Bergman & Beving

Annual Report • May 16, 2019

Financial Report 1 April 2018-31 March 2019

Fourth quarter (1 January-31 March 2019)

• Revenue amounted to MSEK 995 (960).
• EBITA increased by 8 percent to MSEK 57 (53), corresponding to an EBITA margin of 5.7 percent (5.5).
• Operating profit amounted to MSEK 54 (51), corresponding to an operating margin of 5.4 percent (5.3).
• Net profit totalled MSEK 38 (40).
• Earnings per share amounted to SEK 1.40 (1.50).

12 months (1 April 2018-31 March 2019)

• Revenue amounted to MSEK 3,945 (3,833).
• EBITA increased by 11 percent to MSEK 249 (224), corresponding to an EBITA margin of 6.3 percent (5.8).
• Operating profit amounted to MSEK 236 (216), corresponding to an operating margin of 6.0 percent (5.6).
• Net profit totalled MSEK 169 (158).
• Earnings per share amounted to SEK 6.25 (5.70).
• The return on working capital (P/WC) was 22 percent (20).
• Cash flow from operating activities totalled MSEK 258 (109).
• The Board proposes a dividend of SEK 3.00 per share (2.50).

Significant events since the start of the operating year

• Five acquisitions have been completed, two of which after the end of the period, with total annual revenue of approximately MSEK 210.
• In accordance with a resolution by Bergman & Beving's Annual General Meeting on 23 August 2018, the number of Class B shares outstanding was reduced by 1,000,000.
• The Nomination Committee proposes to elect Jörgen Wigh as new Chairman of the Board of Bergman & Beving AB.

	3 months			Full-year
Continuing operations MSEK	Jan-Mar 2019	Jan-Mar 2018	∆ %	Apr 2018- Mar 2019	Apr 2017- Mar 2018	∆ %
Revenue	995	960	4	3,945	3,833	3
EBITA	57	53	8	249	224	11
EBITA margin, percent	5.7	5.5		6.3	5.8
Net profit (after taxes)	38	40	-5	169	158	7
Earnings per share before dilution, SEK	1.40	1.50	-7	6.25	5.70	10
Earnings per share after dilution, SEK	1.40	1.50	-7	6.25	5.70	10
P/WC, percent				22	20
Equity/assets ratio, percent				43	43
Number of employees at the end of the period	1,031	1,028	0	1,031	1,028	0

CEO's comments

Earnings improvement and growth initiatives

The year ended with improved earnings and the development of both the earnings and the operating margin have been positive in every quarter of the year. The year's earnings growth amounted to 11 percent with an EBITA margin of 6.3 percent. It was encouraging to see that the year's cash flow from operating activities totalled MSEK 258.

The fourth quarter is normally a weak quarter in terms of seasonal effects. The demand from industrial customers in the Swedish Market remained good, while a lower level of activity in the construction market was reflected in a cautious attitude among our customers. The demand from the industrial market as well as the construction market in Norway were stable. Our dependency on the TOOLS chain was gradually reduced during the year, which resulted in a more balanced customer structure.

We continued to implement our strategy of making targeted investments in product development, sales and marketing of our strong brands. Both our revenue and share of proprietary product brands grew. Our focus on broadening the customer base intensified and sales to new customers and markets increased. Sales in the Workplace Safety division were favourable with a temporary negative margin impact due to targeted growth initiatives. The international expansion investments in the Building Materials division developed positively which somewhat counteracted the cautiousness in the Swedish market. At the same time, I am very pleased to see that the ongoing changes within the Tools & Consumables division have been successful and the division's earnings have improved significantly. Overall, we are not satisfied with the result level and continue the work with focus on improved profitability balanced with investments for growth.

During the year, we completed three acquisitions with an annual business volume of approximately MSEK 90. After the end of the period, we acquired two leading brands, KGC and Millers, with an annual business volume of approximately MSEK 120. We also entered into a strategic partnership with Sundström Safety. Acquisitions remain an important part of our growth strategy and we see many opportunities to acquire attractive companies in the future, not least given our strong financial position and cash flow.

Finally, I would like to extend my sincere thanks to all our dedicated employees for your excellent work during the year and welcome our new employees to Bergman & Beving.

Stockholm, May 2019

Pontus Boman President & CEO

Profit and revenue

Fourth quarter (Jan-Mar 2019)

Revenue rose by 4 percent to MSEK 995 (960). For comparable units, revenue declined by 1 percent in local currency and acquisitions increased revenue by 3 percent. Exchange-rate fluctuations had a positive impact of 2 percent on revenue.

Revenue from proprietary product brands increased and the share grew. Our investments in the Company's brands and our focus on broadening the customer portfolio intensified and sales to new customers increased. The gross margin strengthened and earnings improved.

