Elanders

Quarterly Report • Nov 7, 2016

Press release from Elanders AB (publ) 2016-11-07

January-September

• In June 2016 Elanders signed a contract to acquire LGI Logistics Group International GmbH ("LGI"), a supply chain company with a strong presence in Europe, particularly in Germany. Through the acquisition Elanders doubles its size and the annual net sales increase from SEK 4.2 to around 8.3 billion (pro forma 2015 level). LGI is consolidated in the Elanders Group from 26 July 2016.
• Net sales increased to MSEK 3,956 (3,113), an increase by 27 percent, of which 1 percentage point was organic growth.
• The operating result excluding one-off items increased to MSEK 230 (181), which was an increase by 27 percent. Including one-off items the operating result increased to MSEK 221 (181).
• The result before tax excluding one-off items increased to MSEK 210 (154), which was an improvement of 36 percent. Including one-off items the result before tax increased to MSEK 197 (154).
• The net result increased to MSEK 138 (101) or SEK 5.20 (3.81) per share.
• Excluding the purchase price of acquisitions, the operating cash flow amounted to MSEK 303 (108). Including acquisitions operating cash flow was MSEK -1,497 (108).
• One-off items during the period consist mainly of advisory and financial costs in connection with the acquisition of LGI and book VAT recognized as revenue. Additional one-off costs related to the acquisition of LGI amounting to maximum MSEK 13 is expected to charge the result in the fourth quarter.
• The rights issue was oversubscribed and concluded in the month of October. It generated a total of MSEK 695 after issue costs.

Third quarter

• Net sales increased to MSEK 1,878 (1,041), an increase of 80 percent, of which 4 percentage points were organic growth.
• The operating result excluding one-off items increased to MSEK 103 (64). Including oneoff items, the operating result increased to MSEK 100 (64).
• The result before tax excluding one-off items increased to MSEK 91 (55), which was an improvement by 65 percent. Including one-off items the result before tax was MSEK 86 (55).
• The net result increased to MSEK 58 (36) or SEK 2.17 (1.35) per share.
• Excluding the purchase price of acquisitions, the operating cash flow amounted to MSEK 201 (-24). Including acquisitions operating cash flow was MSEK -1,565 (-24).

COMMENTS BY THE CEO

We are happy to see that the Group again could show organic growth excluding acquisitions, both for the quarter and accumulated for the year and that we also generated a strong operating cash flow, excluding acquistions. This growth has been generated solely by the business area Supply Chain Solutions, which since the end of July 2016 also includes our newly acquired LGI.

Through the acquisition of LGI, we have created a stable platform for organic growth in Supply Chain Solutions. The acquisition also broadens our customer base in Supply Chain Solutions to include customers in Fashion & Lifestyle, Industrial Manufacturing, Automotive as well as Healthcare and Life Science. Together with LGI, we now have a completely new strongpoint in supply chain management as well as in contract logistics and this allows us to offer our customers more comprehensive global solutions.

Integration of LGI is moving rapidly along. The primary focus is on sales coordination, common customer meetings and bidding processes, where we can showcase the strength of the entire Group and the opportunities this entails for customers. There are several projects in the works with potential new customers and we are hopeful one or more will be realized. In many cases concluding a sales project can take a very long time since it often includes outsourcing processes critical to a customer's business.

Our highest priority continues to be developing and creating new business with current and new customers that includes services from all our business areas as well as growing with our customer base geographically in the world. The combination Elanders and LGI creates entirely new possibilities for that to happen.

Magnus Nilsson President and Chief Executive Officer

FINANCIAL OVERVIEW

	January-September			Third quarter
MSEK	2016	2015	2014	2016	2015	2014
Net sales	3,956	3,113	2,631	1,878	1,041	870
Operating expenses	-3,735	-2,932	-2,527	-1,779	-977	-844
Operating result	221	181	104	100	64	27
Net financial items	-24	-27	-26	-14	-9	-9
Result before tax	197	154	78	86	55	18

GROUP

Our business

Elanders is a global supplier of integrated solutions in the areas supply chain management, print & packaging and e-commerce. The Group operates in more than 18 countries on four continents. Our most important markets are China, Germany, Singapore, Sweden, United Kingdom and the USA. The major customers are active in automotive, consumer electronics, fashion & lifestyle or other industrial manufacturing.

Net sales and result

January-September

Net sales increased by MSEK 843 to MSEK 3,956 (3,113) during the first nine months. Excluding exchange rate effects and acquisitions, net sales increased by 1.0 %. The operating result increased to MSEK 221 (181), including one-off items of some net MSEK -9 (0). The result before tax which increased from MSEK 154 to 197 included one-off items of some net MSEK -12 (0). These items almost entirely refer to the acquisition of LGI, such as advisory and financial costs and also book VAT recognized as revenue. Excluding one-off items, the result after financial items increased to MSEK 210 compared to MSEK 154 for the same period last year. The improvement in the result is primarily due to the acquisition of LGI and Schmid Druck.

Third quarter

During the third quarter net sales increased by MSEK 838 to 1,879 (1,041) compared to the same period last year. Excluding exchange rate effects and acquisitions net sales grew by 4.0 %. The operating result improved and increased to MSEK 100 (64), which equals an operating margin of 5.3 (6.2) %. Excluding net one-off items of approximately MSEK -3 (0), primarily attributable to book VAT recognized as revenue and the acquisition process of LGI, the operating result increased to MSEK 103 (64), which equals an operating margin of 5.5 (6.2) %.

