HEXPOL

Quarterly Report • Oct 21, 2011

Interim report January – September 2011

published on 21 October 2011

Third quarter 2011 – Continued sharp growth with strong margins

• Net sales increased sharply and amounted to 1,843 MSEK (950).
• Operating profit rose 96 per cent and amounted to 235 MSEK (120).
• The operating margin amounted to 12.8 per cent (12.6).
• Profit after tax increased strongly and amounted to 165 MSEK (82).
• Earnings per share rose strongly and totalled 4.80 SEK (2.79* ).
• Operating cash flow amounted to 204 MSEK (100).
• Continued expansion in China decision to increase capacity for HEXPOL Compounding.

January - September 2011 – Sharp growth and improved margins

• Net sales increased sharply and amounted to 5,405 MSEK (2,666).
• Operating profit more than doubled and amounted to 675 MSEK (323).
• The operating margin rose to 12.5 per cent (12.1).
• Profit after tax increased strongly and amounted to 462 MSEK (220).
• Earnings per share rose strongly and totalled 14.10 SEK (7.49* ). Earnings per share based on the number of shares at the end of the period totalled 13.42 SEK.
• Operating cash flow amounted to 548 MSEK (279).

President's comments

"The third quarter of 2011 was the best quarter to date for the HEXPOL Group in terms of both sales and earnings. Our sharp growth continued in the third quarter, with strong sales in all units. The Group's sales rose 94 per cent, of which 21 per cent was organic. Our operating margins remained strong as a result of continued cost-effectiveness and the flexible management of rising volumes, as well as favourable capacity utilisation in our facilities. Sales were strong in all geographic regions, with particularly strong growth in NAFTA and Asia. Our operating profit rose 96 per cent to 235 MSEK (120). Earnings per share increased strongly to 4.80 SEK (2.79*). Our operating cash flow remained strong and amounted to 204 MSEK (100).

We continued our forceful growth in China, and proceeded to expand in all product areas. Our sales in Asia rose 68 per cent. We have decided to invest in a new production line in HEXPOL Compounding in Qingdao, in addition to the earlier decision to expand ELASTO in the Guangdong province. We are also increasing our moulding capacity for gaskets to plate heat exchangers in HEXPOL Gaskets and launching polyurethane wheel manufacturing in HEXPOL Wheels.

Our earnings in January-September 2011 were strong and sales rose 103 per cent to 5,405 MSEK (2,666). Earnings per share totalled 14.10 SEK (7.49*), up 88 per cent."

Group total
Key figures		July-Sep		Jan-Sep	Full-year	Oct 2010-
MSEK	2011	2010	2011	2010	2010	Sep 2011
Net sales	1,843	950	5,405	2,666	3,798	6,537
Operating profit, EBIT	235	120	675	323	396	748
Operating margin, %	12.8	12.6	12.5	12.1	10.4	11.4
Profit before tax	231	115	650	308	370	712
Profit after tax	165	82	462	220	273	515
Earnings per share, SEK	4.80	2.79*	14.10	7.49*	9.30*	15.91*
Equity/assets ratio, %			43.1	40.5	27.0
Return on capital employed, %			22.0	17.3	13.9	20.0

Georg Brunstam, President and CEO

After completion of the new share issue, historical data has been adjusted to take into account the effects of the bonus issue element.

HEXPOL is a world-leading polymers group with strong global positions in advanced rubber compounds (Compounding), gaskets for plate heat exchangers (Gaskets) and wheels made of plastic and rubber materials for truck and castor wheel application (Wheels).Customers are primarily OEM manufacturers of plate heat exchangers and trucks, global systems suppliers to the automotive industry and the medical technology industry. The Group is organised in two business areas, HEXPOL Compounding and HEXPOL Engineered Products. HEXPOL's sales in 2010 amounted to approximately 3,800 MSEK. Following the acquisition of Excel Polymers Group, the HEXPOL Group has some 3,100 employees in nine countries and pro forma sales in 2010 in excess of 6,300 MSEK. Read more at www.hexpol.com

Operating key figures	July-Sep			Jan-Sep	Full-year	Oct 2010-
Excl. items affecting comparability, MSEK	2011	2010	2011	2010	2010	Sep 2011
Operating profit, EBIT	235	120	675	323	460	812
Operating margin, %	12.8	12.6	12.5	12.1	12.1	12.4
Profit before tax	231	115	650	308	434	776
Profit after tax	165	82	462	220	318	560
Earnings per share, SEK	4.80	2.79*	14.10	7.49*	10.83*	17.44*
Return on capital employed, %			22.0	17.3	16.2	21.8
Operating cash flow	204	100	548	279	506	775

After completion of the new share issue, historical data has been adjusted to take into account the effects of the bonus issue element.

