Alleima

Annual Report • Jan 23, 2024

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Continued solid backlog and record-high earnings for full-year 2023

• Organic order intake growth for the rolling 12-month period was -6%. The backlog remained solid.
• Order intake in the quarter decreased by 12% to SEK 5,147 million (5,825), with organic growth of -10%. Excluding major orders, organic growth was -4%.
• Revenues decreased by 2% to SEK 5,038 million (5,159), with organic growth of -1%.
• Adjusted operating profit (EBIT) increased to SEK 582 million (555), corresponding to a margin of 11.6% (10.8), with contribution from an improved product mix and price increases.
• Operating profit (EBIT) amounted to SEK 444 million (407), corresponding to a margin of 8.8% (7.9), and included metal price effects of SEK -138 million (-149).
• Adjusted earnings per share, diluted, was SEK 2.04 (2.11). Earnings per share, diluted, amounted to SEK 1.61 (1.65).
• Free operating cash flow amounted to SEK 400 million (801).
• The Board proposes a dividend of SEK 2.00 (1.40).

Financial overview

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Alleima 61

SEK M	Q4 2023	Q4 2022	Change, %	Full year 2023	Full year 2022	Change, %
Order intake	5,147	5,825	-12	21,684	22,130	-2
Organic growth, %	-10	17	–	-6	19	–
Revenues	5,038	5,159	-2	20,669	18,405	12
Organic growth, %	-1	14	–	8	13	–
Adjusted EBITDA	822	785	5	3,056	2,540	20
Margin, %	16.3	15.2	–	14.8	13.8	–
Adjusted operating profit (EBIT)	582	555	5	2,141	1,681	27
Margin, %	11.6	10.8	–	10.4	9.1	–
Operating profit (EBIT)	444	407	9	2,046	2,122	-4
Profit for the period	403	413	-2	1,574	1,483	6
Adjusted earnings per share, diluted, SEK	2.04	2.11	-3	6.56	4.46	47
Earnings per share, diluted, SEK	1.61	1.65	-2	6.27	5.86	7
Free operating cash flow	400	801	-50	1,688	505	234
Net working capital to revenues, % 1	34.6	33.0	–	34.3	32.8	–
Net debt/Equity ratio	-0.02	0.00	–	-0.02	0.00	–

Notes to the reader: Adjusted EBITDA and adjusted operating profit (EBIT) excludes items affecting comparability (IAC) and metal price effects, see Note 2 and the description of Alternative Performance Measures on page 29 for further details. Definitions and glossary can be found on www.alleima.com/investors 1) Quarter is quarterly annualized and the annual number is based on a four quarter average. Tables and calculations in the report do not always agree exactly with the totals due to rounding. Comments refer to performance in the quarter and comparisons refer to the corresponding period last year, unless otherwise stated.

"2023 was a successful year with record-high revenues and earnings."

CEO's comment

Our first full year as a company listed on Nasdaq Stockholm has now come to an end. We have developed the business successfully in line with our strategy, marketed our new brand and strengthened our position.

During the year, revenues grew 8% organically. Adjusted EBIT increased 27% to SEK 2,141 million, corresponding to an adjusted EBIT margin of 10.4%. Both the Tube and Kanthal divisions made a positive contribution to the increase, with margins of 10.3% and 18.3%, respectively. This means that we delivered record-high revenues and adjusted EBIT, and also increased our free operating cash flow more than threefold to SEK 1,688 million. We benefit from long-term positive trends in several of our segments, which give us continued opportunities for value creation over time.

The market situation in the fourth quarter remained mixed. Organic order intake growth was -10%, and -4% excluding major orders. While absolute levels are high and we perceive that the underlying demand is on a solid level, order intake declined in both Industrial Heating and Chemical and Petrochemical year on year. The same applies to the Oil and Gas segment, where order placements can vary between the quarters. However, we assess that the underlying demand continues to grow. Order intake in the short-cycle business, mainly related to low-refined products in the Industrial segment grew from low levels, driven by single orders. The underlying demand is perceived to be in line with the corresponding period last year.

Organic revenue growth was -1%, which was mainly due to the significantly weaker market in the short-cycle and low-refined business in recent quarters. Adjusted EBIT grew 5% to SEK 582 million and the adjusted EBIT margin was 11.6%. An improved product mix from Industrial Heating and Medical in

Kanthal, and the Oil and Gas segment in Tube, contributed to the higher margin. Price increases also continued to make a positive contribution.

Our aim is to grow faster than the market in our four targeted segments and we are working to further strengthen our position. During the quarter, we inaugurated our new production line for heat exchanger tubing in Mehsana in India, which will increase our presence in Tube's Chemical and Petrochemical segment in Asia. We also decided to expand our production capacity for silicon carbide heating elements for industrial heating in Kanthal through an investment in Perth, UK, and in a new service center in Concord, US. Kanthal's Medical business once again set a new invoicing record. The Hydrogen and Renewable Energy segment also continued to grow at a rapid pace from low levels. Overall, this means that the four targeted customer segments now account for 36% (32) of our total revenues and therefore grew at a faster rate than the rest of our product portfolio during the year.

Demand and the backlog in the Nuclear segment have gradually strengthened and we secured several significant orders during the quarter. Growth in the Nuclear segment is driven by replacements, expansions and new nuclear innovations, such as small modular reactors (SMR), and we are well positioned to secure business in future projects.

We continue to be responsive to how the market situation develops and we take measures on an ongoing basis, while also working to continuously improve our business. I am satisfied with the year's outcome and the solid backlog we have built up for the coming year. I would also like to thank all of our employees, customers, partners and shareholders for a good year.

Göran Björkman, President and CEO

Market development and outlook

Market development

The market situation remained mixed during the quarter. Demand in several customer segments was driven by positive long-term trends, such as increased need for energy. Some stabilization was noted in the short-cycle business.

• In the Oil and Gas segment, underlying demand continued to grow. One major order for both umbilical and OCTG tubing was received.
• In the Industrial segment, the underlying demand for low-refined products was stable year on year.
• Demand in the Chemical and Petrochemical segment remained healthy in Asia. In North America and Europe, demand was slightly lower year on year.
• In the Industrial Heating segment, a slightly weaker demand was noted year on year. Total order intake remained high.
• In the Consumer segment, demand was weaker year on year, with some signs of continued stabilization at low levels.
• Demand in the Mining and Construction segment improved year on year, with signs that customers' inventory levels have now normalized.
• In the Medical segment, demand was strong for the entire product portfolio and successful launches of new products continued to drive growth.
• In the Nuclear segment, the market sentiment and levels of customer activity continued to strengthen and several orders, of which one major order, were received.
• Underlying demand in the Transportation segment remained on a solid level, with high activity in the aerospace industry, mainly related to titanium tubing.
• A stable underlying trend was noted in the Hydrogen and Renewable Energy segment, mainly attributable to hydrogen refueling stations (HRS).

INDUSTRIAL

OIL AND GAS INDUSTRIAL PETROCHEMICAL HEATING CONSUMER Year on year underlying demand trend ↗ → ↘ ↘ ↘ % of Group revenues 2023 21% 21% 18% 11% 8% MINING AND CONSTRUCTION MEDICAL NUCLEAR TRANSPORTATION HYDROGEN AND RENEWABLE ENERGY Year on year underlying demand trend % of Group ↗ ↗ ↗ → → revenues 2023 5% 5% 5% 4% 2%

CHEMICAL AND

Perception of year on year underlying market demand trend

Outlook for the first quarter 2024

Despite mixed demand in our markets during the quarter, underlying megatrends are expected to continue to mitigate the impact of uncertainties in the macroeconomic environment in the coming year. With our solid backlog, we have good visibility in our near-term deliveries.

We are continuously taking measures to mitigate potential impact from cost inflation and under-absorption of costs from the lower production volumes in certain segments. The product mix is expected to be similar to that of the fourth quarter. Cash flow is normally lower in the first half year compared with the second half.

Note: Comments about market development and outlook are based on the company's current perceptions. Comments about the underlying demand are based on the company's perception about the market environment, and are not based on order intake in isolated quarters.

Alleima Q4 January 1 – December 31, 2023

4

-1% Organic revenue growth

Order intake and revenues

Order intake for the rolling 12-month period showed organic growth of -6%. Order intake for the quarter decreased by 12% to SEK 5,147 million (5,825), with organic growth of -10%. Excluding major orders of SEK 670 million (1,095), order intake decreased 4% organically. The development was mainly attributable to a slightly weaker order intake for Industrial Heating in Kanthal, and for Oil and Gas and Chemical and Petrochemical in Tube, year on year. Organic order intake increased in Europe, and declined in North America and Asia.