Supply Chain Solutions

Elanders is one of the leading companies in the world in Global Supply Chain Management. Our services include taking responsibility for and optimizing customers' material and information flows, everything from sourcing and procurement combined with warehousing to after sales service.

	January-September		Third quarter		Last	Full year
Supply Chain Solutions	2016	2015	2016	2015	12 months	2015
Net sales, MSEK	2,339	1,519	1,358	526	2,865	2,045
Operating result, MSEK	163	122	81	49	223	182
Operating margin, %	7.0	8.0	5.9	9.3	7.8	8.9
Average number of employees	2,166	1,433	3,679	1,420	1,980	1,430

The positive trend continued in business area Supply Chain Solutions and the business area grew organically by 3.3 % during the first nine months and 10.6 % during the third quarter. The increase is primarily due to increased sales to existing customers. Since the end of July the newly acquired LGI is a part of the business area. The integration is moving rapidly along and a number of common projects has already started.

Print & Packaging Solutions

Through its innovative force and global presence the business area Print & Packaging offers costeffective solutions that can handle customers' local and global needs for printed material and packaging, often in combination with advanced order platforms on the Internet or just-in-time deliveries.

Print & Packaging Solutions	January-September 2016	2015	Third quarter 2016	2015	Last 12 months	Full year 2015
Net sales, MSEK	1,547	1,526	500	494	2,074	2,054
Operating result, MSEK	81	87	26	26	117	122
Operating margin, %	5.3	5.7	5.3	5.3	5.6	6.0
Average number of employees	1,650	1,679	1,600	1,676	1,655	1,676

The market for Print & Packaging Solutions continues to be characterized by tough price pressure and overcapacity on the market. Excluding acquisitions and using constant exchange rates net sales for the business area dropped during the first nine months by 1.3 % and during the third quarter by 2.0 %.

Total print volumes are down on every Elanders' market, which has a negative effect on the result and margin. On most of the markets there is also a clear shift towards digital print and more personalized products instead of traditional offset print in large volumes.

The Brasilian and parts of the American operations are currently undergoing a transition from focus on printing to focus on supply chain. So far the transition has so far been successful and contributed to developing the businesses and improving their earnings.

e-Commerce Solutions

fotokasten, myphotobook and d|o|m are the Group's brands in e-Commerce. Through the technical solutions for e-commerce provided by d|o|m, fotokasten and myphotobook offer a broad range of photo products primarily to consumers.

	January-September		Third quarter		Last	Full year
e-Commerce Solutions	2016	2015	2016	2015	12 months	2015
Net sales, MSEK	120	125	36	39	232	237
Operating result, MSEK	-5	-5	-4	-4	18	18
Operating margin, %	-4.1	-3.8	-11.6	-9.1	7.8	7.8
Average number of employees	63	67	63	70	64	67

The business area has substantial seasonal sales variations and the fourth quarter is by and far the strongest. Normally all earnings for the year occurs in this quarter. Net sales for the first nine months are slightly lower than last year but the result is on the same level. One reason for the weak sales is the fine weather in the beginning of autumn,which results in people wanting rather spend their time outdoors rather than sitting inside editing pictures for photo books or other photo products.

In the light of Elanders' new strategic direction, there is a need to make a review of the business area e-Commerce's future within the Group and the process will start during the fourth quarter. The business area today represents around 3% of the Group's net sales.

Important events during the period

Acquisitions

LGI Logistics Group International

In June 2016 Elanders signed a contract for the acquisition of all the shares in the German company LGI Logistics Group International GmbH which is one of the leading players in Industrial Contract Logistics in Germany. In 2015, LGI's net sales were around MEUR 430, its normalized EBITDA was approximately MEUR 29 and it operated in ten countries, primarily in Europe with Germany as its main market. LGI has been consolidated into Elanders from 26 July 2016. As part of the financing an Extra General Meeting decided on a rights issue with preferential rights for existing shareholders. The rights issue has now been completed and it raised MSEK 695 after issue costs.

LGI has as long-term vision to become one of the leading players in Europe. LGI was created as an offshoot from Hewlett Packard Deutschland GmbH in 1995 and has grown considerably since. Currently LGI has more than 45 facilities worldwide, whereof 35 in Germany. In addition to Germany the company has operations in Austria, the Czech Republic, Great Britain, Hungary, the Netherlands, Poland, Russia, Sweden and in USA. LGI has specialized in value-adding services to customers in Automotive, Electronics, Healthcare & Life Science, Industrial as well as Fashion & Lifestyle. The company has a particular focus on product and component flows with extremely short lead times and provides everything from simple logistic solutions to comprehensive supply chain management solutions. Customers in Fashion & Lifestyle were added to the customer base in 2013 when LGI acquired ITG GmbH from Deutsche Post.

Through the acquisition, Elanders takes a major step forward in global supply chain management and annual Group net sales will increase from around 4.2 to 8.3 billion Swedish kronor, while the number of

employees will rise from about 3,200 to 7,200 (pro forma 2015 level). Around 600 of the personnel that come with LGI acquisition are hired staff and do not receive salary directly from LGI. The acquisition is expected to contribute positively to earnings per share already in the current year. The purchase price is around MEUR 257 on a debt-free basis. Acquisition and one-off costs attributable to the acquisition are expected to amount to a maximum of MSEK 40, of which about MSEK 27 charged the result before tax during the second and third quarters. The remaining amount is expected to charge the result in the fourth quarter.