Third quarter 2011

The HEXPOL Group's sales rose sharply during the third quarter of 2011, which was primarily attributable to the acquired Excel Polymers Group in November 2010 and strong sales to the engineering, automotive and energy sectors.

Sales increased 94 per cent to 1,843 MSEK (950). Exchange-rate fluctuations had a negative impact of 69 MSEK on sales. The organic sales increase, adjusted for the acquired the Excel Polymers Group and exchange-rate effects, was approximately 21 per cent.

Group sales to the engineering industry and energy sector rose strongly during the quarter, while sales to automotive industry customers remained strong in all geographic regions, particularly in NAFTA and Asia, a combination that contributed to improved market positions.

Operating profit increased 96 per cent to 235 MSEK (120), corresponding to an operating margin of 12.8 per cent (12.6). The improved operating profit was primarily attributable to the acquired Excel Polymers Group but also to continued enhancements in all units, a stable cost scenario, improved productivity and higher capacity utilisation. Exchange-rate fluctuations had a negative impact of 10 MSEK on operating profit during the quarter.

The acquired Excel Polymers Group developed significantly better than expected during the third quarter. The entire acquired group is integrated geographically in the HEXPOL Compounding business area and its operating margin was in line with the HEXPOL Group.

HEXPOL has decided to invest in a new production line for rubber compounding in Qingdao, China, aimed at satisfying increased demand in the Chinese market. HEXPOL also decided to increase moulding capacity for gaskets and to manufacture polyurethane wheels in China.

Net sales Operating profit & operating margin

HEXPOL Compounding's sales rose sharply during the third quarter, which was primarily attributable to the acquired Excel Polymers Group. Sales to the engineering and automotive industry, as well as the energy sector increased strongly. Sales totalled 1,652 MSEK (770), up 115 per cent.

Operating profit rose 105 per cent and amounted to 213 MSEK (104), corresponding to an operating margin of 12.9 per cent (13.5). The improvement in operating profit was primarily attributable to the acquired Excel Polymers Group, but also to improved productivity and increased capacity utilisation in combination with a stable cost base. Excel Polymers Group's profit remained strong during the third quarter. The HEXPOL Compounding business area reported improvements in all units, compared with the third quarter of 2010.

Sales by the HEXPOL Engineered Products business area amounted to 191 MSEK (180). Operating profit improved significantly and amounted to 22 MSEK (16), corresponding to an operating margin of 11.5 per cent (8.9). The improved operating margin was attributable to productivity enhancements, particularly in Sri Lanka, increased sales and a stable cost base in the business area's other units. However, the business area continued to be impacted by the strength of SEK, primarily against the EUR.

HEXPOL Group sales in Europe increased compared with the year-earlier period. Sales rose in all units, including Excel Polymer's UK unit. The greatest volume increase compared with the third quarter of 2010 was to the engineering and automotive industry in Western Europe, although volumes to others parts of the European market also rose considerably. The Group's units in the ELASTO Group experienced a favourable trend in the third quarter.

Group sales in NAFTA increased sharply year-on-year, both organically and as a result of the Excel Polymers Group acquisition. Sales increased primarily in the engineering and automotive segments, although improvements were also noted in other segments, mainly energy, oil and gas. HEXPOL Compounding's units in Mexico reported strong sales and higher volumes during the quarter.

In Asia, the sales increase remained strong, primarily to automotive customers.

The number of employees declined somewhat during the quarter. The total number of Group employees was 3,052 (2,261) at the close of the third quarter.

Raw material prices continued to rise during the third quarter, albeit at a slower pace than in previous quarters in 2011. However, shortages continue to prevail for a number of raw materials. The Group's operating margin continues to remain largely unaffected by the higher raw material prices.

The Group's operating cash flow amounted to 204 MSEK (100) during the third quarter. The Group's net financial items during the quarter amounted to an expense of 4 MSEK (expense: 5), with the Group holding a beneficial currency mix in its loans and experiencing positive exchange-rate effects.

Profit before tax increased strongly and totalled 231 MSEK (115) and profit after tax amounted to 165 MSEK (82). Earnings per share rose strongly to 4.80 SEK (2.79*).