Revenues decreased by 2% to SEK 5,038 million (5,159), with organic growth of -1%. The Kanthal division showed a positive trend, driven by Industrial Heating and Medical. The Tube and Strip divisions showed negative organic growth, mainly attributable to lower delivery volumes in the short-cycle, low-refined business in the Industrial and Consumer segments, due to weaker market conditions for some time.

Book-to-bill was 102% for the quarter, and 105% for the rolling 12-month period. The backlog remained solid.

Structure, i.e. acquisitions, had an impact of 0% on order intake and 1% on revenues. Currency had an impact of 1% on order intake and revenues. Alloy surcharges had an impact of -2% on order intake and -3% on revenues, mainly attributable to lower nickel prices compared to the corresponding period last year.

Order intake and revenue bridge

SEK M	Order intake	Revenues
Q4 2022	5,825	5,159
Organic, %	-10	-1
Structure, %	0	1
Currency, %	1	1
Alloys, %	-2	-3
Total growth, %	-12	-2
Q4 2023	5,147	5,038

Change compared to the corresponding quarter last year.

Order intake and revenues Organic revenue growth

Earnings

SEK M Adjusted EBIT
Q4 2022	555
Organic	-26
Currency	66
Structure	-13
Q4 2023	582

Change compared to the corresponding quarter last year.

Gross profit amounted to SEK 1,083 million (1,108). Adjusted gross profit decreased by 3% to SEK 1,221 million (1,257), with an adjusted gross margin of 24.2% (24.4).

Sales, administrative and R&D costs amounted to SEK -654 million (-612). Adjusted sales, administrative and R&D costs increased by 6% to SEK -654 million (-618), mainly due to higher activity and cost inflation. Adjusted sales, administrative and R&D costs in relation to revenues amounted to 13.0% (12.0).

Adjusted EBIT increased by 5% to SEK 582 million (555), corresponding to a margin of 11.6% (10.8), with an improved product mix and price increases that contributed to the margin improvement. Some temporary productivity challenges in the Transportation segment, and some under-absorption effects due to lower production volumes affected the margin. Currency had a positive impact of SEK 66 million compared with the corresponding period last year. Depreciation and amortization amounted to SEK -240 million (-229).

Reported EBIT increased to SEK 444 million (407), with a margin of 8.8% (7.9). Metal price effects had a negative impact of SEK -138 million (-149). Items affecting comparability amounted to SEK 0 million (0).

Net financial items were SEK 80 million (102).

The reported tax rate was 23.1% (18.8) in the quarter. The normalized tax rate, excluding the impact of metal price effects and items affecting comparability in EBIT, was 24.2% (24.3) for full-year 2023.

Profit for the period amounted to SEK 403 million (413), corresponding to earnings per share, diluted, of SEK 1.61 (1.65). Adjusted profit for the period amounted to SEK 511 million (528) and adjusted earnings per share, diluted, amounted to SEK 2.04 (2.11). See page 30 for further details.

Adjusted earnings per share, Adjusted EBIT diluted

2.04

Adjusted EBIT margin

11.6%

Cash flow and financial position

Capital employed excluding cash decreased to SEK 15,533 million (16,020). Return on capital employed excluding cash decreased to 12.9% (14.2), due to changed metal prices.

Net working capital increased slightly year on year and amounted to SEK 6,825 million (6,519), but decreased compared with the preceding quarter. The sequential decline was mainly due to reduced inventory, which decreased both in value and volume compared with the preceding quarter. Net working capital in relation to revenues was 34.6% (33.0).

Net investments (capex) amounted to SEK -362 million (-319), corresponding to 188.6% (175.3) of scheduled depreciation and -7.2% (-6.2) of revenues.

Net debt amounted to SEK -242 million (21), i.e. a net cash position. The net debt to equity ratio was -0.02x (0.00). The financial net debt was SEK -1,590 million (-883). Available credit facilities were unutilized at the end of the fourth quarter. The net pension liability increased year on year to SEK 843 million (513), primarily due to a lower long-term discount rate. Net debt corresponded to -0.08x (0.01) of rolling 12-month adjusted EBITDA.

Cash flow from operating activities amounted to SEK 796 million (1,107).

Free operating cash flow amounted to SEK 400 million (801).

Free operating cash flow

SEK M	Q4 2023	Q4 2022	Full year 2023	Full year 2022
EBITDA	685	636	2,957	2,980
Non-cash items	54	21	54	-130
Changes in working capital	65	502	-380	-1,590
Capex	-362	-319	-815	-656
Amortization, lease liabilities	-41	-39	-128	-99
Free operating cash flow1	400	801	1,688	505

1) Free operating cash flow before acquisitions and disposals of companies, net financial items and paid taxes.

Net working capital Net debt to Equity

⁰ -0.02X ⁵

7

Revenues per customer segment, 2023

• Chemical & Petrochemical
• Industrial
• Mining & Construction
• Nuclear
• Transportation Hydrogen and Renewable Energy
• Medical
• Industrial heating

Tube

Tube develops and manufactures seamless tubes and other long products in advanced stainless steels and special alloys used primarily in the customer segments of Oil and Gas, Chemical and Petrochemical, Industrial, Mining and Construction, Nuclear and Transportation. The offering also includes products and solutions for the growing Hydrogen and Renewable Energy segment.

Order intake and revenues

Order intake decreased by 8% to SEK 3,770 million (4,119), with organic growth of -7%, primarily attributable to lower order intake in the Oil and Gas segment, as well as the Chemical and Petrochemical segment, year on year. Excluding major orders of SEK 670 million (751), order intake decreased 7% organically. Organic order intake growth for the rolling 12-month period was -3%.

Revenues decreased by 2% to SEK 3,557 million (3,647), with organic growth of -1%. The negative organic revenue growth was mainly due to lower delivery volumes in the short-cycle, low-refined business in the Industrial segment. Book-to-bill was 106% for the quarter, and 111% for the rolling 12-month period.

Earnings

Adjusted EBIT totaled SEK 430 million (374), corresponding to a margin of 12.1% (10.2), driven by an improved product mix and price increases. Some temporary productivity challenges in the Transportation segment, and some underabsorption effects due to lower production volumes affected the margin. EBIT amounted to SEK 339 million (259) and included metal price effects of SEK -91 million (-112) and items affecting comparability of SEK 0 million (-3). Changes in exchange rates had a positive impact of SEK 64 million. Depreciation and amortization amounted to SEK -190 million (-188).

Other quarterly highlights

To strengthen the offering and increase capacity primarily in the Chemical and Petrochemical segment in Asia, the production facility in Mehsana in India has been modernized and expanded in several stages since 2019. The project ended in the fourth quarter in connection with the inauguration of a new production line for heat exchanger tubing.

SEK M	Order intake	Revenues	Adj. EBIT
Q4 2022	4,119	3,647	374
Organic	-7%	-1%	6
Structure	0%	0%	-14
Currency	1%	1%	64
Alloys	-2%	-3%	N/A
Total growth	-8%	-2%	57
Q4 2023	3,770	3,557	430

Change compared to same quarter last year. For order intake and revenues, the table is multiplicative, i.e. the different components must be multiplied to determine the total effect.

SEK M	Q4 2023	Q4 2022	Change %	Full year 2023	Full year 2022	Change %
Order intake	3,770	4,119	-8	16,052	15,959	1
Organic growth, %	-7	19	–	-3	25	–
Revenues	3,557	3,647	-2	14,475	12,804	13
Organic growth, %	-1	12	–	9	14	–
Adjusted EBITDA	621	562	11	2,217	1,922	15
Margin, %	17.4	15.4	–	15.3	15.0	–
Adjusted EBIT	430	374	15	1,491	1,229	21
Margin, %	12.1	10.2	–	10.3	9.6	–
EBIT	339	259	31	1,460	1,691	-14
Margin, %	9.5	7.1	–	10.1	13.2	–
Number of employees	4,082	3,931	4	4,082	3,931	4

Adjusted EBITDA and adjusted EBIT excludes metal price effects and items affecting comparability, for more information see page 25.

Order intake and revenues Adjusted EBIT

January 1 – December 31, 2023

Alleima Q4

8

Industrial Heating Consumer Medical Industrial Transportation

Kanthal

Kanthal is a provider of products and services in the area of industrial heating technology and resistance materials, and also offers ultra-fine wire in stainless steel for use in medical appliances. The customers are primarily in the segments Industrial Heating, Consumer, Medical and Industrial.

Order intake and revenues

Order intake decreased by 23% to SEK 981 million (1,279), with organic growth of -23%. The negative trend was mainly driven by high comparative figures attributable to a major order of SEK 350 million in the Medical segment in the year-earlier period. Excluding major orders, order intake increased by 5% organically. Overall, order intake in the Industrial Heating segment was slightly weaker year on year, but at high absolute levels. Organic order intake growth for the rolling 12-month period was -7%.