Schmid Druck

In December 2015 Elanders signed an agreement to acquire Schmid Druck, a niched packaging company in Germany. The business is consolidated into the Elanders Group as of 1 January 2016. In 2015 net sales in Schmid Druck were around MEUR 8.5 and the company reached an EBITDA level of MEUR 1.6 million. The purchase price was EUR 4.5 million on a cash and debt-free basis and almost all of it has been settled in the beginning of January 2016. Acquisition costs were around MSEK 2 and charged the result in 2015.

Rights issue

An Extra General Meeting in September decided on a rights issue with preferential rights for existing shareholders for a maximum of 8,839,437 new shares at a subscription price of SEK 80 per share. The rights issue was carried out in October and it was oversubscribed. The issue proceeds of MSEK 695 after issue costs have primarily been used to repay MSEK 610 in bridge financing connected to the acquisition of LGI.

Book VAT

In February 2010 the European Court of Justice gave a judgement in the so-called Graphic Procédé case. In Sweden this is of particular importance for the distinction between printing companies' production of products (printed matter) and services as well as applying so-called book VAT, i.e. a VAT rate of 6%. From 2010 to 2012 Elanders submitted claims for VAT refunds to the Swedish Tax Agency pertaining to the period 2004 to 2007. The reason for this is that some of Elanders' net sales subject to VAT during that period pertained to products and not services according to the distinction now considered correct. At the same time in the years from 2011 to 2013 the Swedish Tax Agency made consequential amendments regarding many of Elanders' customers who have then demanded compensation from Elanders.

On 22 December 2015 the Supreme Court of Sweden rendered a judgement which stated that customers have the legal right to demand compensation from the printing company as a result of the consequential amendments made by the Swedish Tax Agency on them. Nonetheless, this verdict is not expected to have any negative effect on either Elanders' result or financial position. The sum Elanders can be required to pay to customers has already been reported as an interest-bearing liability and is included in net debt.

Some of the book VAT was recognized as revenue in the third quarter since the company cannot foresee any further demands being made on it. The amount is included in one-off items for the period.

Disputes

Mentor Media's subsidiary in California has been sued by a group of employees that demand indemnifications because another employee installed a hidden camera. They claim that the company knew or should have known about the situation. The company has denied any responsibility.

Investments and depreciation

January-September

Net investments for the period amounted to MSEK 1,827 (28), investments in 2016 includes acquisitions amounting to MSEK 1,800 (0). Depreciation, amortization and write-downs amounted to MSEK 107 (92).

Third quarter

Net investments for the quarter amounted to MSEK 1,787 (7), of which acquisitions amounted to 1,766 (0). Depreciation, amortization and write-downs amounted to MSEK 52 (31).

Financial position, cash flow and financing

Group net debt as of 30 September 2016 amounted to MSEK 2,921 compared to MSEK 738 at the beginning of the year. In the net change is an increase of MSEK 2,231 respectively 34 referring to paid purchase sum for the acquisition of LGI and Schmid Druck as well as net debt in the acquired companies.

Operating cash flow, excluding acquisitions, for the period January-September amounted to MSEK 303 (108) and MSEK -1,497 (108) including acquisitions. The difference is primarily due to decreased working capital in foremost Supply Chain Solutions and the acquisition of LGI. The corresponding figures for the third quarter were MSEK 201 (-24) respectively MSEK -1,565 (-24).

LGI has been using factoring as a financing form for several years and up to MEUR 35 of LGI's accounts receivable have been transferred to financing institutes. Per 30 September 2016 accounts receivable corresponding to MEUR 27 had been transferred. These were not recognized in the balance sheet in accordance with IFRS. Elanders intends to replace this financing of transferring accounts receivable with normal bank credits during the fourth quarter. As a result accounts receivable and net debt will increase equally during the same period.

Personnel

January-September

The average number of employees during the period was 3,888 (3,186), whereof 275 (275) in Sweden. At the end of the period the Group had 6,472 (3,182) employees, whereof 269 (283) in Sweden. In addition, Elanders has around 600 hired staff in LGI but they do not receive salary directly from LGI.

Third quarter

The average number of employees during the quarter was 5,351 (3,174), whereof 275 (280) in Sweden.

PARENT COMPANY

The parent company has provided intragroup services during the period. The average number of employees during the period was 9 (8) and at the end of the period 9 (10).

OTHER INFORMATION

Elanders' offer

Elanders offers global integrated solutions in the areas supply chain management, print & packaging and e-commerce. Elanders can take an overall responsibility for complex and global deliveries comprising procurement, warehousing, configuration, production and distribution. Our offer also includes order management, payment solutions and after sales services for our clients.

The services are provided by business-oriented employees. They use their expertise and our intelligent IT solutions to develop our customers' offers, which are often completely dependent on efficient product, component and service flows as well as traceability and information.

In addition to our offer to B2B markets the Group also sells photo products directly to consumers through its own brands fotokasten and myphotobook.

Goal and strategy

Elanders' overall goal is to be a leader in global solutions in supply chain management, print & packaging and e-commerce with a world class integrated offer. Our strategy is to work in niches in each business area where the company can attain a leading position in the market. We will achieve this goal by being best at meeting customers' demands for efficiency and delivery. In order to be successful we need to continuously develop our offer as technology and customer needs evolve. Acquisitions play an important role in our company's development and provide competence, broader product and service offers and enlarge our customer base.

The company's financial goals are undergoing a revision as a result of the acquisition of LGI. New financial goals will be communicated at a later date.

Risks and uncertainties

Elanders divides risks into circumstantial risk (the future of our products/services and business cycle sensitivity), financial risk (currency, interest, financing and credit risks) as well as business risk (customer concentration, operational risks, risks in operating expenses as well as contracts and disputes). These risks, together with a sensitivity analysis, are described in detail in the Annual Report 2015. Circumstances in the world around us since the Annual Report was published are not believed to have caused any significant risks or influenced the way in which the Group works with these compared to the description in the Annual Report 2015.

