Garo

Quarterly Report • May 2, 2018

Interim Report January - March 2018

Continued high activity and solid profitability

• Net sales increased 14% to MSEK 207.0 (181.6).
• EBIT rose 6% to MSEK 25.1 (23.6).
• The EBIT margin amounted to 12.1% (13.0).
• Net income was MSEK 19.1 (18.5).
• Earnings per share amounted to SEK 1.91 (1.85).
• The equity ratio was 51.4% (50.8).
• New country CEO of GARO in Finland.

	Jan-Mar	Jan-Mar
MSEK	2018	2017	Change, %	R12*	2017
Net sales	207.0	181.6	14	821.4	796.0
EBIT	25.1	23.6	6	99.6	98.1
EBIT margin, %	12.1	13.0	-	12.1	12.3
Net income	19.1	18.5	3	86.2	85.6
Earnings per share	1.91	1.85	3	8.62	8.56
Cash flow from operating
activities	10.7	15.2	-30	47.0	51.5
Equity ratio, %	51.4	50.8	-	51.4	47.3
Return on equity, %	35.3	41.5	-	35.3	38.3
Net debt (-) / net cash position
(+)	53.1	15.1	252	53.1	56.1
*) Rolling 12 months, April 2017 - March 2018.

GARO develops, manufactures and supplies innovative products and systems for the electrical installations industry under its own brand. The company has operations in Sweden, Norway, Finland, Ireland, Northern Ireland and Poland, and the Group is organized in two business areas: GARO Sweden and GARO Other markets. GARO has a broad product assortment and is a market leader within several product areas. The Group had sales of approximately MSEK 796 in 2017 and has 394 employees. Its head office is located in Gnosjö.

1 The business concept is "with a focus on innovation, sustainability and design, GARO provides profitable complete solutions for the electrical industry."

CEO's comments on the quarter

GARO continued to perform positively with sales growth of 14% for the first quarter. Business area Sweden increased sales by 14% with a positive development in all product areas. Business area Other markets also grew by 14% due to a solid development of EV Charging as well as of electrical distribution products in general. A prolonged and relatively severe winter as well as an early Easter compared with the preceding year also resulted in lower activity in the Nordic markets in March. The market for electrical distribution products in Sweden increased by approximately 2% in the quarter.

EBIT for the quarter increased 6% to MSEK 25.1 and the EBIT margin amounted to 12.1% (13.0). EBIT was charged with the ongoing relocation of production to Poland resulting in temporarily lower productivity. Productivity in the Polish factory is expected to gradually increase in the second quarter as personnel are trained. The relocation of production also entailed a certain planned build-up of inventory to ensure our delivery capacity. This build-up of inventory acts as a buffer during the relocation and during the time the new personnel are trained. The inventory levels are expected to normalize after the relocation and training period.

Further marketing and product development investments have been made in the period. We also strengthened our organization in Finland and appointed a new country CEO in March who took over from the former CEO who has now retired.

Activity in the construction market remained high in Sweden, despite signals of a slight slowdown in housing construction. However, GARO's products are normally included at a late stage of construction projects, which is why we maintain a positive outlook regarding market conditions for 2018. We also see continued high activity in our other markets. We see a continued strong performance in the EV charging product area and the expansion of charging infrastructure in all markets.

Carl-Johan Dalin President and CEO

Group

Net sales

The Group's net sales for the first quarter of 2018 increased 14% to MSEK 207.0 (181.6) as a result of organic growth of 13%, including the acquisition of Emedius AB on February 28, 2017, which is now fully integrated into other operations. The acquisition of WEB-EL Försäljning AB on October 27, 2017 added 1% to growth.

Analysis of change in	Jan-Mar	Jan-Mar	Jan-Mar	Jan-Mar
net sales	2018(MSEK)	2018(%)	2017(MSEK)	2017(%)
Year-earlier period	181.6	-	149.6	-
Organic growth	23.9	13%	22.3	15%
Acquisitions and structural changes	0.9	1%	6.6	4%
Exchange-rate effects	0.6	-	3.1	2%
Current period	207.0	14%	181.6	21%

Activity in the market remained high in Sweden and Ireland in all product areas where GARO has a presence. The markets in Norway and Finland were generally favorable.

EBIT

EBIT increased 6% to MSEK 25.1 (23.6) and the EBIT margin amounted to 12.1% (13.0). The EBIT margin declined mainly as a result of increased costs in Poland related to the expansion of production. In addition, further investments have been made to strengthen GAROs market position and to increase the pace of product development.