Revenues increased by 5% to SEK 1,082 million (1,031), with organic growth of 6%. The growth was driven by a positive trend in the Medical segment, which posted yet another quarter with record-high revenues, and by the Industrial Heating segment. Book-to-bill was 91% for the quarter, and 94% for the rolling 12-month period.

Earnings

Adjusted EBIT totaled SEK 207 million (193), corresponding to a margin of 19.1% (18.7). The improved margin was attributable to higher revenues, an improved product mix and price increases. EBIT amounted to SEK 161 million (164) and included metal price effects of SEK -46 million (-26) and items affecting comparability of SEK 0 million (-2). Changes in exchange rates had a negative impact of SEK -9 million. Depreciation and amortization amounted to SEK -32 million (-24).

Other quarterly highlights

The growing demand for electric heating solutions is driven by several industries, such as the production of lithium-ion batteries, electronics and glass. During the quarter, a decision was made to invest in an expansion of the existing capacity for silicon carbide heating elements in Perth in the UK, and in a new service center at the existing production facility in Concord in the US. Overall, the investments are estimated to about SEK 100 million over a two-year period and will increase production capacity by around 40%.

SEK M	Order intake	Revenues	Adj. EBIT
Q4 2022	1,279	1,031	193
Organic	-23%	6%	22
Structure	1%	2%	1
Currency	1%	0%	-9
Alloys	-2%	-3%	N/A
Total growth	-23%	5%	14
Q4 2023	981	1,082	207

Change compared to same quarter last year. For order intake and revenues, the table is multiplicative, i.e. the different components must be multiplied to determine the total effect.

SEK M	Q4 2023	Q4 2022	Change %	Full year 2023	Full year 2022	Change %
Order intake	981	1,279	-23	4,321	4,466	-3
Organic growth, %	-23	23	–	-7	9	–
Revenues	1,082	1,031	5	4,609	3,972	16
Organic growth, %	6	13	–	11	9	–
Adjusted EBITDA	239	217	10	963	708	36
Margin, %	22.1	21.1	–	20.9	17.8	–
Adjusted EBIT	207	193	7	844	611	38
Margin, %	19.1	18.7	–	18.3	15.4	–
EBIT	161	164	-2	778	802	-3
Margin, %	14.8	15.9	–	16.9	20.2	–
Number of employees	1,311	1,215	8	1,311	1,215	8

Adjusted EBITDA and adjusted EBIT excludes metal price effects and items affecting comparability, for more information see page 25.

Order intake and revenues Adjusted EBIT

Book-to-bill R12, %

0 5 10 15 20 25 2020 2021 2022 2023 EBIT, adj. EBIT margin, adj. EBIT margin, adj. R12

9

Revenues per customer segment, 2023

Strip

Strip develops and manufactures a wide range of precision strip steel products and also offers pre-coated strip steel for one of the most critical components in the hydrogen fuel cell stack – the bipolar plates. The customers are in the segments consumer, industrial, transportation, hydrogen and renewable energy as well as medical.

Order intake and revenues

Order intake decreased by 7% to SEK 395 million (427), with organic growth of -5%. The development was mainly attributable to the Consumer segment, which remained weak. Organic order intake growth for the rolling 12-month period was -24%.

Revenues decreased by 17% to SEK 399 million (481), with organic growth of -15%, driven by a general decline in the market. Book-to-bill was 99% for the quarter, and 83% for the rolling 12-month period.

Earnings

Adjusted EBIT totaled SEK 29 million (82), with a margin of 7.3% (17.0). The margin decrease was mainly attributable to under-absorption effects from lower production volumes. In the quarter, price increases offset the cost inflation. EBIT amounted to SEK 29 million (71) and included metal price effects of SEK -1 million (-10). Changes in exchange rates had a positive impact of SEK 7 million. Depreciation and amortization amounted to SEK -11 million (-11).

Other quarterly highlights

Measures to align capacity with lower demand are ongoing and as previously announced, staffing has been cut by reducing the number of employees in production.

SEK M	Order intake	Revenues	Adj. EBIT
Q4 2022	427	481	82
Organic	-5%	-15%	-60
Structure	–	–	–
Currency	-2%	-2%	7
Alloys	-1%	-1%	N/A
Total growth	-7%	-17%	-52
Q4 2023	395	399	29

Change compared to same quarter last year. For order intake and revenues, the table is multiplicative, i.e. the different components must be multiplied to determine the total effect.

SEK M	Q4 2023	Q4 2022	Change %	Full year 2023	Full year 2022	Change %
Order intake	395	427	-7	1,310	1,705	-23
Organic growth, %	-5	-11	–	-24	2	–
Revenues	399	481	-17	1,585	1,628	-3
Organic growth, %	-15	33	–	-5	14	–
Adjusted EBITDA	40	92	-57	152	254	-40
Margin, %	10.0	19.2	–	9.6	15.6	–
Adjusted EBIT	29	82	-64	109	207	-47
Margin, %	7.3	17.0	–	6.9	12.7	–
EBIT	29	71	-60	110	232	-53
Margin, %	7.2	14.8	–	6.9	14.2	–
Number of employees	488	519	-6	488	519	-6

Adjusted EBITDA and adjusted EBIT excludes metal price effects and items affecting comparability, for more information see page 25.

Order intake and revenues Adjusted EBIT

Sustainability

Alleima's strategy includes to be leading in the market from a sustainability perspective, contribute to increased circularity and support general health and well-being, both through our product offering and our operations. Developing a sustainable product offering, combined with several initiatives to reduce the overall environmental impact of the production process, are some of the most important success factors.

Making an impact through our offering

Electricity generated by nuclear power is an important source of carbon-free baseload power and dispatchable energy generation. During the quarter, Alleima received a major order for steam generator tubing with an estimated value of SEK 220 million. These will be used for several steam generators in a nuclear power plant. As a supplier to nuclear power projects, Alleima plays a key role in enabling sustainable energy solutions and reducing dependence on fossil fuels as a source of energy.

Making an impact through our operations

• Total recordable injury frequency rate (TRIFR) for the rolling 12-month period improved to 6.8 (7.6). The quarterly outcome was 5.2 (9.0).
• Share of recycled steel, i.e., scrap metal input in steel manufacturing, for the rolling 12-month period was 80.0% (82.6). The share declined to 80.0% (82.4) in the quarter, due to the product mix.
• CO₂ emissions for the rolling 12-month period amounted to 96 kton (107), corresponding to a reduction of 10%. CO₂ emissions during the quarter amounted to 26 kton (25), corresponding to an increase of 3%.
• The share of female managers increased to 23.3% (22.8) at year-end.

Definitions and glossary can be found at www.alleima.com/investors.

Sustainability overview

	Q4 2023	Q4 2022	Change, %	R12M, Q4 2023	R12M, Q4 2022	Change, %
TRIFR 1	5.2	9.0	-43	6.8	7.6	-11
CO2 emissions, thousand tons	26	25	3	96	107	-10
Recycled steel, %	80.0	82.4	-3	80.0	82.6	-3
Share of female mana gers, %	23.3	22.8	2	-	-	-

1) Total recordable injury frequency rate. Normalization factor: 1,000,000 exposure hours.

Health and safety Recycled steel CO2 emissions Share of female managers

TRIFR, R12

Full year 2023

Market development, order intake and revenues

Market development was mixed for the various customer segments during the year. The short-cycle business, mainly related to low-refined products in the Industrial and Consumer segments, weakened, while demand in mainly Oil and Gas, Chemical and Petrochemical, Nuclear, and Medical increased year on year.

Order intake decreased by 2% to SEK 21,684 million (22,130), with organic growth of -6%. Excluding major orders of SEK 2,382 million (2,653), organic growth was -5%.

Revenues increased by 12% to SEK 20,669 million (18,405), with organic growth of 8%. The Tube and Kanthal divisions noted a positive trend, while the trend was negative for Strip.

Book-to-bill was 105%.

Earnings

Adjusted EBIT increased by 27% to SEK 2,141 million (1,681) corresponding to a margin of 10.4% (9.1). The development was primarily attributable to higher revenues, an improved product mix and price increases. Currency had a positive impact of SEK 133 million year on year. Depreciation and amortization amounted to SEK -915 million (-859).

Reported EBIT amounted to SEK 2,046 million (2,122), corresponding to a margin of 9.9% (11.5). Metal price effects had a negative impact of SEK -95 million (695). Items affecting comparability amounted to SEK 0 million (-254).

Profit for the period amounted to SEK 1,574 million (1,483), corresponding to earnings per share, diluted, of SEK 6.27 (5.86). Adjusted profit for the period amounted to SEK 1,647 million (1,131) and adjusted earnings per share, diluted, amounted to SEK 6.56 (4.46). See page 30 for further details.

Cash flow and financial position

Capital employed excluding cash decreased to SEK 15,533 million (16,020). Return on capital employed excluding cash amounted to 12.9% (14.2).