Seasonal variations

The Group's net sales, and thereby income, are affected by seasonal variations. Historically the fourth quarter has been the strongest for Elanders before the acquisition of LGI.

Transaction with related parties

The following transactions with related parties have occurred during the period:

• In connection with the rights issue guarantee compensation has been paid in accordance with the published prospect to the principle owner Carl Bennet AB.
• One of the members of the Board, Erik Gabrielson, is a partner in the law firm Vinge, which provides the company with legal services.
• Related parties to Peter Sommer, a member of Group Management and Managing Director of Elanders GmbH, owns shares in a property where Elanders GmbH runs most of its operations.

Remuneration is considered on par with the market for all of these transactions.

Events after the balance sheet date

The rights issue was concluded in October and payment has been received for all of the shares. As a result the bridge financing amounting to MSEK 610 from Elanders' main banks has been repaid in its entirety.

There have been no other important events after the balance sheet date up to the day this report was signed.

Forecast

No forecast is given for 2016.

Review and accounting principles

The quarterly report for the Group has been prepared in accordance with the Annual Accounts Act and IAS 34 Interim Financial Reporting and for the parent company in accordance with the Annual Accounts Act. The same accounting principles and calculation methods as those in the last Annual Report have been used. The primary alternative performance measures that are presented in this report are EBITDA, return on capital employed, net debt and operating cash flow. Definitions of these performance measures are found on page 21 along with a reconciliation with financial information in accordance with IFRS on pages 19-20 in this report.

Nomination committee

The nomination committee for the Annual General Meeting on 26 April 2017 is as follows:

Carl Bennet, Chair	Carl Bennet AB
Hans Hedström	Carnegie Funds
Britt-Marie Årenberg	representative for the smaller shareholders

Future reports from Elanders

Q4 2016	26 January 2017
Q1 2017	26 April 2017
Q2 2017	13 July 2017
Q3 2017	19 October 2017

Conference call

In connection to the issuing of the Quarterly Report for the third quarter 2016, Elanders will hold a Press and Analysts conference call on 7 November 2016 at 3:00 p.m. CET, hosted by President and CEO Magnus Nilsson and CFO Andréas Wikner. Please see below details in order to join the conference:

Sweden:	+46 8 5033 6574
Germany:	+49 69 2222 13484
UK:	+44 203 043 2006
USA:	+1 719 325 2226

Participant code: 7290165

Agenda

Conference number is opened
Review of the quarterly report
Q&A
End of the conference

During the telephone conference a presentation will be held. To access the presentation, please use this link:

http://www.livemeeting.com/cc/premconfeurope/join?id=5947523&role=attend&pw=pw7650

Contact information

Further information can be found on Elanders' website www.elanders.com or requested via e-mail info@elanders.com.

Questions concerning this report can be put to:

Magnus Nilsson Andréas Wikner Elanders AB (publ)

Phone +46 31 750 07 50 Phone +46 31 750 07 50 P.O. Box 137,

President and CEO Chief Financial Officer (Company ID 556008-1621) 435 23 Mölnlycke, Sweden Phone +46 31 750 00 00

This document is a translation of the Swedish original. In the event of any discrepancies between this translation and the Swedish original, the latter shall prevail

Report of Review of Interim Financial Information

Introduction

We have reviewed the condensed interim financial information (interim report) of Elanders AB (publ), 556008-1621, as of 30 September 2016 and the nine-month period then ended. The board of directors and the CEO are responsible for the preparation and presentation of the interim financial information in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.

Scope of Review

We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Report Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing, ISA, and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act, regarding the Group, and with the Swedish Annual Accounts Act, regarding the Parent Company.

Gothenburg, 7 November 2016

PricewaterhouseCoopers AB

Magnus Willfors Authorized Public Accountant

GROUP

Group - Income Statements

	January-September		Third quarter		Last	Full year
MSEK	2016	2015	2016	2015	12 months	2015
Net sales	3,956	3,113	1,878	1,041	5,079	4,236
Cost of products and services sold	-3,198	-2,430	-1,559	-813	-4,020	-3,252
Gross profit	758	683	320	228	1,060	984
Sales and administrative expenses	-590	-526	-249	-173	-781	-718
Other operating income	59	38	33	14	72	51
Other operating expenses	-6	-14	-3	-5	-18	-26
Operating result	221	181	100	64	332	292
Net financial items	-24	-26	-14	-9	-30	-33
Result after financial items	197	154	86	55	302	259
Income tax	-60	-53	-28	-20	-91	-85
Result for the period	138	101	58	36	211	175
Result for the period attributable to:
- parent company shareholders	138	101	58	36	211	175
Earnings per share, SEK 1) 2)	5.20	3.81	2.17	1.35	7.97	6.58
Average number of shares, in
thousands	26,518	26,518	26,518	26,518	26,518	26,518
Outstanding shares at the end of
the year, in thousands	26,518	26,518	26,518	26,518	26,518	26,518

1) Earnings per share before and after dilution.

2) Earnings per share calculated by dividing the result for the period attributable to parent company shareholders by the average number of outstanding shares during the period.

