Alligo

Quarterly Report • Feb 12, 2020

INTERIM REPORT – 9 MONTHS 1 April-31 December 2019

Third quarter (1 October-31 December 2019)

• Revenue increased by 2 percent to MSEK 1,588 (1,552).
• EBITA (excluding items affecting comparability of MSEK –9 related to costs arising from the ongoing acquisition of Swedol) increased by 3 percent to MSEK 92 (89), corresponding to an EBITA margin of 5.8 percent (5.7).
• Adjusted operating profit (excluding items affecting comparability) increased to MSEK 87 (85), corresponding to an adjusted operating margin of 5.5 percent (5.5). Operating profit amounted to MSEK 78 (85) and the operating margin to 4.9 percent (5.5).
• Profit after financial items totalled MSEK 72 (84).
• Net profit amounted to MSEK 56 (64).
• Earnings per share for the most recent 12-month period totalled SEK 7.95, compared with SEK 8.20 for the 2018/19 financial year.
• Cash flow from operating activities for the most recent 12-month period improved to MSEK 468.
• The return on equity for the most recent 12-month period was 17 percent (18) and the return on working capital (P/WC) was 25 percent (24).
• The operational net loan liability amounted to MSEK 198 (297) and the equity/assets ratio was 40 percent at the end of the reporting period.
• A merger of TOOLS and Swedol creates favourable opportunities. On 11 November 2019, Momentum Group announced a recommended public offer to the shareholders of Swedol. A merger of TOOLS and Swedol will create an attractive business partner for Nordic customers, including both smaller and larger companies in the industrial and construction sectors. The acceptance period for the offer will run until 20 March 2020.

Reporting period (1 April-31 December 2019)

• Revenue increased by 3 percent to MSEK 4,596 (4,464).
• EBITA (excluding items affecting comparability of MSEK –9) rose by 5 percent to MSEK 247 (235), corresponding to an EBITA margin of 5.4 percent (5.3).
• Adjusted operating profit (excluding items affecting comparability) increased by 4 percent to MSEK 232 (223), corresponding to an adjusted operating margin of 5.0 percent (5.0). Operating profit amounted to MSEK 223 (223).
• Profit after financial items decreased to MSEK 209 (219).
• Net profit amounted to MSEK 163 (170).

TRANSITION TO IFRS 16 AS OF 1 APRIL 2019

As of 1 April 2019, Momentum Group applies IFRS 16 Leases. The transition was made using the modified retrospective approach, which means that comparative figures have not been restated. The total transition effects on the balance sheet, income statement, cash flow and selected performance measures are reported in Note 5. Refer also to the accounting policies in Note 1.

Momentum Group AB (publ)

Mail address: PO Box 5900, SE-102 40 Stockholm, Sweden │ Visit: Östermalmsgatan 87 D, Stockholm │ Tel: +46 10 454 54 70

Org No: 559072-1352 Reg office: Stockholm │ www.momentum.group

PRESIDENT'S STATEMENT

ACQUISITION OF SWEDOL – Together we are creating a stronger partner in the market In mid-November 2019, Momentum Group took a strategically important step through the offer for Swedol. We are confident that the combination of TOOLS and Swedol's complementary customer focus and sales channels will help our two companies to become an even stronger and more attractive business partner for our customers, suppliers and employees in the areas of tools, workwear, personal protective equipment and consumables. Together, we will be able to strengthen our product ranges, procurement channels and logistics solutions, increase the proportion of proprietary product brands and develop an even better service offering and new digital solutions. I have been following Swedol for quite some time and I am impressed by their development over the past few years. The merger is logical from an industrial perspective and will create favourable opportunities to continue to generate value for our owners. The Norwegian competition authority approved of the acquisition at the beginning of February and we are now awaiting corresponding approvals of the merger from the national competition authorities in Sweden and Finland. We hope to thereafter be able to complete the offer during March 2020.

2019/20 FINANCIAL YEAR – Continued positive earnings performance during the year

Revenue for the Group remained stable during the first nine months of the financial year, compared with the preceding year. The end of the third quarter was characterised by somewhat lower activity among customers, but trends varied significantly between different customer segments and product areas. It is nevertheless encouraging to see healthy revenue growth in Norway, where demand in the oil and gas sector in particular remained favourable. It is also positive that our acquired businesses have contributed by approximately 4 percent to revenue growth so far this year.

Operating profit for the reporting period includes items affecting comparability of MSEK 9 pertaining to costs arising from the ongoing acquisition of Swedol. Adjusted for these items affecting comparability, EBITA rose by 5 percent to MSEK 247 (235) for the period. Additionally, extra costs of approximately MSEK 12 pertaining to the expansion of the logistics function in TOOLS Norway (of which MSEK 4 arose during the third quarter) had a negative impact on earnings. The logistics project was expanded during late autumn to encompass more local units. Thanks to our focused initiatives, our cash flow from operating activities strengthened during the reporting period, even when adjusted for IFRS 16 effects.

FOCUS ON ACQUISITIONS CONTINUES – Creating opportunities for the future

Increased coordination and shared resources within areas such as logistics, IT, offering and purchasing are key success factors, which we are now strengthening through the acquisition of Swedol in the business area Tools & Consumables. At the same time, we are continuing to evaluate attractive acquisition opportunities in the business area Components & Services that would further strengthen our position.

Stockholm, February 2020

Ulf Lilius

President & CEO

	QUARTER				REPORTING PERIOD			FULL-YEAR
	3 MONTHS ENDING 31 DEC		9 MONTHS ENDING 31 DEC			12 MONTHS ENDING 31 DEC
	2019	2018	Δ	2019	2018	Δ	2019	2018	Δ
Revenue, MSEK	1,588	1,552	2%	4,596	4,464	3%	6,156	5,901	4%
EBITA, MSEK	92	89	3%	247	235	5%	330	299	10%
Operating profit, MSEK	78	85	–8%	223	223	0%	302	283	7%
of which, items affecting comparability	– 9	–		– 9	–		– 9	–1
Adjusted operating profit	87	85	2%	232	223	4%	311	284	10%
Profit after financial items, MSEK	72	84	–14%	209	219	–5%	286	279	3%
Net profit (after taxes), MSEK	56	64	–13%	163	170	–4%	224	216	4%
Earnings per share, SEK	1.95	2.25	–13%	5.75	6.00	–4%	7.95	7.65	4%
EBITA margin	5.8%	5.7%		5.4%	5.3%		5.4%	5.1%
Operating margin	4.9%	5.5%		4.9%	5.0%		4.9%	4.8%
Adjusted operating margin	5.5%	5.5%		5.0%	5.0%		5.1%	4.8%
Profit margin	4.5%	5.4%		4.5%	4.9%		4.6%	4.7%
Return on equity							17%	18%
Return on working capital (EBITA/WC)							27%	26%
Return on working capital (P/WC)							25%	24%
Equity per share, SEK				48.45	43.60	11%
Equity/assets ratio				40%	45%
Number of employees at the end of the period				1,675	1,668	0%

MOMENTUM GROUP IN SUMMARY

PROFIT AND REVENUE

Third quarter (1 October-31 December 2019)

Revenue for the third quarter of the financial year increased by 2 percent to MSEK 1,588 (1,552). Exchange-rate translation effects had an impact of MSEK +3 on revenue. Revenue for comparable units, measured in local currency and adjusted for the number of trading days, fell by approximately 2 percent compared with the corresponding quarter in the preceding year. Acquisitions contributed approximately 4 percent to total revenue growth. The quarter contained the same number of trading days as the corresponding quarter in the preceding financial year.

Operating profit for the quarter totalled MSEK 78 (85). Operating profit for the quarter includes items affecting comparability of MSEK 9 pertaining to costs for advisors and other costs arising from the ongoing acquisition of Swedol. Adjusted operating profit (excluding these items affecting comparability) thus amounted to MSEK 87 (85) and EBITA to MSEK 92 (89). Exchange-rate translation effects had a net impact of MSEK 0 (+1) on operating profit. The adjusted operating margin was 5.5 percent (5.5). Profit after financial items totalled MSEK 72 (84) and net profit amounted to MSEK 56 (64) for the quarter.