Net working capital amounted to SEK 6,825 million (6,519). Net working capital in relation to revenues was 34.3% (32.8).

Net investments (capex) amounted to SEK -815 million (-656), corresponding to 108.4% (90.7) of scheduled depreciation and -3.9% (-3.6) of revenues.

Cash flow from operating activities increased to SEK 2,234 million (687).

Free operating cash flow increased to SEK 1,688 million (505).

Significant events

During the quarter

• On October 25, Alleima announced the receipt of two major orders for the Oil and Gas segment, of which one for advanced tubes, umbilicals, and one for corrosion resistant alloy OCTG tubes (Oil Country Tubular Goods), to a total value of SEK 450 million.
• On December 22, Alleima announced that it had received a major order for steam generator tubes for the Nuclear segment, to a total value of approximately SEK 220 million.

After the quarter

– On January 19, Alleima announced the receipt of a major order for steam generator tubes for the Nuclear segment to a total value of approximately SEK 250 million.

Guidance and financial targets

Guidance relating to certain non-operational key figures considered useful when modeling financial outcome is provided below:

Guidance

Capex (Cash) (full year)	Estimated at approximately SEK 950 million for 2024.
Currency effects (quarterly)	Based on currency rates at the end of December 2023, it is estimated that transaction and translation currency effects will have an impact of about SEK -60 million on operating profit (EBIT) for the first quarter of 2024, compared to the corresponding period last year.
Metal price effects (quarterly)	In view of currency rates, inventory levels and metal prices at the end of December 2023, it is estimated that there will be an impact of approximately SEK -300 million on operating profit (EBIT) for the first quarter of 2024.
Tax rate, normalized (full year)	Estimated at 24-26% for 2024.

Financial targets

Alleima has four long-term financial targets:
Organic growth	Deliver profitable organic revenue growth in line with or above growth in targeted end-markets over a business cycle.
Earnings	Adjusted EBIT margin (excluding items affecting comparability and metal price effects) to average above 9% over a business cycle.
Capital structure	A net debt to equity ratio below 0.3x.
Dividend policy	Dividend on average 50% of net profit (adjusted for metal price effects) over a business cycle. Dividend to reflect financial position, cash flow and outlook.

About us

Alleima is a world-leading developer, manufacturer, and supplier of high value-added products in advanced stainless steels and special alloys as well as products for industrial heating, operating with a global footprint. Based on close and long-term customer partnerships, Alleima advances processes and applications in the most demanding industries through materials that are lightweight, durable,

corrosion-resistant and able to withstand extremely high temperatures and pressures.

Through its offering and in-depth expertise in materials technology, metallurgy and industrial processes, Alleima enables its customers to become more efficient, profitable, safe and sustainable.

Tube

Tube develops and manufactures seamless tubes and other long products in advanced stainless steels and special alloys.

Kanthal

Kanthal is a provider of products and services in the area of industrial heating technology and resistance materials, and also offers ultra-fine wire in stainless steel for use in medical appliances.

Strip

Strip develops and manufactures a wide range of precision strip steel products and also offers pre-coated strip steel.

Purpose

We advance industries through materials technology Our unique and leading expertise enables more efficient, more profitable and more sustainable processes, products and applications for our customers.

Business model

The business model is based on close customer cooperation and extensive industry knowledge in combination with materials and process competence and a global footprint. Customer relationships are often characterized by a high degree of technical collaboration, including identifying the customers' needs and finding innovative ways to solve complex challenges. Approximately 80 percent of products are sold directly through Alleima's own global sales network and the remainder is often sold through distributors. Alleima has a fully integrated value chain, including in-house R&D, two steel mills with melt shops, five extrusion presses and several hot working, cold working, and finishing facilities.

Strategy

The strategy is based on four pillars:

Values

• Drive profitable growth by capitalizing on global megatrends such as energy transition, energy efficiency, electrification and medical growth
• Continuous focus of R&D activities and digital innovations toward new business opportunities, defending and strengthening the current business and widening of the material portfolio
• Operational and commercial excellence through continuous improvement, price management, mix optimization, cost flexibility, footprint optimization and resilience
• Industry-leading sustainability that benefits the climate, increases circularity and supports general health and wellbeing, both through product offering as well as operations.

Customer segments sales exposure

We care We deliver We evolve

Revenues per customer segment is based on full-year 2023. Historically, these percentages have not changed substantially between the quarters and the full year figures of 2023 will therefore give a good approximation.

Revenues per customer segment, full year 2023

• Oil & Gas
• Industrial Chemical & Petrochemical
• Industrial heating
• Consumer
  • Mining & Construction Medical
  • Nuclear
  • Transportation
  • Hydrogen and Renewable Energy

Other information

Risks and uncertainties

As an international group with a wide geographical spread, Alleima is exposed to several strategic, business and financial risks. Strategic risk at Alleima is defined as emerging risks affecting the business long-term, such as industry shifts, technological shifts, and macroeconomic developments. The business risks can be divided into operational, sustainability, compliance, legal and commercial risks. The financial risks include currency risks, interest rate risk, price risk, tax risks and more. These risk areas can all impact the business negatively both long and short-term but often also create business opportunities if managed well. Risk management at Alleima begins with an assessment in operational management teams where the material risks to their operations are first identified, followed by an evaluation of the probability of the risks occurring and their potential impact on the Group. Once the key risks have been identified and evaluated, risk mitigating activities to eliminate or reduce the risks are agreed on. For a more detailed description of Alleima's analysis of risks and risk universe, see the Annual Report 2022.

The situation by the Red Sea

The uncertainties that have arisen around the situation in the Red Sea and transports through the Suez Canal may have certain effects on freight costs, lead-times and capital tie-up as Alleima has some logistical exposure through the geographical area. As there is a general uncertainty regarding how the situation will evolve, it is difficult to foresee the final impact on Alleima's financial results and financial position.

Stockholm, January 23, 2024 Alleima AB (publ) 559224-1433

The Board of Directors

The Company's Auditor has not reviewed the report for the fourth quarter and full year 2023.

Financial reports summary

The Group

Condensed consolidated income statement

SEK M	Note	Q4 2023	Q4 2022	Full year 2023	Full year 2022
Revenues		5,038	5,159	20,669	18,405
Cost of goods sold		-3,955	-4,050	-16,090	-13,692
Gross profit		1,083	1,108	4,579	4,713
Selling expenses		-318	-314	-1,288	-1,177
Administrative expenses		-262	-245	-973	-1,203
Research and development costs		-73	-53	-255	-209
Other operating income		62	14	229	145
Other operating expenses		-47	-104	-245	-148
Operating profit/loss	2	444	407	2,046	2,122
Financial income		130	154	172	185
Financial expenses		-50	-51	-144	-368
Net financial items		80	102	28	-184
Profit/loss after net financial items		524	509	2,074	1,938
Income tax	3	-121	-96	-500	-455
Profit/loss for the period		403	413	1,574	1,483
Profit/loss for the period attributable to
Owners of the parent company		403	413	1,574	1,470
Non-controlling interests		-	-	-	12
Earnings per share, SEK
Basic	6	1.61	1.65	6.28	5.86
Diluted	6	1.61	1.65	6.27	5.86

Condensed consolidated comprehensive income

SEK M	Note	Q4 2023	Q4 2022	Full year 2023	Full year 2022
Profit/loss for the period		403	413	1,574	1,483
Other comprehensive income
Items that will not be reclassified to profit (loss)
Actuarial gains (losses) on defined benefit pension plans		-390	-19	-327	660
Tax relating to items that will not be reclassified		82	5	69	-129
Total items that will not be reclassified to profit (loss)		-308	-14	-258	531
Items that may be reclassified to profit (loss)
Foreign currency translation differences		-370	-95	-227	438
Hedge reserve adjustment		337	-468	-965	667
Tax relating to items that may be reclassified		-70	96	199	-137
Total items that may be reclassified to profit (loss)		-102	-467	-994	967
Total other comprehensive income		-410	-481	-1,252	1,498
Total comprehensive income		-7	-68	322	2,981
Total comprehensive income attributable to
Owners of the parent company		-7	-68	322	2,967
Non-controlling interests		-	-	-	14

Condensed consolidated balance sheet

SEK M	Note	Dec 31, 2023	Dec 31, 2022
Goodwill		1,621	1,615
Other intangible assets		292	194
Property, plant and equipment		7,281	7,350
Right-of-use assets		502	392
Financial assets	4	103	714
Deferred tax assets		164	174
Non-current assets		9,963	10,440
Inventories		7,360	7,355
Current receivables	4	4,077	4,712
Cash and cash equivalents		1,595	892
Current assets		13,033	12,960
Total assets		22,996	23,399
Equity attributable to owners of the parent company	6	15,732	15,901
Non-controlling interest		0	0
Total equity		15,732	15,901
Non-current interest-bearing liabilities		1,266	916
Non-current non-interest-bearing liabilities	4	971	1,398
Non-current liabilities		2,237	2,314
Current interest-bearing liabilities		130	94
Current non-interest-bearing liabilities	4	4,897	5,090
Current liabilities		5,027	5,184
Total equity and liabilities		22,996	23,399