Group - Statements of Comprehensive Income

MSEK	January-September 2016	2015	Third quarter 2016	2015	Last 12 months	Full year 2015
Result for the period	138	101	58	36	211	175
Translation differences,
net after tax	42	63	41	3	18	39
Cash flow hedges, net after tax	-0	0	-0	0	0	0
Hedging of net investment abroad,
net after tax	-2	-38	-4	-3	-8	-44
Total items that may be reclassified to the income statement	39	25	37	0	10	-5
Other comprehensive income, net after tax	39	25	37	0	10	-5
Total comprehensive income for the period	177	126	95	36	221	169
Total comprehensive income attributable to: - parent company shareholders	177	126	95	36	221	169

Group - Statements of Cash Flow

MSEK	January-September 2016	2015	Third quarter 2016	2015	Last 12 months	Full year 2015
Result after financial items	197	154	86	55	302	259
Adjustments for items not included in
cash flow	67	31	34	9	137	102
Paid tax	-70	-76	-30	-27	-80	-85
Changes in working capital	42	-76	88	-90	111	-8
Cash flow from operating activities	236	33	178	-53	471	269
Net investments in intangible and
tangible assets	-28	-31	-21	-8	-44	-46
Acquisition of operations	-1,800	-	-1,766	-	-1,800	-
Payments received regarding long
term holdings	1	3	0	1	2	4
Cash flow from investing activities	-1,827	-28	-1,787	-7	-1,841	-42
Amortization of loans	-53	-79	-0	-26	-81	-107
New loans	1,911	-	1,911	-	1,911	-
Other changes in long- and
short-term borrowing	-130	6	-176	50	-154	-18
Dividend to parent company
shareholders	-58	-29	-	-	-58	-29
Cash flow from financing activities	1,669	-102	1,735	-24	1,618	-154
Cash flow for the period	78	-97	126	-36	247	73
Liquid funds at the beginning of the
period	529	457	489	405	372	457
Translation difference	21	12	13	3	8	0
Liquid funds at the end of the	628	372	628	372	628	529
period
Net debt at the beginning of the period	738	895	785	882	951	895
Translation difference in net debt	43	32	35	9	51	40
Net debt in acquired operations	462	-	466	-	462	-
Change in net debt	1,678	24	1,636	60	1,456	-198
Net debt at the end of the period	2,921	951	2,921	951	2,921	738
Operating cash flow	-1,497	108	-1,565	-24	-1,261	344

Group – Statements of Financial Position

MSEK	30 Sep 2016	30 Sep 2015	31 Dec 2015
Assets
Intangible assets	3,104	1,292	1,269
Tangible assets	768	368	334
Other fixed assets	258	199	199
Total fixed assets	4,130	1,859	1,802
Inventories	292	271	266
Accounts receivable	1,361	889	825
Other current assets	302	156	139
Cash and cash equivalents	628	372	529
Total current assets	2,583	1,689	1,758
Total assets	6,713	3,547	3,560
Equity and liabilities
Equity	1,607	1,445	1,488
Liabilities
Non-interest-bearing long-term liabilities	257	87	83
Interest-bearing long-term liabilities	2,666	23	20
Total long-term liabilities	2,922	110	103
Non-interest-bearing current liabilities	1,301	692	722
Interest-bearing current liabilities	883	1,301	1,247
Total current liabilities	2,184	1,993	1,969
Total equity and liabilities	6,713	3,547	3,560

LGI was acquired in 2016 which explains most of the increase in all the balance items. At the same time the Group has refinanced resulting in a three-year financing plan with Elanders' main banks. This has led to shift from current interest-bearing liabilities to long-term. A large part of the financing of the acquisition has also been accounted for as long-term interest-bearing liabilities.

Group – Statements of Changes in Equity

MSEK	Equity attributable to parent company shareholders	Total equity
Opening balance on 1 Jan. 2015	1,348	1,348
Dividend to parent company shareholders	-29	-29
Total comprehensive income for the year	169	169
Closing balance on 31 Dec. 2015	1,488	1,488
Opening balance on 1 Jan. 2015	1,348	1,348
Dividend to parent company shareholders	-29	-29
Total comprehensive income for the period	126	126
Closing balance on 30 Sep. 2015	1,445	1,445
Opening balance on 1 Jan. 2016	1,488	1,488
Dividend to parent company shareholders	-58	-58
Total comprehensive income for the period	177	177
Closing balance on 30 Sep. 2016	1,607	1,607

Segment reporting

The three business areas are reported as reportable segments, since this is how the Group is governed and the President has been identified as the highest executive decision-maker. The operations within the business area Print & Packaging in each region are identified as operating segments. These have then been merged to create one reportable segment. In the other business areas the operating segments coincides with the reportable segments. The operations within each reportable segment have similar economic characteristics and resemble each other regarding the nature of their products and services, production processes and customer types. Sales between segments are made on markets terms.

Net sales

	January-September		Third quarter		Last	Full year
MSEK	2016	2015	2016	2015	12 months	2015
Supply Chain Solutions	2,339	1,519	1,358	526	2,865	2,045
Print & Packaging Solutions	1,547	1,526	500	494	2,074	2,054
e-Commerce Solutions	120	125	36	39	232	237
Group functions	21	19	6	7	30	27
Eliminations	-72	-76	-22	-25	-122	-126
Group net sales	3,956	3,113	1,878	1,041	5,079	4,236

Operating result

		January-September Third quarter			Last	Full year
MSEK	2016	2015		2016 2015		2015
Supply Chain Solutions	163	122	81	49	223	182
Print & Packaging Solutions	81	87	26	26	117	122
e-Commerce Solutions	-5	-5	-4	-4	18	18
Group functions	-18	-23	-3	-7	-25	-31
Group operating result	221	181	100	64	332	292

During the nine month period the result has been charged with one-off items attributable to acquisitions and book VAT recognized as revenue for a total of net MSEK 9. MSEK 5 has been recognized in Supply Chain Solutions and MSEK 4 in Group functions.