EBITA for the fourth quarter amounted to MSEK 57 (53), corresponding to an EBITA margin of 5.7 percent (5.5).

Profit after financial items totalled MSEK 48 (45) and net profit amounted to MSEK 38 (40), corresponding to earnings per share of SEK 1.40 (1.50).

12 months (Apr 2018-Mar 2019)

Revenue rose by 3 percent to MSEK 3,945 (3,833). For comparable units, revenue declined by 2 percent in local currency and acquisitions increased revenue by 2 percent. Exchange-rate fluctuations had a positive impact of 3 percent on revenue.

EBITA for the period amounted to MSEK 249 (224), corresponding to an EBITA margin of 6.3 percent (5.8).

Profit for the first quarter previous year was impacted positively by items affecting comparability amounting to MSEK 2.

Profit after financial items totalled MSEK 216 (192) and net profit amounted to MSEK 169 (158), corresponding to earnings per share of SEK 6.25 (5.70).

Performance by division

	3 months			Full-year
Continuing operations	Jan-Mar	Jan-Mar		Apr 2018-	Apr 2017-
MSEK	2019	2018	∆ %	Mar 2019	Mar 2018	∆ %
Revenue
Building Materials	275	270	2	1,055	1,009	5
Workplace Safety	335	312	7	1,355	1,317	3
Tools & Consumables	397	378	5	1,579	1,504	5
Group-wide/eliminations	-12	0		-44	3
Total revenue	995	960	4	3,945	3,833	3
EBITA
Building Materials	20	25	-20	88	92	-4
Workplace Safety	21	27	-22	118	103	15
Tools & Consumables	20	4	400	62	22	182
Group-wide/eliminations	-4	-3		-19	7
Total EBITA	57	53	8	249	224	11
EBITA margin, percent
Building Materials	7.3	9.3		8.3	9.1
Workplace Safety	6.3	8.7		8.7	7.8
Tools & Consumables	5.0	1.1		3.9	1.5
Total EBITA margin	5.7	5.5		6.3	5.8

Building Materials

Building Materials' revenue for the quarter increased by 2 percent to MSEK 275 (270) and EBITA amounted to MSEK 20 (25). Revenue for the full year rose by 5 percent to MSEK 1,055 (1,009) and EBITA totalled MSEK 88 (92). Profit for the full preceding year was impacted negatively by items affecting comparability of approximately MSEK 2.

Demand from customers in the construction sector in Sweden remained cautious as a result of a lower activity level and with increased price competition. The trend in the Norwegian market remained stable and the investment in international expansion had a positive effect. Profit was impacted negatively by a changed customer mix. Demand from shipyard customers continued to increase from a lower-than-normal level.

Workplace Safety

Workplace Safety's revenue for the quarter rose by 7 percent to MSEK 335 (312) and EBITA amounted to MSEK 21 (27). Revenue for the full year rose by 3 percent to MSEK 1,355 (1,317) and EBITA totalled MSEK 118 (103). Profit for the full preceding year was impacted negatively by items affecting comparability of approximately MSEK 9.

Demand for personal protective equipment in the market remained favourable and the establishment of our strong brands as independent units had a positive impact on revenue. The result was affected by start-up costs when introducing new customer contracts, investments for international expansion and a weaker Swedish krona.

Tools & Consumables

Tools & Consumables' revenue for the quarter rose by 5 percent to MSEK 397 (378) and EBITA totalled MSEK 20 (4). Revenue for the full year rose by 5 percent to MSEK 1,579 (1,504) and EBITA totalled MSEK 62 (22). Profit for the full preceding year was impacted negatively by items affecting comparability of approximately MSEK 12.

Demand from industrial customers within our primary markets remained at a high level. The measures implemented in the subsidiary Luna continued to generate positive results and efforts to improve profitability went according to plan. The other units in the division reported favourable earnings trends and strengthened their margins, while acquired units performed as expected.

Group-wide and eliminations

Group-wide expenses and eliminations for the fourth quarter amounted to MSEK -4 (-3). Group-wide expenses and eliminations for the full year amounted to MSEK -19 (7). Profit for the full preceding year was impacted positively by items affecting comparability of approximately MSEK 24.

The Parent Company's revenue for the full year amounted to MSEK 30 (25) and profit after financial items to MSEK 28 (17). The item "Appropriations" includes Group contributions received in a net amount of MSEK 50 (-24).

Employees

At the end of the period, the number of employees in the Group amounted to 1,031, compared with 1,028 at the beginning of the financial year. The operations were streamlined by 22 employees during the period, while 25 employees were gained via acquisitions.

