BTS Group

Interim / Quarterly Report • Aug 23, 2019

BTS GROUP AB (PUBL) Interim report January 1–June 30, 2019

Profit increases by 22 percent in the first half of the year

January 1–June 30, 2019

• • Net sales amounted to MSEK 853 (727). Adjusted for changes in foreign exchange rates, growth was 10 percent.
• • Operating profit (EBITA) increased by 21 percent to MSEK 1021 (85).
• • Profit before tax increased by 22 percent to MSEK 90 (74).
• • Profit after tax increased by 22 percent to MSEK 63 (52).
• • Earnings per share increased by 21 percent to SEK 3.31 (2.74).

Second quarter 2019

• • Net sales amounted to MSEK 477 (427). Adjusted for changes in foreign exchange rates, growth was 6 percent.
• • Operating profit (EBITA) increased by 13 percent to MSEK 72 (64).2
• • Profit before tax increased by 14 percent to MSEK 67 (59).
• • Profit after tax increased by 14 percent to MSEK 47 (41).
• • Earnings per share increased by 12 percent to SEK 2.46 (2.19).

Upgraded outlook for 2019

Profit before tax is expected to be significantly better than in the preceding year, which deviates from the previous report when profit before tax was expected to be better than in the preceding year.

1) BTS applies the new reporting standard IFRS 16 regarding leases as of January 1 2019. Comparative figures for 2018 have not been restated. IFRS 16 had a positive effect of MSEK 2.0 on EBITA for the first half of the year. If the new standard had not been applied, EBITA would have amounted to MSEK 100 (85). For other effects, see the separate table on pages 12–13.

2) IFRS 16 had a positive effect of MSEK 1.0 on EBITA for the second quarter, and if the new standard had not been applied, EBITA would have amounted to MSEK 71 (64).

NET SALES AND PROFIT BEFORE TAX Rolling 12 months

Vision The global leader in turning strategy into action.

BTS is a global professional services firm headquartered in Stockholm, Sweden, with approximately 780 professionals in 33 offices located on six continents. We focus on the people side of strategy, working with leaders at all levels to help them make better decisions, convert those decisions to actions and deliver results. At our core, we believe people learn best by doing. For more than 30 years, we've been designing fun, powerful experiences™ that have a profound and lasting impact on people and their careers. We inspire new ways of thinking, build critical capabilities and unleash business success. It's strategy made personal.

1 | BTS INTERIM REPORT JANUARY 1–JUNE 30, 2019 BTS INTERIM REPORT JANUARY 1–JUNE 30, 2019 | 1 We serve a wide range of client needs, including: Strategy execution, Leadership development programs, Assessment, Developing business acumen, Transforming sales organizations, Coaching, and Digital solutions, events and services. We partner with nearly 450 organizations, including over 30 of the world's 100 largest global corporations. Our major clients are e.g.: ABB, Chevron, Coca-Cola, Ericsson, EY, HP, Mercado Libre, Salesforce.com, SAP, and Tencent. BTS is a public company listed on the Nasdaq Stockholm exchange and trades under the symbol BTS B. For more information, please visit www.bts.com. Q2

CEO COMMENTS

Another recordbreaking quarter

A positive performance was reported for the first half of the year, with a 22 percent increase in profit before tax. Organic growth was 10 percent.

Our increase in profit has been stable over time. Earnings have now improved every quarter for the past 12 quarters.

The second quarter of the year broke new records. It was the best second quarter ever, and the second best quarter in our history – only the fourth quarter of 2018 was better. And we achieved these results despite a weak quarter in APG and despite the postponement of a few major projects in Europe to the third quarter.

The operating margin increases merely 0.1 of a percentage point during the second quarter, a temporary interruption in the positive trend we have been seeing in the EBITA margin since the fourth quarter of 2016. We expect to see margins increase again during the second half of the year.

These improvements were due to a higher share of licensing revenue, more efficient resource utilization and economies of scale – revenue growing more rapidly than overall costs. We will continue to invest in raising the margin, with a target EBITA margin of 15 percent.

The market for BTS's services is continuing to grow. The rate of change in the global business sector is high, which is favorable for demand. BTS holds a strong competitive position through our global organization, our digital services and our track record on creating earnings for our customers. We are securing many new assignments from existing customers while adding many new customers.

One trend in the market is that major international companies prefer to work with fewer partners and are looking for more strategic and long-term collaborations. BTS is well positioned here, and we win several global, long-term agreements with broader content services.

The acquisitions made in the end of 2017 have been integrated well and are demonstrating favorable results. There are solid opportunities for further acquisitions that offer appealing synergies and growth potential.