Reporting period (1 April-31 December 2019)

Revenue for the full reporting period increased by 3 percent to MSEK 4,596 (4,464). Exchange-rate translation effects had an impact of MSEK +20 on revenue. Revenue for comparable units, measured in local currency and adjusted for the number of trading days, fell by approximately 1 percent compared with the corresponding period in the preceding year. Acquisitions contributed approximately 4 percent to total revenue growth. The reporting period contained the same total number of trading days as the corresponding period in the preceding financial year.

Operating profit for the reporting period amounted to MSEK 223 (223). Operating profit for the period includes items affecting comparability of MSEK 9 pertaining to costs for advisors and other costs arising from the ongoing acquisition of Swedol. Adjusted operating profit (excluding these items affecting comparability) thus rose by 4 percent to MSEK 232 (223) and EBITA by 5 percent to MSEK 247 (235). Operating profit was charged with depreciation and impairment losses of MSEK –13 (–12) on tangible non-current assets and amortisation and impairment losses of MSEK –26 (–22) on intangible non-current assets. Exchange-rate translation effects had a net impact of MSEK +1 (+5) on operating profit. The adjusted operating margin was 5.0 percent (5.0).

Profit after financial items totalled MSEK 209 (219) and net profit amounted to MSEK 163 (170). This corresponds to earnings per share of SEK 5.75 (6.00) for the period.

OPERATIONS

The Momentum Group comprises two business areas – Tools & Consumables and Components & Services. Group-wide includes the Group's management, finance function, support functions (including internal communications, investor relations and legal affairs) and logistics operations in Sweden.

Activity among industrial customers in Sweden and Finland was characterised by continued restraint and a cautious attitude, although trends in different customer segments and product areas varied. Demand in Norway was somewhat stronger, primarily in oil and gas. In some of the operations, the relatively mild winter had a negative effect on sales of workwear suited for the cold and snow. In total, sales and earnings performances were stable during the third quarter of the financial year.

The Momentum Group

	QUARTER		REPORTING PERIOD		FULL-YEAR
MSEK	OCT-DEC 2019	OCT-DEC 2018	APR-DEC 2019	APR-DEC 2018	ROLLING 12 MON	2018/19
Revenue	1,588	1,552	4,596	4,464	6,156	6,024
Operating profit	78	85	223	223	302	302
of which, items affecting comparability	– 9	–	– 9	–	– 9	–
Adjusted operating profit	87	85	232	223	311	302
Operating margin	4.9%	5.5%	4.9%	5.0%	4.9%	5.0%
Adjusted operating margin	5.5%	5.5%	5.0%	5.0%	5.1%	5.0%

Business area Tools & Consumables

This business area comprises TOOLS Sweden, TOOLS Norway, TOOLS Finland, Gigant, Mercus Yrkeskläder, TriffiQ Företagsprofilering, Reklamproffsen and Company Line, which offer products and services related to tools, industrial consumables and workplace equipment as well as workwear and profile clothing for the industrial and construction sectors in the Nordic region.

	QUARTER		REPORTING PERIOD		FULL-YEAR
MSEK	OCT-DEC 2019	OCT-DEC 2018	APR-DEC 2019	APR-DEC 2018	ROLLING 12 MON	2018/19
Revenue	1,283	1,257	3,727	3,657	4,995	4,925
Operating profit	48	55	126	134	172	180
of which, items affecting comparability	–	–	–	–	–	–
Adjusted operating profit	48	55	126	134	172	180
Operating margin	3.7%	4.4%	3.4%	3.7%	3.4%	3.7%
Adjusted operating margin	3.7%	4.4%	3.4%	3.7%	3.4%	3.7%

Acquisitions contributed approximately 4 percent to the total increase in revenue, while revenue for comparable units in the business area Tools & Consumables decreased by 2 percent¹ during the third quarter of the financial year.

Revenue for TOOLS Norway increased by 8 percent¹ during the quarter, with a continued favourable trend, primarily in the oil and gas sector, as well as increased market shares. Efforts to restructure the logistics function by establishing a logistics hub in Region East continued and were expanded to encompass more local units, resulting in extra costs of approximately MSEK 4 for the business during the quarter (a total of MSEK 12 for the reporting period).

Revenue for TOOLS Sweden decreased by 7 percent¹ during the quarter compared with the preceding year, partly due to a lingering cautious attitude among industrial customers and lower sales of winter clothing. Efforts to increase profitability, including increased cost-efficiency, improved sales promotion and changes in purchasing, are proceeding according to plan and continue to contribute to higher gross margins and lower costs in the operations compared with the preceding year.

Revenue in TOOLS Finland declined by 4 percent¹ during the quarter compared with the preceding year, with growth in the industrial market remaining weak during the quarter. The business continues to focus on customer cultivation in order to capture market shares, in combination with measures to streamline operations and increase earnings. The personal protective equipment (PPE) business acquired from Lindström Group contributed to revenue and earnings during the quarter.

The development of Gigant is proceeding according to plan and gradually contributes to a reduction in costs and improved operating profit in the unit. The Group's niche companies within workwear and promotional products (Mercus Yrkeskläder, TriffiQ Företagsprofilering, Reklamproffsen and Company Line) contributed positively to the Group's earnings performance during the quarter, although sales in these companies were negatively impacted by weaker demand for winter clothing due to the mild winter.

Business area Components & Services

This business area comprises Momentum Industrial and its subsidiaries, which offer spare parts, service and repairs for customers in the industrial sector in the Nordic region.

	QUARTER		REPORTING PERIOD		FULL-YEAR
MSEK	OCT-DEC 2019	OCT-DEC 2018	APR-DEC 2019	APR-DEC 2018	ROLLING 12 MON	2018/19
Revenue	312	308	894	845	1,197	1,148
Operating profit	39	33	107	95	142	130
of which, items affecting comparability	–	–	–	–	–	–
Adjusted operating profit	39	33	107	95	142	130
Operating margin	12.5%	10.7%	12.0%	11.2%	11.9%	11.3%
Adjusted operating margin	12.5%	10.7%	12.0%	11.2%	11.9%	11.3%

¹ Comparable units, measured in local currency and adjusted for the number of trading days this year compared with the preceding year.

Revenue in the business area Components & Services decreased by 3 percent² during the third quarter of the financial year. The business area's operating margin for the quarter was 12.5 percent.

Revenue for the parent company, Momentum Industrial, decreased by 4 percent²during the quarter, with varied trends across the different customer and product areas. Sales to customer groups in the steel and automotive industry, for example, remained generally positive, while demand in pulp and paper was somewhat more restrained. Measures to improve cost efficiency and customer cultivation had a positive effect on the gross margins and operating profit during the quarter.

Momentum Industrial's subsidiaries within service and repairs (Rörick Elektriska Verkstad and Carl A Nilssons El Rep Verkstad) and pneumatics and hydraulics (ETAB Industriautomation) continued to develop positively during the quarter. The subsidiaries generate combined annual revenue of approximately MSEK 130.

Group-wide and eliminations

An operating loss of MSEK –11 (–3) was reported for "Group-wide and eliminations" for the reporting period, of which items affecting comparability accounted for MSEK –9 MSEK (–) during the third quarter. Items affecting comparability pertain to costs for advisors and other costs arising from the public offer for Swedol announced on 11 November 2019.

The Parent Company's revenue for the period amounted to MSEK 22 (17) and profit after financial items totalled MSEK 7 (9). The period's results do not include any Group contributions, intra-Group dividends or other corresponding items.

EMPLOYEES

At the end of the reporting period, the number of employees in the Group was 1,675, compared with 1,684 at the beginning of the financial year.

CORPORATE ACQUISITIONS

OFFER TO THE SHAREHOLDERS IN SWEDOL

On 11 November 2019, Momentum Group announced a recommended public offer to the shareholders of Swedol. The shareholders in Swedol were given the opportunity to choose between a cash consideration of SEK 46.50 or a share consideration amounting to 0.40 of a new Class B share in Momentum Group for each Class A and Class B share in Swedol.