Corporate acquisitions

In early April, the Building Materials division acquired all shares in BVS Brannvernsystemer A/S (BVS) and its group companies. BVS is a provider of passive fire protection solutions focusing on fire curtains, smoke ventilation and inspection hatches under its own brand names Flammatex and Inspecto. The business is primarily aimed at the Norwegian market, but the company also has a sales company in Sweden and own production in Hungary. The company, based in Stavanger, generates annual revenue of approximately MNOK 20 and has 15 employees.

In early May, the Tools & Consumables division acquired all shares in Belano Maskin AB (Belano). Belano is a leading supplier of machinery, spare parts and service focused on the attractive niche of construction and ventilation sheet-metal workers. The business is primarily aimed at the Swedish market. The company, based in Alingsås, generates annual revenue of approximately MSEK 65 and has ten employees.

During the third quarter, a minor company within weighing was acquired.

The following analysis has been finalised.

Fair value of acquired assets and liabilities	MSEK
Customer relations	32
Other non-current assets	2
Other assets	36
Deferred tax liability, net	7
Non-current liabilities	2
Current liabilities	11
Acquired net assets	50
Goodwill	39
Purchase consideration paid for shares	86
Additional purchase consideration Less: Cash and cash equivalents in acquired	3
companies	-18
Net change in cash and cash equivalents	-68

The acquisitions are expected to have a marginally positive impact on Bergman & Beving's earnings per share for the 2018/2019 operating year.

Acquisition-related transaction costs, which are reported among other operating expenses in the income statement, amount to MSEK 0. The additional purchase price is conditional and is calculated to a maximum of MSEK 10.

		Rev.	No. of
Acquisition Closing		MSEK*	empl.*	Division
BVS,	April			Building
Norway	2018	22	15	Materials
Belano,	May			Tools &
Sweden	2018	65	10	Consumables
B&O Vågar,	Nov			Tools &
Sweden	2018	3	0	Consumables

* Refers to the situation assessed on a full-year basis on the date of acquisition.

Profitability, cash flow and financial position

Profitability, measured as the return on working capital (P/WC), amounted to 22 percent (20). The return on capital employed was 9 percent (8 at the beginning of the year) and the return on equity was 11 percent (9 at the beginning of the year).

Cash flow from operating activities for the full year amounted to MSEK 258 (109), with cash flow for the yearearlier period including discontinued operations. Working capital remained essentially unchanged compared to the previous year. During the full year, the Group's inventories increased by MSEK 52 and operating receivables increased by MSEK 24 in the same time as the operating liabilities rose by MSEK 74.

Cash flow for the financial year was impacted in an amount of MSEK -80 (-5) pertaining to investments and divestments of non-current assets and an amount of MSEK -68 (-191) pertaining to acquisitions and divestments of operations. The slightly higher rate of investment in the fourth quarter was primarily attributed to investments in ecommerce, digitisation and product development.

The Group's operational net loan liability at the end of the period amounted to MSEK 356 (370), excluding pension obligations of MSEK 646 (623). Cash and cash equivalents, including unutilised granted credit facilities, totalled MSEK 444 (530).

The equity/assets ratio was 43 percent (43 percent at the beginning of the year).

Equity per share amounted to SEK 61.35, compared with SEK 56.10 at the beginning of the year. Equity per share after dilution totalled SEK 61.35, compared with SEK 56.15 at the beginning of the year.

The Swedish tax rate, which is also the Parent Company's tax rate, was 22 percent. The Group's weighted average tax rate, with its current geographic mix, was approximately 22 percent. In June, the Swedish Riksdag passed a proposal concerning new tax rules, including interest deduction restrictions and a two-stage reduction in corporate tax to 20.6 percent by 2021. As a result of the reduced tax rate, deferred tax assets and tax liabilities have been remeasured. This remeasurement resulted in an accounting tax expense of approximately MSEK 1.

Share structure and repurchase of shares

At the end of the financial year, share capital totalled MSEK 56.9. In accordance with a resolution by Bergman & Beving's Annual General Meeting on 23 August 2018, the number of Class B shares outstanding was reduced by 1,000,000. The distribution by class of share is as follows.

SHARE STRUCTURE

Class of share	No. of shares	No. of votes	% of capital	% of votes
Class A shares, 10 votes per share	1,062,436	10,624,360	3.9	28.7
Class B shares, 1 vote per share Total number of shares before	26,373,980	26,373,980	96.1	71.3
repurchasing	27,436,416	36,998,340	100.0	100.0
Of which, repurchased Class B shares Total number of shares after	-426,706		1.6	1.2
repurchasing	27,009,710

The share price as of 31 March 2019 was SEK 106.60. The average number of treasury shares was 859,583 during the period and 426,706 at the end of the period. The average purchase price for the repurchased shares was SEK 92.83 per share.