In 2019, we expect profit before tax that is significantly better than in the preceding year.

Stockholm, August 23, 2019

Henrik Ekelund President and CEO of BTS Group AB (publ)

OPERATIONS

Sales

BTS's net sales for the first half of the year amounted to MSEK 853 (727). Adjusted for changes in foreign exchange rates, growth was 10 percent. Growth is exclusively organic.

Growth varied between the units: BTS Other markets 12 percent, BTS North America 11 percent, BTS Europe 9 percent and APG –7 percent (growth measured in local currency).

Earnings

Operating profit (EBITA) increased by 21 percent in the first half of the year to MSEK 102 (85). The operating margin (EBITA margin) was 12.0 (11.7) percent. IFRS 16 had a positive effect of MSEK 2 on EBITA. If IFRS 16 had not been applied, EBITA would have increased by MSEK 100 (85).

Operating profit (EBIT) increased in the first half of the year by 24 percent in the first quarter to MSEK 93 (75). The operating margin (EBIT margin) was 10.9 percent (10.3). Operating profit (EBIT) for the first half of the year was charged with MSEK 8.9 (9.6) for amortization of intangible assets attributable to acquisitions.

The Group's profit before tax increased by 22 percent to MSEK 90 (74). IFRS 16 resulted in a higher interest expense of MSEK 3.1. If IFRS 16 had not been applied, the Group's profit before tax would have increased by MSEK 91 (74).

The Group's profitability was positively affected by improved profit in all operating units and of positive currency effects.

Second quarter

BTS's second-quarter net sales amounted to MSEK 477 (427). Adjusted for changes in foreign exchange rates, growth was 6 percent.

Operating profit (EBITA) increased by 13 percent in the second quarter to MSEK 72 (64). The operating margin (EBITA margin) was 15.1 (15.0) percent. IFRS 16 had a positive effect of MSEK 1 on EBITA. If IFRS 16 Leases had not been applied, EBITA would have increased by MSEK 71 (64).

Operating profit (EBIT) increased by 14 percent to MSEK 68 (59). The operating margin (EBIT margin) was 14.2 percent (13.9). Operating profit for the second quarter was charged with MSEK 4.6 (4.9) for amortization of intangible assets attributable to acquisitions.

Profit before tax for the second quarter increased by 14 percent to MSEK 67 (59). IFRS 16 resulted in a higher interest expense of MSEK 1.5. If IFRS 16 had not been applied, the Group's profit before tax would have increased by MSEK 67 (59). The Group's profitability was positively affected by improved profit in all operating units and of positive currency effects.

Market development

The market for BTS services continued to trend positively during the first half of the year.

NET SALES BY SOURCE OF REVENUE JANUARY 1–JUNE 30, 2019 (2018)

REVENUE BY QUARTER

PROFIT BEFORE TAX BY QUARTER

PROFIT BEFORE TAX AND OPERATING MARGIN (EBITA) BY QUARTER

SEGMENT REPORTING

The effects if IFRS 16 are not included in the BTS Operating units reporting. These effects are recognized as Group adjustments and presented in a separate table.

Operating units

BTS North America consists of BTS's operations in North America excluding APG.

BTS Europe consists of operations in France, Germany, the Netherlands, Sweden and the UK.

BTS Other markets consists of operations in Argentina, Australia, Brazil, China, Costa Rica, India, Italy, Japan, Mexico, Singapore, South Africa, South Korea, Spain, Taiwan, Thailand and the United Arab Emirates.

APG consists of operations in Advantage Performance Group in North America.

NET SALES PER OPERATING UNIT

MSEK	April–June 2019	April–June 2018	Jan–June 2019	Jan–June 2018	July–June 2018/19	Jan–Dec 2018
BTS North America	229	191	409	331	792	714
BTS Europe	89	88	162	143	334	316
BTS Other markets	128	116	225	196	489	460
APG	31	32	58	56	110	109
Total	477	427	853	727	1,725	1,598

OPERATING PROFIT (EBITA) PER OPERATING UNIT

MSEK	April–June 2019	April–June 2018	Jan–June 2019	Jan–June 2018	July–June 2018/19	Jan–Dec 2018
BTS North America	32.5	28.2	57.0	46.5	104.0	93.4
BTS Europe	15.3	14.1	19.2	16.0	48.2	44.9
BTS Other markets	22.5	21.1	23.5	22.2	64.1	62.8
APG	0.9	0.9	0.3	0.0	1.3	0.9
Total	71.3	64.3	100.0	84.7	217.5	202.1

BTS North America

Net sales for BTS's operations in North America amounted to MSEK 409 (331) in the first half of the year. Adjusted for changes in foreign exchange rates, revenue grew by 11 percent. Operating profit (EBITA) amounted to MSEK 57.0 (46.5) in the first half of the year. The operating margin (EBITA margin) was 13.9 (14.0) percent.

