Indutrade

Earnings Release • Feb 14, 2013

Year-end report1 Jan – 31 Dec ²⁰¹²

1 JANUARY – 31 DECEMBER 2012

• Net sales rose 5% to SEK 8,384 million (7,994). The increase for comparable units was 1%.
• Operating profit before amortisation of intangible non-current assets attributable to acquisitions (EBITA) decreased by 1% to SEK 905 million (917), and the EBITA margin was 10.8% (11.5%).
• Profit after tax rose 5% to SEK 565 million (540).
• Earnings per share were SEK 14.13 (13.50).
• Cash flow from operating activities totalled SEK 519 million (709), corresponding to SEK 12.98 per share (17.73).
• The Board of Directors proposes a dividend of SEK 7.05 per share (6,75).

FOURTH QUARTER 2012

• Net sales rose 5% during the fourth quarter, to SEK 2,267 million (2,158). The increase for comparable units was 0.5%.
• Operating profit before amortisation of intangible non-current assets attributable to acquisitions (EBITA) rose 4% to SEK 260 million (251), and the EBITA margin was 11.5% (11.6%).
• Profit after tax was SEK 189 million (155).
• Earnings per share were SEK 4.73 (3.88).

FINANCIAL DEVELOPMENT

SEK million	2012 Oct-Dec	2011 Oct-Dec	Change	2012 Jan-Dec	2011 Jan-Dec	Change
Net Sales	2,267	2,158	5%	8,384	7,994	5%
EBITA EBITA margin, %	260 11.5	251 11.6	4%	905 10.8	917 11.5	-1%
Profit after financial items	208	207	0%	710	729	-3%
Net profit	189	155	22%	565	540	5%
Earnings per share, SEK 1)	4.73	3.88	22%	14.13	13.50	5%
Return on operating capital, %	22	25		22	25

1) Attributable to equity holders of the parent company

CEO's message

Sales in 2012 reached a record high level and passed the SEK 8 billion mark by a good margin. Order intake during the year exceeded sales, despite a weaker last quarter. The year was characterised by gradually softer demand in many markets and niches. The downturn has been most apparent in the forest, marine and wind power sectors. Other segments also noted a downturn, but to a much lesser degree. Some of the Group's companies were able to compensate for the decline by capturing market shares. The major exception to the general downturn was products for the conventional energy sector, which performed very strongly.

Fourth quarter

In my comments on the previous quarter's results I expressed great uncertainty about the market situation – a view that I held through the end of the year. Most customers had short order books. This resulted in reductions in production capacity and thereby also in demand.

The month of December contained an unusually few number of work days throughout Europe. In Finland, where our Engineering & Equipment business area conducts most of its business, there were even fewer work days due to the country's Independence Day followed by a day off prior to the weekend. Invoicing in December was thereby low in general.

Margins

The accumulated gross margin of 33.9% (34.1%) was on a par with 2011. Historically the Group's gross margin is in the range of 33%-34%. This level has been stable for many years.

The EBITA margin was 10.8% (11.5%) for the full year, while it was 11.5% for the fourth quarter (11.6%). The high margin of 16.8% (15.5%) for Special Products in the fourth quarter is mainly due to high invoicing in the energy segment.

Acquisitions

During the year, twelve acquisitions of varying sizes were carried out. Of these companies, approximately 60% have proprietary products/trademarks, which is higher than the average for the Group.

During the final quarter of the year, Indutrade acquired Krämer AG (Switzerland), with customers in the pharmaceutical industry, Nolek AB (Sweden), which specialises in equipment for leak testing, and Thermotech AS (Norway), with business in the offshore industry. Possession of Thermotech took place in January 2013. All three of these are interesting companies with good development potential.

Outlook

2012 was a year marked by great anxiety in the international economy and also in industry. The year ended on a weak note. The start of 2013 has brought more positive signs, however. Optimism has risen in general, which also has an impact on business climate.

The indications that are now coming from China and the USA, along with a somewhat calmer situation in the euro zone, give me reason to be somewhat optimistic about the trend in 2013.

Johnny Alvarsson, President and CEO

Sales growth

Group performance

ORDER INTAKE AND NET SALES Order intake

Order intake during the year totalled SEK 8,444 million (8,315), an increase of 2%. For comparable units, order intake decreased by 2%, while acquired growth was 5%. Currency movements had a negative effect on order intake by 1%.