CALL OPTION PROGRAMMES

Outstanding programmes	No. of options	Corresponding no. of shares	% of total shares	Redemption price	Redemption period
Call option programme 2017/2021	160,000	160,000	0.6%	118.10	14 Sep 2020-11 Jun 2021
Call option programme 2018/2022	210,000	210,000	0.8%	117.90	13 Sep 2021-10 Jun 2022

Call options issued for repurchased shares did not result in any dilution effect over the most recent 12-month period.

The Annual General Meeting

The Annual General Meeting (AGM) of Bergman & Beving AB will be held on Thursday, 26 August 2019, at 2:00 p.m. at IVA in Stockholm, Grev Turegatan 16. The notice of the AGM will be published in July 2018 and will be available at www.bergmanbeving.com. The Board proposes a dividend of SEK 3.00 per share (2.50), corresponding to a dividend of MSEK 81 (68). The Board also proposes that the AGM renew the mandate to repurchase own shares corresponding to a maximum of 10 percent of all shares in the Company.

Events after the end of the financial year

On April 1, Bröderna Miller AB was acquired to the Building Materials division. Bergman & Beving acquires only the hardware fitting business, while the owner family Miller continues to run the bathroom business. The company is one of the leaders in hardware fittings in Sweden and sells most of the products as its own brand "Miller's". The acquired business has a turnover of approximately SEK 40 million per year and has about 10 employees.

On April 10, KGC Verktyg & Maskiner AB was acquired to the Building Materials division. 60 years developed and delivered quality tools and accessories for bricklayers and tilers in its own brand KGC. The business has a turnover of approximately SEK 80 million per year and has 24 employees.

On May 7, the Division Workplace Safety and Sundström Safety AB established the jointly owned company Zekler Safety AB with Bergman & Beving as majority shareholder. The Zekler brand was established by Bergman & Beving in 2003 and is today one of the Nordic region's leading brands in, among other things, eye protection, hearing protection, and respiratory protection. Sundström was founded in 1926 and is today one of the world leaders in advanced respiratory protection.

The Nomination Committee proposes to elect Jörgen Wigh as new Chairman of the Board of Bergman & Beving AB.

No other significant events occurred after the end of the financial year.

Stockholm, 16 May 2019

Pontus Boman President & CEO

This report has not been subject to special review by the Company's auditors.

Other information

Publication

The information in this report is such that Bergman & Beving AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out below, at 7:45 a.m. CET on 16 May 2019.

Dates for forthcoming financial information

Interim Report 1 April-30 June 2019 will be published on 17 July at 7:45 a.m.

The 2019 Annual General Meeting will be held at IVA, Grev Turegatan 16 in Stockholm on 26 August at 2:00 p.m.

Interim Report 1 April-30 September 2019 will be published on 25 October at 7:45 a.m.

Interim Report 1 April-31 December 2019 will be published on 7 February 2020 at 7:45 a.m.

The 2018/2019 Annual Report will be published on Bergman & Beving's website in July.

Contact information

Pontus Boman, President & CEO, Tel: +46 10 454 77 00 Peter Schön, CFO, Tel: +46 70 339 89 99

Visit www.bergmanbeving.com to download reports and press releases.

Reporting by quarter

	2018/2019			2017/2018
MSEK	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1
Revenue
Building Materials	275	227	251	302	270	209	244	286
Workplace Safety	335	369	300	351	312	349	291	365
Tools & Consumables	397	418	378	386	378	397	367	362
Group-wide/eliminations	-12	-20	-10	-2	0	-1	0	4
Total revenue	995	994	919	1,037	960	954	902	1,017
EBITA
Building Materials	20	12	21	35	25	6	23	38
Workplace Safety	21	36	27	34	27	39	22	15
Tools & Consumables	20	22	18	2	4	15	18	-15
Group-wide/eliminations	-4	-6	-2	-7	-3	-5	-3	18
Total EBITA	57	64	64	64	53	55	60	56
EBITA margin, percent
Building Materials	7.3	5.3	8.4	11.6	9.3	2.9	9.4	13.3
Workplace Safety	6.3	9.8	9.0	9.7	8.7	11.2	7.6	4.1
Tools & Consumables	5.0	5.3	4.8	0.5	1.1	3.8	4.9	-4.1
Total EBITA margin	5.7	6.4	7.0	6.2	5.5	5.8	6.7	5.5