Condensed consolidated cash flow statement

SEK M	Note	Q4 2023	Q4 2022	Full year 2023	Full year 2022
Operating activities
Operating profit/loss		444	407	2,046	2,122
Adjustments for non-cash items:
Depreciation, amortization and impairments		240	229	911	859
Other non-cash items		54	21	54	-130
Received and paid interest		32	-11	22	-281
Income tax paid		-38	-41	-419	-292
Cash flow from operating activities before changes in working capital		732	604	2,615	2,277
Changes in working capital		65	502	-380	-1,590
Cash flow from operating activities		796	1,107	2,234	687
Investing activities
Investments in intangible and tangible assets		-365	-331	-827	-679
Proceeds from sale of intangible and tangible assets		3	12	12	23
Acquisition and sale of shares and participations	7	-4	-171	-174	-312
Other investments and financial assets, net		2	-6	1	0
Cash flow from investing activities		-363	-495	-988	-968
Financing activities
Proceeds from loans		-	-	18	0
Repayments of loans		-1	-703	-22	-1,639
Amortization of lease liabilities		-41	-39	-128	-99
New share issue and capital contribution from shareholders		-	-	-	1,400
Equity swap	1,6	-	-	-20	-
Dividends paid	6	-	-	-351	-3
Cash flow from financing activities		-42	-742	-503	-341
Net change in cash and cash equivalents		391	-131	743	-622
Cash and cash equivalents at beginning of period		1,245	1,086	892	1,661
Exchange rate differences in cash and cash equivalents		-41	-40	-39	48
Other cash flow from transactions with shareholders		-	-24	-	-195
Cash and cash equivalents at end of the period		1,595	892	1,595	892

Condensed consolidated statements of changes in equity

SEK M	Note	Equity attributable to owners of the parent company	Non controlling interest	Total equity
Equity at January 1, 2022		11,663	97	11,761
Changes
Net profit		1,470	12	1,483
Other comprehensive income for the period, net of tax		1,496	2	1,498
Total comprehensive income for the period		2,967	14	2,981
Cash flow hedge, transferred to cost of hedged item		37	-	37
Tax on cash flow hedge, transferred to cost		-8	-	-8
Net cash flow hedge, transferred to cost		30	-	30
New share issue		251	-	251
Capital contribution from shareholders		1,149	-	1,149
Dividends		-	-3	-3
Transactions with shareholders	5	-123	0	-123
Transactions with non-controlling interests		-36	-109	-145
Total transactions with owners		1,241	-112	1,130
Equity at December 31, 2022		15,901	0	15,901
Changes
Net profit		1,574	-	1,574
Other comprehensive income for the period, net of tax		-1,252	-	-1,252
Total comprehensive income for the period		322	-	322
Cash flow hedge, transferred to cost of hedged item		-153	-	-153
Tax on cash flow hedge, transferred to cost		32	-	32
Net cash flow hedge, transferred to cost		-122	-	-122
Shared-based payments	1,6	2	-	2
Equity swap	1,6	-20	-	-20
Dividends	6	-351	-	-351
Total transactions with owners		-369	-	-369
Equity at December 31, 2023		15,732	0	15,732

The Parent Company

Condensed income statement

SEK M	Note	Q4 2023	Q4 2022	Full year 2023	Full year 2022
Revenues		6	5	24	20
Gross profit		6	5	24	20
Administrative expenses		-26	-53	-84	-143
Other operating income		2	1	1	0
Operating loss		-18	-48	-59	-122
Dividend from group companies		485	-	485	500
Interest revenue and similar income		9	5	32	6
Interest expense and similar costs		0	0	-1	0
Profit/loss after financial items		476	-43	458	383
Appropriations		11	41	31	111
Income tax		1	0	0	1
Profit/loss for the period		487	-2	488	495

Condensed balance sheet

SEK M	Note	Dec 31, 2023	Dec 31, 2022
Financial assets		11,907	11,907
Deferred tax assets		2	1
Non-current assets		11,909	11,908
Current receivables		1,580	1,441
Current assets		1,580	1,442
Total assets		13,490	13,350
Restricted equity		251	251
Unrestricted equity	1,6	13,188	13,069
Total equity		13,439	13,320
Non-current interest-bearing liabilities		2	-
Non-current non-interest-bearing liabilities		13	4
Non-current liabilities		14	4
Current non-interest-bearing liabilities		36	25
Current liabilities		36	26
Total equity and liabilities		13,490	13,350

Order intake by division and region

		Q4	Q4	Organic	Organic ex. major orders¹	Full year	Full year	Organic	Organic ex. major orders¹
SEK M	Note	2023	2022	%	%	2023	2022	%	%
Tube
Europe		2,533	2,164	18	7	10,080	7,783	25	4
North America		498	1,130	-54	-37	2,570	3,922	-39	-13
Asia		421	409	8	8	2,087	2,494	-18	3
Other		318	415	-26	-42	1,314	1,760	-29	-40
Total		3,770	4,119	-7	-7	16,052	15,959	-3	-4
Kanthal
Europe		281	289	-7	-7	1,326	1,298	-7	-7
North America		361	641	-42	23	1,339	1,712	-24	-5
Asia		231	320	-25	-25	1,379	1,271	9	9
Other		109	29	272	272	277	185	40	40
Total		981	1,279	-23	5	4,321	4,466	-7	1
Strip
Europe		171	172	0	0	538	765	-31	-31
North America		18	41	-55	-55	134	192	-36	-36
Asia		199	208	1	1	617	724	-14	-14
Other		7	7	5	5	22	24	-14	-14
Total		395	427	-5	-5	1,310	1,705	-24	-24
GROUP
Europe		2,985	2,625	14	5	11,944	9,846	16	0
North America		876	1,812	-50	-22	4,043	5,827	-34	-11
Asia		851	937	-5	-5	4,083	4,488	-10	2
Other		434	451	-7	1	1,614	1,969	-22	-30
Total		5,147	5,825	-10	-4	21,684	22,130	-6	-5

1) Major orders are defined as orders above SEK 200 million.

Revenues by division and region

SEK M Note	Q4 2023	Q4 2022	Organic %	Full year 2023	Full year 2022	Organic %
Tube
Europe	1,998	1,666	22	7,975	6,817	14
North America	587	657	-8	2,780	2,960	-11
Asia	636	793	-17	2,127	2,049	2
Other	336	533	-37	1,593	978	54
Total	3,557	3,647	-1	14,475	12,804	9
Kanthal
Europe	316	361	-16	1,459	1,259	6
North America	366	351	8	1,584	1,429	7
Asia	348	267	35	1,373	1,111	24
Other	52	53	-2	193	172	5
Total	1,082	1,031	6	4,609	3,972	11
Strip
Europe	170	224	-23	712	792	-12
North America	36	51	-28	217	168	20
Asia	190	201	-2	636	643	-1
Other	2	4	-41	20	26	-26
Total	399	481	-15	1,585	1,628	-5
GROUP
Europe	2,484	2,250	11	10,146	8,867	10
North America	989	1,059	-4	4,581	4,558	-4
Asia	1,174	1,261	-3	4,137	3,803	8
Other	391	589	-34	1,806	1,176	45
Total	5,038	5,159	-1	20,669	18,405	8

Quarterly by division

Alleima has three reportable operating segments, Tube, Kanthal and Strip. Items not included in the operating segments, mainly related to Group staff functions typically to run the Group or items Alleima considers to be centrally decided, are presented as Common functions.

