Equity/assets ratio	Equity including non-controlling interests divided by total assets.	A key measurement for the assessment of the company's financial stability.
Capital employed	Total assets less non-interest-bearing liabilities.	Capital employed shows the proportion of the company's assets that are financed by capital requiring returns.

EXCHANGE RATES

ABOUT ENGCON

Business operations

engcon AB is the leading global manufacturer of tiltrotators with accessories, which enhance excavators' profitability, effectiveness, flexibility, safety and sustainability. Under our own brand, we offer a unique overall solution that transforms an excavator into a tool carrier that can replace several other machines.

engcon focuses on an attractive market niche, where our products contribute to changing the conditions for digging by ensuring the sustainable and responsible use of resources. From the beginning, we have formed close relationships with end users of our products, with the aim of optimising their everyday work.

We address the market through our 13 local sales companies and through an established network of resellers. With our slightly more than 400 employees, engcon is currently active in 16 markets. The head office is located in Strömsund, in northern Sweden, and this is also the location of our largest production facility. We also have a production facility in Niepruszewo, Poland.

Our vision

Change the world of digging.

Our mission

To become the world's leading, independent manufacturer of advanced attachments for excavators worldwide.

13 local sales companies

400+ employees

SEK 1.5 billion in net sales in 2021

engcon AB | Corp. Id. No. 556647-1727 | Registered office: Strömsund Municipality, Jämtland County Head office: Godsgatan 6, SE-833 36 Strömsund, Sweden | Tel: +46 670 178 00 | www.engcongroup.com