Group summary

CONSOLIDATED INCOME STATEMENT	3 months		Full-year
	Jan-Mar	Jan-Mar	Apr 2018-	Apr 2017-
MSEK	2019	2018	Mar 2019	Mar 2018
Revenue	995	960	3,945	3,833
Other operating income	7	0	11	3
Total operating income	1,002	960	3,956	3,836
Cost of goods sold	-575	-557	-2,280	-2,196
Personnel costs	-198	-165	-744	-718
Depreciation, amortisation and impairment losses	-8	-6	-31	-25
Other operating expenses	-167	-181	-665	-681
Total operating expenses	-948	-909	-3,720	-3,620
Operating profit	54	51	236	216
Financial income and expenses	-6	-6	-20	-24
Profit after financial items	48	45	216	192
Taxes	-10	-5	-47	-34
Net profit	38	40	169	158
Net profit from discontinued operations	-	-	-	1,091
Net profit	38	40	169	1,249
Of which, attributable to Parent Company shareholders	38	40	169	1,249
Earnings per share before dilution, SEK	1.40	1.50	6.25	44.95
- of which, continuing operations	1.40	1.50	6.25	5.70
Earnings per share after dilution, SEK	1.40	1.50	6.25	44.90
- of which, continuing operations	1.40	1.50	6.25	5.70
Number of shares outstanding before dilution, '000	27,010	27,010	27,010	27,010
Weighted number of shares before dilution, '000	27,010	27,010	27,010	27,785
Weighted number of shares after dilution, '000	27,010	27,010	27,010	27,816

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

MSEK
Net profit	38	40	169	1,249
Remeasurement of defined-benefit pension plans	9	-7	-16	-59
Tax attributable to components that will not be reclassified	-2	2	3	13
Components that will not be reclassified to net profit	7	-5	-13	-46
Translation differences	11	10	5	-2
Fair value changes for the year in cash-flow hedges	-10	-8	5	-10
Tax attributable to components that will be reclassified	2	1	-1	2
Components that will be reclassified to net profit	3	3	9	-10
Other comprehensive income for the period	10	-2	-4	-56
Total comprehensive income for the period	48	38	165	1,193
Of which, attributable to Parent Company shareholders	48	38	165	1,193

CONSOLIDATED BALANCE SHEET

MSEK	31 March 2019	31 March 2018
Assets
Intangible non-current assets	1,681	1,569
Tangible non-current assets	99	88
Financial non-current assets	3	2
Deferred tax assets	79	81
Inventories	942	879
Accounts receivable	834	790
Other current receivables	127	157
Cash and cash equivalents	85	67
Total assets	3,850	3,633
Equity and liabilities
Equity	1,657	1,559
Non-current interest-bearing liabilities	175	130
Provisions for pensions	646	623
Other non-current liabilities and provisions	120	115
Current interest-bearing liabilities	266	307
Accounts payable	580	497
Other current liabilities	406	402
Total equity and liabilities	3,850	3,633
Operational net loan liability	356	370

CONSOLIDATED STATEMENT OF EQUITY ATTRIBUTABLE TO PARENT COMPANY SHAREHOLDERS

MSEK	31 March 2019	31 March 2018
Opening equity	1,559	2,724
Dividend	-68	-141
Exercise and purchase of options for repurchased shares	1	3
Repurchase of own shares	-	-118
Distribution of Momentum Group	-	-2,102
Total comprehensive income for the period	165	1,193
Closing equity	1,657	1,559

CONSOLIDATED CASH-FLOW STATEMENT	3 months		Full-year
MSEK	Jan-Mar 2019	Jan-Mar 2018	Apr 2018- Mar 2019	Apr 2017- Mar 2018
Operating activities before changes in working capital	40	21	260	125
Changes in working capital	-81	-42	-2	10
Cash flow from operating activities, discontinued operations	-	-	-	-26
Cash flow from operating activities	-41	-21	258	109
Investments in intangible and tangible assets	-30	-8	-80	-29
Proceeds from sale of intangible and tangible assets	0	0	0	24
Acquisition of businesses	2	-	-68	-208
Divestment of businesses	-	-	-	17
Investing activities, discontinued operations	-	-	-	-6
Cash flow before financing	-69	-29	110	-93
Financing activities	74	40	-94	-171
Financing activities, discontinued operations	-	-	-	268
Cash flow for the period	5	11	16	4
Cash and cash equivalents at the beginning of the period*	77	55	67	63*
Cash flow for the period	5	11	16	4
Exchange-rate differences in cash and cash equivalents	3	1	2	0
Cash and cash equivalents at the end of the period	85	67	85	67