	Note	Full year 2023	Full year 2022	Q4 2023	Q3 2023	Q2 2023	Q1 2023	Q4 2022	Q3 2022	Q2 2022	Q1 2022
Order intake, SEK M
Tube		16,052	15,959	3,770	3,316	4,129	4,837	4,119	2,552	4,869	4,419
Kanthal		4,321	4,466	981	1,003	1,066	1,271	1,279	945	1,111	1,130
Strip		1,310	1,705	395	276	331	308	427	372	460	447
Total¹		21,684	22,130	5,147	4,595	5,526	6,416	5,825	3,869	6,440	5,996
Revenues, SEK M
Tube		14,475	12,804	3,557	3,130	4,025	3,763	3,647	2,931	3,329	2,897
Kanthal		4,609	3,972	1,082	1,153	1,179	1,195	1,031	995	1,012	934
Strip		1,585	1,628	399	334	435	418	481	344	416	388
Total¹		20,669	18,405	5,038	4,617	5,638	5,376	5,159	4,270	4,757	4,219
Adjusted EBITDA, SEK M	2
Tube		2,217	1,922	621	383	635	577	562	311	592	458
Kanthal		963	708	239	245	256	223	217	139	182	170
Strip		152	254	40	7	55	51	92	22	68	72
Common functions		-276	-344	-77	-52	-80	-67	-86	-69	-90	-99
Total¹		3,056	2,540	822	583	866	785	785	403	751	601
Adjusted EBITDA margin, %
Tube		15.3	15.0	17.4	12.2	15.8	15.3	15.4	10.6	17.8	15.8
Kanthal		20.9	17.8	22.1	21.2	21.7	18.7	21.1	14.0	18.0	18.2
Strip		9.6	15.6	10	2	12.6	12.3	19.2	6.5	16.2	18.6
Common functions		N/M	N/M	N/M	N/M	N/M	N/M	N/M	N/M	N/M	N/M
Total¹		14.8	13.8	16.3	12.6	15.4	14.6	15.2	9.4	15.8	14.2
Adjusted EBIT, SEK M	2
Tube		1,491	1,229	430	199	457	404	374	145	428	282
Kanthal		844	611	207	214	227	196	193	115	158	146
Strip		109	207	29	-4	44	41	82	10	55	60
Common functions		-303	-367	-84	-59	-86	-73	-92	-75	-94	-105
Total¹		2,141	1,681	582	350	642	567	555	195	547	384
Adjusted EBIT margin, %
Tube		10.3	9.6	12.1	6.4	11.4	10.7	10.2	4.9	12.9	9.7
Kanthal		18.3	15.4	19.1	18.6	19.3	16.4	18.7	11.6	15.6	15.6
Strip		6.9	12.7	7.3	-1.3	10.0	9.7	17.0	3.0	13.3	15.5
Common functions		N/M	N/M	N/M	N/M	N/M	N/M	N/M	N/M	N/M	N/M
Total¹		10.4	9.1	11.6	7.6	11.4	10.5	10.8	4.6	11.5	9.1
EBIT, SEK M
Tube		1,460	1,691	339	94	189	838	259	12	914	507
Kanthal		778	802	161	182	203	233	164	107	297	234
Strip		110	232	29	-10	44	48	71	15	73	73
Common functions		-303	-603	-84	-59	-86	-73	-87	-160	-177	-179
Total¹		2,046	2,122	444	206	350	1,045	407	-26	1,106	635

1) Internal transactions had negligible effect on division profits.

Notes

Note 1 | Accounting principles

The financial statements of the Group were prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU. This interim report for the Group was prepared in accordance with IAS 34 Interim Financial Reporting as issued by the International Accounting Standards Board (IASB) and the Swedish Annual Accounts Act, and for the parent company in accordance with the Swedish Annual Accounts Act and RFR 2 Reporting for legal entities and other statements issued by the Swedish Financial Reporting Board. The accounting principles and computation methods applied in the preparation of this interim report are the same as those applied in the Annual Report 2022 as amended below. All amounts are in million SEK (SEK M) unless otherwise stated. Roundings may occur.

The interim information on pages 1–33 is an integrated part of these financial statements.

Share-based payments

Following the decision on Alleima's Annual General Meeting held on May 2, 2023, Alleima grants share-based payments to be settled with Alleima shares, so called equity-settled payments, under the terms and conditions of the incentive program. The costs for equity-settled payments are based on the fair value of the share rights calculated by an independent party at the date of grant. These payments are reported as employee costs during the vesting period with a corresponding increase in equity. The vesting conditions in the program are linked to non-market performance conditions (earnings per share and reduction of carbon dioxide) and service conditions (employment period) which are taken into account in employee cost during the vesting period by the change in the number of shares that are expected to finally vest. Alleima records a liability for social security expenses, at each reporting period, for all outstanding share-based payments. Social security expenses attributable to equity-based instruments to employees as compensation for purchased services are expensed in the periods during which the services are performed. The provision for social security expenses is based on the fair value of the share rights at each reporting period.

Equity swap raised to secure the delivery of shares under the incentive program is reported in equity with adjustment for related expenses and any dividends on the shares.

Changes in IFRS standards

IASB has published amendments of standards that are effective as of January 1, 2023 or later. The standards have not had any material impact on the financial reports.

Note 2 | Adjustment items on EBITDA/EBIT

SEK M	Full year 2023	Full year 2022	Q4 2023	Q3 2023	Q2 2023	Q1 2023	Q4 2022	Q3 2022	Q2 2022	Q1 2022
EBITDA
Items affecting comparability
Tube	0	-12	0	0	0	0	-3	-4	-3	-2
Kanthal	0	-5	0	0	0	0	-2	-1	-3	1
Strip	0	-1	0	0	0	0	-1	0	0	0
Common functions	0	-236	0	0	0	0	5	-85	-83	-74
Total	0	-254	0	0	0	0	0	-90	-89	-75
Metal price effect
Tube	-30	474	-91	-105	-268	434	-112	-129	489	226
Kanthal	-65	196	-46	-33	-24	38	-26	-7	142	88
Strip	0	25	-1	-6	0	7	-10	5	17	13
Total	-95	695	-138	-144	-293	479	-149	-131	649	327
Total adjustment items EBITDA
Tube	-30	462	-91	-105	-268	434	-115	-133	486	224
Kanthal	-65	190	-46	-33	-24	38	-29	-8	139	88
Strip	0	24	-1	-6	0	7	-11	5	17	13
Common functions	0	-236	0	0	0	0	5	-85	-83	-74
Total	-95	441	-138	-144	-293	479	-149	-221	559	252
EBIT
Impairment of tangible and intan gible fixed assets
Tube	0	0	0	0	0	0	0	0	0	0
Total	0	0	0	0	0	0	0	0	0	0
Total adjustment items EBIT
Tube	-30	462	-91	-105	-268	434	-115	-133	486	224
Kanthal	-65	190	-46	-33	-24	38	-29	-8	139	88
Strip	0	24	-1	-6	0	7	-11	5	17	13
Common functions	0	-236	0	0	0	0	5	-85	-83	-74
Total	-95	441	-138	-144	-293	479	-149	-221	559	252
Items affecting comparability, EBITDA, consists of:
Separation costs	0	-254	0	0	0	0	0	-90	-89	-75
Reversal restructuring provisions	0	0	0	0	0	0	0	0	0	0
Capital gain from divestment of pro perty	0	0	0	0	0	0	0	0	0	0
Total	0	-254	0	0	0	0	0	-90	-89	-75
Items affecting comparability, impairments, consists of:
Reversal of impairment	0	0	0	0	0	0	0	0	0	0
Total	0	0	0	0	0	0	0	0	0	0
Total items affecting comparability	0	-254	0	0	0	0	0	-90	-89	-75

Note 3 | Taxes

SEK M		Q4 2023		Q4 2022		Full year 2023	Full year 2022
Reported tax	-121	23.1%	-96	18.8%	-500	24.1%	-455	23.5%
Tax on adjustment items (note 2)	-30	-21.6%	-34	-22.8%	-22	-23.3%	89	-20.1%
Tax excluding adjustment items	-151	22.8%	-130	19.7%	-522	24.1%	-367	24.5%
Adjustment for one time items taxes	-7	1.1%	-13	2.0%	-3	0.1%	3	-0.2%
Normalized tax rate	-158	23.8%	-143	21.7%	-525	24.2%	-364	24.3%

Adjustment for one time items taxes during 2023 consist of revaluation of tax loss-carry-forwards of SEK -3 million (-3) and temporary differences of SEK 17 million (13) and other one time tax items of SEK -17 million (-7).

Note 4 | Financial assets and liabilities

Financing

During Q2 2023, Alleima has prolonged the revolving credit facility of SEK 3,000 million with one year by utilizing a one-year option, extending the facility to 2028. The facility was not utilized as of December 31, 2023.

Financial instruments - fair values

In order to mitigate financial risks, the Group has entered into financial instruments such as currency-, commodity- and electricity- and gas derivatives. All derivatives belong to Level 2 in the fair value hierarchy, i.e. observable inputs have been used in deriving the fair values. Fair values, which equals carrying amounts, of outstanding derivatives amounted at each reporting period to the amounts below.

SEK M	Dec 31, 2023	Dec 31, 2022
Financial assets derivatives	327	1,540
Financial liabilities derivatives	493	623

The carrying amounts for other financial assets and liabilities are considered to represent a good approximation of the fair values due to the short durations.

Note 5 | Related party transactions

The Group companies have related party relationships with their subsidiaries. All related party transactions are based on market terms and negotiated on an arm's length basis. For outstanding share right programs refer to Note 6. Other remunerations to senior executives for Alleima are presented in the Annual Report 2022 in Note 3.