Earnings per share have been adjusted in the historical comparison to take into account the effects of the new share issue – in terms of the bonus issue element – which in practice entails a reversal of the effects of the subscription discount received by existing shareholders.

January – September 2011

The Group sales increased sharply in the first nine months of 2011, rising 103 per cent to 5,405 MSEK (2,666), with organic growth accounting for 28 per cent. Exchange-rate fluctuations had a negative impact of 294 MSEK on sales, due mainly to the stronger SEK against the USD and EUR. Operating profit more than doubled, amounting to 675 MSEK (323), corresponding to an operating margin of 12.5 per cent (12.1). Effects of the stronger SEK had a negative impact of 49 MSEK on operating profit during the ninemonth period.

Sales by the HEXPOL Compounding business area increased sharply, rising 127 per cent to 4,836 MSEK (2,130), more than doubling operating profit to 620 MSEK (278). The operating margin amounted to 12.8 per cent (13.1). Sales were strong during the nine-month period both in NAFTA and Europe. The acquired Excel Polymers Group noted strong sales in all units and contributed to a significant increase in business growth. Sales to customers in the engineering industry rose strongly, as did sales to the automotive industry and energy sector. Growth was also noted in NAFTA, Western and Central Europe and Asia.

Sales by the HEXPOL Engineered Products business area rose 6 per cent to 569 MSEK (536). Operating profit improved strongly, amounting to 55 MSEK (45), yielding an improvement in the operating margin to 9.7 per cent (8.4). However, the business area was somewhat impacted by the strength of SEK, primarily against the EUR. Sales of gaskets for plate heat exchangers rose during the nine-month period. In general, the market was characterised by increased activity. Sales of polyurethane and rubber wheels developed favourably during the period.

The Group's operating cash flow during the first nine months of 2011 amounted to 548 MSEK (279). The cash flow was achieved mainly through increased operating profit and a level of investment that was lower than depreciation. The strong increase in sales and higher raw material prices led to a certain increase in working capital. The Group's net financial items during the nine-month period amounted to an expense of 25 MSEK (expense: 15). Net financial items were impacted by higher net debt due to the acquisition of Excel Polymers Group. During the period, the HEXPOL Group replaced elements of the acquisition financing for the Excel Polymers Group with a new share issue that was completed during March, entailing a loan repayment of approximately 551 MSEK before issue costs.

Profit before tax increased strongly to 650 MSEK (308). Profit after tax rose 110 per cent to 462 MSEK (220), corresponding to earnings per share of 14.10 SEK (7.49*). Earnings per share based on the number of shares at the close of the period totalled 13.42 SEK.

Profitability

The return on average capital employed rose strongly to 22.0 per cent (17.3). The improvement was attributable primarily to the strong increase in profit. The return on shareholders' equity was 31.9 per cent (23.4).

Financial position and liquidity

The equity/assets ratio was 43.1 per cent (40.5). The Group's total assets amounted to 5,421 MSEK (3,181). Net debt, which amounted to 1,370 MSEK (927), declined during the nine-month period as a result of the new share issue and strong operating cash flow. The impact of the revaluation of the Group's external loans at the end of the quarter was significant compared with the second quarter of 2011, due to the USD strengthening against the SEK. HEXPOL's resolved dividend was paid in May in a total amount of 103 MSEK (27). The net debt/equity ratio was a multiple of 0.6 (0.7).

In May 2008, the Group signed a five-year credit agreement totalling 1.7 billion SEK with a number of Nordic banks. As part of the financing of Excel Polymers Group, an additional five-year credit agreement was signed with a Nordic bank in an amount of 100 MUSD, which falls due in October 2015. The bridge financing agreed in conjunction with the acquisition of Excel Polymers Group was repaid in full at the end of March 2011.

Cash flow

Operating cash flow during the first nine months of the year amounted to 548 MSEK (279). The operating cash flow includes positive effects of a continued, relatively low rate of investment and a substantial improvement in profit before depreciation. The cash flow from operating activities amounted to 406 MSEK (180).

Investments, depreciation and amortisation

Group investments amounted to 53 MSEK (14). Depreciation and amortisation totalled 111 MSEK (61). The investments pertained mainly to maintenance investments.