The combination of TOOLS and Swedol will create an attractive business partner for Nordic customers – including both smaller and larger companies in the industrial and construction sectors as well as other sectors, such as the public sector – in the areas of tools, workwear, personal protective equipment and consumables. The acquisition will create the prerequisites for increased efficiency and scalability, which will also be of benefit to the customers of both companies and lead to increased competition within the sector. Together, both businesses will benefit from common product ranges, procurement channels, more efficient logistics and Swedol's proprietary product brands as well as the development of an even better service offering and new digital solutions. Consequently, this will lead to a solid platform for continued expansion. Hence, the coordination between Swedol's and TOOLS' operations will create value for customers, suppliers, employees and owners.

Extraordinary General Meeting of Shareholders in Momentum Group on 17 December 2019 On 17 December 2019, an Extraordinary General Meeting of Shareholders in Momentum Group AB resolved, with the requisite majority, to authorise the Board of Directors to issue new shares in connection with the offer for Swedol. In accordance with this resolution, the Board of Directors was authorised to decide on a new share issue of no more than 33,280,000 Class B shares to the shareholders in Swedol, with subscribed shares to be paid for with a non-cash consideration comprising shares in Swedol.

Complete information and acceptance period

Competition inquiries for the transaction are currently being conducted by the national competition authorities in Sweden and Finland. The competition authority in Norway approved of the transaction at the beginning of February 2020. The acceptance period for shareholders in Swedol will run until 20 March 2020. Complete information about the offer, including the offer document and registration form, is available on Momentum Group's website (www.momentum.group).

OTHER CORPORATE ACQUISITIONS DURING THE 2019/20 FINANCIAL YEAR

To date, Momentum Group has conducted three corporate acquisitions with closing during the 2019/20 financial year.

² Comparable units, measured in local currency and adjusted for the number of trading days this year compared with the preceding year.

Acquisition of Lindström Group's PPE business in Finland

In March 2019, the subsidiary TOOLS Finland Oy acquired Lindström Group's PPE (Personal Protective Equipment) business in Finland. The acquisition further strengthens TOOLS' position as a leading supplier of tools, PPE and related services to Finnish industry. As of the acquisition date, the acquired business generated annual revenue of approximately MEUR 6 with favourable profitability and had five employees. The acquisition was carried out as a conveyance of assets and liabilities. Closing took place in early April 2019.

Acquisition of ETAB Industriautomation

The subsidiary Momentum Industrial acquired 70 percent of the shares in ETAB Industriautomation AB in early May 2019. ETAB is one of the leading industrial automation companies in Sweden and provides products and services in hydraulics, linear technology and pneumatics to industrial companies in Sweden. The acquisition further strengthens Momentum Industrial's position as the leading supplier of products and services in industrial components to Swedish industry. As of the acquisition date, ETAB generated annual revenue of approximately MSEK 45 and had nine employees. Closing took place in early June 2019.

Acquisition of Company Line

Momentum Group acquired 70 percent of the shares in Company Line Förvaltning AB in late June 2019. Company Line is one of the largest resellers of workwear and profile clothing in northern Sweden, with professional stores in Luleå and Kiruna. As of the acquisition date, Company Line generated annual revenue of approximately MSEK 75 and had 25 employees. Closing took place in conjunction with the acquisition.

Refer to Note 4 for a preliminary acquisition analysis regarding the acquisitions during the financial year and a summary of acquisitions completed since the 2015/16 financial year.

PROFITABILITY, CASH FLOW AND FINANCIAL POSITION

The Group's profitability, measured as the return on equity, amounted to 17 percent (18) and the return on working capital (P/WC) to 25 percent (24) for the most recent 12-month period. The return on capital employed for the same period was 15 percent (19).

Cash flow from operating activities before changes in working capital for the reporting period totalled MSEK 365 (174). During the period, inventories increased by MSEK 17, while operating receivables decreased by MSEK 137. Operating liabilities decreased by MSEK 85. Accordingly, cash flow from operating activities for the period amounted to MSEK 400 (162). The transition to IFRS 16 affected cash flow from operating activities in an amount of MSEK 157 for the period. Refer also to Note 5.

Cash flow for the reporting period was also impacted in a net amount of MSEK –14 (–19) pertaining to investments in and divestments of non-current assets, a net amount of MSEK –58 (–46) pertaining to the acquisition of subsidiaries and other business units, and a net amount of MSEK –157 in financing activities pertaining to the transition to IFRS 16.

At the end of the reporting period, the Group's operational net loan liability amounted to MSEK 198 (297). Dividends totalling MSEK 89 were paid out during the period. Cash and cash equivalents, including unutilised granted credit facilities, totalled MSEK 603. The equity/assets ratio at the end of the reporting period was 40 percent, compared with 45 percent at the beginning of the financial year. Refer also to Note 5.

Equity per share, both before and after dilution, totalled SEK 48.45 at the end of the reporting period, compared with SEK 46.70 at the beginning of the financial year.

A SHARE STRUCTURE AND REPURCHASE OF OWN SHARES

At the end of the reporting period, share capital totalled MSEK 57. The distribution by class of share was as follows:

CLASS OF SHARE	AS OF 31 DECEMBER 2019
Class A shares	1,062,436
Class B shares	27,202,980
Total number of shares before repurchasing	28,265,416
Less: Repurchased Class B shares	–500,000
Total number of shares after repurchasing	27,765,416

As of 31 March 2019, Momentum Group's holding of Class B treasury shares totalled 500,000. There were no changes to the holding of treasury shares during the reporting period. Accordingly, the number of Class B shares held in treasury as of 31 December 2019 amounted to 500,000, corresponding to 1.8 percent of the total number of shares and 1.3 percent of the total number of votes.

The shares held in treasury cover the Company's obligations in the call option programmes issued to senior management in December 2017 and September 2018, respectively. The redemption price for the 250,000 call options issued in connection with the 2017 share-based incentive programme is SEK 121.60 per share. Each call option in this programme entitles the holder to acquire one repurchased Class B share during the redemption periods of 12-25 February and 12-25 May 2021, respectively. The redemption price for the 250,000 call options issued in connection with the 2018 share-based incentive programme is SEK 137.30 per share. Each call option in this programme entitles the holder to acquire one repurchased Class B share during the redemption periods of 14-28 February and 16-30 May 2022, respectively.

The share price on 31 December 2019 was SEK 116.60 SEK and the issued call options thus did not result in any dilution effect during the reporting period.

There have been no changes in the holding of treasury shares after the end of the reporting period.

TRANSACTIONS WITH RELATED PARTIES

No transactions having a material impact on the Group's position or earnings occurred between Momentum Group and its related parties during the reporting period.

RISKS AND UNCERTAINTIES

Momentum Group's earnings, financial position and strategic position are impacted by a number of internal factors that are within the control of Momentum Group as well as a number of external factors where the Group's ability to influence the course of events is limited. The most important external risk factors for Momentum Group are the economic and market situation as well as the development in the number of employees in the industrial and construction sectors combined with structural changes and the competitive situation. The risks and uncertainties impacting the Group are the same as in earlier periods. For more information about the Group's risks and uncertainties, refer to page 34 of Momentum Group's Annual Report for 2018/19. The Parent Company is impacted indirectly by the above risks and uncertainties through its function in the Group.

ELECTION COMMITTEE FOR THE ELECTION OF THE BOARD OF DIRECTORS

In accordance with a resolution passed at the Annual General Meeting held in August 2019, the largest shareholders in terms of votes as of 31 December 2019 have been contacted and asked to appoint four members who, together with the Chairman of the Board, will form the Election Committee for the election of the Board of Directors at the upcoming Annual General Meeting in August 2020. Accordingly, the Election Committee comprises Tobias Lönnevall (appointed by Nordstjernan), Stefan Hedelius (appointed by Tom Hedelius), Marianne Flink (appointed by Swedbank Robur Funds), Jonas Linnell (appointed by SEB Funds) and Chairman of the Board Johan Sjö. Contact information for the Election Committee is available on Momentum Group's website.