GARO Group		Jan-Mar	Jan-Mar		Jan-Dec
Key figures		2018	2017	R12	2017
Net sales	MSEK	207.0	181.6	821.4	796.0
Growth	%	14	21	19	21
EBIT	MSEK	25.1	23.6	99.6	98.1
EBIT margin	%	12.1	13.0	12.1	12.3
Investments	MSEK	8.1	17.9	41.6	51.4
Depreciation	MSEK	3.7	2.6	13.3	12.2
Return on equity	%	35.3	41.5	35.3	38.3
Equity ratio	%	51.4	50.8	51.4	47.3
Number of employees		394	321	394	376

Net income

Net income for the first quarter amounted to MSEK 19.1 (18.5) and earnings per share amounted to MSEK 1.91 (1.85). Tax for the period was MSEK 5.2 (5.0) and the average effective tax rate for the Group was 21.4% (21.3).

Cash flow and investments

Cash flow from operating activities for the period amounted to MSEK 10.7 (15.2), as a result of a higher working capital, primarily from increased inventories. Investments during the quarter amounted to MSEK 8.1 (17.9).

Liquidity and financial position

The Group's net debt at the end of the period amounted to MSEK 53.1 compared with MSEK 15.1 for the year-earlier period and MSEK 56.1 at the end of 2017.

Available liquidity in the Group, including unutilized overdraft facilities, amounted to MSEK 88.2 (101.3) and the equity ratio was 51.4% (50.8).

Parent Company

The Parent Company's operations encompass a significant part of the Swedish operations and Group Management, as well as certain Group-wide functions and the Group's Finance function. Net sales for the Parent Company in the first quarter amounted to MSEK 119.5 (96.1), up 24%. Of this amount, MSEK 43.6 (28.4) comprised internal sales to other Group companies. EBIT amounted to MSEK 10.3 (7.7).

Operations and segments

GARO divides its operations into two business areas: Sweden and Other markets. The Sweden business area comprises the Swedish companies, and the Other markets business area comprises the companies in Norway, Poland, Ireland and Finland.

67% 33% Allocation of net sales by segment, Jan-Mar 2018 GARO Sverige GARO Övriga marknader GARO Sweden GARO Other Markets

Group Management comprises seven individuals and the functions of: President and CEO, CFO, IR Director, CMO, CTO, CTO, CEO GARO Norway and CEO GARO Ireland.

15% Allocation of net sales by product area, Jan-Mar 2018

GARO Sweden

Net sales and earnings

Net sales for GARO Sweden increased 14% to MSEK 138.6 (121.8) during the first quarter of 2018, with continued strong volume growth in all product areas.

EBIT was MSEK 17.5 (16.2) and the EBIT margin declined to 12.6% (13.3). A prolonged and relatively severe winter as well as an early Easter compared with the preceding year also resulted in lower activity in the market in March.

Product areas

The market for Electrical distribution products, in which GARO is represented among all major wholesalers, is estimated to have grown by approximately 2% during the quarter.

The Project business product area reported a solid performance for the quarter with a strong order intake. The Temporary electric installations product area also continued to grow, benefiting from high construction activity.

The EV charging product area reported continued healthy growth for the quarter. Another key milestone was passed in Sweden in March with more than 50,000 rechargeable cars. In 18 months, the number of rechargeable cars has doubled according to www.elbilsstatistik.se.

GARO Sweden		Jan-Mar	Jan-Mar		Jan-Dec
Key figures		2018	2017	R12	2017
Net sales	MSEK	138.6	121.8	560.5	543.7
Growth	%	14%	34%	25%	30%
EBIT	MSEK	17.5	16.2	65.8	64.5
EBIT margin	%	12.6%	13.3%	11.7%	11.9%
Investments	MSEK	3.3	14.3	16.2	27.2
Depreciation	MSEK	2.8	2.0	10.4	9.6
Number of employees		233	221	233	234

GARO Other markets

Net sales and earnings

Net sales for GARO Other markets increased 14% to MSEK 68.4 (59.8), with strong volume growth in EV charging in particular and healthy growth in construction-related areas.

EBIT amounted to MSEK 7.6 (7.4). The EBIT margin declined to 11.1% (12.4) mainly as a result of start-up costs for the expanded factory in Poland.

Countries

During the quarter, GARO Norway posted a positive trend in construction-related products. Growth in EV charging was high.

GARO Ireland continued to report a favorable increase in volumes and is following the positive trend in construction. GARO Finland reported a strong performance and a new country CEO was appointed in the quarter to take over from the former CEO who has now retired.

GARO Poland has successively increased production and sales. However, productivity was reduced due to the ongoing production relocation and staff training. Productivity in the Polish factory is expected to gradually increase in the second quarter as personnel are trained. The relocation of production also entailed a certain planned build-up of inventory to ensure delivery capacity. This buildup of inventory acts as a buffer during the relocation and during the time the new personnel are trained.

GARO Other markets		Jan-Mar	Jan-Mar		Jan-Dec
Key figures		2018	2017	R12	2017
Net sales	MSEK	68.4	59.8	260.9	252.3
Growth	%	14%	2%	9%	6%
EBIT	MSEK	7.6	7.4	33.8	33.6
EBIT margin	%	11.1%	12.4%	13.0%	13.3%
Investments	MSEK	4.8	3.6	25.4	24.2
Depreciation	MSEK	0.9	0.6	2.9	2.6
Number of employees		161	100	161	142

Accounting policies

This interim report has been prepared in accordance with IAS 34, Interim Financial Reporting and the Swedish Annual Accounts Act. The Parent Company's accounts were prepared in accordance with Chapter 9 of the Annual Accounts Act and the Swedish Financial Reporting Board's recommendation RFR 2.

IFRS 15 came into effect in 2018 and established new rules for determining performance obligations and transaction prices, and when a company is to recognize income. The standard replaced all previously issued standards and interpretations on income. The standard is based on the principle that income is to be recognized when the company satisfies a performance obligation by transferring a good or service to a customer, meaning that the control has been passed to the customer. This can take place over time or at a point in time. The Group's significant income flows and contracts have been analyzed and it was determined that control is primarily transferred at a point in time – when goods are delivered. Based on this, the company believes that the standard will not entail any change in income recognition for these deliveries. The accounting policies applied correspond with the accounting policies and valuation principles presented in the 2017 Annual Report. The 2017 Annual Report is available at www.garo.se.

Performance measures together with the definitions of performance measures in this report are deemed to be sufficient to comply with the new guidelines. The performance measures in this report take into account the nature of the operations and are deemed to provide relevant information to shareholders and other stakeholders and also enable comparability with other companies.

Risks and uncertainties

GARO's risks and uncertainties are described on pages 50-52 of the 2017 Annual Report. The Annual Report is available at www.garo.se. No significant changes have arisen that alter the view of risks and uncertainties.

Related-party transactions

Related-party transactions took place to the same extent as previously, and the same principles were applied as those described in the 2017 Annual Report.

Significant events after the end of the period

Lars Kvarnsund, CFO of GARO, announced on April 17, 2018 that he intends to leave his position at the company. He will step down in autumn 2018 to take office as President and CEO of a company with different operations.

Annual General Meeting

The 2018 Annual General Meeting will take place on May 2, at 5:00 pm in Gnosjö. More information about the AGM is available on the company's website at the following address http://corporate.garo.se/bolagsstyrning/bolagsstammor.

GARO Group

GARO Sweden

GARO Other markets

Consolidated income statement

	Jan-Mar	Jan-Mar		Jan-Dec
Amount in MSEK	2018	2017	R12	2017
Net sales	207.0	181.6	821.4	796.0
Other operating income	1.6	0.2	3.2	1.8
Total income	208.6	181.8	824.6	797.8
Operating expenses
Raw materials and consumables	-103.4	-92.6	-415.0	-404.2
Other external expenses	-26.1	-22.3	-103.9	-100.1
Personnel expenses	-50.3	-40.7	-192.8	-183.2
Depreciation/amortization of intangible and
tangible assets	-3.7	-2.6	-13.3	-12.2
Other operating expenses	-	-	-	-
EBIT	25.1	23.6	99.6	98.1
Result from financial items
Net financial income/expenses	-0.8	-0.1	-2.9	-2.2
Profit before tax	24.3	23.5	96.7	95.9
Income tax	-5.2	-5.0	-10.5	-10.3
Net income	19.1	18.5	86.2	85.6
Other comprehensive income: Items that may be reclassified to the income statement
Translation differences	2.7	0.8	4.1	2.2
Other comprehensive income, net	2.7	0.8	4.1	2.2
Total comprehensive income for the period	21.8	19.3	90.3	87.8
Net income and total comprehensive income for the period are entirely attributable to shareholders of the Parent Company
Key ratios per share
Average number of shares	10 000000	10,000,000	10,000,00 0	10,000,00 0
Earnings per share, SEK	1.91	1.85	8.62	8.56

Consolidated balance sheet

Amount in MSEK	Mar 31, 2018	Mar 31, 2017	Dec 31, 2017
ASSETS
Fixed assets
Intangible assets	50.4	35.0	49.9
Tangible assets	103.1	73.2	97.8
Financial assets	9.7	-	9.6
Total fixed assets	163.2	108.2	157.3
Current assets
Inventories	163.3	110.6	142.8
Accounts receivable	173.9	170.8	196.7
Other current receivables	13.6	6.9	8.9
Cash and cash equivalents	20.1	24.0	28.2
Total current assets	370.9	312.3	376.6
TOTAL ASSETS	534.1	420.5	533.9
EQUITY AND LIABILITIES
Equity
Share capital	20.0	20.0	20.0
Other reserves	4.8	0.6	2.1
Other equity including net income for the period	249.7	193.1	230.6
Total equity	274.5	213.7	252.7
Long-term liabilities
Interest-bearing liabilities	37.8	19.2	38.3
Other provisions	1.6	1.5	1.6
Deferred tax liabilities	4.6	5.0	4.5
Total long-term liabilities	44.0	25.7	44.4
Short-term liabilities Interest-bearing liabilities	35.4	19.9	46.0
Accounts payable	93.2	82.8	93.7
Other short-term liabilities	87.0	78.4	97.1
Total short-term liabilities	215.6	181.1	236.8
TOTAL EQUITY AND LIABILITIES	534.1	420.5	533.9
Key figures
Net debt	53.1	15.1	56.1
Equity ratio	51.4%	50.8%	47.3%
Equity per share, SEK	27.5	21.4	25.3
Outstanding number of shares, '000	10,000.0	10,000.0	10,000.0

Changes in consolidated equity

	Equity attributable to shareholders in the
--	--------------------------------------------

Parent Company	Share		Retained	Total
Amount in MSEK	capital	Reserves	profit	equity
Equity at January 1, 2017	20.0	-0.1	174.5	194.4
Net income for the period			85.6	85.6
Other comprehensive income for the period		2.2		2.2
Dividend to shareholders			-28.9	-28.9
Change in value, liability, put option			-0.7	-0.7
Closing equity, December 31, 2017	20.0	2.1	230.6	252.7
Equity at January 1, 2018	20.0	2.1	230.6	252.7
Net income for the period			19.1	19.1
Other comprehensive income for the period		2.7		2.7
Dividend to shareholders
Change in value, liability, put option
Closing equity, March 31, 2018	20.0	4.8	249.7	274.5

Condensed consolidated cash-flow statement

				Jan
	Jan-Mar	Jan-Mar		Dec
Amount in MSEK	2018	2017	R12	2017
Operating activities
Cash flow from operating activities
before changes in working capital	17.7	16.1	88.5	86.9
Cash flow from changes in working capital	-7.0	-0.9	-41.5	-35.4
Cash flow from operating activities	10.7	15.2	47.0	51.5
Investing activities
Investments in intangible assets	-1.2	-1.8	-6.9	-7.5
Acquisition of subsidiaries	-	-29.8	-15.4	-45.2
Investments in tangible assets	-6.9	-16.1	-34.7	-43.9
Disposal of tangible assets	0.3	0.3	1.5	1.5
Cash flow from investing activities	-7.8	-47.4	-55.5	-95.1
Financing activities
Net borrowing/amortization of loans	-11.1	14.7	33.5	59.3
Dividend paid to shareholders	-	-	-28.9	-28.9
Cash flow from financing activities	-11.1	14.7	4.6	30.4
Cash flow for the period	-8.2	-17.5	-3.9	-13.2
Currency effect in cash and cash equivalents	0.1	-0.1	0.0	-0.2
Cash and cash equivalents, start of the period	28.2	41.6	24.0	41.6
Cash and cash equivalents, end of the period	20.1	24.0	20.1	28.2

	Jan-Mar	Jan-Mar	Jan-Dec
Amount in MSEK	2018	2017	2017
Net sales	117.2	94.4	428.9
Other operating income	2.3	1.7	8.2
Total income	119.5	96.1	437.1
Operating expenses
Raw materials and consumables	-71.9	-55.1	-255.6
Other external expenses	-12.2	-11.2	-48.3
Personnel expenses	-22.6	-20.2	-88.0
Depreciation/amortization of tangible and
intangible assets	-2.5	-1.9	-8.7
Other operating expenses	-	-	-
EBIT	10.3	7.7	36.5
Result from financial items
Profit from participations in Group companies	-	0.0	20.4
Net interest income and similar items	1.1	0.1	2.1
Net interest expenses and similar items	-1.7	-0.4	-2.6
Income after financial items	9.7	7.4	56.4
Appropriations	-	-	8.3
Income tax	-2.1	-1.6	-8.5
Net income	7.6	5.8	56.2

Parent Company income statement

Parent Company balance sheet

Amount in MSEK	Mar 31, 2018	Mar 31, 2017	Dec 31, 2017
ASSETS
Intangible assets	10.0	8.1	9.3
Tangible assets	50.2	46.8	50.3
Participations in Group companies	42.7	12.8	42.7
Other financial assets	26.1	28.5	36.6
Total fixed assets	129.0	96.2	138.9
Current assets
Inventories	60.0	49.7	62.4
Accounts receivable	69.7	69.8	84.4
Other receivables	87.8	35.1	70.5
Cash and bank balances	0.0	11.3	0.0
Total current assets	217.5	165.9	217.3
TOTAL ASSETS	346.5	262.1	356.2
EQUITY AND LIABILITIES
Share capital	20.0	20.0	20.0
Fund for internal development expenses	1.8	0.8	1.8
Statutory reserve Non-restricted equity including net income	2.6	2.6	2.6
for the period	162.4	133.9	154.8
Total equity	186.8	157.3	179.2
Untaxed reserves	7.9	6.2	7.9
Provisions	3.3	4.9	3.3
Liabilities
Long-term interest-bearing liabilities	22.7	16.3	23.5
Short-term interest-bearing liabilities	26.8	2.8	35.9
Short-term non-interest-bearing liabilities	99.0	74.6	106.4
Total liabilities	148.5	93.7	165.8
TOTAL EQUITY AND LIABILITIES	346.5	262.1	356.2

	Sweden		Other markets		Elimination		Group
Segment	Jan-Mar	Jan-Mar	Jan-Mar	Jan-Mar	Jan-Mar	Jan-Mar	Jan-Mar	Jan-Mar
information	2018	2017	2018	2017	2018	2017	2018	2017
Sales
Total net sales	186.5	151.2	100.9	81.1	-80.4	-50.7	207.0	181.6
Internal net sales	-47.9	-29.4	-32.5	-21.3	50.7	50.7	-	-
External net sales	138.6	121.8	68.4	59.8	-	-	207.0	181.6
EBIT	17.5	16.2	7.6	7.4	-	-	25.1	23.6
Net financial income/expense s	-	-	-	-	-	-	-0.8	-0.1
Tax expense for the period	-	-	-	-	-	-	-5.2	-5.0
Net income for the period	-	-	-	-	-	-	19.1	18.5

Sales and EBIT by segment

					Full	Full	Full	Full
GARO Group		Jan-Mar	Jan-Mar		year	year	year	year
Multi-year overview and key ratios		2018	2017	R12	2017	2016	2015	2014
Net sales	MSEK	207.0	181.6	821.4	796.0	657.8	554.1	441.7
Growth	%	14%	21%	19%	21%	19%	25%	15%
EBITDA	MSEK	28.8	26.2	112.9	110.3	84.8	74.3	50.6
EBITDA margin	%	13.9%	14.4%	13.7%	13.9%	12.9%	13.4%	11.5%
EBIT	MSEK	25.1	23.6	99.6	98.1	73.8	62.4	39.8
EBIT margin		12.1%	13.0%	12.1%	12.3%	11.2%	11.3%	9.0%
Adjusted EBIT	MSEK	-	-	-	-	86,4*	-	-
Adjusted EBIT margin	%	-	-	-	-	13.1%*	-	-
Investments	MSEK	8.1	17.9	41.6	51.4	12.8	13.8	6.3
Depreciation	MSEK	3.7	2.6	13.3	12.2	11.0	11.9	10.8
Return on equity*	%	35.3%	41.5%	35.3%	38.3%	32.4%	31.3%	17.1%
Equity ratio	%	51.4%	50.8%	51.4%	47.3%	52.0%	49.8%	48.5%
Net debt	MSEK	53.1	15.1	53.1	56.1	-17.3	-0.4	19.3
	mul
Net debt/EBITDA*	tipl e	0.5	0.1	0.5	0.5	-0.2	0.0	0.4
Number of employees		394	321	394	276	274	254	244

*) Key ratios are calculated on last 12 months.

Quarterly figures

Consolidated income statement Amount in MSEK	Q1 2018	Q4 2017	Q3 2017	Q2 2017	Q1 2017	Q4 2016	Q3 2016	Q2 2016	Q1 2016
Net sales	207.0	238.3	184.1	192.0	181.6	200.9	148.2	159.1	149.6
Operating expenses	-181.9	-207.4	-163.0	-169.5	-158.0	-170.6	-125.9	-140.6	-146.9
EBIT	25.1	30.9	21.1	22.5	23.6	30.3	22.3	18.5	2.7
Net financial income/expenses	-0.8	-1.6	-0.3	-0.2	-0.1	-2.2	0.1	1.0	0.1
Profit before tax	24.3	29.3	20.8	22.3	23.5	28.1	22.4	19.5	2.8
Tax	-5.2	-3.3	2.4	-4.4	-5.0	-6.4	-4.8	-4.1	-0.5
Net income	19.1	26.0	23.2	17.9	18.5	21.7	17.6	15.4	2.3
Net sales per segment	Q1	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1
Amount in MSEK	2018	2017	2017	2017	2017	2016	2016	2016	2016
GARO Sweden	138.6	163.5	124.9	133.5	121.8	135.9	94.5	97.6	91.0
GARO Other markets	68.4	74.8	59.2	58.5	59.8	65.0	53.7	61.5	58.6
Total Group	207.0	238.3	184.1	192.0	181.6	200.9	148.2	159.1	149.6
EBIT per segment	Q1	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1
Amount in MSEK	2018	2017	2017	2017	2017	2016	2016	2016	2016
GARO Sweden	17.5	20.8	14.1	13.4	16.2	19.3	13.3	9.0	-5.5
GARO Other markets	7.6	10.1	7.0	9.1	7.4	11.0	9.0	9.5	8.2
Total Group	25.1	30.9	21.1	22.5	23.6	30.3	22.3	18.5	2.7

Definitions EBITDA: Earnings before interest, tax, depreciation and amortization EBIT: Earnings before interest and tax EBITDA margin, %: EBITDA as a percentage of net sales for the period EBIT margin, %: EBIT as a percentage of net sales for the period Net debt: Interest-bearing liabilities minus assets including cash and cash equivalents Net debt/EBITDA, multiple: Net debt at the end of the period as a percentage of EBITDA for the past 12 months R12: Rolling 12 months Equity per share: Equity divided by the number of shares at the end of the period Return on equity, %: Net income for the past 12 months divided by average equity Equity ratio, %: Equity as a percentage of total assets Earnings per share: Earnings for the period divided by average number of shares

Teleconference

A teleconference for investors will be held on May 2 at 3:15 p.m.

Telephone numbers: Sweden: +46 10 884 80 16 International: +44 20 3936 2999 Code: 88 03 99

The presentation used during this teleconference can be downloaded at www.garo.se under Investor Relations. A recording of the teleconference will be available on the company's website afterwards.

For more information, please contact:

Carl-Johan Dalin, President and CEO: +46 70 361 00 95 Lars Kvarnsund, CFO: +46 70 516 59 98 Malin Rylander Thordén, IR Director: +46 76 894 95 96

Financial calendar

Second quarter of 2018: August 24 Third quarter of 2018: October 31

Forward-looking information

Certain statements in this report are forward-looking and the actual outcome may be significantly different. In addition to the specifically mentioned factors, other factors may have a material impact on the actual outcome. Such factors include, but are not limited to, the general economic climate, exchange-rate fluctuations and changes in interest rates, political developments, the impact of competing products and the prices of such products, difficulties associated with product development and commercialization, technical problems, interruptions to the access to raw materials and credit losses attributable to major customers.

Assurance by the Board and CEO

The CEO and Board assure that this interim report provides a fair review of the Group's and Parent Company's operations, financial position and earnings, and describes significant risks and uncertainties faced by the Parent Company and the companies included in the Group.

Gnosjö, May 2, 2018

GARO AB (publ), (Corp. ID. No. 556051-7772)

Chairman Board member Board member

Board member Board member Board member

Per Holmstedt Lars Svensson Stefan Jonsson

Anders Pålsson Sofia Axelsson Rickard Blomqvist

Carl-Johan Dalin President and CEO

The information in this interim report is unaudited.

This information is such information that GARO aktiebolag is obligated to publish in accordance with the EU Market Abuse Regulation. The information was published on May 2, 2018 at 3:00 p.m.