* Includes cash and cash equivalents in discontinued operations

Compilation of key financial ratios

KEY FINANCIAL RATIOS	Full-year
MSEK	31 March 2019	31 March 2018
Revenue	3,945	3,833
EBITA	249	224
EBITA margin, percent	6.3	5.8
Operating profit	236	216
Operating margin, percent	6.0	5.6
Profit after financial items	216	192
Net profit	169	158
Profit margin, percent	5.5	5.0
Return on working capital (P/WC), percent	22	20
Return on capital employed, percent	9	8
Return on equity, percent	11	9
Operational net loan liability (closing balance)	356	370
Equity (closing balance)	1,657	1,559
Equity/assets ratio, percent	43	43
Number of employees at the end of the period	1,031	1,028
Key per-share data
Earnings, SEK	6.25	5.70
Earnings after dilution, SEK	6.25	5.70
Cash flow from operating activities, SEK	9.60	3,90*
Equity, SEK	61.35	56.10
Share price, SEK	106.60	84.70

* Key financial ratios refer to items including discontinued operations.

Parent Company summary

INCOME STATEMENT	3 months		Full-year
MSEK	Jan-Mar 2019	Jan-Mar 2018	Apr 2018- Mar 2019	Apr 2017- Mar 2018
Revenue	8	2	30	25
Other operating income	0	0	0	0
Total operating income	8	2	30	25
Operating expenses	-9	-9	-36	-38
Operating loss	-1	-7	-6	-13
Financial income and expenses	9	7	34	30
Profit after financial items	8	0	28	17
Appropriations	30	14	30	14
Profit before taxes	38	14	58	31
Taxes	-9	-3	-13	-7
Net profit	29	11	45	24

STATEMENT OF COMPREHENSIVE INCOME	3 months		Full-year
MSEK	Jan-Mar 2019	Jan-Mar 2018	Apr 2018- Mar 2019	Apr 2017- Mar 2018
Net profit	29	11	45	24
Fair value changes for the year in cash-flow hedges	-9	-9	6	-10
Taxes attributable to other comprehensive income	2	2	-1	2
Components that will not be reclassified to net profit	-7	-7	5	-8
Other comprehensive income for the period	-7	-7	5	-8
Total comprehensive income for the period	22	4	50	16

BALANCE SHEET

MSEK	31 March 2019	31 March 2018
Assets
Intangible non-current assets	0	0
Tangible non-current assets	0	0
Financial non-current assets	2,330	2,333
Current receivables	452	530
Cash and cash equivalents	0	0
Total assets	2,782	2,863
Equity, provisions and liabilities
Equity	1,332	1,349
Untaxed reserves	246	226
Provisions	40	44
Non-current liabilities	175	130
Current liabilities	989	1,114
Total equity, provisions and liabilities	2,782	2,863

Notes

1. Accounting policies

This Interim Report was prepared in accordance with IFRS and by applying IAS 34, Interim Financial Reporting, the Swedish Annual Accounts Act and the Swedish Securities Market Act. The Interim Report for the Parent Company was prepared in accordance with the Swedish Annual Accounts Act and the Swedish Securities Market Act, which conforms to the provisions detailed in RFR 2 Accounting for Legal Entities.

Bergman & Beving measures financial instruments at fair value or cost in the balance sheet depending on their classification. In addition to items in the financial net debt, financial instruments also include accounts receivable and accounts payable. According to IFRS 7, financial instruments measured at fair value in the balance sheet are included in level 2 of the fair value hierarchy. The carrying amounts for financial assets and liabilities correspond to fair value in all material respects.

The same accounting policies and bases of judgement have been applied in this Interim Report as in the Annual Report for 2017/2018 - with the exception of the changed accounting policies described below. Information is provided, in addition to the financial reports and its associated notes, also in other parts of the interim report.

For the current year, all figures in the income statement and balance sheet refer to continuing operations. In the comparative periods, all figures in the income statement and balance sheet refer to continuing operations unless otherwise stated. Momentum Group, which was distributed and listed in the first quarter of 2017, is reported as discontinued operations and thus included in certain key ratios in the comparative period.

New or amended accounting standards which take effect in 2018 or later

IFRS has issued new standards (IFRS 9 and IFRS 15) that took effect on 1 January 2018 and have been applied by Bergman & Beving as of 1 April 2018. IFRS has issued a new standard (IFRS 16) that took effect on 1 January 2019 and will be applied by Bergman & Beving as of 1 April 2019. These standards are described in more detail in Note 1 Accounting policies of the Annual Report for 2017/2018. A brief description of the effects for Bergman & Beving as of 1 April 2018 and 1 April 2019, respectively, is presented below.

IFRS 9 Financial instruments

Bergman & Beving's accounts receivable generally relate to customers with a good payment capacity, which is taken into account in the provision for expected credit losses. The new standard will entail no transition effects for Bergman & Beving in this respect and thus there is no need to adjust equity at the beginning of the 2018/2019 financial year.