EVENTS AFTER THE END OF THE REPORTING PERIOD

Extended acceptance period for the public offer to shareholders in Swedol In the recommended public offer to the shareholders of Swedol announced on 11 November 2019, the initial acceptance period ran until 25 February 2020. The completion of the Offer is conditional upon approval from the relevant competition authorities, and at the end of January, the European Commission – at the request of Nordstjernan AB (as principal owner of Swedol and the largest shareholder in Momentum Group in terms of votes as well as the formal notifiable party) – resolved to refer the competition inquiry to the national competition authorities in Sweden, Norway and Finland. Because these national competition inquiries will not be completed before the end of the initial acceptance period, Momentum Group's Board of Directors resolved on 31 January 2020 to extend the acceptance period until 20 March 2020.

The national competition authority in Norway approves of the acquisition of Swedol Based on the above mentioned national filings of the public offer with the competition authorities in Norway, among others, the Norwegian competition authority announced their approval of the transaction at the beginning of February 2020. The competition inquiries in Sweden and Finland continue according to plan.

No other significant events affecting the Group have occurred since the end of the reporting period.

Stockholm, 12 February 2020

Ulf Lilius President & CEO

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

Contact information

Ulf Lilius, President & CEO, Tel: +46 10 454 54 70 Mats Karlqvist, Head of Investor Relations, Tel: +46 70 660 31 32

Dates for forthcoming financial information

Presentation of Interim Report (9 months) – Conference call today, Wednesday, 12 February 2020, at 11:00 a.m. CET. Refer to www.momentum.group for information about telephone numbers and the link to the webcast.

Financial Report 2019/20 – 1 April 2019-31 March 2020 will be published on 13 May 2020.

The Annual Report for the 2019/20 financial year will be published at the end of June 2020 and will be available on the Company's website on the same date.

Interim Report (3 months) – 1 April-30 June 2020 will be published on 16 July 2020. Momentum Group AB's Annual General Meeting 2020 will be held at IVA's Conference Centre, Grev Turegatan 16 in Stockholm on 27 August 2020 at 4:00 p.m. CET.

Interim Report (6 months) – 1 April-30 September 2020 will be published on 23 October 2020. Interim Report (9 months) – 1 April-31 December 2020 will be published on 11 February 2021. Financial Report 2020/21 – 1 April 2020-31 March 2021 will be published on 12 May 2021.

Visit www.momentum.group to subscribe for reports and press releases.

The information in this report is such that Momentum Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 8:00 a.m. CET on 12 February 2020.

This document is in all respects a translation of the Swedish original Interim Report. In the event of any differences between this translation and the Swedish original, the latter shall prevail.

Momentum Group AB (publ) Mail address: PO Box 5900, SE-102 40 Stockholm, Sweden Visit: Östermalmsgatan 87 D, Stockholm Tel: +46 10 454 54 70 Org No: 559072-1352 Reg office: Stockholm www.momentum.group

BUSINESS AREAS

REVENUE BY BUSINESS AREA

	QUARTER		REPORTING PERIOD		FULL-YEAR
MSEK	OCT-DEC 2019	OCT-DEC 2018	APR-DEC 2019	APR-DEC 2018	ROLLING 12 MON	2018/19
Tools & Consumables	1,283	1,257	3,727	3,657	4,995	4,925
Components & Services	312	308	894	845	1,197	1,148
Group-wide	34	31	98	93	131	126
Eliminations	–41	–44	–123	–131	–167	–175
Momentum Group	1,588	1,552	4,596	4,464	6,156	6,024

REVENUE BY QUARTER

		2019/20				2018/19
MSEK	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Tools & Consumables		1,283	1,157	1,287	1,268	1,257	1,119	1,281
Components & Services		312	284	298	303	308	263	274
Group-wide		34	32	32	33	31	31	31
Eliminations		–41	–41	–41	–44	–44	–44	–43
Momentum Group	1,588 1,432 1,576				1,560	1,543

OPERATING PROFIT/LOSS BY BUSINESS AREA

	QUARTER		REPORTING PERIOD		FULL-YEAR
MSEK	OCT-DEC 2019	OCT-DEC 2018	APR-DEC 2019	APR-DEC 2018	ROLLING 12 MON	2018/19
Tools & Consumables	48	55	126	134	172	180
Components & Services	39	33	107	95	142	130
Group-wide	–11	–3	–12	–6	–14	–8
Eliminations	2	0	2	0	2	0
Momentum Group	78	85	223	223	302	302

OPERATING PROFIT/LOSS BY QUARTER

	2019/20				2018/19
MSEK	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Tools & Consumables		48	38	40	46	55	34	45
Components & Services		39	36	32	35	33	32	30
Group-wide		–11	1	–2	–2	–3	2	–5
Eliminations		2	0	0	0	0	0	0
Momentum Group		78	75	70	79	85	68	70

ADJUSTED OPERATING PROFIT/LOSS BY BUSINESS AREA

	QUARTER		REPORTING PERIOD		FULL-YEAR
MSEK	OCT-DEC 2019	OCT-DEC 2018	APR-DEC 2019	APR-DEC 2018	ROLLING 12 MON	2018/19
Tools & Consumables	48	55	126	134	172	180
Components & Services	39	33	107	95	142	130
Group-wide	–2	–3	–3	–6	–5	–8
Eliminations	2	0	2	0	2	0
Momentum Group	87	85	232	223	311	302

GROUP SUMMARY³

INCOME STATEMENT

	QUARTER		REPORTING PERIOD		FULL-YEAR
MSEK	OCT-DEC 2019	OCT-DEC 2018	APR-DEC 2019	APR-DEC 2018	ROLLING 12 MON	2018/19
Revenue	1,588	1,552	4,596	4,464	6,156	6,024
Other operating income	1	1	3	3	4	4
Total operating income	1,589	1,553	4,599	4,467	6,160	6,028
Cost of goods sold	–1,001	–977	–2,895	–2,819	–3,880	–3,804
Personnel costs	–310	–304	–893	–877	–1,204	–1,188
Depreciation, amortisation, impairment losses and reversal of impairment losses	–65	–12	–198	–34	–211	–47
Other operating expenses	–135	–175	–390	–514	–563	–687
Total operating expenses	–1,511	–1,468	–4,376	–4,244	–5,858	–5,726
Operating profit	78	85	223	223	302	302
Financial income	0	1	0	1	0	1
Financial expenses	–6	–2	–14	–5	–16	–7
Net financial items	–6	–1	–14	–4	–16	–6
Profit after financial items	72	84	209	219	286	296
Taxes	–16	–20	–46	–49	–62	–65
Net profit	56	64	163	170	224	231
Of which, attributable to: Parent Company shareholders Non-controlling interest	55 1	63 1	160 3	168 2	221 3	229 2
Earnings per share, SEK – before dilution – after dilution	1.95 1.95	2.25 2.25	5.75 5.75	6.00 6.00	7.95 7.95	8.20 8.20

STATEMENT OF COMPREHENSIVE INCOME

		REPORTING PERIOD
MSEK	OCT-DEC 2019	OCT-DEC 2018	APR-DEC 2019	APR-DEC 2018	ROLLING 12 MON	2018/19
Net profit	56	64	163	170	224	231
OTHER COMPREHENSIVE INCOME FOR THE PERIOD
Components that will not be reclassified to net profit
Remeasurement of defined-benefit
pension plans	2	–1	–3	–1	–2	0
Tax attributable to components that will
not be reclassified	0	0	1	0	1	0
	2	–1	–2	–1	–1	0
Components that will be reclassified to net profit
Translation differences	–16	–22	–5	–14	17	8
Fair value changes for the year in cash-flow hedges	–1	1	–1	1	–2	0
Tax attributable to components that will
be reclassified	0	0	0	0	0	0
	–17	–21	–6	–13	15	8
Other comprehensive income for the period	–15	–22	–8	–14	14	8
Total comprehensive income for the period	41	42	155	156	238	239
Of which, attributable to: Parent Company shareholders Non-controlling interest	40 1	41 1	152 3	154 2	235 3	237 2

³ As of 1 April 2019, the Group applies IFRS 16 Leases. The transition was made using the modified retrospective approach, which means that comparative figures have not been restated. The total transition effects on the balance sheet, income statement, cash flow and selected performance measures are reported in Note 5. Refer also to the accounting policies in Note 1.