Net sales for the second quarter amounted to MSEK 229 (191). Adjusted for changes in foreign exchange rates, revenue grew by 10 percent. Operating profit (EBITA) amounted to MSEK 32.5 (28.2) in the second quarter. The operating margin (EBITA margin) was 14.2 (14.7) percent.

BTS North America shows positive growth during the entire first half of the year. The decrease in the operating margin during the second quarter has been deemed temporary.

BTS Europe

Net sales for BTS Europe amounted to MSEK 162 (143) in the first half of the year. Adjusted for changes in foreign exchange rates, revenue grew by 9 percent. Operating profit (EBITA) amounted to MSEK 19.2 (16.0) in the first half of the year. The operating margin (EBITA margin) was 11.9 (11.1) percent.

Net sales for the second quarter amounted to MSEK 89 (88). Adjusted for changes in foreign exchange rates, revenue declined by 1 percent. Operating profit (EBITA) amounted to MSEK 15.3 (14.1) in the second quarter. The operating margin (EBITA margin) was 17.2 (16.1) percent.

The low growth in Europe in the second quarter was due to the postponement of deliveries in some major projects. The growth is deemed to return during the second half of the year.

BTS Other markets

Net sales for BTS Other markets amounted to MSEK 225 (196) in the first half of the year. Adjusted for changes in foreign exchange rates, revenue grew by 12 percent. Operating profit (EBITA) amounted to MSEK 23.5 (22.2) in the first half of the year. The operating margin (EBITA margin) was 10.4 (11.3) percent.

Net sales for the second quarter amounted to MSEK 128 (116). Adjusted for changes in foreign exchange rates, revenue grew by 9 percent. Operating profit (EBITA) amounted to MSEK 22.5 (21.1) in the second quarter. The operating margin (EBITA margin) was 17.6 (18.2) percent.

BTS Other markets showed growth during the first half of the year. Owing to investments in the market and in organization, the margin was lower than during the first half of the preceding year.

APG

Net sales for APG amounted to MSEK 58 (56) in the first half of the year. Adjusted for changes in foreign exchange rates, revenue declined by 7 percent. Operating profit (EBITA) amounted to MSEK 0.3 (0.0) in the first half of the year. The operating margin (EBITA margin) was 0.6 (0.0) percent.

Net sales for the second quarter amounted to MSEK 31 (32). Adjusted for changes in foreign exchange rates, revenue declined by 11 percent. Operating profit (EBITA) amounted to MSEK 0.9 (0.9) in the second quarter. The operating margin (EBITA margin) was 2.9 (2.7) percent.

BTS'S OFFICES AROUND THE WORLD

OTHER INFORMATION

Financial position

BTS's cash flow from operating activities for the first half of the year amounted to MSEK –7.6 (–18.2). IFRS 16 had a positive effect of MSEK 21.2 on the cash flow from operating activities. The weak cash flow, excluding the IFRS effect in the first half of the year compared with the previous year, is exclusively attributable to a reduction in current liabilities.

Available cash and cash equivalents amounted to MSEK 200 (158) at the end of the period. The company's interestbearing loans attributable to previously implemented acquisitions amounted to MSEK 88 (127) at the end of the period.

BTS's equity ratio was 49 percent (48) at the end of the period. If IFRS 16 had not been applied, the equity ratio would have increased by 54 percent.

The company had no outstanding conversion loans at the balance sheet date.

Employees

At June 30, the number of employees at BTS was 781 (634).

The average number of employees in the first half of the year was 743 (616).

Parent Company

The Parent Company's net sales amounted to MSEK 1.8 (1.7) and profit before tax totaled MSEK 23.1 (22.1). Cash and cash equivalents amounted to MSEK 13.5 (1.0).

Outlook for 2019

Profit before tax is expected to be significantly better than in the preceding year, which deviates from the previous report when profit before tax was expected to be better than in the preceding year.

Events after the end of the period

No significant events occurred after the close of the period.

Risks and uncertainties

The Group's material risks and uncertainties include market and business risks, operational risks and financial risks. Business and market risks may relate to greater customer exposure for specific sectors and companies as well as sensitivity to market conditions. Operational risks include dependence on individuals, skills supply and intellectual property as well as BTS meeting the high quality demands of its clients. Financial risks mainly relate to foreign exchange and credit risks.