Since Bergman & Beving applies hedge accounting according to the previous rules of IAS 39, the introduction of IFRS 9 is not expected to have any impact in this regard. Nor will the classification of financial instruments according to IFRS 9 have any impact on the Group's reporting. The new standard will thus have no impact on equity at the beginning of the 2018/2019 financial year.

IFRS 15 Revenue from Contracts with Customers

Bergman & Beving's revenue is mainly derived from sales of goods with a marginal share derived from sales of services. With respect to sales of both goods and services, risk and control are transferred to the buyer upon delivery. Sales are made on normal credit terms and Bergman & Beving does not offer any other financing. Bergman & Beving is always the principal during the supply process. Accordingly, revenue can be recognised immediately upon delivery. The new standard will entail no transition effects for Bergman & Beving and thus there is no need to adjust equity or accounting policies at the beginning of the 2018/2019 financial year.

IFRS 16 Leases

During 2018/2019, Bergman & Beving has prepared for the transition to the new IFRS 16 Leases. The leases in all of the Group's companies have been reviewed and evaluated, and system support for managing and reporting leases has been implemented. When the new standard takes effect for the Group on 1 April 2019, Bergman & Beving will apply the modified retrospective approach, which entails that the opening balance will be adjusted in an amount corresponding to the accumulated effect of the initial application of the standard on the initial application date and that comparative years will not be restated.

The lease liability is initially measured at the present value of the remaining leasing payments and the right-of-use asset for all leases is recognised in an amount corresponding to the lease liability adjusted for any prepaid and accrued lease payments recognised on 31 March 2019. The transition will have no impact on equity.

An incremental borrowing rate has been established for each country. The average incremental borrowing rate on 1 April 2019 amounted to approximately 3 percent.

The Group has chosen to exclude short-term leases with a term of 12 months or less and leases where the underlying asset has a low value (assets valued approximately SEK 50,000 or less when new). This primarily includes personal

computers, printers and other office equipment. For open-ended leases for office and warehouse premises, the Group has determined that a five-year time horizon can generally be used, even if the formal lease term is shorter than five years.

The Group has no material leases in which the Group is the lessor. Nor does the Group have any material finance leases.

The established lease portfolio includes approximately 600 leases and mainly comprises leases for offices, warehouse premises, company cars, warehouse vehicles and other warehouse equipment that are currently classified as operational. The total right-of-use asset and corresponding lease liability have been calculated at approximately MSEK 500 as of 1 April 2019.

Dividing the lease liability into depreciation and interest will have a marginally positive impact on operating profit (EBITA) and a marginally negative impact on net financial items. Tax is not affected. The balance-sheet total will increase as a result of increased non-current assets and net loan liability.

2. Revenue per geographic area

The Group primarily conducts operations in Sweden, Norway and Finland and revenue presented for the geographic markets is based on the domicile of the customers.

	3 months		Full-year
MSEK	Jan-Mar 2019	Jan-Mar 2018	Apr 2018- Mar 2019	Apr 2017- Mar 2018
Sweden	406	390	1,633	1,692
Norway	302	286	1,151	1,042
Finland	76	74	325	336
Other countries	211	210	856	763
Revenue	995	960	3,945	3,833

3. Risks and uncertainties

During the financial year, no significant changes occurred with respect to risks and uncertainties, for either the Group or the Parent Company. For information about the Group's risks and uncertainties, refer to page 31 of Bergman & Beving's Annual Report for 2017/2018.

4. Transactions with related parties

No transactions having a material impact on the Group's position or earnings occurred between Bergman & Beving and its related parties during the financial year.

5. Alternative performance measures

Bergman & Beving AB uses certain financial performance measures in its analysis of the operations and their performance that are not calculated in accordance with IFRS. The Company believes that these performance measures provide valuable information for investors, since they enable a more accurate assessment of current trends when combined with other key financial ratios calculated in accordance with IFRS. Since listed companies do not always calculate these performance measures ratios in the same way, there is no guarantee that the information is comparable with other companies' performance measures of the same name.

Change in revenue

Comparable units refer to sales in local currency from units that were part of the Group during the current period and the entire corresponding period in the preceding year.

	3 months		Full-year
Percentage change in revenue for:	Jan-Mar 2019	Jan-Mar 2018	Apr 2018- Mar 2019	Apr 2017- Mar 2018
Comparable units in local currency	-0.8	-7.0	-2.0	-7.9
Currency effects	1.6	0.4	2.5	0.2
Acquisitions/divestments	2.8	5.7	2.4	7.6
Total – change	3.6	-0.9	2.9	-0.1

EBITA

Operating profit for the period before impairment of goodwill and amortisation and impairment of other intangible assets in connection with corporate acquisitions and equivalent transactions.