BALANCE SHEET

MSEK	31 DEC 2019	31 DEC 2018	31 MAR 2019
ASSETS
Non-current assets
Intangible non-current assets	663	638	649
Tangible non-current assets	62	56	63
Right-of-use assets	531	–	–
Financial investments	2	2	2
Deferred tax assets	22	22	20
Total non-current assets	1,280	718	734
Current assets
Inventories	1,036	968	986
Accounts receivable	907	915	1,044
Other current receivables	132	130	142
Cash and cash equivalents	37	5	8
Total current assets	2,112	2,018	2,180
TOTAL ASSETS	3,392	2,736	2,914
EQUITY AND LIABILITIES
Equity
Equity attributable to Parent Company shareholders	1,345	1,219	1,303
Non-controlling interest	18	14	14
Total equity	1,363	1,233	1,317
Non-current liabilities
Non-current interest-bearing liabilities	105	128	137
Non-current lease liabilities	347	–	–
Provisions for pensions	31	30	27
Other non-current liabilities and provisions	66	69	76
Total non-current liabilities	549	227	240
Current liabilities
Current interest-bearing liabilities	130	174	137
Current lease liabilities	206	–	–
Accounts payable	770	730	822
Other current liabilities	374	372	398
Total current liabilities	1,480	1,276	1,357
TOTAL LIABILITIES	2,029	1,503	1,597
TOTAL EQUITY AND LIABILITIES	3,392	2,736	2,914
Financial net loan liability	782	327	293
Operational net loan liability	198	297	266

STATEMENT OF CHANGES IN EQUITY

	Equity attributable to Parent Company shareholders
MSEK	Share capital	Reserves	Retained earnings, including net profit	Total	Non-controlling interest	Total equity
Closing equity, 31 March 2018	57	2	1,096	1,155	15	1,170
Net profit			229	229	2	231
Other comprehensive income		8	0	8		8
Dividend			–73	–73		–73
Premium received for issued share options			2	2		2
Repurchase of own shares			–22	–22		–22
Changes in share of partly owned subsidiaries			2	2	–2	0
Dividends paid in partly owned subsidiaries				–	–1	–1
Change in value of option liability1)			2	2		2
Closing equity, 31 March 2019	57	10	1,236	1,303	14	1,317
Change in accounting policy2)			–8	–8		–8
Net profit			160	160	3	163
Other comprehensive income		–6	–2	–8		–8
Dividend			–89	–89		–89
Acquisitions of partly owned subsidiaries				–	8	8
Changes in share of partly owned subsidiaries			5	5	–5	0
Dividends paid in partly owned subsidiaries				–	–2	–2
Option liability, acquisitions3)			–16	–16		–16
Change in value of option liability1)			–2	–2		–2
Closing equity, 31 December 2019	57	4	1,284	1,345	18	1,363

1) Pertains to a change in the value of the call/put options in relation to non-controlling interests carried out in conjunction with the acquisitions of partly owned subsidiaries.

2) Transition to IFRS 16. Refer to accounting policies in Note 1 and the total transition effects on the balance sheet, income statement, cash flow and selected performance measures in Note 5.

3) Refers to the value of call/put options in relation to the non-controlling interests in the acquired subsidiaries ETAB Industriautomation AB and Company Line Förvaltning AB, which entail that: a) Momentum Group is entitled to purchase the remaining shares from the shareholders (call option), and b) the shareholders are entitled to sell their shares to Momentum Group (put option). The call options expire during the 2021/22 financial year and can thereafter be extended for a period of one year at a time. The put options can be exercised until the 2020/21 financial year. The price of the options is dependent on certain results being achieved in the respective company.

CASH-FLOW STATEMENT

	QUARTER		REPORTING PERIOD		FULL-YEAR
MSEK	OCT-DEC 2019	OCT-DEC 2018	APR-DEC 2019	APR-DEC 2018	ROLLING 12 MON	2018/19
Operating activities
Operating activities before changes in
working capital	121	74	365	174	426	235
Changes in working capital	77	80	35	–12	42	–5
Cash flow from operating activities	198	154	400	162	468	230
Investing activities
Acquisition of intangible & tangible non
current assets Sale of intangible & tangible non	–4	–6	–14	–19	–23	–28
current assets	0	0	0	0	0	0
Acquisition of subsidiaries & other
business units	–	–3	–58	–46	–85	–73
Cash flow from investing activities	–4	–9	–72	–65	–108	–101
Cash flow before financing	194	145	328	97	360	129
Financing activities
Financing activities	–184	–146	–299	–102	–328	–131
Cash flow for the period	10	–1	29	–5	32	–2
Cash and cash equivalents at the beginning
of the period	27	6	8	10	5	10
Exchange-rate differences in cash and
cash equivalents	0	0	0	0	0	0
Cash and cash equivalents at the end
of the period	37	5	37	5	37	8

KEY PER-SHARE DATA

	QUARTER		REPORTING PERIOD		FULL-YEAR
SEK	OCT-DEC 2019	OCT-DEC 2018	APR-DEC 2019	APR-DEC 2018	ROLLING 12 MON	2018/19
Earnings before dilution	1.95	2.25	5.75	6.00	7.95	8.20
Earnings after dilution	1.95	2.25	5.75	6.00	7.95	8.20
Equity, at the end of the period			48.45	43.60		46.70
Equity after dilution, at the end of the period			48.45	43.60		46.70
NUMBER OF SHARES OUTSTANDING IN THOUSANDS
Number of shares outstanding before dilution	27,765	27,765	27,765	27,765	27,765	27,765
Weighted number of shares outstanding before dilution Weighted number of shares outstanding	27,765	27,849	27,765	27,960	27,765	27,911
after dilution	27,765	27,849	27,765	27,960	27,765	27,911

Weighted number of shares and dilution

Average number of shares outstanding before or after dilution. Shares held by Momentum Group at any given time are not included in the number of shares outstanding. Dilution effects arise due to any call options issued by the Company that can be settled using shares in share-based incentive programmes. In such cases, the call options have a dilution effect when the average share price during the period is higher than the redemption price of the call options. Momentum Group held 500,000 Class B shares as of 31 December 2019 and has issued 500,000 call options for repurchased treasury shares. Since the average share price is lower than the redemption prices of SEK 121.60 per call option ("2017 share-based incentive programme") and SEK 137.30 per call option ("2018 share-based incentive programme"), respectively no dilution effect existed as of 31 December 2019. Refer also to page 6.

PARENT COMPANY IN SUMMARY

INCOME STATEMENT

	QUARTER		REPORTING PERIOD		FULL-YEAR
MSEK	OCT-DEC 2019	OCT-DEC 2018	APR-DEC 2019	APR-DEC 2018	ROLLING 12 MON	2018/19
Revenue	8	6	22	17	29	24
Other operating income	0	0	2	0	4	2
Total operating income	8	6	24	17	33	26
Operating expenses	–10	–8	–32	–23	–45	–36
Operating profit/loss	–2	–2	–8	–6	–12	–10
Financial income and expenses	5	5	15	15	20	20
Profit/loss after financial items	3	3	7	9	8	10
Appropriations	–	–	–	–	93	93
Profit before taxes	3	3	7	9	101	103
Taxes	–1	–1	–2	–2	–23	–23
Net profit	2	2	5	7	78	80

STATEMENT OF COMPREHENSIVE INCOME

	QUARTER		REPORTING PERIOD		FULL-YEAR
MSEK	OCT-DEC 2019	OCT-DEC 2018	APR-DEC 2019	APR-DEC 2018	ROLLING 12 MON	2018/19
Net profit	2	2	5	7	78	80
OTHER COMPREHENSIVE INCOME FOR THE PERIOD
Components that will not be reclassified to net profit
	–	–	–	–	–	–
Components that will be reclassified to net profit
	–	–	–	–	–	–
Other comprehensive income for the period	–	–	–	–	–	–
Total comprehensive income for the period	2	2	5	7	78	80