Order intake during the fourth quarter totalled SEK 2,038 million (2,137), a decrease of 5%. For comparable units, order intake decreased by 10%, while acquired growth was 8%. Currency movements had a negative effect on order intake by 3%.

Following a strong start to the year, with rising order intake for comparable units, the trend was weaker during the second half. The weaker business climate was prevalent in most geographic markets and customer segments of importance for the Group, including the general engineering industry in the Nordic countries and the rest of Europe, and the water/wastewater segment. Order intake from many customers showed signs of uncertainty about the future level of activity, resulting in orders on short notice and lower volumes than what would be typical in a stable market situation.

One exception from the decline described above was the international energy sector, which has performed favourably since the end of 2011. Demand in this segment stabilised at a high level.

All business areas noted a drop in order intake during the fourth quarter for comparable units. For the year as a whole, Flow Technology showed an increase for comparable units due to strong order intake for projects during the year, while other business areas experienced a decline.

Net sales

Net sales for the year totalled SEK 8,384 million (7,994), an increase of 5%. The increase for comparable units was 1%, and acquired growth was 5%. The negative effect of currency movements was 1%.

Net sales during the fourth quarter of the year rose 5% to SEK 2,267 million (2,158). The increase for comparable units was marginal on the whole, with major differences between the Group's business areas. Flow Technology and Special Products showed favourable growth owing to substantial invoicing for projects, while Engineering & Equipment and Industrial Components posted declines. Acquired growth was 7%. Currency movements had a negative effect on net sales by 2%.

Earnings and return

EARNINGS

Operating profit before amortisation of intangible assets (EBITA) amounted to SEK 905 million (917) for the year, a decrease of 1%. The operating margin before amortisation of intangible assets (the EBITA margin) was 10.8% (11.5%).

The gross margin on an accumulated basis was marginally lower than the preceding year, at 33.9% (34.1%). The gross margin for the fourth quarter was 34.2%.

The lower earnings and lower EBITA margin were partly an effect of the lower gross margin as above, but above all they were the result of a slightly higher level of overheads in all business areas. The efficiency-improvement and costsavings measures that were taken by a large number of the Group's companies against the background of the weakened business climate took gradual effect during the year.

Currency effects from translation of foreign units had a negative impact on EBITA by SEK -6 million, or -2%, during the fourth quarter and by SEK -17 million, or -2%, on an accumulated basis.

Net financial items amounted to SEK -87 million (-93), of which net interest expense accounted for SEK -81 million (-87). Net interest expense was favourably affected by a lower average interest rate, which compensated for the higher average level of net debt.

Tax on profit for the year was SEK -145 million (-189), corresponding to a tax charge of 20.4% (25.9%). The tax charge for the year decreased through addition of a deferred tax revenue of approximately SEK 30 million as a result of the lower corporate tax rate in Sweden that was decided on. This corresponded to a reduction in the effective tax rate by 4 percentage points for the full year.

Profit after tax rose 5% to SEK 565 million (540). Earnings per share increased to SEK 14.13 (13.50). The tax reduction of SEK 30 million referred to above corresponded to an increase in earnings per share of approximately SEK 0.75.

For the fourth quarter, operating profit before amortisation of intangible assets (EBITA) totalled SEK 260 million (251), an increase of 4%. The operating margin before amortisation of intangible assets (the EBITA margin) was 11.5% (11.6%).

Net financial items for the fourth quarter amounted to SEK -23 million (-19), of which net interest expense accounted for SEK -21 million (-20). Tax on profit for the period was SEK -19 million (-52), after the reduced tax rate in Sweden lowered the tax charge during the fourth quarter by SEK 30 million. Profit after tax was SEK 189 million (155). Earnings per share were SEK 4.73 (3.88), of which the one-time effect of the lowered tax rate was approximately SEK 0.75.

RETURN

The return on operating capital was 22% (25%), and the return on equity was 27% (29%).

Business areas1

ENGINEERING & EQUIPMENT

Engineering & Equipment's operations involve sales of components as well as customisation, combinations and installations of products from various suppliers.