Separation from Sandvik

On August 31, 2022, the Alleima shares were delivered to the shareholders of Sandvik and Alleima is no longer part of the Sandvik Group. Alleima former shareholder was Sandvik AB. Transactions with the Sandvik Group are presented in the Annual Report 2022 in Note 1 and in Note 27.

Note 6| Equity, number of shares and incentive programs

Number of shares	Dec 31, 2023	Dec 31, 2022
Total number of shares	250,877,184	250,877,184
Number of treasury shares via equity swap (LTI)	-410,620	-
Number of outstanding shares	250,466,564	250,877,184
Number of outstanding shares, weighted average	250,630,812	250,877,184
Number of shares after dilution	250,870,108	250,877,184
Number of shares after dilution, weighted average	250,875,769	250,877,184

Outstanding share right programs

Alleima's General Meeting held on May 2, 2023 approved the Board's proposal for a long-term share-based incentive program for 30 senior executives and key employees in the Group (LTI 2023). Participation requires an investment in Alleima shares. Each acquired Alleima share entitles the participant to be allotted, after a period of three years, a certain number of Alleima shares free of charge, provided that certain performance targets with respect to earnings per share and reduction of carbon dioxide (CO2) are met. As of December 31, 2023, LTI 2023 comprises 403,544 share rights. The delivery of these shares is secured through an equity swap agreement with a third party. Total costs before tax for outstanding rights in the incentive program are expensed over the three-year vesting period. These costs are expected to amount to SEK 18 million, of which social security costs amount to SEK 6 million.

Dividend

To the Annual General Meeting on May 2, 2024, Alleima's Board of Directors proposes for the financial year 2023 an ordinary dividend of SEK 2.00 per share (SEK 502 million), proposed to be paid on May 10, 2024.

The Annual General Meeting held on May 2, 2023, resolved for the financial year 2022 on an ordinary dividend of SEK 1.40 per share. The dividend of SEK 351 million was distributed to the shareholders on May 9, 2023.

Note 7 | Business acquisitions

On May 2, 2023, Alleima acquired Söderfors Steel Operations AB ("Söderfors Steel"). The acquisition will add capabilities in hot rolling of small diameter bars and profiles to expand the offering of advanced materials for the Medical and Aerospace segments. The company will be reported within the Tube division. The production facility and head office of Söderfors Steel is located in Söderfors, Sweden, with approximately 50 employees. In 2022, Söderfors Steel had revenues of approximately SEK 145 million. During Q2 to Q4 2023, the company's impact on Alleima's revenues amounted to SEK 41 million with a slightly negative result for the Group. Impact on earnings per share is expected to be accretive going forward. The acquisition was made through the purchase of 100% of shares and voting rights. Alleima assumed control over the operations upon the date of closing. No equity instruments have been issued in connection with the acquisition. The acquisition have been accounted for using the acquisition method.

On November 30, 2022, Alleima acquired Endosmart Gesellschaft für Medizintechnik mbH (Endosmart), a German-based manufacturer of medical devices and components made of the shape memory alloy nitinol. The company is reported in division Kanthal. The preliminary purchase price allocation disclosed in the Annual Report 2022 has been adjusted during Q1 and Q2 2023 based on the deferred purchase price settlement and the valuation of identified intangible assets and related deferred tax. The carrying value of intangible assets has been increased by SEK 30 million (whereof customer relationships SEK 28 million). And in addition, some other minor adjustments have been made. Related deferred tax liability of SEK 10 million has been recognized. Goodwill has been reduced by the corresponding net amount of SEK 16 million. The cost of the combination, the fair values of net assets acquired and goodwill for the combination are presented in the table below. For more information on the Endosmart acquisition, see Note 28 in the Annual Report 2022.

Assets, liabilities and contingent liabilities included in the acquired operations are stated below. The valuations of acquired assets and assumed liabilities are still preliminary for the acquisition Söderfors.

SEK M	Endosmart	Söderfors
Intangible assets	30	42
Property, plant and equipment	12	55
Right of use assets	20	83
Inventories	29	6
Receivables	35	21
Cash and cash equivalents	8	-
Other liabilities and provisions	-77	-151
Deferred tax assets/liabilities, net	-10	-12
Net identifiable assets and liabilities	48	44
Goodwill	142	55
Purchase consideration	189	99
Payment for debt in acquired companies	-	49
	189	148
Less: cash and cash equivalents in acqui
red companies	-8	-
Net cash outflow (+)	180	148

Goodwill from the acquisitions is not deductible for tax purposes.

Note 8 | Significant events after the quarter

On January 19, Alleima announced the receipt of a major order for steam generator tubes for the Nuclear segment to a total value of approximately SEK 250 million.

Key ratios

	Q4 2023	Q4 2022	Full year 2023	Full year 2022	Full year 2021	Full year 2020	Full year 2019
Adjusted gross margin, %	24.2	24.4	22.6	21.8	20.6	22.2	23.2
Adjusted EBITDA margin, %	16.3	15.2	14.8	13.8	13.1	13.9	14.9
Adjusted EBIT margin, %	11.6	10.8	10.4	9.1	7.6	8.7	9.7
Operating profit (EBIT) margin, %	8.8	7.9	9.9	11.5	10.0	3.5	9.2
Normalized tax rate, % (Note 3)	23.8	21.7	24.2	24.3	24.9	31.6	35.2
Net working capital to revenues, % 1	34.6	33.0	34.3	32.8	31.2	30.4	26.1
Return on capital employed, % 2	12.2	13.2	12.2	13.2	10.4	3.8	10.7
Return on capital employed excluding cash, % 2	12.9	14.2	12.9	14.2	11.0	3.8	10.8
Net debt/Adjusted EBITDA ratio	-0.08	0.01	-0.08	0.01	0.73	0.90	2.04
Net debt/Equity ratio	-0.02	0.00	-0.02	0.00	0.11	0.17	0.54
Cash flow from operations, SEK M	796	1,107	2,234	687	1,151	1,671	1,617
Adjusted earnings per share, diluted, SEK	2.04	2.11	6.56	4.46	3.82	3.69	2.94
Average number of shares, diluted, at the end of the period (millions)	250.874	250.877	250.876	250.877	250.877	250.877	250.877
Number of shares at the end of the period (millions)	250.467	250.877	250.467	250.877	250.877	250.877	250.877
Number of employees 3	6,110	5,886	6,110	5,886	5,465	5,084	5,726
Number of consultants 3	596	612	596	612	413	287	513

1) Quarter is quarterly annualized and the annual number is based on a four quarter average.

2) Based on rolling 12 months and a four-quarter average.

3) Full-time equivalent.

Alternative Performance Measures

This interim report contains certain alternative performance measures that are not defined by IFRS. These measures are included as they are considered to be important performance indicators of the operating performance and liquidity of Alleima. They should not be considered a substitute for Alleima's financial statements prepared in accordance with IFRS. Alleima's definitions of these measures are described below, and as other companies may calculate non IFRS measures differently, these measures are therefore not always comparable to similar measures used by other companies.

Organic order intake and revenue growth

Change in order intake and revenues after adjustments for exchange rate effects and structural changes such as divestments and acquisitions and alloy surcharges. Organic growth is used to analyze the underlying sales performance in the Group, as most of its revenues are in currencies other than in the reporting currency (i.e. SEK, Swedish Krona). Alloy surcharges are used as an instrument to pass on changes in alloy costs along the value chain and the effects from alloy surcharges may fluctuate over time.

Adjusted EBITDA and adjusted operating profit (EBIT)

Alleima considers Adjusted EBITDA and Adjusted operating profit (EBIT) and the related margin to be relevant measures to present profitability of the underlying business excluding metal price effects and items affecting comparability (IAC).

Metal price effect is the difference between sales price and purchase price on metal content used in the production of products. Metal price effect on operating profit in a particular period arises from changes in alloy prices arising from the timing difference between the purchase, as included in cost of goods sold, and the sale of an alloy, as included in revenues, when alloy surcharges are applied. IAC includes capital gains and losses from divestments and larger restructuring initiatives, impairments, capital gains and losses from divestments of financial assets as well as other material items having a significant impact on the comparability.

Adjusted EBITDA and margin: Operating profit (EBIT) excluding depreciations, amortization of intangible assets, items affecting comparability and metal price effects. Margin is expressed as a percentage of revenues.

Adjusted operating profit (EBIT) and margin: Operating profit (EBIT) excluding items affecting comparability and metal price effects. Margin is expressed as a percentage of revenues.