Tax expenses

The Group's tax expenses amounted to 188 MSEK (88), corresponding to a tax rate of 28.9 per cent (28.6)

Personnel

The number of employees at the end of the period was 3,052 (2,261). The increase was primarily attributable to the acquired Excel Polymers Group. There were 20 fewer employees compared with the second quarter of 2011.

Business area HEXPOL Compounding

The HEXPOL Compounding business area is a world leader in the development and manufacture of high-quality advanced polymer compounds (Compounding). Customers are manufacturers of rubber products and components with stringent demands in terms of performance and global delivery capacity. The largest market segment is the automotive and engineering industry, followed by the construction industry. Other key segments are the medical technology, cabling, water treatment, energy, and oil industries.

		July-Sep		Jan-Sep	Full year	Oct 2010-
MSEK	2011	2010	2011	2010	2010*	Sep 2011*
Net sales	1,652	770	4,836	2,130	3,080	5,786
Operating profit	213	104	620	278	398	740
Operating margin, %	12.9	13.5	12.8	13.1	12.9	12.8

* excl. items affecting comparability

HEXPOL Compounding's sales rose 115 per cent in the third quarter of 2011 to 1,652 MSEK (770). The increase was attributable primarily to the acquired Excel Polymers Group, but also to a strong rise in sales to the industrial, automotive and energy segments.

Operating profit increased 105 per cent to 213 MSEK (104), corresponding to an operating margin of 12.9 per cent (13.5). The business area increased its sales in all existing segments and experienced strong growth in all markets. Excel Polymers Group's profit was strong during the third quarter, in common with previous quarters in 2011. Excel Polymers Group generated an operating margin during the third quarter in line with the HEXPOL Group.

The business area's sales in Europe increased year-on-year, particularly sales to automotive customers in Western and Central Europe. Sales to industrial customers also rose during the third quarter in Europe. In Asia, the operations in China noted increased sales, with deliveries substantially higher than in the corresponding quarter in the preceding year. As a result of considerably higher demand, HEXPOL has decided to expand its capacity with an additional line for rubber compounding in Qingdao, China, which is expected to start up in late 2012.

Sales in the NAFTA region increased strongly compared with the corresponding period in the preceding year. The increase in sales was attributable primarily to the acquired Excel Polymers Group and otherwise strong sales to the automotive, engineering and energy segments. The operations in Mexico performed favourably and net sales increased compared with the year-earlier period.

ELASTO Group had a positive development for all customer groups during the third quarter.

Net sales Operating profit & operating margin

Business area HEXPOL Engineered Products

The HEXPOL Engineered Products business area has gained a world-leading position as a supplier of advanced products, such as gaskets for plate heat exchangers (Gaskets) and wheels for truck and castor wheel applications (Wheels) through its comprehensive expertise in polymers and the production of rubber, plastic and polyurethane products.

		July-Sep		Jan-Sep	Full year	Oct 2010-
MSEK	2011	2010	2011	2010	2010	Sep 2011
Net sales	191	180	569	536	718	751
Operating profit	22	16	55	45	62	72
Operating margin, %	11.5	8.9	9.7	8.4	8.6	9.6

Sales by the HEXPOL Engineered Products business area during the third quarter totalled 191 MSEK (180). Operating profit improved sharply to 22 MSEK (16), corresponding to an operating margin of 11.5 per cent (8.9). The improved operating margin was attributable to increased sales, internal efficiency-enhancement measures and productivity improvements in a number of units. The business area was impacted by the strength of SEK, primarily against the EUR, particularly affecting export sales from operations in Sweden to customers in Europe. The business area's products are under price pressure from surplus market capacity.

HEXPOL Gaskets reported a slight improvement in sales and increased demand during the quarter. Sales to project-related operations also rose somewhat during the quarter. The market remains characterised by continued strong price pressure and rising raw material prices. The product area's sales in the Asian market increased again during the third quarter.

The market for HEXPOL Wheels showed some improvement during the third quarter. The product area reported increased sales, but was impacted by the stronger SEK against both USD and EUR. Sales of polyurethane and thermoplastic wheels increased compared with the year-earlier period. In the markets for wheels, prices remained under pressure, resulting in difficulties to adjust for raw material price changes.

Net sales Operating profit & operating margin

Parent Company

The Parent Company's profit after tax amounted to 160 MSEK (724). Shareholders' equity amounted to 1,743 MSEK (1,062), after the new share issue that was completed in March, which provided funds of approximately 539 MSEK. The Parent Company received dividends from subsidiaries during the ninemonth period.