	3 months		Full-year
MSEK	Jan-Mar 2019	Jan-Mar 2018	Apr 2018- Mar 2019	Apr 2017- Mar 2018
EBITA	57	53	249	224
Depreciation and amortisation in connection with acquisitions	-3	-2	-13	-8
Operating profit	54	51	236	216

Return on working capital (P/WC)

Bergman & Beving's profitability target is for each unit in the Group to achieve profitability of at least 45 percent, measured as EBITA (P) for the rolling 12-month period as a percentage of average 12 months' working capital (WC), defined as inventories plus accounts receivable less accounts payable.

MSEK	Apr 2018- Mar 2019	Apr 2017- Mar 2018
EBITA (P)	249	224
Average working capital (WC)
Inventories	898	883
Accounts receivable	737	730
Accounts payable	-513	-496
Total – average WC	1,122	1,117
P/WC, percent	22	20

6. Discontinued operations

On 14 June 2017, an Extraordinary General Meeting of Shareholders resolved to distribute all of Bergman & Beving's shares in Momentum Group to the shareholders of Bergman & Beving AB, meaning that for each Class A share in Bergman & Beving the shareholders received one Class A share in Momentum Group and for each Class B share in Bergman & Beving the shareholders received one Class B share in Momentum Group. The first day of trading in Momentum Group shares on Nasdaq Stockholm took place on 21 June.

Profit from the discontinued operations amounted to MSEK 1,077, which pertains to the difference between the market value of Momentum Group AB of MSEK 2,102 (based on the average trading price on the first day of trading) and the consolidated value of MSEK 1,025. The consolidated value mainly pertained to goodwill and other current assets. The capital gain includes transaction costs of MSEK 16. For more information on discontinued operations, refer to Note 31 Discontinued operations in Bergman & Beving's Annual Report for 2017/2018.

INCOME STATEMENT

MSEK	2018/2019	2017/2018
Revenue	-	917
Other operating income	-	1
Total operating income	-	918
Cost of goods sold	-	-579
Personnel costs	-	-202
Depreciation, amortisation and impairment losses	-	-5
Other operating expenses	-	-114
Total operating expenses	-	-900
Operating profit	-	18
Profit from discontinued operations	-	1,077
Financial income	-	0
Financial expenses	-	-1
Net financial items	-	1,076
Profit after financial items	-	1,094
Taxes	-	-3
Net profit from discontinued operations	-	1,091
Earnings per share before dilution	-	39.25
Earnings per share after dilution	-	39.20
CASH-FLOW STATEMENT
MSEK	2018/2019	2017/2018
Cash flow from operating activities	-	-26
Cash flow from investing activities	-	-6
Cash flow from financing activities	-	268
Cash flow for the period, discontinued operations	-	236

7. Other definitions

Return on equity

Net profit for the rolling 12-month period divided by average equity.

Return on capital employed

Profit after financial items plus financial expenses for the rolling 12-month period divided by the average balance-sheet total less non-interest-bearing liabilities.

EBITA margin

EBITA for the period as a percentage of revenue.

Equity per share

Equity attributable to Parent Company shareholders divided by the weighted number of shares at the end of the period.

Cash flow per share

Cash flow for the rolling 12-month period from operating activities divided by the weighted number of shares.

Operational net loan liability

Interest-bearing liabilities excluding provisions for pensions less cash and cash equivalents.

Earnings per share

Net profit attributable to the Parent Company shareholders divided by the weighted number of shares.

Operating margin

Operating profit for the period as a percentage of revenue.

Equity/assets ratio

Equity as a percentage of the balance-sheet total.

Profit margin

Net profit after financial items as a percentage of revenue.

Weighted number of shares

Average number of shares outstanding before or after dilution. Shares held by Bergman & Beving are not included in the number of shares outstanding. Dilution effects arise due to call options that can be settled using shares in share-based incentive programmes. The call options have a dilution effect when the average share price during the period is higher than the redemption price of the call options.

Bergman & Beving in brief

• Bergman & Beving develops, acquires and markets leading brands for the manufacturing and construction sectors.
• The subsidiaries in the Group are operated with decentralised business responsibility, with a focus on simplicity, responsibility and freedom.
• We offer the subsidiaries financial resources and competence within brand development.
• Bergman & Beving currently comprises numerous strong brands for the manufacturing and construction sectors.
• Through our brands, we are represented in more than 25 countries with over 5,000 sales outlets.

Strategy

Bergman & Beving aims to be a leader in selected niches in the manufacturing and construction sectors, where its brands and high level of expertise are important differentiators.

Bergman & Beving strives to build and develop a portfolio comprising a wide variety of individual brands that achieve leading positions in their selected niches.

The following units/brands are included in the Company's divisions: