Actic Group

Interim / Quarterly Report • Aug 16, 2018

Six-month report 1 January–30 June 2018

Actic Group AB

"Organic growth of 2% despite weather conditions – continued strong PT sales"

SIX-MONTH REPORT 1 JANUARY–30 JUNE 2018 ACTIC GROUP AB 1

Q2

Six-month report 1 January–30 June 2018

Second quarter – April to June 2018

• Net sales rose to SEK 239.5 million (216.8), up 10%, of which 2% was organic.
• Adjusted EBITDA amounted to SEK 37.7 million (35.0), corresponding to a margin of 15.8% (16.2).
• EBIT amounted to SEK 14.5 million (neg: 0.4).
• Net profit for the period was SEK 6.8 million (loss: 15.1).
• Earnings per share before and after dilution amounted to SEK 0.43 (neg: 1.08).
• CEO Christer Zaar will leave the company during the autumn of 2018.
• Agreement signed to divest Finnish operations with transfer on 1 July 2018.

First six months – January to June 2018

• Net sales rose to SEK 483.7 million (442.8), up 9%, of which 0% was organic.
• Adjusted EBITDA amounted to SEK 77.2 million (71.3), corresponding to a margin of 16.0% (16.1).
• EBIT amounted to SEK 29.5 million (3.8).
• Net profit for the period was SEK 13.8 million (loss: 19.8).
• Earnings per share before and after dilution amounted to SEK 0.87 (neg: 3.99).

Key financial data

Figures in SEK million	Apr–Jun 2018	Apr–Jun 2017	Jan–Jun 2018	Jan–Jun 2017	Rolling 12 months	Jan–Dec 2017
Net sales	239.5	216.8	483.7	442.8	922.1	881.2
Adjusted EBITDA	37.7	35.0	77.2	71.3	150.1	144.2
Adjusted EBITA	22.7	21.5	46.8	41.9	89.7	84.8
Adjusted EBITA margin, %	9.5	9.9	9.7	9.5	9.7	9.6
EBIT	14.5	-0.4	29.5	3.8	58.3	32.7
Net profit/loss for the period	6.8	-15.1	13.8	-19.8	28.2	-5.4
Earnings per share before and after dilution, SEK	0.43	-1.08	0.87	-3.99	1.77	-1.53
Cash flow from operating activities	16.4	-7.5	66.8	23.5	146.4	103.2
Cash flow for the period	-11.9	2.4	-1.4	22.3	-6.6	17.0
Average number of shares before and after dilution, thou sands	15,897	14,943	15,897	8,263	15,897	12,122
Equity/assets ratio, %	45.3	44.4	45.3	44.4	45.3	43.7
Total ARPM, SEK	350	339	352	344	344	339

For definitions of key financial data, see page 13.

Clubs and members

Figures in SEK million	Apr–Jun 2018	Apr–Jun 2017	Jan–Jun 2018	Jan–Jun 2017	Rolling 12 months	Jan–Dec 2017
Number of clubs at the end of the period	180	170	180	170	180	178
Number of members at the end of the period	223,907	215,702	223,907	215,702	223,907	225,133
Average number of members during the period	228,275	216,034	229,208	215,994	223,056	216,666
Average number of full-time equivalent employees	801	741	812	755	784	752

	Openings last 12 months	Openings last 24 months	Mature clubs	Total clubs
Nordics	1	4	150	155
Germany	4	4	17	25

On average, a mature club in the Nordic segment generates annual revenues of SEK 6.0 million and an EBITDA of SEK 1.3 million after the allocation of shared costs. For the German segment, the corresponding figures are SEK 3.4 million and SEK 0.2 million respectively.

Organic growth of 2% despite weather conditions – continued strong PT sales

Sales for the second quarter of 2018 increased by 10% compared with the year-earlier period, with organic growth of 2%. In the same way as other players in the industry, the hot weather had an adverse impact on our operations, with fewer visitors and weaker new sales. Nonetheless, we reported organic growth due to expansion in the German segment and continuing strong demand for personal training in the Nordics.

Adjusted EBITDA rose by SEK 2.7 million compared with the preceding year. Furthermore, our cost control and implemented efficiency enhancements are starting to have an impact at the same time as we are investing in our offering and digitalisation.

Adverse impact of weather

Our membership base remains stable, the decline compared with the end of the first quarter is a natural seasonal variation that was unfortunately reinforced slightly by the abovementioned weather conditions. Compared with the year-earlier quarter, member numbers rose, mainly driven by acquisitions made.

PT increasingly important

Personal training is an important and expanding share of revenues in the Nordic segment. During the quarter, growth was all of 28%. As part of our efforts to professionalise the industry, we have through our trade organisation initiated a project to authorise companies that educate personal trainers. We are convinced that the stamp of quality offered by an authorisation will create opportunities for both price adjustments and would convince more existing customers to become PT customers.

Positive in Germany

The German segment shows both expansion and margin improvements compared with the corresponding period in the preceding year as more of our clubs enter the mature phase.

Exiting Finland

During the quarter, we signed an agreement to divest our three clubs in Finland and have opened a new club in Karlstad, where we now own five facilities. This is in line with our strategy to grow on our main markets of Sweden, Norway and Germany and to build clusters in the cities where we operate in these markets.

Strategic digital cooperation

To strengthen our customer offering and to digitalise operations, we signed a strategic collaboration with Technogym, which is the world leader in IT for the training industry. We are planning to offer our members, initially at 30 facilities, a new app that gathers together training programmes, health data and statistics while enabling individual communication. This digitalisation will increase our internal efficiency, though the primary purpose is to enhance customer experience and improve customer loyalty.

Solna, August 2018

Christer Zaar

For further information, contact: Christer Zaar, CEO: christer.zaar@actic.se, +46 70 893 33 22 Niklas Alm, Investor Relations: niklas.alm@actic.se, +46 708 24 40 88 Jörgen Fritz, CFO jorgen.fritz@actic.se, +46 73 663 54 74

Operations

Second quarter

The extremely hot and sunny weather in the Nordics resulted in a decline in the number of visitors to the facilities, which also had an adverse impact on new sales. Net sales in the quarter amounted to SEK 239.5 million (216.8), a growth of 10%. Acquisitions contributed SEK 16.1 million. Measured at fixed exchange rates, organic growth totalled 2%. Exchange-rate changes affected net sales positively by SEK 2.8 million. Adjusted EBITDA amounted to SEK 37.7 million (35.0), corresponding to an adjusted EBITDA margin of 15.8% (16.2). Items affecting comparability amounted to SEK 0 million (15.8). EBIT amounted to SEK 14.5 million (neg: 0.4). Earnings were positively impacted by the acquisitions made and greater maturity in the German clubs and negatively impacted by a continued weak performance in Norwegian operations. On 22 May, Svea Court of Appeal ruled that Actic shall receive repayment totalling SEK 3.2 million for previously paid rent and for legal expenses pertaining to Högdalen. The facility in Högdalen closed on 30 June and during the quarter earnings were also charged with provisions for discontinued operations, doubtful receivables, and a few minor disputes totalling SEK 2.2 million.

First six months

Net sales in the period amounted to SEK 483.7 million (442.8), a growth of 9%. Acquisitions contributed SEK 37.4 million. Measured at fixed exchange rates, organic growth totalled 0%, which was partly attributable to IFRS 15, which had a negative impact on revenue recognition of SEK 6 million. Adjusted for this, organic growth would have been 1%. Exchange-rate changes affected net sales positively by SEK 2.9 million. Growth was primarily attributable to acquired operations in the Nordics and by establishments completed in Germany. The membership base increased to 223,907 (215,702) at the end of the period. Adjusted EBITDA amounted to SEK 77.2 million (71.3), corresponding to an adjusted EBITDA margin of 16.0% (16.1), which adjusted for the effect of IFRS 15 would have been 17%. Items affecting comparability amounted to SEK 0 million (26.1). EBIT amounted to SEK 29.5 million (3.8).

Financial income and expenses – first six months

Financial expenses amounted to SEK 12.4 million (expense: 30.2) and financial income totalled SEK 2.9 million (3.7). The financial expenses were attributable to interest expenses for loan financing, while financial income mainly pertained to currency-related exchange-rate differences.

Tax – first six months

The earnings impact of tax for the period amounted to a negative SEK 6.2 million (pos: 2.9).

Consolidated profit/loss – first six months

Consolidated net profit amounted to SEK 13.8 million (loss: 19.8), corresponding to earnings per share before and after dilution of SEK 0.87 (loss: 3.99).

NET SALES PER CATEGORY Sold cards 82 % Sold cards 82 %

NET SALES & ARPM NET SALES & ARPM

ADJUSTED EBITA & EBITA MARGIN

Sales and earnings per operating segment

Actic conducts operations in two operating segments. Actic's largest operating segment is the Nordics, which comprises its operations in Sweden, Norway and Finland. The operation has gradually expanded since 1981. The Nordics are home to

just over 750 swimming halls and Actic conducts operations in approximately 100 of these. Actic's second operating segment comprises Germany and Austria, where the company primarily operates Gym & Swim clubs.

REVENUES PER OPERATING SEGMENT, SEK MILLION

	Apr–Jun 2018	Apr–Jun 2017	Jan–Jun 2018	Jan–Jun 2017	Full-year 2017
Nordics	219.8	201.0	446.2	411.7	818.4
Germany	19.7	15.8	37.5	31.2	62.8
Net sales	239.5	216.8	483.7	442.8	881.2

ADJUSTED EBITDA PER SEGMENT AND RECONCILIATION WITH THE GROUP'S EARNINGS BEFORE TAX, SEK MILLION

	Apr–Jun 2018	Apr–Jun 2017	Jan–Jun 2018	Jan–Jun 2017	Full-year 2017
Nordics	45.0	42.2	91.4	87.8	173.9
Germany	1.6	0.7	1.6	0.7	3.3
Shared Group expenses, excl. items affecting comparability	-8.9	-7.9	-15.8	-17.2	-33.0
Adjusted EBITDA total	37.7	35.0	77.2	71.3	144.2
Items affecting comparability	-	-15.8	-	-26.0	-25.6
Depreciations	-23.2	-19.6	-47.7	-41.5	-86.0
EBIT	14.5	-0.4	29.5	3.8	32.7
Financial net	-4.9	-17.4	-9.5	-26.5	-34.1
EBT	9.6	-17.8	20.0	-22.7	-1.4

Nordics operating segment

Net sales in the second quarter amounted to SEK 219.8 million (201.0), corresponding to growth of 9%. EBITDA amounted to SEK 45.0 million (42.2) corresponding to a margin of 20.5% (21.0).

Earnings were positively impacted by the acquisitions made and the previously completed establishments beginning to show profitability. An unsatisfactory trend in the Norwegian operations and declining sales due to the hot weather had a negative impact on earnings.

Net sales for the Nordics segment during the period amounted to SEK 446.2 million (411.7), corresponding to growth of 8%. EBITDA amounted to SEK 91.4 million (87.8) corresponding to a margin of 20.5% (21.3). Average revenue per member and month (ARPM) was SEK 357 during the period, compared with SEK 349 for the year-earlier period. For full-year 2017, it was SEK 344.

At the end of the period, there were 155 clubs, one less than in the preceding report.

German operating segment

Net sales in the second quarter amounted to SEK 19.7 million (15.8), corresponding to growth of 25%. EBITDA amounted to SEK 1.6 million (0.7) corresponding to a margin of 8.0% (4.6).

Earnings were positively impacted by establishments completed beginning to show profitability and efficiency enhancements in the operation. New establishments that are not mature and acquired due diligence costs had an adverse impact on earnings.

Net sales for the German segment amounted to SEK 37.5 million (31.2) during the period, corresponding to growth of 20%. EBITDA amounted to SEK 1.6 million (0.7) corresponding to a margin of 4.3% (2.3). Average revenue per member and month (ARPM) was SEK 301 during the period, compared with SEK 284 for the year-earlier period. For full-year 2017, it was SEK 283.

At the close of the period, there were 25 clubs, with no change since the preceding report.

SEASONAL VARIATIONS

Actic's operations are subject to seasonal variations related to the level of activity at the clubs, which is highest in the first quarter of the year. After activity levels decline at the end of the second quarter, member flows and activities at the clubs increase again after the summer months at the end of the third quarter. The introduction of IFRS 15 is expected to have an equalising factor over the financial year.

Financial position

PERSONNEL

The number of full-time equivalent employees during the period totalled 812, compared with 752 for full-year 2017. This increase in the number of employees was mainly attributable to acquisitions and new establishments.

PARENT COMPANY

Net loss for the period was SEK 5.0 million (loss: 12.3). Equity at the end of the period totalled SEK 820.8 million, compared with SEK 833.8 million at year-end.

CASH FLOW, CASH AND CASH EQUIVALENTS

Cash flow from operating activities totalled SEK 62.5 million (23.5) for the period. Available unutilised loans amounted to SEK 93 million at the end of the period, compared with SEK 73 million at year-end 2017.

EQUITY AND LIABILITIES

The equity/assets ratio was 45.3% at the end of the period, compared with 43.7% at 31 December 2017. Interest-bearing liabilities amounted to SEK 490.6 million compared with SEK 506.5 million at yearend 2017. Net debt of SEK 425.2 million in relation to adjusted EBITDA for the most recent 12-month period gave a ratio of 2.8, compared with 3.1 for full-year 2017.

INVESTMENTS

During the period, the company invested SEK 34.2 million in tangible fixed assets, with most of the amount earmarked for newly opened clubs and the upgrade of existing clubs. SEK 5.8 million was invested in intangible fixed assets, mainly accounting systems and the company's members app.

Actic foresees continued strong demand for personal training in the Nordics. Operations grew 28% during the second quarter.

EVENTS DURING THE PERIOD

Christer Zaar, President and CEO, reached an agreement with the Board to leave the company in the autumn of 2018. His employment contract includes a notice period of six months and he will continue to act as CEO until a replacement has been recruited, and will also conclude certain ongoing projects within the Group. Christer was recruited to Actic in 2015 by the previous principal owner and tasked with building structural capital, expanding operations, opening up to new revenue streams and to list the company. The process to recruit a new CEO has begun.

Actic divested all of its three facilities in Finland. The facilities in question had sales of about SEK 15 million in 2017, and the purchaser acquired existing personnel and contracts as of 1 July. The transaction is expected to have a marginal positive impact on Actic's earnings per share for the current year.

EVENTS AFTER THE END OF THE PERIOD

There are no significant events to report.

MATERIAL RISKS AND UNCERTAINTIES

Actic is exposed to a number of business and financial risks. The company's business risks can be divided into three categories: strategic, operational and legal risks. Among other factors, the company's financial risks are attributable to exchange rates, interest rates, liquidity and credit granting. Risk management within the Actic Group aims to identify, control and reduce these risks. This is accomplished through an assessment of risk probability and the potential impact on the Group. The company's risk assessment is unchanged compared with the risk scenario presented on pages 81–83 of the 2017 Annual Report. The Parent Company's risks and uncertainties are indirectly the same as those of the Group.

OUTLOOK

Actic does not publish forecasts.

The Board of Directors and the President and CEO affirm that this six-month report provides a true and fair view of the Group's and the Parent Company's operations, position and earnings, and describes the significant risks and uncertainties facing the Parent Company and the companies included in the Group.

Solna, 16 August 2018

Göran Carlson Stefan Charette Therese Hillman Chairman of the Board Board member Board member

Åsa Wirén Fredrik Söderberg Viktor Linnell Board member Board member Board member

Christer Zaar

President and CEO

The information in this interim report is of the type that Actic Group AB (publ) is required to disclose according to the Securities Market Act. The information was submitted for publication on Thursday, 16 August at 7:45 a.m. (CEST).

This report has not been audited by the company's auditors.

Condensed consolidated income statement

SEK 000s	Apr–Jun 2018	Apr–Jun 2017	Jan–Jun 2018	Jan–Jun 2017	Full-year 2017
Net sales	239,462	216,783	483,709	442,831	881,206
Other operating income	7,946	7,014	16,500	14,705	29,121
Total revenue	247,408		223,798 500,209	457,536	910,326
Operating expenses		-209,675 -204,534 -423,026		-412,327	-791,704
Depreciation of tangible and intangible fixed assets	-23,198	-19,623	-47,703	-41,386	-85,961
EBIT	14,535	-359	29,480	3,824	32,661
Financial net	-4,890	-17,389	-9,465	-26,481	-34,088
Profit/loss before tax	9,645	-17,748	20,015	-22,657	-1,427
Estimated tax	-2,820	2,629	-6,186	2,873	-3,976
Net profit/loss for the period	6,825	-15,120	13,829	-19,784	-5,403
of which, attributable to Parent Company shareholders	6,825	-15,120	13,829	-19,784	-5,403
Profit/loss per share
before dilution (SEK)	0.43	-1.08	0.87	-3.99	-1.53
after dilution (SEK)	0.43	-1.08	0.87	-3.99	-1.53

Consolidated statement of comprehensive income

SEK 000s	Apr–Jun 2018	Apr–Jun 2017	Jan–Jun 2018	Jan–Jun 2017	Full-year 2017
Net profit/loss for the period	6,825	-15,120	13,829	-19,784	-5,403
Other comprehensive income
Items that have been transferred or may be transferred to net profit for the year
Tax attributable to items booked against equity		3,850		3,850
Translation differences for the year on translation of foreign operations	8,217	-6,053	21,122	-8,603	-9,821
Total other comprehensive income	8,217	-2,203	21,122	-4,753	-9,821
Comprehensive income for the period	15,042	-17,323	34,951	-24,537	-15,224

Condensed consolidated statement of cash flows

SEK 000s	Apr–Jun 2018	Apr–Jun 2017	Jan–Jun 2018	Jan–Jun 2017	Full-year 2017
Cash flow from operating activities before changes in working capital	34,195	11,889	66,468	26,082	97,145
Cash flow from changes in working capital	-22,101	-19,408	-4,012	-2,557	6,065
Cash flow from operating activities	12,094	-7,519	62,456	23,525	103,210
Cash flow from investing activities	-16,822	-53,361	-40,054		-67,405 -179,996
Cash flow from financing activities	-7,208	63,231	-23,754	66,184	93,835
Cash flow for the period	-11,936	2,351	-1,353	22,304	17,050
Cash and cash equivalents at the beginning of the period	77,168	68,979	66,077	49,057	49,057
Exchange-rate difference in cash and cash equivalents	105	28	613	-3	-29
Cash and cash equivalents at the end of the period	65,337	71,359	65,337	71,359	66,078

Condensed consolidated financial position

SEK 000s	18-06-30	17-06-30	17-12-31
Assets
Intangible fixed assets	874,722	826,482	870,650
Tangible fixed assets	343,117	322,706	333,766
Financial and other fixed assets	6,355	12,485	5,163
Total fixed assets	1,224,194	1,161,673	1,209,579
Other current assets	108,082	100,772	111,383
Cash and cash equivalents	65,337	71,359	66,078
Total current assets	173,419	172,131	177,461
Total assets	1,397,614	1,333,804	1,387,040
Equity and liabilities
Equity	632,642	592,477	605,638
Non-current interest-bearing liabilities	470,786	460,562	466,252
Other non-current liabilities	30,394	35,205	27,766
Current interest-bearing liabilities	19,782	17,919	40,219
Other current liabilities	244,011	227,641	247,166
Total liabilities	764,972	741,327	781,402
Total equity and liabilities	1,397,614	1,333,804	1,387,040

Consolidated statement of changes in equity, condensed

SEK 000s	Jan–Jun 2018	Jan–Jun 2017	Full-year 2017
Equity at the end of the period	605,638	364,515	364,515
Comprehensive income for the period	34,952	-28,384	-15,224
New share issue	-	256,346	256,346
Dividend to shareholders	-7,948
Equity at the end of the period	632,642	592,477	605,638

Parent Company condensed income statement

SEK 000s	Apr–Jun 2018	Apr–Jun 2017	Jan–Jun 2018	Jan–Jun 2017	Full-year 2017
Net sales	858	8,991	1,491	10,491	11,954
Operating expenses	-3,477	-20,622	-6,291	-24,596	-29,788
Amortisation of intangible fixed assets	-7	0	-13	0	-25
EBIT	-2,626	-11,631	-4,813	-14,105	-17,859
Financial net	-94	-1,634	-179	-1,634	-1,656
Appropriations	0	0	0	0	43,499
Profit/loss before tax	-2,720	-13,265	-4,992	-15,739	23,984
Estimated tax	0	2,918	0	3,460	-5,284
Net profit/loss for the period	-2,720	-10,347	-4,992	-12,278	18,700

Net profit/loss for the period corresponds to comprehensive income for the period for the Parent Company.

Parent Company's condensed balance sheet

SEK 000s	30 Jun 2018	30 Jun 2017	31 Dec 2017
Financial fixed assets	794,803	803,521	794,803
Other fixed assets	98	0	110
Current assets	45,438	17,176	45,820
Total assets	840,338	820,697	840,733
Equity	820,809	804,492	833,750
Liabilities	19,529	16,205	6,983
Total equity and liabilities	840,338	820,697	840,733

Quarterly data

Amount in SEK, Group	2018 Q2	2018 Q1	2017 Q4	2017 Q3	2017 Q2	2017 Q1
Net sales	239.5	244.2	229.2	209.1	216.8	226.0
Adjusted EBITDA	37.7	39.5	33.9	39.0	35.0	36.3
Adjusted EBITDA margin	15.8	16.2	14.8	18.7	16.2	16.0
Items affecting comparability	0.0	0.0	0.6	-1.2	15.8	10.3
Adjusted EBITA	22.7	24.1	19.2	23.6	21.5	20.4
Adjusted EBITA margin, %	9.5	9.9	8.4	11.3	9.9	9.0
EBIT	14.5	14.9	11.1	17.7	-0.4	4.2
Net profit/loss for the period	6.8	7.0	1.6	12.8	-15.1	-4.7
Cash flow from
operating activities	16.4	50.4	52.0	27.7	-7.5	31.0
Total ARPM, SEK	350	353	349	324	339	349

Notes to the financial statements

NOTE 1 REPORTING UNITS

The Parent company Actic Group AB is a Swedish public limited-liability company, with corporate registration number 556895-3409. This consolidated six-month report for the period ending 30 June 2018 encompasses the company and its subsidiaries, collectively referred to as the Group.

NOTE 2 ACCOUNTING POLICIES

This consolidated interim report was prepared in accordance with IAS 34 Interim Financial Reporting. The Group applied the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), as adopted by the EU. The Group also applies relevant sections of the Swedish Annual Accounts Act and Swedish Financial Reporting Board's recommendation RFR 1 Supplementary Accounting Rules for Groups. The Parent Company applies RFR 2 Accounting for Legal Entities and the Swedish Annual Accounts Act. The accounting policies and terms of calculation applied for the Group and the Parent Company are the same as those applied in the most recent Annual Report. New and amended IFRS standards (IFRS 15 and IFRS 9) and interpretations and amendments to RFR 2 and RFR 1 that came into effect for the 2018 financial year have impacted the Group's financial statements as described in the Annual Report, while the Parent Company's financial statements are unaffected. No recalculation of previous periods has been made in respect of IFRS 9 and 15. No premature application of established standards has taken place.

NOTE 3 ESTIMATES AND JUDGEMENTS

In the preparation of an interim report, management is required to make judgements and estimates as well as assumptions that impact the application of the accounting policies and the amounts recognised with respect to assets, liabilities, revenue and expenses. The actual outcome may deviate from these estimates and judgements. The company's critical judgements and sources of uncertainty in estimates are the same as those reported in the most recent Annual Report.

NOTE 4 EQUITY

No dividend was approved or paid in 2016 or 2017. For 2018, a dividend was paid of SEK 0.50 per share.

NOTE 5 FINANCIAL INSTRUMENTS

Only low value derivatives contracts were entered into for the period ending 30 June 2018.

NOTE 6 TRANSACTIONS WITH RELATED PARTIES

The nature and scope of the company's transactions with related parties has not changed materially compared with the information disclosed in the 2017 Annual Report.

NOTE 7 ALTERNATIVE PERFORMANCE MEASURES

To increase the understanding of the development of the operations and the financial status of Actic Group, Actic presents some alternative performance measures in addition to the conventional financial ratios established by IFRS. However, these alternative performance measures should not be considered as a substitute for the financial information presented in the financial statements in accordance with IFRS. The reconciliations presented in the tables below are to be read together with the definitions on page 13.

Adjusted EBITA, EBITDA and margins

SEK 000s	Apr–Jun 2018	Apr–Jun 2017	Jan–Jun 2018	Jan–Jun 2017	Rolling 12 months	Jan–Dec 2017
EBIT	14,535	-359	29,480	3,824	58,317	32,661
Reversal of amortisation of intangible fixed assets	8,147	6,076	17,334	11,992	31,886	26,545
EBITA	22,682	5,717	46,814	15,815	90,204	59,206
Items affecting comparability	-	-	-	718	649	1,366
Listing-related expenses	-	15,766	-	25,359	-1,160	24,200
Adjusted EBITA	22,682	21,482	46,814	41,892	89,693	84,772
Reversal of depreciation of tangible fixed assets	15,051	13,547	30,369	29,394	60,392	59,416
Adjusted EBITDA	37,733	35,029	77,183	71,286	150,085	144,188
Net sales	239,462	216,783	483,709	442,831	922,084	881,206
Adjusted EBITA margin, %	9.5	9.9	9.7	9.5	9.7	9.6
Adjusted EBITDA margin, %	15.8	16.2	16.0	16.1	16.3	16.4

Net debt and net debt/adjusted EBITDA ratio

SEK 000s	Apr–Jun 2018	Apr–Jun 2017	Jan–Jun 2018	Jan–Jun 2017	Rolling 12 months	Jan–Dec 2017
Non-current interest-bearing liabilities	470,786	460,562	470,786	460,562	470,786	466,252
Current interest-bearing liabilities	19,782	17,919	19,782	17,919	19,782	40,219
Total interest-bearing liabilities	490,568	478,480	490,568	478,480	490,568 506,470
Cash and cash equivalents	-65,337	-71,359	-65,337	-71,359	-65,337	-66,078
Net debt	425,231	407,122	425,231	407,122	425,231	440,393
Adjusted EBITDA	37,733	35,029	77,183	71,286	150,085	144,188
Net debt/adjusted EBITDA ratio	-	-	-	-	2.8	3.1

Organic growth

	Apr–Jun		Jan–Jun
SEK 000s	2018	Growth %	2018	Growth %
Net sales	239,462	10.5	483,709	9.1
Of which, organic growth	6,537	3.0	3,036	0.7
Of which, acquired growth	16,142	7.4	37,418	8.4
Organic growth exchange rate adjusted	3,694	1.7	122	0.0
Total growth	22,679	10.5	40,454	9.1
Currency effect	2,843	–	2,913	–

Financial calendar

Interim report Jan–Sep 2018 14 November 2018 Year-end report 2018 14 February 2019

Financial objectives

Actic has adopted the following financial targets: Growth — Average yearly organic growth of at least 5%, with additional growth from acquisitions. Profitability — Adjusted EBITDA margin of more

than 20% in the medium term. Capital structure— Net debt/adjusted EBITDA ratio below 3.0.

Dividend policy

A dividend rate of 30% to 50% of annual net income.

Overall strategy

Actic's overall strategy can be summarised as follows:

• Refine existing clubs and strengthen the product and service offering.
• Continued expansion of the offering through new establishments.
• Participate in the consolidation of the industry through acquisitions.