Risk factors

The Group's and Parent Company's business risks, risk management and management of financial risks are described in detail in the 2010 Annual Report. No significant events occurred during the period that could affect or change the aforementioned descriptions of the Group's or the Parent Company's risks and their management.

Accounting policies

The consolidated financial statements contained in this interim report have been prepared in compliance with International Financial Reporting Standards (IFRS) as adopted by the EU and with the Swedish Annual Accounts Act. The Parent Company's financial statements have been prepared in compliance with the Annual Accounts Act and the Swedish Financial Reporting Board's recommendation RFR 2, Reporting for Legal Entities.

This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting. The accounting and measurement policies, as well as the assessment bases, applied in the 2010 Annual Report have also been applied in this interim report. No new or revised IFRSs that entered force in 2011 have any significant impact on the Group.

Ownership structure

HEXPOL AB (publ), corporate registration number 556108-9631, is the Parent Company of the HEXPOL Group. HEXPOL's Class B shares are listed on the Stockholm Mid Cap industrial segment of the NASDAQ OMX Nordic exchange. HEXPOL had 8,933 shareholders as of 30 September 2011. The largest owner is Melker Schörling AB, with 26 per cent of the capital and 47 per cent of voting rights. The 20 largest shareholders own 73 per cent of the capital and 81 per cent of voting rights.

New share issue

HEXPOL completed a new share issue in March, which provided funds of approximately 551 MSEK before issue costs. The new share issue led to the issuance of 6,637,993 new shares. The total number of shares outstanding, including shares newly subscribed for under the incentive programme, amounts to 34,420,128.

Incentive programme

HEXPOL's incentive programme 2008/2011 was exercised in full in March. Warrant holders subscribed for their full share entitlement, which meant that 1,230,158 new shares were subscribed for. Allocation was adjusted to take into consideration the effects of the previously implemented new share issue. The incentive programme provided the Parent Company with funds of 71 MSEK for the shares subscribed.

Invitation to presentation of report

This report will be presented on 21 October, at 9:00 a.m. CET, at SEB Enskilda's office, Kungsträdgårdsgatan 8, Stockholm, Sweden. The presentation and information on participation are available at www.hexpol.com.

Calendar for financial information

HEXPOL AB will publish financial information on the following dates:

Event Date

• Year-end report 2011 7 February 2012
• Annual General Meeting 2012 4 May 2012
• Interim report first quarter 2012 4 May 2012
• Half-year report 2012 19 July 2012
• Nine-month report 2012 23 October 2012

Financial information is also available in Swedish and English on HEXPOL AB's website – www.hexpol.com.

For further information, contact:

• Georg Brunstam, President and CEO Tel: +46 708 55 12 51
• Urban Ottosson, Chief Financial Officer/ Investor Relations Tel: +46 767 85 51 44

The interim report provides a fair view of the Parent Company's and Group's operations, financial position and results of operations and describes material risks and uncertainties facing the Parent Company and the companies included in the Group.

Malmö, October 21, 2011 HEXPOL AB (publ)

Georg Brunstam, President and CEO

Address:	Skeppsbron 3
	SE-211 20 Malmö
	Sweden
Corporate registration number:	556108–9631
Tel:	+46 40-25 46 60
Fax:	+46 40-25 46 89
Website:	www.hexpol.com

This report may contain forward-looking statements. When used in this report, words such as "anticipate", "believe", "estimate", "expect", "intend", "plan" and "project" are intended to identify forward-looking statements. They may involve risks and uncertainties, including product demand, market acceptance, the effect of economic conditions, the impact of competitive products and pricing, foreign currency exchange rates and other risks. These forward-looking statements reflect the views of HEXPOL's management as of the date made with respect to future events and are subject to risks and uncertainties. All of these forward-looking statements are based on estimates and assumptions made by HEXPOL's management and are believed to be reasonable, though are inherently uncertain and difficult to predict. Actual results or experience could differ materially from the forward-looking statements. HEXPOL disclaims any intention or obligation to update these forward-looking statements.

This report consists of such information that HEXPOL AB may be obliged to disclose in accordance with the Swedish Securities Market Act and /or the Financial Instruments Trading Act. The information was submitted for publication on 21 October 2011 at 8:00 a.m. CET. This report has been prepared both in Swedish and English. In case of any divergence in the content of the two versions, the Swedish version shall have precedence.