Adjusted EBITDA and adjusted operating profit (EBIT)

SEK M	Full year 2023	Full year 2022	Q4 2023	Q3 2023	Q2 2023	Q1 2023	Q4 2022	Q3 2022	Q2 2022	Q1 2022
Operating profit/loss	2,046	2,122	444	206	350	1,045	407	-26	1,106	635
Reversal (Note 2):
Items affecting comparability	0	254	0	0	0	0	0	90	89	75
Metal price effect	95	-695	138	144	293	-479	149	131	-649	-327
Impairments	0	0	0	0	0	0	0	0	0	0
Adjusted operating profit (EBIT)	2,141	1,681	582	350	642	567	555	195	547	384
Reversal:
Depreciation and amortization	915	859	240	233	224	218	229	208	205	217
Adjusted EBITDA	3,056	2,540	822	583	866	785	785	403	751	601
Revenues	20,669	18,405	5,038	4,617	5,638	5,376	5,159	4,270	4,757	4,219
Adjusted operating profit (EBIT) margin, %	10.4	9.1	11.6	7.6	11.4	10.5	10.8	4.6	11.5	9.1
Adjusted EBITDA margin, %	14.8	13.8	16.3	12.6	15.4	14.6	15.2	9.4	15.8	14.2

Adjusted earnings per share, diluted

Alleima considers Adjusted earnings per share (EPS), diluted to be relevant to understand the underlying performance, which excludes items affecting comparability and metal price effects between periods.

Adjusted EPS, diluted: Profit/loss, adjusted for items affecting comparability and metal price effects, attributable to equity holders of the Parent Company divided by the average number of shares, diluted, outstanding during the period.

Adjusted profit for the period and adjusted earnings per share, diluted

SEK M	Full year 2023	Full year 2022	Q4 2023	Q3 2023	Q2 2023	Q1 2023	Q4 2022	Q3 2022	Q2 2022	Q1 2022
Profit/loss for the period	1,574	1,483	403	137	218	815	413	-154	669	555
Reversal:
Adjustment items EBITDA/EBIT (Note 2)	95	-441	138	144	293	-479	149	221	-559	-252
Tax on adjustment items (Note 3)	-22	89	-30	-34	-61	103	-34	-48	118	52
Adjusted profit for the period	1,647	1,131	511	247	449	439	528	19	228	356
Attributable to
Owners of the parent com pany	1,647	1,118	511	247	449	439	528	19	228	343
Non-controlling interests	0	12	0	-	-	-	-	-	-	12
Average number of shares, dil uted, at the end of the period (millions)	250.876	250.877	250.874	250.877	250.877	250.877	250.877	250.877	250.877	250.877
Adjusted earnings per share, diluted, SEK	6.56	4.46	2.04	0.99	1.79	1.75	2.11	0.07	0.91	1.37

Net working capital (NWC) in relation to revenues and return on capital employed (ROCE)

Alleima considers NWC in relation to revenues for the quarter relevant as a measure of both the Group's efficiency and its short-term financial health.

Net working capital (NWC): Total of inventories, trade receivables, account payables and other current non-interest-bearing receivables and liabilities, including those classified as liabilities and assets held for sale, but excluding tax assets and liabilities and provisions. Net working capital (NWC) in relation to revenues: Quarter is quarterly annualized and year-to-date numbers are based on a four-quarter average.

Alleima considers ROCE to be useful for the readers of its financial reports as a complement in assessing the possibility of implementing strategic investments and considering the Group's ability to meet its financial commitments. In addition, it is useful to also follow ROCE excluding cash, as it is focused on the operating capital employed.

Capital employed: Total assets less non-interest-bearing liabilities (including deferred tax liabilities).

ROCE: Rolling 12 months' operating profit/loss plus financial income (excl. derivatives), as a percentage of a four-quarter average capital employed.

ROCE excluding cash: Rolling 12 months' operating profit/loss, as a percentage of a four-quarter average capital employed excluding cash and cash equivalents.

SEK M	Q4 2023	Q4 2022	Dec 31, 2023	Dec 31, 2022
Inventories	7,360	7,355	7,360	7,355
Trade receivables	2,952	2,981	2,952	2,981
Account payables	-2,003	-2,619	-2,003	-2,619
Other receivables	720	662	720	662
Other liabilities	-2,205	-1,860	-2,205	-1,860
Net working capital	6,825	6,519	6,825	6,519
Average net working capital	6,967	6,805	7,087	6,044
Revenues annualized	20,153	20,634	20,669	18,405
Net working capital to revenues, %	34.6	33.0	34.3	32.8
Tangible assets			7,281	7,350
Intangible assets			1,913	1,809
Cash and cash equivalents			1,595	892
Other assets			12,206	13,348
Other liabilities			-5,868	-6,488
Capital employed			17,128	16,911
Average capital employed			16,999	16,280
Operating profit rolling 12 months			2,046	2,122
Financial income, excl. derivatives, rolling 12 months			34	28
Total return rolling 12 months			2,080	2,150
Return on capital employed (ROCE), %			12.2	13.2
Average capital employed excl. cash			15,920	14,989
Return on capital employed excl. cash, %				14.2

Free operating cash flow (FOCF)

Alleima considers free operating cash flow (FOCF) to be useful for providing an indication of the funds the operations generate to be able to implement strategic investments, make amortizations and pay dividends to the shareholders.

Free operating cash flow (FOCF): EBITDA adjusted for noncash items plus the change in net working capital minus investments and disposals of tangible and intangible assets and plus the amortization of lease liabilities.

Net debt to Equity and Net debt to Adjusted EBITDA

Alleima considers both Net debt to Equity and Net debt to Adjusted EBITDA to be useful for the readers of its financial reports as a complement for assessing the possibility of dividends, implementing strategic investments and considering the Group's ability to meet its financial commitments. Net debt to Equity ratio is included in Alleima's financial targets.

Net debt: Interest-bearing current and non-current liabilities, including net pension liabilities and leases, less cash and cash equivalents

Financial net debt

Alleima considers financial net debt to be a useful indicator of the business's ability to pay off all debt, excluding pension liabilities and lease liabilities, at a certain point in time.

Financial net debt: Net debt, excluding net pension and lease liabilities.

Net debt to Equity and Net debt to Adjusted EBITDA

SEK M	Dec 31, 2023	Dec 31, 2022
Interest-bearing non-current liabilities	1,266	916
Interest-bearing current liabilities	130	94
Prepayment of pensions	-43	-97
Cash & cash equivalents	-1,595	-892
Net debt	-242	21
Net pension liability	-843	-513
Leasing liabilities	-505	-391
Financial net debt	-1,590	-883
Adjusted EBITDA accumulated current year	3,056	2,540
Adjusted EBITDA previous year	-	-
Adjusted EBITDA rolling 12 months	3,056	2,540
Total equity	15,732	15,901
Net debt/Equity ratio	-0.02	0.00
Net debt/Adjusted EBITDA ratio (multiple)	-0.08	0.01

Shareholder information

Disclaimer statement

Some statements herein are forward-looking and the actual outcome could be materially different. In addition to the factors explicitly commented upon, the actual outcome could be materially affected by other factors, for example the effect of economic conditions, exchange-rate and interest-rate movements, political risks, impact of competing products and their pricing, product development, commercialization and technological difficulties, supply disturbances, and major customer credit losses.

This report is published in Swedish and English. The Swedish version shall prevail in any instance where the two versions differ.

Annual General Meeting

The 2024 Annual General Meeting will be held in Sandviken, Sweden on May 2, 2024. The notice to convene the Annual General Meeting will be made in the prescribed manner. The Board of Directors proposes a cash dividend of SEK 2.00. The proposal corresponds to 30% of net profit (adjusted for metal price effects). The proposed record date to receive dividends is May 6, 2024. Assuming the general meeting accepts the dividend proposal, the expected date to receive dividends is May 10, 2024.

For further information, please contact: Emelie Alm, Head of Investor Relations +46 79 060 87 17 or emelie.alm@alleima.com

Conference call and webcast: A conference call will be held on January 23, 2024 at 13:00 PM CEST.

Dial-in detalis for the conference call: Participants in Sweden: +46 (0)8 5051 0031 Participants in the UK: +44 (0) 207 107 06 13 Participants in the US: +1 (1) 631 570 56 13

Presentation for download and webcast link: https://www.alleima.com/en/investors/

Financial calendar

Annual report 2023, published on Alleima's website Week 12, March 18-22, 2024 Q1 interim report January - March April 23, 2024 Annual General Meeting, Sandviken May 2, 2024 Proposed record date to receive dividends May 6, 2024 Proposed date to receive dividends May 10, 2024 Q2 interim report January - June July 19, 2024 Q3 interim report January - September October 22, 2024

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Alleima AB (publ), corporate registration no. 559224-1433 Postal address: SE-811 81 Sandviken, Sweden Visiting address: Storgatan 2, Sandviken, Sweden Telephone: +46 26 426 00 00

This information is information that Alleima 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 person set out above, at 11.30 AM CET on January 23, 2024.