The management of risks and uncertainties is described in the 2018 Annual Report. BTS is considered to have a good spread of risks across companies and sectors, and operational risks are handled in a structured manner through well-established processes. Day-to-day exposure to currency fluctuations is limited since revenue and costs are mainly in the same currency in each market, and credit risk is limited since BTS only accepts creditworthy counterparties. No new material risks or uncertainties are deemed to have arisen during 2019.

Critical accounting estimates and assumptions

In order to prepare the financial statements in conformity with IFRS, Corporate Management is required to make estimates and assumptions that affect the application of accounting principles and the recognized amounts of assets, liabilities, revenue and costs. Estimates and assumptions are based on historical experience and a number of other factors that are regarded as reasonable under prevailing conditions. Actual outcomes can deviate from these estimates and assumptions. Estimates and assumptions are reviewed regularly.

Accounting principles

This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting. The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) as endorsed by the EU, RFR 1 Supplementary Accounting Rules for Groups, and the Swedish Annual Accounts Act. The Parent Company's statements have been prepared in accordance with RFR 2 Accounting for Legal Entities and the Annual Accounts Act.

New accounting policies for 2019 IFRS 16 Leases

BTS applies IFRS 16 Leases as of January 1, 2019. IFRS 16 is applied retrospectively without restating comparative figures. Accordingly, the opening balance for 2019 has been restated in accordance with the new standard. The standard has impacted BTS's accounting of the Group's operating leases, which mostly comprise premises.

The Group recognizes a right-of-use asset in the balance sheet and a lease liability at the present value of future lease payments, adjusted for any prepaid or accrued payments attributable to the lease. The leased asset is depreciated straight-line over the lease term or over the useful life of the underlying asset if it is deemed to be probable that the Group will take over ownership at the end of the lease term. The lease expense is recognized as depreciation in EBITA and interest expenses in net financial items.

The implementation of the new lease standard results in increased assets and interest-bearing liabilities in the balance sheet, which thus impact the net financial position. The implementation will also have a positive impact on EBITA in profit or loss based on a portion of the lease expenses being recognized as interest expenses in net financial items. In the cash flow statement, lease payments are distributed between interest paid in the operating cash flow and repayment of lease liabilities in the financing activities. Since the main payment is recognized in financing activities, cash flow from financing activities is reduced by the corresponding increase in cash flow from operating activities.

The average interest rate for the transition calculation was 4 percent. The Group applies the modified retrospective approach, meaning that the asset is recognized at the same amount as the lease liability, and for this reason no transition effect is presented in equity. Accordingly, comparative information continues to be recognized in accordance with IAS 17 Leases.

The opening effect on the consolidated balance sheet on January 1, 2019 was a reported lease asset (right-of-use asset) of MSEK 170 and a lease liability of MSEK 167 were added, of which MSEK 3 was reclassified from prepaid rent. The implementation effects are summarized in the table "Comparison between IAS 17 and IFRS 16." More details about the implementation, restated financial information and a description of new accounting principles are presented in BTS's 2018 Annual Report.

IFRIC 23 Uncertainty over Income Tax Treatments

IFRIC 23 is a new interpretation that clarifies the accounting for uncertainty in income taxes under the framework of IAS 12 Income Taxes. For BTS, this entails a change to the classification of identified income-tax related risks that were previously recognized as a provision for tax expenses that are probable for setting the commitment. The uncertainty in the treatment of income taxes is recognized as a tax liability going forward.

IFRIC 23 is applied retrospectively without restating comparative figures. Accordingly, the opening balance for 2019 has been restated in accordance with the new interpretation. Income-tax related risks that were previously recognized as short and long-term provisions are reclassified to tax liabilities at an amount totaling MSEK 48 on January 1, 2019. Accordingly, no transition effect is presented in equity.

Financial calendar

Interim report Jan–Sept 2019 November 13, 2019 Year-end report 2019 February 18, 2020 Interim report Jan–March 2020 May 14, 2020

The Board of Directors and the CEO declare that the undersigned interim report provides a true and fair overview of the Company's and the Group's operations, their financial position and performance as well as describing material risks and uncertainties facing the Company and other companies in the Group.

Stockholm, August 23, 2019

Reinhold Geijer	Mariana Burenstam Linder
Chairman	Board member
Stefan Gardefjord	Dag Sehlin
Styrelseledamot	Board member
Anna Söderblom Board member	Henrik Ekelund CEO Board member

This report has not been reviewed by BTS's auditors.