Auditors report pertaining to the review of the interim report

The auditors' report on the review of the condensed financial information for the interim period (interim report) has been prepared in accordance with IAS 34 and Chapter 9 of the Swedish Annual Accounts Act. (1995:1554)

To the Board of Directors of HEXPOL AB (publ) Corp. Reg. No: 556108-9631.

Introduction

We have reviewed the consolidated financial interim information (interim report) of HEXPOL AB as per 30 September 2011, and the nine-month period ending on that date. The Board of Directors and the President are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim financial information based on our review.

Extent and scope of the review

We conducted our review in accordance with the Standard on Review Engagements SÖG 2410, Review of Interim Financial Information 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 has a different focus and a substantially more limited scope compared with the focus and extent of an audit conducted in accordance with International Standards on Auditing, ISA, and other generally accepted auditing practices.

The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed on the basis of a review does not provide the same level of assurance as a conclusion expressed on the basis of an audit.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interim report has not, in all material aspects, been compiled in accordance with IAS 34 Interim reporting and the Swedish Annual Accounts Act, and for the Parent Company in accordance with the Swedish Annual Accounts Act.

Malmö, 21 October 2011

Ernst & Young AB

Ingvar Ganestam Stefan Engdahl Authorised Public Accountant Authorised Public Accountant

Consolidated income statement

		July-Sep		Jan-Sep	Full-year	Oct 2010-
MSEK	2011	2010	2011	2010	2010	Sep 2011
Net sales	1,843	950	5,405	2,666	3,798	6,537
Costs of goods sold 1)	-1,517	-761	-4,432	-2,148	-3,091	-5,375
Gross profit	326	189	973	518	707	1,162
Selling and administration costs, etc. 2)	-91	-69	-298	-195	-311	-414
Operating profit	235	120	675	323	396	748
Financial income and expenses	-4	-5	-25	-15	-26	-36
Profit before tax	231	115	650	308	370	712
Tax	-66	-33	-188	-88	-97	-197
Net profit for the period	165	82	462	220	273	515
- of which, attributable to Parent Company shareholders	165	82	462	220	273	515
- of which, attributable to minority shareholders	-	-	0	-	0	0
Earnings per share , SEK	4.80	2.79	14.10	7.49	9.30	15.91
Earnings per share excluding items affecting comparability, SEK	4.80	2.79	14.10	7.49	10.83	17.44
Shareholders' equity per share, SEK			67.90	43.88	44.88
Average number of shares, thousands	34,420	29,369	32,773	29,369	29,369	32,370
Depreciation and amortisation	-37	-19	-111	-61	-88	-138
1) of which, items affecting comparability	-	-	-	-	-22	-22
2) of which, items affecting comparability	-	-	-	-	-42	-42

Consolidated statement of

comprehensive income
	July-Sep			Jan-Sep		Oct 2010-
MSEK	2011	2010	2011	2010	2010	Sep 2011
Profit for the period	165	82	462	220	273	515
Cash-flow hedging, net after tax	0	0	-2	1	1	-2
Translation differences	98	-138	52	-122	-146	28
Comprehensive income	263	-56	512	99	128	541
- of which, attributable to Parent Company shareholders	263	-56	512	99	128	541
- of which, attributable to minority shareholders	-	-	0	-	0	0

Consolidated balance sheet

	30 Sep	30 Sep	31 Dec
MSEK	2011	2010	2010
Intangible fixed assets	2,308	1,439	2,297
Tangible fixed assets	1,069	678	1,116
Financial fixed assets	1	1	1
Deferred tax assets	28	30	24
Total fixed assets	3,406	2,148	3,438
Inventories	550	281	487
Accounts receivable	905	436	616
Other receivables	25	35	32
Prepaid expenses and accrued income	21	15	20
Cash and cash equivalents	514	266	318
Total current assets	2,015	1,033	1,473
Total assets	5,421	3,181	4,911
			,
Attributable to Parent Company shareholders	2,337	1,289	1,318
Attributable to minority shareholders	-	-	9
Total shareholders' equity	2,337	1,289	1,327
Interest-bearing liabilities	1,809	1,120	1,909
Deferred tax liabilities	76	51	79
Provision for pensions	12	11	11
Total non-current liabilities	1,897	1,182	1,999
Interest-bearing liabilities	105	115	683
Accounts payable	739	403	656
Other liabilities	79	48	34
Accrued expenses, prepaid income, provisions	264	144	212
Total current liabilities	1,187	710	1,585
Total shareholders' equity and liabilities	5,421	3,181	4,911