Financial assets and liabilities measured at fair value

The financial instruments recognized at fair value in the Group's report on financial position are derivatives identified as hedging instruments. The derivatives consist of forward contracts and are used for hedging purposes. Valuation at fair value of forward contracts is based on published forward rates on an active market. All derivates are therefore included in level 2 in the fair value hierarchy. Since all the financial instruments recognized at fair value are included in level 2 there have been no transfers between valuation levels.

Derivative instruments in hedge accounting relationships recognized at fair value is presented under other current assets and non-interest bearing current liabilities. These items gross are below MSEK 1 both per 30 September 2016 and the comparison periods.

The fair value of other financial assets and liabilities valued at their amortized purchase price is estimated to be equivalent to their book value.

Acquisition of operations in 2016

Company	Acquisition date	Country	Number of employees
LGI Logistics Group International GmbH incl. subsidiaries	July 2016	Germany	Appr. 3,400
Schmid Druck & Medien GmbH	January 2016	Germany	75

LGI Logistics Group International GmbH

In June 2016 Elanders signed a contract for the acquisition of all the shares in the German company LGI Logistics Group International GmbH which is one of the leading players in Industrial Contract Logistics in Germany. In 2015, LGI's net sales were around MEUR 430, its normalized EBITDA was approximately MEUR 29 and it operated in ten countries, primarily in Europe with Germany as its main market. In addition to 3,400 employees LGI has more than 600 hired staff but they do not receive salary directly from LGI. The purchase price amounted to around MEUR 257 on a debt-free basis. There is no additional purchase price. During the fourth quarter LGI's factoring will be replaced with loan financing thereby increasing accounts receivable and interest-bearing liabilities to a maximum of MEUR 35. LGI was consolidated into the Elanders group from 26 July 2016. Acquisition and one-off costs attributable to the LGI acquisition were around MEUR 27 during the current year and have charged the result. Another MSEK 13 maximum is expected to charge the result during the fourth quarter. Excluding oneoff items LGI has contributed to with close to MEUR 83 in net sales and MEUR 5.3 in operating profit to the Group. The acquisition analysis below is preliminary.

Assets and liabilities in acquisitions

MSEK	Recorded values in acquired operation	Adjust ments to fair value	Recorded value in the Group
Intangible assets	20	750	770
Tangible assets	455	-	455
Financial assets	43	-	43
Inventory	8	-	8
Accounts receivable	567	-	567
Other current assets	135	-	135
Cash and cash equivalents	48	-	48
Accounts payable	-162	-	-162
Other non-interest bearing liabilities	-432	-124	-556
Interest bearing liabilities	-513	-	-513
Identifiable net assets	169	626	795
Goodwill			1,019
Total			1,814
Less:
Cash and cash equivalents in acquisition			-48
Negative effect on cash and cash equivalents for the Group			1,766

Schmid Druck & Medien GmbH

In December 2015 Elanders signed an agreement to acquire Schmid Druck, a niched packaging company in Germany. The business is consolidated into the Elanders Group as of 1 January 2016. In 2015 net sales in Schmid Druck were some MEUR 8.5 and the company reached an EBITDA level of MEUR 1.6 million. The purchase price was EUR 4.5 million on a cash and debt-free basis and almost all of it has been settled in the beginning of January 2016. Acquisition costs were around MSEK 2 and charged the result in 2015. During the first nine months 2016 Schmid Druck have contributed with MEUR 8.0 to the net sales and MEUR 1.0 to the operating result.

Assets and liabilities in acquisitions

MSEK	Recorded values in acquired operation	Adjust ments to fair value	Recorded value in the Group
Fixed assets	10	8	18
Inventory	5	-	5
Accounts receivable	6	-	6
Other current assets	0	-	0
Cash and cash equivalents	3	-	3
Accounts payable	-2	-	-2
Other liabilities	-5	-1	-6
Identifiable net assets	17	7	24
Goodwill			17
Total			41
Less:
Unpaid purchase sum			-4
Cash and cash equivalents in acquisition			-3
Negative effect on cash and cash equivalents for the Group			34

PARENT COMPANY

Parent Company – Income Statements

MSEK	2016	January-September 2015		Third quarter 2015	Last 12 months	Full year 2015
Net sales	23	19	8	6	30	26
Operating expenses	-50	-40	-26	-13	-66	-56
Operating result	-27	-21	-18	-7	-35	-29
Net financial items	44	91	4	74	36	83
Result after financial items	18	70	-14	68	1	54
Income tax	1	13	0	2	3	15
Result for the period	19	83	-13	70	5	69

Parent Company - Statements of Comprehensive Income

MSEK	January-September 2016 2015		Third quarter 2016	2015	Last 12 months	Full year 2015
Result for the period	19	83	-13	70	5	69
Other comprehensive income	-	-	-	-	-	-
Total comprehensive income for the period	19	83	-13	70	5	69

Parent Company - Balance Sheets

MSEK	30 Sep 2016	30 Sep 2015	31 Dec 2015
Assets
Fixed assets	4,045	2,078	2,056
Current assets	180	247	306
Total assets	4,225	2,325	2,361
Equity, provisions and liabilities
Equity	862	916	902
Provisions	3	3	3
Long-term liabilities	2,370	71	71
Current liabilities	991	1,336	1,386
Total equity, provisions and liabilities	4,225	2,325	2,361