	2012	2011	2012	2011
SEK million	Oct-Dec	Oct-Dec	Jan-Dec	Jan-Dec
Net sales	402	424	1,584	1,560
EBITA	21	34	117	121
EBITA margin, %	5.2	8.0	7.4	7.8

Net sales for the year rose 2% to SEK 1,584 million (1,560). For comparable units, net sales decreased by 1%. Acquisitions contributed 6%, while currency movements had a negative effect on net sales, by 3%. During the fourth quarter net sales decreased by 5%. The decrease for comparable units was 7%, at the same time that acquisitions contributed 7%. Currency movements had a negative effect on net sales, by 5%.

Following a positive start of the year with good demand in the Finnish market, where the business area conducts most of its business, the trend turned downward starting in the second quarter. The final quarter of the year was also weak, with falling demand. The trend in Finnish industry has been weak across a broad front since the spring, which has had a negative impact on many of the business area's companies. One sector with positive development was the mining industry. The water/wastewater segment, which is highly important for the business area, experienced soft demand during the year as a result of uncertainty associated with structural changes in the municipal sector in Finland.

EBITA for the year decreased by 3% to SEK 117 million (121), corresponding to an EBITA margin of 7.4% (7.8%). Acquisitions made a significant, positive earnings contribution. The fourth quarter was the business area's weakest quarter in terms of earnings and margins. Net sales at the end of the year were hurt by a negative calendar effect at the same time that measures and adaptations in the business area to create conditions for improved profitability led to higher costs.

In early March the company Geotrim Oy was acquired, with annual sales of approximately SEK 100 million.

FLOW TECHNOLOGY

Flow Technology offers components and systems for controlling, measuring, monitoring and regulating flows. The business area includes companies that specialise in various areas of industrial flow technology.

	2012	2011	2012	2011
SEK million	Oct-Dec	Oct-Dec	Jan-Dec	Jan-Dec
Net sales	555	515	2,015	1,930
EBITA	49	52	186	221
EBITA margin, %	8.8	10.1	9.2	11.5

Net sales for the year totalled SEK 2,015 million (1,930), an increase of 4%. The increase for comparable units was 2%, while acquired growth was also 2%. Currency movements had only a marginal effect on net sales. During the fourth quarter net sales rose 8%. The increase for comparable units was 7%, while acquisitions contributed 2%. Currency movements had a negative effect on net sales, by 1%.

The year began with a growing level of activity, however, the level of continuing business weakened already in the second quarter. The level of domestic and international projects in areas such as water/wastewater systems, energy and chemicals was favourable for most of the year and compensated for the decline in continuing business. During the final quarter of the year, it was also various project deliveries that lifted net sales. One area that has shown particularly weak performance since the summer is the marine segment. The level of vessel newbuilding activity has fallen significantly, which has had a negative impact on the business area.

¹ Comparative figures for the business areas in 2011 have been changed as a result of the transfer of companies between the various business areas. For further details, see separate press release issued on 27 April 2012.

EBITA for the year decreased by 16% to SEK 186 million (221), and the EBITA margin was 9.2% (11.5%). The lower EBITA margin is attributable in part to a lower gross margin in association with a greater share of large projects during the year and in part to an increase in overheads.

In January the company Rostfria VA-system i Storfors AB was acquired, with annual sales of approximately SEK 15 million, and in September the company Euroflon Tekniska Produkter AB was acquired, with annual sales of approximately SEK 40 million.

INDUSTRIAL COMPONENTS

Industrial Components offers a wide range of technically advanced components and systems for production and maintenance, and medical technology equipment. The products consist mainly of consumables.

	2012	2011	2012	2011
SEK million	Oct-Dec	Oct-Dec	Jan-Dec	Jan-Dec
Net sales	405	401	1,531	1,488
EBITA	45	43	165	167
EBITA margin, %	11.1	10.7	10.8	11.2

Net sales for the year rose 3% to SEK 1,531 million (1,488). For comparable units, net sales decreased by 5%. Acquisitions contributed 9%, while currency movements had a negative effect of 1%. During the fourth quarter, net sales rose 1%. For comparable units, net sales decreased by 11% at the same time that acquisitions contributed 13%. Currency movements had a negative effect on net sales, by 1%.

Apart from a temporary stabilisation during the second quarter of the year, the business climate during the year was weak, with a drop in sales for comparable units. Most industrial customer segments felt the effects of the weaker business climate, with the exception of demand for investment goods in the vehicle and automotive industries, which was stable. Some weakness was noted in demand for medical technology equipment.