	30 Sep 2011				30 Sep 2010	31 Dec 2010
MSEK	Attributable to Parent Company	Minority interests	Total equity	Attributable to Parent Company	Total equity	Attributable to Parent Company	Minority interests	Total equity
Opening equity	1,318	9	1,327	1,217	1,217	1,217	-	1,217
Comprehensive income	512	0	512	99	99	128	0	128
Dividend	-103	-	-103	-27	-27	-27	-	-27
Acquisition of minority interest	-	-9	-9	-	-	-	9	9
New share issue	539	-	539	-	-	-	-	-
New share issue, exercise of warrants	71	-	71	-	-	-	-	-
Closing equity	2,337	-	2,337	1,289	1,289	1,318	9	1,327

Consolidated changes in shareholders' equity

Number of shares, trend

	Total number of Class A shares	Total number of Class B shares	Total number of shares
Number of shares at 1 January	1,181,250	25,370,727	26,551,977
New share issue	295,312	6,342,681	6,637,993
Exercise of warrants	-	1,230,158	1,230,158
Number of shares at close of period	1,476,562	32,943,566	34,420,128

Incentive programme 2008/2011

The Extraordinary General Meeting on 18 August 2008 resolved to offer a warrant programme consisting of a total of 1,325,000 warrants to senior executives. Each warrant entitled the holder to subscribe for one share. The exercise period was March 2011 to September 2011.

During 2008, senior executives subscribed for 933,250 warrants at a subscription price of 65.70 SEK per warrant. During 2009, new senior executives subscribed for 175,000 warrants at a subscription price of 56.60 SEK. The warrant premium was 8 SEK per warrant on both occasions.

During the first nine months of 2011, all warrants outstanding were exercised, which led to the subscription of 1,230,158 new shares. The number of newly subscribed shares was adjusted for dilution effects stemming from HEXPOL's new share issue completed in the first nine months of 2011.

Consolidated cash flow statements

	July-Sep			Jan-Sep	Full-year
MSEK	2011	2010	2011	2010	2010
Cash flow from operating activities before change in working capital	216	103	614	282	421
Non-recurring items	-10	-3	-23	-11	-24
Changes in working capital	-53	-33	-185	-91	-10
Cash flow from operating activities	153	67	406	180	387
Acquisitions	-	-	1	-341	-1,827
Cash flow from other investing activities	-15	-6	-53	-14	-32
Dividend	-	-	-103	-27	-27
New share issue	-	-	539	-	-
Exercise of warrants	-	-	71	-	-
Cash flow from other financing activities	-54	-79	-679	164	1,525
Change in cash and cash equivalents	84	-18	182	-38	26
Cash and cash equivalents at 1 January	403	299	318	317	317
Exchange-rate differences in cash and cash	27	-15	14	-13	-25
equivalents
Cash and cash equivalents at close of the period	514	266	514	266	318

Operating cash flow, Group

	July-Sep			Jan-Sep
MSEK	2011	2010	2011	2010	2010
Operating profit	235	120	675	323	460
Depreciation/amortisation	37	19	111	61	88
Change in working capital	-53	-33	-185	-91	-10
Investments	-15	-6	-53	-14	-32
Operating cash flow	204	100	548	279	506

Other key figures

	July-Sep			Jan-Sep	Full-year	Oct 2010-
	2011	2010	2011	2010	2010	Sep 2011
Profit margin before tax, %	12.5	12.1	12.0	11.6	9.7	10.9
Profit margin before tax, excluding items affecting comparability, %	12.5	12.1	12.0	11.6	11.4	11.9
Return on shareholders' equity, %			31.9	23.4	21.5	28.4
Return on shareholders' equity, excluding items affecting comparability, %			31.9	23.4	25.1	30.9
Interest-coverage ratio, multiple			26.0	35.2	22.8	21.9
Net debt, MSEK			1,370	927	2,239
Net debt ratio, multiple			0.6	0.7	1.7
Cash flow per share, SEK	4.47	2.28	12.39	6.13	13.18	19.44
Cash flow per share before change in working capital, SEK	6.27	3.51	18.73	9.60	14.33	23.46