Parent Company - Statements of Changes in Equity

MSEK	Share capital	Statutory reserve	Unrestricted equity
Opening balance on 1 Jan. 2015	265	332	264	862
Dividend	-	-	-29	-29
Total comprehensive income for the year	-	-	69	69
Closing balance on 31 Dec. 2015	265	332	304	902
Opening balance on 1 Jan. 2015	265	332	264	862
Dividend	-	-	-29	-29
Total comprehensive income for the period	-	-	83	83
Closing balance on 30 Sep. 2015	265	332	318	916
Opening balance on 1 Jan. 2016	265	332	304	902
Dividend	-	-	-58	-58
Total comprehensive income for the period	-	-	19	19
Closing balance on 30 Sep. 2016	265	332	265	862

KVARTALSDATA

	2016	2016	2016	2015	2015	2015	2015	2014	2014
MSEK	Q3	Q2	Q1	Q4	Q3	Q2	Q1	Q4	Q3
Net sales	1,878	1,079	998	1,124	1,041	1,066	1,006	1,099	870
EBITDA	152	92	85	154	95	93	85	101	56
Operating result	100	66	56	111	64	63	54	71	27
Operating margin, %	5.3	6.1	5.6	9.9	6.2	5.9	5.4	6.4	3.1
Result after financial items	86	61	51	105	55	55	44	62	18
Result after tax	58	45	36	73	36	38	27	45	11
Earnings per share, SEK 1)	2.17	1.69	1.34	2.77	1.35	1.43	1.04	1.70	0.43
Operating cash flow	-1,565	64	3	237	-24	116	16	175	-21
Cash flow per share, SEK2)	6.71	1.23	0.95	8.86	-1.99	3.96	-0.71	6.00	-1.04
Depreciation and write-downs	52	26	29	43	31	30	31	30	29
Net investments	1,787	-3	43	14	7	19	2	7	8
Goodwill	2,274	1,228	1,211	1,200	1,217	1,209	1,224	1,205	1,168
Total assets	6,713	3,510	3,524	3,560	3,547	3,504	3,629	3,570	3,336
Equity	1,607	1,512	1,505	1,488	1,445	1,409	1,433	1,348	1,245
Equity per share, SEK	60.59	57.03	56.76	56.11	54.48	53.13	54.03	50.82	46.93
Net debt	2,921	785	750	738	951	882	945	895	1,016
Capital employed	4,528	2,297	2,255	2,226	2,396	2,291	2,378	2,243	2,260
Return on total assets, % 3)	7.8	7.5	6.4	12.6	7.3	7.1	6.0	8.2	3.3
Return on equity, % 3)	14.8	11.8	9.5	20.0	10.0	10.7	7.9	14.0	3.7
Return on capital employed, % 3)	11.7	11.6	10.0	19.2	10.9	10.8	9.3	12.5	4.9
Debt/equity ratio	1.8	0.5	0.5	0.5	0.7	0.6	0.7	0.7	0.8
Equity ratio, %	23.9	43.1	42.7	42.0	40.7	40.2	39.5	37.8	37.3
Interest coverage ratio 4)	11.0	16.1	14.3	12.7	10.0	7.2	5.9	5.0	4.6
Number of employees at the end of	6,472	3,101	3,173	3,177	3,182	3,166	3,146	3,320	3,327
the period

1) There is no dilution.

2) Cash flow per share refers to cash flow from operating activities.

3) Return ratios have been annualized (the result has been recalculated to correspond to the result for a 12 month period).

4) Interest coverage ratio calculation is based on a moving 12 month period.

FIVE YEAR OVERVIEW – JANUARY – SEPTEMBER

	2016	2015	2014	2013	2012
Net sales, MSEK	3,956	3,113	2,631	1,498	1,397
Result after tax, MSEK	138	101	43	35	36
Earnings per share, SEK 1) 2)	5.20	3.81	1.72	1.51	1.65
Cash flow from operating activities per share, SEK 2)	8.89	1.26	0.11	1.24	4.01
Equity per share, SEK 2)	60.59	54.48	46.93	41.69	40.02
Return on equity, % 3)	12.0	9.7	5.0	4.9	5.3
Return on capital employed, % 3)	10.4	10.4	6.9	5.9	6.1
Operating margin, %	5.6	5.8	4.0	5.1	5.1
Average number of shares, in thousands 2)	26,518	26,518	24,766	23,395	21,908

FIVE YEAR OVERVIEW – THIRD QUARTER

	2016	2015	2014	2013	2012
Net sales, MSEK	1,878	1,041	870	493	456
Result after tax, MSEK	58	36	11	26	4
Earnings per share, SEK 1) 2)	2.17	1.35	0.43	0.55	0.18
Cash flow from operating activities per share, SEK 2)	6.71	-1.99	-1.04	0.66	0.98
Equity per share, SEK 2)	60.59	54.48	46.93	41.69	40.02
Return on equity, % 3)	14.8	10.0	3.3	5.3	1.8
Return on capital employed, % 3)	11.7	10.9	3.7	5.9	3.2
Operating margin, %	5.3	6.2	3.1	5.3	2.8
Average number of shares, in thousands 2)	26,518	26,518	26,518	23,395	23,395

FIVE YEAR OVERVIEW – FULL YEAR

	2015	2014	2013	2012	2011
Net sales, MSEK	4,236	3,730	2,096	1,924	1,839
Result after financial items, MSEK	259	140	102	93	80
Result after tax, MSEK	175	88	70	45	60
Earnings per share, SEK 1) 2)	6.58	3.48	2.99	1.99	3.00
Cash flow from operating activities per share, SEK 2)	10.13	6.42	5.48	9.64	4.20
Equity per share, SEK 2)	56.11	50.82	44.39	40.77	43.75
Dividends per share, SEK 2)	2.20	1.10	0.78	0.58	0.49
Operating margin, %	6.9	4.7	6.2	6.2	6.0
Return on total assets, %	8.2	5.9	5.6	5.6	5.5
Return on equity, %	12.1	7.4	7.0	4.8	7.1
Return on capital employed, %	12.6	8.7	7.7	7.4	7.1
Debt/equity ratio	0.5	0.7	0.7	0.7	0.8
Equity ratio, %	42.0	37.8	42.2	42.2	43.9
Average number of shares, in thousands 2)	26,518	25,204	23,395	22,279	20,102

1) There is no dilution.