BALANCE SHEET

MSEK	31 DEC 2019	31 DEC 2018	31 MAR 2019
ASSETS
Intangible non-current assets	0	0	0
Tangible non-current assets	0	–	–
Financial non-current assets	846	843	877
Current receivables	226	245	363
Cash and cash equivalents	–	–	–
Total assets	1,072	1,088	1,240
EQUITY, PROVISIONS AND LIABILITIES
Equity	583	594	667
Untaxed reserves	63	29	63
Provisions	–	–	–
Non-current liabilities	105	128	137
Current liabilities	321	337	373
Total equity, provisions and liabilities	1,072	1,088	1,240

NOTES

NOTE 1 ACCOUNTING POLICIES

The Interim Report for the Group was prepared in accordance with IFRS and by applying IAS 34 Interim Financial Reporting, the Swedish Annual Accounts Act and the Swedish Securities Market Act. In addition to the financial statements and associated notes, disclosures in accordance with IAS 34.16A are also presented in other sections of the report. The Interim Report for the Parent Company was prepared in accordance with the Swedish Annual Accounts Act and the Swedish Securities Market Act, which conforms to the provisions detailed in RFR 2 Accounting for Legal Entities. The same accounting policies and bases of judgement as in Momentum Group's Annual Report for 2018/19 have been applied, with the exception of the new standard IFRS 16 Leases which applies as of 1 April 2019.

Momentum Group's business area structure has been adjusted as of 1 April 2019. The adjustment mainly impacted the subsidiary Gigant AB, which was previously part of the Components & Services business area but became part of the Tools & Consumables business area as of 1 April 2019. The comparative figures have been restated for the adjusted business areas as of 1 April 2018.

IFRS 16 Leases

IFRS 16 Leases applies as of 1 April 2019 and replaces IAS 17 Leases and IFRIC 4 Determining Whether an Arrangement Contains a Lease. The standard primarily entails changes for the lessee, since the distinction between operating and financial leases has been removed. Lessees are to recognise a right-of-use asset representing the right to use the underlying asset and a lease liability representing the obligation to make lease payments for each lease. In the income statement, interest and depreciation are recognised instead of lease expenses.

Upon transition to the new standard, Momentum Group has chosen to apply the modified retrospective approach, which does not require restating of comparative periods. Comparative information will continue to be recognised in accordance with IAS 17 Leases and IFRIC 4 Determining Whether an Arrangement Contains a Lease.

The Group will recognise new assets and liabilities for operating leases primarily for warehouses and store facilities. The expenses for these leases will change since the Group will recognise depreciation for right-of-use assets and interest expense for lease liabilities. In addition, the Group will no longer recognise provisions for operating leases deemed to be onerous. The Group has chosen to apply the practical expedient permitted in the standard, which entails adjusting the right-of-use asset by the amount recognised as a provision for expected credit losses in connection with the transition.

The right-of-use assets attributable to earlier operating leases are primarily recognised at their depreciated value as of the lease commencement date and to a lesser extent at the value of the liability as of 1 April 2019 plus advance payments recognised in the balance sheet as of 31 March 2019. Lease commitments in connection with the transition have been discounted by the Group's incremental borrowing rate. The incremental borrowing rate is established per country based on a risk-free interest rate with a duration equivalent to the average tenor for leases plus expenses for the Group and its subsidiaries' estimated credit risk and type of asset.

Low-value leases (right-of-use leases with a replacement value less than approximately SEK 50 thousand) are not included in lease liability but continue to be expensed on a straight-line basis over the lease term. Short-term leases (leases with a term of 12 months or less) are not deemed to be material in the Group.

The total effects on the balance sheet, income statement, cash flow and selected performance measures in connection with the transition to IFRS 16 are presented in Note 5.

NOTE 2 OPERATING SEGMENTS

The Group's operating segments comprise the Tools & Consumables and Components & Services business areas. The operating segments are consolidations of the operational organisation, as used by Group management and the Board of Directors to monitor operations. Group management, comprising the CEO and CFO, are the Group's chief operating decision makers.

Tools & Consumables comprises TOOLS Sweden, TOOLS Norway, TOOLS Finland, Gigant, Mercus Yrkeskläder, TriffiQ Företagsprofilering, Reklamproffsen Skandinavien and Company Line, which offer products and services related to tools, industrial consumables and workplace equipment as well as workwear and profile clothing for the industrial, construction and public sectors in the Nordic region. Components & Services comprises Momentum Industrial and its subsidiaries, which offer spare parts, service and repairs for customers in the industrial sector in the Nordic region. Group-wide includes the Group's management, finance function, support functions and logistics operations in Sweden. The support functions include internal communications, investor relations and legal affairs. Financial income and expenses are not distributed by operating segment but rather are recognised in their entirety in Group-wide.

Intra-Group pricing between the operating segments occurs on market terms. The accounting policies are the same as those applied in the consolidated financial statements. Revenue presented for the geographic markets is based on the domicile of the customers.

	APR-DEC 2019 (9 MON)
MSEK	Tools & Consumables	Components & Services	Group-wide	Eliminations	Group total
Revenue
From external customers by geographic
area
Sweden	1,438	847	1	–	2,286
Norway	1,423	18	–	–	1,441
Finland	747	1	–	–	748
Other countries	114	7	–	–	121
From other segments	5	21	97	–123	-
Total	3,727	894	98	–123	4,596
	APR-DEC 2018 (9 MON)
MSEK	Tools & Consumables	Components & Services	Group-wide	Eliminations	Group total
Revenue
From external customers by geographic
area
Sweden	1,492	783	1	–	2,276
Norway	1,307	20	–	–	1,327
Finland	739	2	–	–	741
Other countries	113	7	–	–	120
From other segments	6	33	92	–131	-

NOTE 3 FINANCIAL INSTRUMENTS

Momentum Group measures financial instruments at fair value or cost in the balance sheet depending on their classification. In addition to items in the financial net debt, financial instruments also include accounts receivable and accounts payable. The fair value of all of the Group's financial assets is estimated to correspond with their carrying amount. Liabilities measured at fair value comprise options issued in connection with the acquisition of equity instruments in partly owned subsidiaries, which are measured using discounted cash flow and are thus included in level 3 according to IFRS 13.

MSEK	31 DEC 2019	31 MAR 2019
Financial assets measured at fair value
Financial investments	1	1
Financial assets measured at amortised cost
Long-term receivables	1	1
Accounts receivable	907	1,044
Cash and cash equivalents	37	8
Total financial assets	946	1,054
Financial liabilities measured at fair value
Option liability	38	31
Financial liabilities measured at amortised cost
Interest-bearing liabilities	788	274
Accounts payable	770	822
Total financial liabilities	1,596	1,127

NOTE 4 ACQUISITIONS

According to the preliminary acquisition analysis, the assets and liabilities included in the acquisitions during the financial year amounted to the following:

	Carrying amount on	Adjustment to	Fair value recognised
MSEK	acquisition date	fair value	in the Group
Acquired assets:
Intangible non-current assets	–	19	19
Other non-current assets	0	–	0
Inventories	36	–	36
Other current assets	25	–	25
Total assets	61	19	80
Acquired provisions and liabilities:
Deferred tax liability	–	–3	–3
Current operating liabilities	–24	–	–24
Total provisions and liabilities	–24	–3	–27
Net of identified assets and liabilities	37	16	53
Goodwill			21
Non-controlling interest1)			–8
Purchase consideration			66
Less/Additional: Net cash in acquired business2)			–4
Less: Additional purchase consideration			–4
Effect on consolidated cash and cash equivalents			58

1) Non-controlling interest is calculated as the proportional share of the identified net assets.

2) Net of cash and cash equivalents and interest-bearing liabilities in the acquired businesses.