Acquired clubs are to contribute positively to the Group's earnings from day one, while new establishments are expected to achieve break-even after 12 months and full profitability after 24 months.

Financial definitions

Number of members Number of members at the end of the period.

EBIT Operating profit after depreciation and amortisation.

EBITA Operating profit before impairment and amortisation of intangible fixed assets.

EBITDA Operating profit before impairment, depreciation and amortisation of tangible and intangible fixed assets.

EBITDA margin per segment EBITDA divided by revenue from external customers per segment.

Average number of shares after dilution Average number of ordinary shares outstanding and potential future shares.

Average number of shares before dilution

Average number of ordinary shares outstanding.

Adjusted EBITA margin Adjusted EBITA divided by net sales.

Adjusted EBITDA margin Adjusted EBITDA divided by net sales.

Adjusted EBITA EBITA after reversal of items affecting comparability.

Adjusted EBITDA EBITDA after reversal of items affecting comparability.

Items affecting comparability Items included in the statement of profit/loss that affect comparability between earlier periods.

Earnings per share Profit or loss for the period in relation to the number of shares outstanding.

Cash flow per share Cash flow for the period in relation to the number of shares outstanding.

Average number of full-time equivalent employees The average number of employees is calculated as the total of the average number of full-time positions during the period on a monthly basis and the accumulated hours worked for the period for hourly contract employees converted to full-time positions.

Net debt/adjusted EBITDA ratio Net debt at the end of the period divided by adjusted EBITDA based on the rolling twelve-month value.

Organic growth Change in net sales adjusted for currency effects, acquisitions and disposals compared with the year-earlier period.

Average revenue per member (ARPM) Net sales during the period in relation to the average number of members during the period divided by the number of months in the period. The average number of members is based on the number of members at the end of each month during the period.

Equity/assets ratio Equity as a percentage of total assets.

Glossary

Full-service clubs Clubs where both the fitness club and the swimming facility are operated by Actic's own personnel.

Gym & Swim clubs Clubs where the fitness club is operated by Actic and the swimming facility is operated by an external partner.

HIT High-intensity training is a strength training method. The method is focused on short, high-intensity exercise. HIT prioritises high intensity and few repetitions with the aim of developing muscles as efficiently as possible.

In-house clubs Clubs where the fitness facility is operated by external personnel.

Cluster Geographic area with several Actic clubs located in close proximity to one another, forming a cluster.

PT Personal training.

Stand-alone clubs Clubs that exclusively operate fitness facilities

Actic in brief

Actic was founded in 1981. The company began its international expansion in 1995 and Actic is now one of the leading players in the staffed gym market in the Nordics. Actic has 180 clubs with just over 223,000 members in five countries. Its main markets are Sweden, Norway, Finland, Germany and Austria.

Actic has a unique business model whereby the majority of its clubs have access to swimming facilities, which is included in the membership fee paid by Actic's members.

Actic uses a well-established exercise method known as high-intensity training (HIT) and offers its members personal training programmes including follow-up sessions with trained instructors. Together with swimming, this differentiates Actic in the market.

The training offering is broad, with strength training, with group classes and functional training, and personal training (PT), which attracts a broad target group and is building successful clusters of Gym & Swim clubs as well as stand-alone clubs in the Nordics and Germany.

Actic's vision is to contribute to a healthier society by attracting broader target groups and thereby expanding the market. Actic's employees play an active role in the local community as a way of contributing to a healthier society.

Actic, which has its head office in Solna in Stockholm, had approximately 800 full-time equivalent employees and net sales of SEK 881 million in 2017. The Group is led by CEO Christer Zaar.

Each year, Actic holds more than 90,000 group training classes at its 180 facilities.

Actic AB Smidesvägen 12, SE-171 41 Solna, Sweden Box 1805, SE-171 21 Solna, Sweden

Actic Sweden AB Actic Norway AS Actic Fitness GmbH Actic Finland OY

E-mail: info@actic.com

SIX-MONTH REPORT 1 JANUARY–30 JUNE 2018 ACTIC GROUP AB 15