2) Historic number of shares and historic key ratios have been adjusted for the bonus issue element in the new share issue in 2014. No adjustment of the historic number of shares has been made for the new share issue in 2012 since it did not entail any bonus issue element.

3) Return ratios have been annualized.

RECONCILIATION ALTERNATIVE PERFORMANCE MEASURES – QUARTERLY DATA

MSEK	2016 Q3	2016 Q2	2016 Q1	2015 Q4	2015 Q3	2015 Q2	2015 Q1	2014 Q4	2014 Q3
Operating result	100	66	56	111	64	63	54	71	27
Depreciation, amortization and write
downs	52	26	29	43	31	30	31	30	29
EBITDA	152	92	85	154	95	93	85	101	56
Cash flow from operating activities	178	33	25	235	-53	105	-19	159	-28
Net financial items	14	5	6	6	9	8	10	8	9
Paid tax	30	24	16	9	27	21	27	15	6
Net investments	-1,787	3	-43	-14	-7	-19	-2	-7	-8
Operating cash flow	-1,565	64	3	237	-24	116	16	175	-21
Average total assets	5,112	3,517	3,542	3,543	3,526	3,567	3,600	3,453	3,307
Average cash and cash equivalents	-558	-505	-526	-451	-389	-403	-429	-397	-354
Average non-interest-bearing liabilities	-1,141	-736	-776	-782	-794	-829	-860	-804	-746
Average capital employed	3,412	2,276	2,240	2,311	2,344	2,334	2,311	2,252	2,206
Annualized operating result	398	263	224	444	256	252	216	282	108
Return on capital employed, %	11.7	11.6	10.0	19.2	10.9	10.8	9.3	12.5	4.9
Interest-bearing long-term liabilities	2,666	20	20	20	23	23	25	25	27
Interest-bearing current liabilities	883	1,254	1,252	1,247	1,301	1,264	1,322	1,327	1,327
Cash and cash equivalents	-628	-489	-522	-529	-372	-405	-401	-457	-338
Net debt	2,921	785	750	738	951	882	945	895	1,016

RECONCILIATION ALTERNATIVE PERFORMANCE MEASURES – JANUARY – SEPTEMBER

MSEK	2016	2015	2014	2013	2012
Average total assets	4,327	3,558	2,900	2,310	2,046
Average cash and cash equivalents	-542	-414	-276	-142	-114
Average non-interest-bearing liabilities	-959	-825	-605	-447	-373
Average capital employed	2,826	2,319	2,019	1,721	1,559
Annualized operating result	295	241	139	103	95
Return on capital employed, %	10.4	10.4	6.9	5.9	6.1

RECONCILIATION ALTERNATIVE PERFORMANCE MEASURES – THIRD QUARTER

MSEK	2016	2015	2014	2013	2012
Average total assets	5,112	3,526	3,307	2,313	2,068
Average cash and cash equivalents	-558	-389	-354	-108	-113
Average non-interest-bearing liabilities	-1,141	-794	-746	-440	-370
Average capital employed	3,412	2,344	2,206	1,764	1,585
Annualized operating result	398	256	108	104	50
Return on capital employed, %	11.7	10.9	4.9	5.9	3.2

RECONCILIATION ALTERNATIVE PERFORMANCE MEASURES – FULL YEAR

MSEK	2015	2014	2013	2012	2011
Average total assets	3,559	3,017	2,363	2,133	2,008
Average cash and cash equivalents	-418	-336	-192	-125	-66
Average non-interest-bearing liabilities	-816	-671	-461	-410	-389
Average capital employed	2,325	2,010	1,710	1,598	1,553
Operating result	292	175	131	119	110
Return on capital employed, %	12.6	8.7	7.7	7.4	7.1

DEFINITIONS

Average number of employees	The number of employees at the end of each month divided number of months.
Average number of shares	Weighted average number of shares outstanding during the period.
Capital employed	Total assets less liquid funds and non-interest bearing liabilities.
Debt/equity ratio	Net debt in relation to reported equity, including non controlling interests.
Earnings per share	Result for the year divided by the average number of shares.
EBIT	Earnings before interest and taxes; operating result.
EBITDA	Earnings before interest, taxes, depreciation and amortization; operating result plus depreciation, amortization and write-downs of intangible assets and tangible fixed assets.
Equity ratio	Equity, including non-controlling interests, in relation to total assets.
Interest coverage ratio	Operating result plus interest income divided by interest costs.
Net debt	Interest bearing liabilities less liquid funds.
Operating cash flow	Cash flow from operating activities and investing activities, adjusted for paid taxes and financial items.
Operating margin	Operating result in relation to net sales.
Return on capital employed (ROCE)	Operating result in relation to average capital employed.
Return on equity	Result for the year in relation to average equity.
Return on total assets	Operating result plus financial income in relation to average total assets.