Corporate acquisitions carried out since the 2015/16 financial year are distributed between the Momentum Group's business areas as follows:

	TIME		NO. OF
ACQUISITION	(possession taken)	REVENUE1)	EMPLOYEES1)	BUSINESS AREA
AB Carl A. Nilssons El. Rep.verkstad, SE	September 2015	MSEK 20	13	Components & Services
Tønsberg Maskinforretning AS, NO	April 2016	MNOK 20	10	Tools & Consumables
Astrup Industrivarer AS, NO	November 2016	MNOK 240	50	Tools & Consumables
Arboga Machine Tool AB, SE	March 2017	MSEK 10	5	Components & Services
TriffiQ Företagsprofilering AB2), SE	September 2017	MSEK 70	18	Tools & Consumables
AB Knut Sehlins Industrivaruhus, SE	October 2017	MSEK 40	14	Tools & Consumables
Elka Produkter AB2), SE	October 2017	3) –	10	Tools & Consumables
Reklamproffsen Skandinavien AB2), SE	March 2018	MSEK 35	12	Tools & Consumables
Profilmakarna i Södertälje AB, SE	April 2018	MSEK 25	8	Tools & Consumables
MRO business from Brammer4), SE	May 2018	MSEK 140	33	Components & Services
MFG Components Oy4), FI	October 2018	MEUR 1	3	Tools & Consumables
TOOLS Løvold AS, NO	January 2019	MNOK 95	28	Tools & Consumables
PPE business from Lindström Group4), FI	April 2019	MEUR 6	5	Tools & Consumables
ETAB Industriautomation AB2), SE	June 2019	MSEK 45	9	Components & Services
Company Line Förvaltning AB2), SE	June 2019	MSEK 75	25	Tools & Consumables

1) Refers to information for the full year on the date of acquisition.

2) Momentum Group acquired 70 percent of the shares in each company.

3) The current operations of Elka Produkter AB were established in autumn 2017. Accordingly, there is no full-year information available regarding comparable revenue.

4) The acquisition was carried out as a conveyance of assets and liabilities.

INTERIM REPORT – 9 MONTHS

1 APRIL-31 DECEMBER 2019

NOTE 5 TRANSITION EFFECTS OF IFRS 16

As of 1 April 2019, the Group applies IFRS 16 Leases. Due to the implementation of IFRS 16, the Group has reclassified operating leases as right-of-use assets or lease liabilities recognised in the balance sheet. Upon transition to IFRS 16, Momentum Group recognised MSEK 543 for right-of-use assets and MSEK 563 for lease liabilities. The aggregate average incremental borrowing rate for all contracts, by which the Group's lease commitments were discounted in connection with the transition, amounted to approximately 2 percent.

As shown in the tables below, the recognition of depreciation of right-of-use assets instead of lease payments had a net impact of MSEK +8 on operating profit during the first nine months of 2019/20. Depreciation of right-of-use assets totalled MSEK 159. Interest on lease liabilities had a negative impact of MSEK 8 on net financial items.

The effects on the balance sheet, income statement, cash flow and selected performance measures are reported in the tables below. All other things being equal, the effects of IFRS 16 are expected to be approximately the same for the remainder of the 2019/20 financial year.

EFFECTS OF IFRS 16 ON THE CONSOLIDATED BALANCE SHEET IN CONNECTION WITH THE TRANSITION AS OF 1 APRIL 2019

MSEK	Closing balance 31 Mar 2019, before transition to IFRS 16	Adjustment due to transition to IFRS 16	Adjusted opening balance 1 Apr 2019
ASSETS
Right-of-use assets	–	543	543
of which, buildings and premises	–	472	472
of which, vehicles	–	61	61
of which, other assets	–	10	10
Deferred tax assets	20	2	22
Total non-current assets	734	545	1,279
Other current receivables	142	–22	120
Total current assets	2,180	–22	2,158
TOTAL ASSETS	2,914	523	3,437
EQUITY AND LIABILITIES Equity attributable to Parent Company
shareholders	1,303	–8	1,295
Total equity	1,317	–8	1,309
Non-current lease liabilities	–	362	362
Other non-current liabilities and provisions	76	–16	60
Total non-current liabilities	240	346	586
Current lease liabilities	–	201	201
Accounts payable	822	–14	808
Other current liabilities	398	–2	396
Total current liabilities	1,357	185	1,542
TOTAL LIABILITIES	1,597	531	2,128
TOTAL EQUITY AND LIABILITIES	2,914	523	3,437

EFFECTS OF IFRS 16 ON THE CONSOLIDATED INCOME STATEMENT IN THE FIRST NINE MONTHS OF 2019/20

MSEK	APR-DEC 2019 [IFRS 16]	Effect of IFRS 16	APR-DEC 2019 [IAS 17]
Total operating income	4,599	–	4,599
Cost of goods sold	–2,895	–	–2,895
Personnel costs	–893	–	–893
Depreciation, amortisation, impairment and reversal of impairment losses	–198	–159	–39
Other operating expenses	–390	167	–557
Total operating expenses	–4,376	8	–4,384
Operating profit	223	8	215
Financial income	0	–	0
Financial expenses	–14	–8	–6
Net financial items	–14	–8	–6
Profit after financial items	209	0	209
Taxes	–46	0	–46
Net profit	163	0	163

EFFECTS OF IFRS 16 ON THE GROUP'S PERFORMANCE MEASURES (SELECTED)

	12 MON ENDING 31 DEC 2019 [IFRS 16]	Effect of IFRS 16	12 MON ENDING 31 DEC 2019 [IAS 17]
EBITA, MSEK	330	8	322
Adjusted operating profit, MSEK	311	8	303
Operating profit, MSEK	302	8	294
EBITA margin, %	5.4%	0.2%	5.2%
Adjusted operating margin, %	5.1%	0.2%	4.9%
Operating margin, %	4.9%	0.1%	4.8%
Profit margin, %	4.6%	0.0%	4.6%
Earnings per share, SEK	7.95	0.00	7.95
Cash flow from operating activities, MSEK	468	157	311
Cash flow for the period*, MSEK	32	–	32
Return on working capital (EBITA/WC), %	27%	1%	26%
Return on working capital (P/WC), %	25%	0%	25%
Return on capital employed, %	15%	–3%	18%
Return on equity, %	17%	0%	17%
Financial net loan liability (closing balance), MSEK	782	553	229
Operational net loan liability (closing balance), MSEK	198	–	198
Equity/assets ratio, %	40%	–7%	47%

*EFFECTS OF IFRS 16 ON CASH FLOW FOR THE PERIOD

Since most of the lease payment is recognised as financing activities, cash flow from financing activities has declined, with a corresponding increase in cash flow from operating activities. The interest portion of the lease payment remains as cash flow from operating activities and is included in net financial items, paid.

PERFORMANCE MEASURES – DEFINITIONS & CALCULATIONS

Momentum Group uses certain financial performance measures in its analysis of the operations and their performance that are not defined in accordance with IFRS. Momentum Group believes that these alternative performance measures provide valuable information for the Company's Board of Directors, owners and investors, since they enable a more accurate assessment of current trends and the Company's performance when combined with other performance measures calculated in accordance with IFRS. Since not all listed companies calculate these financial performance measures in the same way, there is no guarantee that the information is comparable with other companies' performance measures of the same name. Hence, these financial performance measures must not be viewed as a replacement for those measures calculated in accordance with IFRS. Insofar as the performance measures are used and commented on by business area (operating segment), the derivation of the performance measures is also presented at this level.