Contact information

Henrik Ekelund CEO		Tel: +46 8 587 070 00
Stefan Brown	CFO	Tel: +46 8 587 070 62
	Michael Wallin Head of Investor	Tel: +46 8 587 070 02
	Relations	Mobile: +46 70 878 80 19

For further information, visit our website www.bts.com

BTS Group AB (publ) Grevgatan 34 SE-114 53 Stockholm SWEDEN

Tel. +46 8 587 070 00 Fax. +46 8 587 070 01 Company registration number: 556566-7119

GROUP INCOME STATEMENT, SUMMARY

KSEK	April–June 2019	April–June 2018	Jan–June 2019	Jan–June 2018	July–June 2018/19	Jan–Dec 2018
Net sales	477,432	427,172	853,256	726,570	1,725,084	1,598,399
Operating expenses	–390,352	–360,312	–721,761	–636,483	–1,469,728	–1,384,450
Depreciation of property, plant, and equipment	–14,760	–2,608	–29,414	–5,427	–35,822	–11,835
Amortization of intangible assets	–4,570	–4,910	–8,874	–9,645	–17,942	–18,713
Operating profit	67,749	59,341	93,207	75,015	201,592	183,401
Net financial items	–2,010	–765	–4,004	–1,492	–5,642	–3,130
Associated company, profit after tax	1,221	81	745	13	255	–477
Profit before tax	66,960	58,657	89,947	73,536	196,205	179,794
Estimated tax	–19,814	–17,372	–26,640	–21,781	–58,519	–53,660
Profit for the period	47,146	41,284	63,307	51,755	137,686	126,134
attributable to the shareholders of the parent company	47,146	41,284	63,307	51,755	137,686	126,134
Earnings per share, before dilution of shares, SEK	2.46	2.19	3.31	2.74	7.24	6.67
Number of shares at end of the period	19,307,864	18,887,051	19,307,864	18,887,051	19,307,864	19,013,916
Average number of shares before dilution	19,198,247	18,887,051	19,127,669	18,887,051	19,030,433	18,905,124
Earnings per share, after dilution of shares, SEK	2.46	2.14	3.31	2.68	7.24	6.56
Average number of shares after dilution	19,198,247	19,284,748	19,127,669	19,284,748	19,030,433	19,232,346
Dividend per share, SEK						3.60

GROUP STATEMENT OF COMPREHENSIVE INCOME

KSEK	April–June 2019	April–June 2018	Jan–June 2019	Jan–June 2018	July–June 2018/19	Jan–Dec 2018
Profit for the period	47,146	41,284	63,307	51,755	137,686	126,134
Items that will not be reclassified to profit or loss	–	–	–	–	–	–
	–	–	–	–	–	–
Items that may be reclassified to profit or loss
Translation differences in equity	–2,241	28,034	28,736	45,389	23,095	39,747
Other comprehensive income for the period, net of tax	–2,241	28,034	28,736	45,389	23,095	39,747
Total comprehensive income for the period	44,905	69,318	92,044	97,144	160,781	165,881
attributable to the shareholders of the parent company	44,905	69,318	92,044	97,144	160,781	165,881

GROUP BALANCE SHEET, SUMMARY

KSEK	June 30 2019	June 30 2018	Dec 31 2018
Assets
Goodwill	468,441	449,990	455,268
Other intangible assets	65,760	82,758	72,026
Tangible assets	192,343	32,556	38,803
Financial assets	15,677	11,731	15,082
Total non-current assets	742,220	577,035	581,179
Trade receivables	450,947	413,386	512,468
Other current assets	207,996	205,138	172,006
Cash and cash equivalents	199,986	157,817	262,357
Total current assets	858,929	776,340	946,831
TOTAL ASSETS	1,601,149	1,353,375	1,528,010
Equity and liabilities
Equity	785,600	651,633	704,203
Provisions	176,4611	233,494	220,608
Non-current liabilities	209,392	80,632	62,893
Current liabilities	429,696	387,616	540,307
Total liabilities	815,550	701,742	823,807
TOTAL EQUITY AND LIABILITIES	1,601,149	1,353,375	1,528,010