Quarterly data, Group

Sales per business area	2011			2010					Oct 2010-
MSEK	Jan March	April June	July Sep	Jan March	April June	July Sep	Oct Dec	Full year	Sep 2011
HEXPOL Compounding	1,598	1,586	1,652	581	779	770	950	3,080	5,786
HEXPOL Engineered Products	188	190	191	169	187	180	182	718	751
Group total	1,786	1,776	1,843	750	966	950	1,132	3,798	6,537

Sales per geographic area	2011			2010					Oct 2010-
MSEK	Jan March	April June	July Sep	Jan March	April June	July Sep	Oct Dec	Full year	Sep 2011
Europe	615	636	604	386	510	494	538	1,928	2,393
NAFTA	1,082	1,040	1,130	326	398	391	524	1,639	3,776
Asia	89	100	109	38	58	65	70	231	368
Group total	1,786	1,776	1,843	750	966	950	1,132	3,798	6,537

Operating profit per business area	2011			2010					Oct 2010-
MSEK	Jan March	April June	July Sep	Jan March	April June	July Sep	Oct Dec	Full year	Sep 2011
HEXPOL Compounding	196	211	213	74	100	104	56	334	676
HEXPOL Engineered Products	14	19	22	13	16	16	17	62	72
Group total	210	230	235	87	116	120	73	396	748

Operating profit per business area excl. items affecting comparability	2011			2010					Oct 2010-
MSEK	Jan March	April June	July Sep	Jan March	April June	July Sep	Oct Dec	Full year	Sep 2011
HEXPOL Compounding	196	211	213	74	100	104	120	398	740
HEXPOL Engineered Products	14	19	22	13	16	16	17	62	72
Group total	210	230	235	87	116	120	137	460	812

Operating margin per business area excl. items affecting comparability	2011			2010					Oct 2010-
%	Jan March	April June	July Sep	Jan March	April June	July Sep	Oct Dec	Full year	Sep 2011
HEXPOL Compounding	12.3	13.3	12.9	12.7	12.8	13.5	12.6	12.9	12.8
HEXPOL Engineered Products	7.4	10.0	11.5	7.7	8.6	8.9	9.3	8.6	9.6
Group total	11.8	13.0	12.8	11.7	12.0	12.6	12.1	12.1	12.4

Income statement, Parent Company

		July-Sep		Jan -Sep
MSEK	2011	2010	2011	2010	2010
Net sales	8	6	24	18	23
Selling and administration costs, etc.	-9	-7	-33	-25	-35
Operating loss	-1	-1	-9	-7	-12
Financial income and expenses	16	733	175	728	677
Profit before tax	15	732	166	721	665
Tax	-3	0	-6	3	19
Profit after tax for the period	12	732	160	724	684

Balance sheet, Parent Company

30 Sep	30 Sep	31 Dec
2011	2010	2010
3,568	2,183	3,787
695	638	536
4,263	2,821	4,323
1,743	1,062	1,076
1,811	1,091	1,916
709	668	1,331
Total shareholders' equity and liabilities 4,263	2,821	4,323

Financial definitions

Capital employed	Total assets less non-interest-bearing liabilities.
Cash flow	Cash flow from operating activities after change in working capital.
Cash flow per share	Cash flow from operating activities after change in working capital, divided by the average number of shares.
Earnings per share	Profit after tax attributable to Parent Company shareholders divided by the average number of shares.
Earnings per share after dilution	Profit after tax attributable to Parent Company shareholders divided by the average number of shares, adjusted for the dilution effects of warrants.
Equity/assets ratio	Shareholders' equity as a percentage of total assets.
Interest-coverage ratio	Profit before tax plus interest expenses divided by interest expenses.
Investments	Purchases less sales of tangible and intangible fixed assets, excluding those included in acquisitions and divestments of subsidiaries.
Net debt/equity ratio	Interest-bearing liabilities less cash and cash equivalents and interest bearing assets divided by shareholders' equity.
Net indebtedness	Interest-bearing liabilities less cash and cash equivalents and interest bearing assets.
Operating cash flow	Operating profit, less depreciation/amortisation and investments, after changes in working capital.
Operating margin	Operating profit as a percentage of net sales for the period.
Profit margin before tax	Profit before tax as a percentage of net sales for the period.
Return on capital employed	Profit before tax plus interest expenses as a percentage of average working capital.
Return on equity	Net profit attributable to Parent Company shareholders as a percentage of average shareholders' equity, excluding minority interests.
Shareholders' equity per share	Shareholders' equity attributable to Parent Company shareholders divided by the number of shares at the end of the period.