	12 MONTHS ENDING
	31 DEC 2019	31 MAR 2019	31 MAR 2018	31 MAR 2017
IFRS PERFORMANCE MEASURES
Net profit, MSEK	224	231	182	42
Earnings per share, SEK	7.95	8.20	6.45	1.50
ALTERNATIVE PERFORMANCE MEASURES
Performance measures related to the income statement
Revenue, MSEK	6,156	6,024	5,616	5,411
Operating profit, MSEK	302	302	240	65
Adjusted operating profit, MSEK	311	302	252	193
EBITA, MSEK	330	318	262	195
Profit after financial items, MSEK	286	296	235	54
Operating margin, %	4.9%	5.0%	4.3%	1.2%
Adjusted operating margin, %	5.1%	5.0%	4.5%	3.6%
EBITA margin, %	5.4%	5.3%	4.7%	3.6%
Profit margin, %	4.6%	4.9%	4.2%	1.0%
Performance measures related to profitability
Return on working capital (P/WC), %	25%	25%	24%	21%
Return on working capital (EBITA/WC), %	27%	27%	25%	21%
Return on capital employed, %	15%	19%	17%	4%
Return on equity, %	17%	19%	17%	4%
Performance measures related to financial position
Financial net loan liability (closing balance), MSEK	782	293	322	287
Operational net loan liability (closing balance), MSEK	198	266	295	263
Equity (closing balance)*, MSEK	1,345	1,303	1,155	1,007
Equity/assets ratio, %	40%	45%	42%	39%
Other performance measures
Number of employees at the end of the period	1,675	1,684	1,647	1,660
Share price at the end of the period, SEK	116.60	93.40	100.00	–
DEFINITIONS OF PERFORMANCE MEASURES Revenue Own invoicing, commission-based revenue from commission sales and side revenue.
Operating profit Profit before financial items and tax.
Adjusted operating profit Operating profit adjusted for items affecting comparability.
EBITA Adjusted operating profit before any impairment of goodwill and amortisation and impairment of other intangible assets incurred in connection with corporate acquisitions and equivalent transactions.
Operating margin, % Operating profit relative to revenue.
Adjusted operating margin, % Adjusted operating profit as a percentage of revenue.
EBITA margin, % EBITA as a percentage of revenue.
Profit margin, % Profit after financial items as a percentage of revenue.
Return on working capital (P/WC), % Adjusted operating profit for the most recent 12-month period divided by average working capital measured as total working capital (accounts receivable and inventories less accounts payable) at the end of each month for the most recent 12-month period and the opening balance at the start of the period divided by 13.

DEFINITIONS OF PERFORMANCE MEASURES

Revenue

Operating profit

Adjusted operating profit

EBITA

Adjusted operating profit before any impairment of goodwill and amortisation and impairment of other intangible assets incurred in connection with corporate acquisitions and equivalent transactions.

Operating margin, %

Adjusted operating margin, %

EBITA margin, %

Profit margin, %

Return on working capital (P/WC), %

Adjusted operating profit for the most recent 12-month period divided by average working capital measured as total working capital (accounts receivable and inventories less accounts payable) at the end of each month for the most

Return on working capital (EBITA/WC), %

EBITA for the most recent 12-month period divided by average working capital measured as total working capital (accounts receivable and inventories less accounts payable) at the end of each month for the most recent 12-month period and the opening balance at the start of the period divided by 13.

Return on capital employed, %

Operating profit plus financial income for the most recent 12-month period divided by average capital employed measured as the balance-sheet total less non-interest-bearing liabilities and provisions at the end of the most recent four quarters and the opening balance at the start of the period divided by five.

Return on equity, %

Net profit for the most recent 12-month period divided by average equity measured as total equity attributable to Parent Company shareholders at the end of the most recent four quarters and the opening balance at the start of the period divided by five.

Financial net loan liability (closing balance)

Financial net loan liability measured as non-current interest-bearing liabilities and current interest-bearing liabilities, less cash and cash equivalents at the end of the period.

Operational net loan liability (closing balance)

Operational net loan liability measured as non-current interest-bearing liabilities and current interest-bearing liabilities, excluding financial lease liabilities and net provisions for pensions, less cash and cash equivalents at the end of the period.

Equity/assets ratio, %

Equity attributable to Parent Company shareholders as a percentage of the balance-sheet total at the end of the period.

Earnings per share, SEK

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

DERIVATION OF ALTERNATIVE PERFORMANCE MEASURES

	12 MONTHS ENDING
MSEK	31 DEC 2019	31 MAR 2019	31 MAR 2018	31 MAR 2017
ADJUSTED OPERATING PROFIT
Operating profit	302	302	240	65
Items affecting comparability
Acquisition related expenses	9	–	–	–
Restructuring expenses	–	–	–	94
Split and listing expenses	–	–	12	34
Adjusted operating profit	311	302	252	193

	12 MONTHS ENDING
MSEK	31 DEC 2019	31 MAR 2019	31 MAR 2018	31 MAR 2017
WORKING CAPITAL
Average operating assets
Average inventories	1,017	975	884	823
Average accounts receivable	966	956	895	821
Total average operating assets	1,983	1,931	1,779	1,644
Average operating liabilities
Average accounts payable	–759	–736	–732	–709
Total average operating liabilities	–759	–736	–732	–709
Average working capital	1,224	1,195	1,047	935
Adjusted operating profit	311	302	252	193
Return on working capital (P/WC), %	25%	25%	24%	21%

	12 MONTHS ENDING
MSEK	31 DEC 2019	31 MAR 2019	31 MAR 2018	31 MAR 2017
EBITA
Adjusted operating profit	311	302	252	193
Amortisation of intangible non-current assets incurred in connection with acquisitions	19	16	10	2
EBITA	330	318	262	195
Average working capital	1,224	1,195	1,047	935
Return on working capital (EBITA/WC), %	27%	27%	25%	21%

INTERIM REPORT – 9 MONTHS

1 APRIL-31 DECEMBER 2019

	12 MONTHS ENDING
MSEK	31 DEC 2019	31 MAR 2019	31 MAR 2018	31 MAR 2017
CAPITAL EMPLOYED
Average balance-sheet total	3,205	2,813	2,619	2,719
Average non-interest-bearing liabilities and provisions
Average non-interest-bearing non-current liabilities	–74	–74	–57	–14
Average non-interest-bearing current liabilities	–1,143	–1,150	–1,149	–1,073
Total average non-interest-bearing liabilities and provisions	–1,217	–1,224	–1,206	–1,087
Average capital employed	1,988	1,589	1,413	1,632
Operating profit	302	302	240	65
Financial income	0	1	2	2
Total operating profit + financial income	302	303	242	67
Return on capital employed, %	15%	19%	17%	4%

	12 MONTHS ENDING
MSEK	31 DEC 2019	31 MAR 2019	31 MAR 2018	31 MAR 2017
RETURN ON EQUITY
Average equity*	1,301	1,220	1,070	1,008
Net profit*	221	229	181	42
Return on equity, %	17%	19%	17%	4%

* Refers to equity and earnings attributable to Parent Company shareholders.

	12 MONTHS ENDING
MSEK	31 DEC 2019	31 MAR 2019	31 MAR 2018	31 MAR 2017
FINANCIAL NET LOAN LIABILITY (CLOSING BALANCE)
Non-current interest-bearing liabilities	483	164	130	174
Current interest-bearing liabilities	336	137	202	182
Cash and cash equivalents	–37	–8	–10	–69
Financial net loan liability (closing balance)	782	293	322	287

	12 MONTHS ENDING
MSEK	31 DEC 2019	31 MAR 2019	31 MAR 2018	31 MAR 2017
OPERATIONAL NET LOAN LIABILITY (CLOSING BALANCE)
Financial net loan liability	782	293	322	287
Financial lease liabilities	–553	–	–	–
Net provisions for pensions	–31	–27	–27	–24
Operational net loan liability (closing balance)	198	266	295	263

	12 MONTHS ENDING
MSEK	31 DEC 2019	31 MAR 2019	31 MAR 2018	31 MAR 2017
BALANCE-SHEET TOTAL
Balance-sheet total (closing balance)	3,392	2,914	2,734	2,551
Equity (closing balance)*	1,345	1,303	1,155	1,007
Equity/assets ratio, %	40%	45%	42%	39%

* Refers to equity attributable to Parent Company shareholders.

Change in revenue

Comparable units refer to sales in local currency from units that were part of the Group during the current period and the entire corresponding period in the preceding year. Trading days refer to the effect on sales in local currency depending on the difference in the number of trading days compared with the comparative period. Other units refer to acquired or divested units during the corresponding period.

	QUARTER		REPORTING PERIOD
	OCT-DEC 2019	OCT-DEC 2018	APR-DEC 2019	APR-DEC 2018
Change in revenue for:
Comparable units in local currency	–2.2%	2.7%	–1.3%	1.9%
Currency effects	0.2%	2.3%	0.4%	2.9%
Number of trading days	0.0%	–1.7%	–0.2%	0.2%
Other units	4.3%	1.2%	3.9%	1.8%
Total change	2.3%	4.5%	2.8%	6.8%