1 MSEK 48.2 has been reclassified from provisions to long-term and short-term tax liabilities.

GROUP CASH FLOW STATEMENT, SUMMARY

KSEK	Jan–June 2019	Jan–June 2018	Jan–Dec 2018
Cash flow before changes in working capital	94,784	69,493	160,097
Cash flow from changes in working capital	–102,432	–87,714	–1,934
Cash flow from operating activities	–7,647	–18,221	158,163
Acquisition related	–	–	–15,055
Other1	–11,547	–6,319	–22,266
Cash flow from investing activities	–11,547	–6,319	–37,321
Dividend	–34,458	–26,442	–53,010
New issue	22,899	–	5,800
Other2	–36,608	1,217	–23,366
Cash flow from financing activities	–48,167	–25,225	–70,576
Cash flow for the period	–67,362	–49,765	50,266
Cash and cash equivalents, opening balance	262,357	199,876	199,876
Translation differences in cash and cash equivalents	4,990	7,706	12,215
Cash and cash equivalents, closing balance	199,986	157,817	262,357

1 Acquisition of assets.

2 The IFRS effect for the period January to June 2019 appears in a separate table on pages 12–13; the remainder relates to changes in loans.

GROUP CHANGES IN CONSOLIDATED EQUITY

KSEK	Total equity June 30, 2019	Total equity June 30, 2018	Total equity Dec 31, 2018
Opening balance	704,203	580,555	580,555
Dividend to shareholders	–34,458	–26,442	–53,010
New issue	24,972	–	10,943
Other	–1,161	377	–166
Total comprehensive income for the period	92,044	97,144	165,881
Closing balance	785,600	651,633	704,203

GROUP CONSOLIDATED KEY RATIOS

KSEK	April–June 2019	April–June 2018	Jan–June 2019	Jan–June 2018	July–June 2018/19	Jan–Dec 2018
Net sales	477,432	427,172	853,256	726,570	1,725,084	1,598,399
Operating profit (EBITA)	72,320	64,251	102,081	84,660	219,535	202,114
Operating margin (EBITA margin), %	15.1	15.0	12.0	11.7	12.7	12.6
Operating profit (EBIT)	67,749	59,341	93,207	75,015	201,592	183,401
Operating margin (EBIT margin), %	14.2	13.9	10.9	10.3	11.7	11.5
Profit margin, %	9.9	9.7	7.4	7.1	8.0	7.9
Operating capital1					673,390	544,686
Return on operating capital, %					33	35
Return on equity, %					18	20
Equity ratio, at end of the period, %	49	48	49	48	49	46
Cash flow	–58,774	–17,637	–67,362	–49,765	32,670	50,266
Cash and cash equivalents, at end of the period	199,986	157,817	199,986	157,817	199,986	262,357
Average number of employees	765	624	743	616	708	645
Number of employees at end of the period	781	634	781	634	781	701
Revenues for the year per employee					2,435	2,478

1 The calculation included the item of non-interest-bearing liabilities amounting to KSEK 727,773 (574,324).

PARENT COMPANY'S INCOME STATEMENT, SUMMARY

KSEK	April–June 2019	April–June 2018	Jan–June 2019	Jan–June 2018	July–June 2018/19	Jan–Dec 2018
Net sales	945	575	1,770	1,700	3,025	2,955
Operating expenses	–1,109	–284	–233	761	–2,750	–1,756
Operating profit	–164	291	1,537	2,461	275	1,199
Net financial items	22,127	20,160	21,608	19,606	69,741	67,739
Profit before tax	21,963	20,451	23,144	22,067	70,016	68,939
Estimated tax	–	–	–	–	–827	–827
Profit for the period	21,963	20,451	23,144	22,067	69,190	68,112

PARENT COMPANY'S BALANCE SHEET, SUMMARY

KSEK	June 30, 2019	June 30, 2018	Dec 31, 2018
Assets
Financial assets	302,606	302,305	301,983
Other current assets	30,266	31,048	41,517
Cash and cash equivalents	13,541	1,010	4,509
Total assets	346,413	334,362	348,010
Equity and liabilities
Equity	170,539	126,461	156,881
Non-current liabilities	147,802	174,014	147,802
Current liabilities	28,071	33,887	43,327
Total equity and liabilities	346,413	334,362	348,010

COMPARISON BETWEEN IFRS 16 AND IAS 17

Excerpt from Group income statement

	IFRS 16		IAS 17
KSEK	Jan–June 2019	Change	Jan–June 2019	Jan–June 2018
EBITDA	131,495	24,306	107,189	90,087
Depreciation of property, plant, and equipment	–29,414	–22,270	–7,143	–5,427
EBITA	102,081	2,036	100,045	84,660
Amortization of intangible assets	–8,874	–	–8,874	–9,645
EBIT	93,207	2,036	91,171	75,015
Net financial items	–4,004	–3,056	–948	–1,492
Associated company, profit after tax	745	–	745	13
EBT	89,947	–1,020	90,967	73,536
Estimated tax	–26,640	302	–26,942	–21,781
Profit for the period	63,307	–718	64,025	51,755

Group balance sheet

	IFRS 16		IAS 17
	June 30,		June 30,	June 30,
KSEK	2019	Change	2019	2018
ASSETS
Goodwill	468,441	–	468,441	449,990
Other intangible assets	65,760	–	65,760	82,758
Tangible assets	192,343	147,878	44,465	32,556
Financial assets	15,677	–	15,677	11,731
Total non-current assets	742,220	147,878	594,342	577,035
Trade receivables	450,947	–	450,947	413,386
Other current assets	207,996	–3,525	211,521	205,138
Cash and cash equivalents	199,986	–	199,986	157,817
Total current assets	858,929	–3,525	862,454	776,340
TOTAL ASSETS	1,601,149	144,353	1,456,796	1,353,375
EQUITY AND LIABILITIES
Equity	785,600	–709	786,309	651,633
Provisions	176,461	–	176,461	233,494
Non-current liabilities	209,392	103,481	105,911	80,632
Current liabilities	429,696	41,582	388,114	387,616
Total liabilities	815,550	145,063	670,487	701,742
TOTAL EQUITY AND LIABILITIES	1,601,149	144,353	1,456,796	1,353,375

Group cash flow statement

	IFRS 16		IAS 17
KSEK	Jan–June 2019	Change	Jan–June 2019	Jan–June 2018
Cash flow before changes in working capital	94,784	21,250	73,534	69,493
Cash flow from changes in working capital	–102,432	–89	–102,342	–87,714
Cash flow from operating activities	–7,647	21,161	–28,808	–18,221
Cash flow from investing activities	–11,547	–	–11,547	–6,319
Cash flow from financing activities	–48,167	–21,161	–27,006	–25,225
Cash flow for the period	–67,362	–	–67,362	–49,765
Cash and cash equivalents, opening balance	262,357	–	262,357	199,876
Translation differences in cash and cash equivalents	4,990	–,	4,990	7,706
Cash and cash equivalents, closing balance	199,986	–	199,986	157,817

NET SALES ACCORDING TO BUSINESS MODEL

	Jan–June 2019					Jan–June 2018
MSEK	BTS North America	BTS Europe	BTS Other markets	APG	Total	BTS North America	BTS Europe	BTS Other markets	APG	Total
Programs	219	88	166	47	519	189	87	142	46	464
Development	126	55	41	0	222	95	50	38	0	183
Licenses	38	9	8	11	67	22	1	8	10	41
Other revenue	26	9	10	0	45	24	6	9	0	39
TOTAL	409	162	225	58	853	331	143	196	56	727

BTS applies IFRS 15 Revenue from contracts with customers from 2018. For more information, see Note 2 Significant accounting policies and Note 9 Segment reporting in the Annual Report 2018.

DEFINITIONS

Earnings per share

Earnings attributable to the parent company's shareholders divided by number of shares before dilution.

Operating margin (EBITA margin)

Operating profit before interest, tax and amortization as a percentage of net sales.

Operating margin (EBIT margin)

Operating profit after depreciation as a percentage of net sales.

Profit margin

Profit for the period as a percentage of net sales.

Operating capital

Total balance sheet reduced by liquid funds and other interest-bearing assets and reduced by non-interest bearing liabilities.

Return on operating capital

Operating profit (EBIT) as a percentage of average operating capital.

Return on equity

Profit after tax as a percentage of average equity.

Equity ratio

Equity as a percentage of total balance sheet.

The global leader in turning strategy into action

BTS focuses on the people side of strategy, working with leaders at all levels to help them make better decisions, convert those decisions to actions and deliver results. At our core, we believe people learn best by doing. For more than 30 years, we've been designing fun, powerful experiences™ that have a profound and lasting impact on people and their careers. We inspire new ways of thinking, build critical capabilities and unleash business success. It's strategy made personal.

Vision

The global leader in turning strategy into action.

Purpose

We inspire and equip people to do the best work of their lives, creating better businesses and a better planet.

Value proposition

We make strategy personal and drive great execution. Our unforgettable experiences create levels of alignment, mindset, and capability that deliver better results, faster.

Financial goals

BTS's financial goals over time are to reach:

• A revenue growth, adjusted for changes in exchange rates, of 20 percent, primarily organic.
• An EBITA margin of 15 percent.
• An equity ratio that does not fall below 50 percent over extended periods.

| BTS INTERIM REPORT JANUARY 1–JUNE 30, 2019

SWEDEN

Head Office Grevgatan 34 114 53 Stockholm SWEDEN Tel. 08 58 70 70 00

ARGENTINA

BTS BUENOS AIRES Reconquista 657 PB 3 CP1003 CABA. Buenos Aires Tel. +54 1157955721

AUSTRALIA

198 Harbour Esplanade, Suite 404 Docklands VIC 3008 Tel. +61 3 9670 9850

Level 6 10 Barrack St Sydney NSW 2000 Tel. +61 02 8243 0900

BRAZIL

Rua Geraldo Flausino Gomes, 85, cj 42 04575-060 São Paulo – SP Tel. +55 (11) 5505 2070

CHINA

1376 West Nanjing Road Suite 531, East Office Tower Shanghai Centre Shanghai 200040 Tel. +86 21 6289 8688

COSTA RICA

Office 203 Prisma Business Center San Jose Tel: +506 22 88 48 19

FRANCE

57, rue de Seine 75006 Paris Tel. +33 1 40 15 07 43

GERMANY

Ritterstraße 12 D-50668 Cologne Tel +49 221 270 70 763

INDIA

Vatika Business Center Divyashree Chambers, 2nd Floor, Wing A O'Shaugnessy Road, Langford Town Bangalore 560025 Tel. +91 80 4291 1111 Ext 116

801, 8th Floor, DHL Park Opposite MTNL, Staff quarters, S.V. Road, Goregaon (West). Mumbai - 400062 Maharashtra, Tel. +91 22 6196 6800

ITALY

Viale Fulvio Testi 223 20162 Milan Tel. +39 02 6611 6364

BTS Design Innovation Viale Abruzzi, 13 20131 Milan Tel. +39 02 69015719

JAPAN

TS Kojimachi Bldg. 3F 6-4-6 Kojimachi Chiyoda-ku Tokyo 102-0083, Japan Tel. +81 (3) 6272 9973

MEXICO

Edificio Torre Moliere Calle Moliere 13 – PH Col Chapultepec Polanco C.P. 11560 México, D.F. Tel. +52 (55) 52 81 69 72

THE NETHERLANDS

Barbara Strozzilaan 201 1083 HN Amsterdam The Netherlands Tel: + 31 (0)20 615 15 14

SINGAPORE

1 Finlayson Green #07-02 Singapore 049246 Tel. +65 6221 2870

SPAIN

Simon Bolivar 27-1, Office No. 4 Bilbao 48013 Tel. +34 94 423 5594

Calle José Abascal 55, piso 3ºDcha 28003 Madrid Tel. +34 91 417 5327

SOUTH AFRICA

267 West Avenue, 1st Floor Centurion 0046, Gauteng Tel. +27 12 663 6909

SOUTH KOREA

Room 103, 1st Floor Wonseo Building 13, Changdeokgung 1-gil Jongo-gu Seoul 03058 Tel. +82 2 539 7676

TAIWAN

7 F, No. 307, Dun-Hua, North Road Taipei 105 Tel. +886 2 8712 3665

THAILAND

128/27 Phyathai Plaza Building (4th Floor) Phyathai Rd. Kwaeng Thung Phyathai Khet Ratchathewi Bangkok 10400 Tel. +66 2 216 5974

UK

1 Queen Caroline Street London W6 9YN Tel: +44 20 7368 4180

Holbrook Court, Cumberland Business Centre, Hampshire, PO5 1DS Portsmouth Tel: +44 2393 162686

UNITED ARAB EMIRATES

10th Floor, Swiss Tower Jumeirah Lakes Towers Dubai Tel. +971 4 279 8341

USA

Frost Bank Building 401 Congress Avenue Suite 2740 Austin, Texas 78701 Tel. +1 512 474 1416

200 South Wacker Drive Suite 925 Chicago, IL 60606 Tel. +1 312 509 4750

101 West Elm St Suite 310 Conshohocken, PA 19428 Tel. (toll free) +1 800 445 7089 Tel. +1 484 391 2900

350 Fifth Ave, Suite 5020 New York, NY 10118 Tel. +1 646 378 3730

4742 N. 24th St., Suite 120 Phoenix, AZ 85016 Tel. +1 480 948 2777

222 Kearny Street, Ste 1000 San Francisco, CA 94108 Tel. +1 415 362 4200

ADVANTAGE

PERFORMANCE GROUP

100 Smith Ranch Road, Suite 306 San Rafael, CA 94903 USA Tel. +1 800 494 6646

We create powerful experiences that help leaders build the future of their business