EBITA for the year decreased by 1% to SEK 165 million (167), corresponding to an EBITA margin of 10.8% (11.2%). Acquisitions made a positive contribution to earnings. Active work on efficiency enhancements and costsaving measures in the business area limited the narrowing margins despite lower net sales for comparable units.

In April the company Rubin Medical AB was acquired, with annual sales of approximately SEK 100 million, in June the company Conroy Medical AB was acquired, with annual sales of approximately SEK 30 million, and in August the company Hydnet AB was acquired, with annual sales of approximately SEK 80 million.

SPECIAL PRODUCTS

Special Products offers specially manufactured niche products, design solutions, aftermarket service and assembly, and special processing. The business area includes companies that conduct a considerable amount of own manufacturing. It is also the Indutrade business area with the highest share of proprietary products.

	2012	2011	2012	2011
SEK million	Oct-Dec	Oct-Dec	Jan-Dec	Jan-Dec
Net sales	927	833	3,308	3,052
EBITA	156	129	486	452
EBITA margin, %	16.8	15.5	14.7	14.8

Net sales for the year rose 8% to SEK 3,308 million (3,052), with a 5% increase in sales for comparable units. Acquired growth was 5%, while currency movements had a negative effect on net sales, by 2%. During the fourth quarter, net sales rose 11%. The increase for comparable units was 6%, while acquisitions contributed 8%. Currency movements had a negative effect on net sales, by 3%.

The strong demand from the international energy market toward the end of 2011 and start of 2012 stabilised at a high level during the second quarter. For the year as a whole, order intake in this segment exceeded net sales, despite substantial deliveries in the latter part of the year. Aside from the energy sector, the engineering industry is the business area's most important customer segment, where demand during the last quarter of the year was somewhat subdued, as was the situation earlier in the year. Development for the business area's companies in this segment was essentially the same in the Nordic countries as in the rest of Europe.

EBITA increased by 8% to SEK 486 million (452), and the EBITA margin was 14.7% (14.8%). Both the gross margin and overheads were level with the preceding year, despite the larger share of large projects compared with the same period a year ago.

In January, the company Dasa Control System AB was acquired, with annual sales of approximately SEK 50 million, and in March the Swiss company Eco Analytics AG was acquired, with annual sales of SEK 22 million. During the second quarter, the company Topflight AB was acquired, with annual sales of approximately SEK 60 million. In October the company Krämer AG was acquired, with annual sales of approximately SEK 70 million, and in December the company Nolek AB was acquired, with annual sales of approximately SEK 160 million.

Other financial information

FINANCIAL POSITION

Shareholders' equity amounted to SEK 2,290 million (2,064), and the equity ratio was 35% (38%).

Cash and cash equivalents amounted to SEK 243 million (264). In addition to this, the Group had unutilised credit promises of SEK 896 million (710). Interest-bearing net debt amounted to SEK 2,339 million (1,656). The net debt/equity ratio at the end of the year was 102% (80%).

CASH FLOW

Cash flow from operating activities was SEK 519 million (709). Cash flow after net capital expenditures in intangible non-current assets and property, plant and equipment (excluding company acquisitions) was SEK 392 million (570). The lower cash flow is mainly attributable to a higher level of tied up working capital during the year.

CAPITAL EXPENDITURES AND DEPRECIATION

The Group's net capital expenditures, excluding company acquisitions, amounted to SEK 127 million (139). Depreciation of property, plant and equipment amounted to SEK 107 million (102). Investments in company acquisitions amounted to SEK 591 million (467), of which earn-out payments pertaining to previous years' acquisitions amounted to SEK 72 million (117).

EMPLOYEES

The number of employees was 4,086 at the end of the year (3,807). A total of 283 employees were added through acquisitions.

COMPANY ACQUISITIONS AND DIVESTMENTS

The Group has acquired the following companies, which are consolidated for the first time in 2012.

Month acquired	Acquisitions	Business area	Net sales/ SEK m*	No. of employees*
January	Rostfria VA-System i Storfors AB	Flow Technology	15	5
	Dasa Control Systems AB	Special Products	50	27
March	Geotrim Oy	Engineering & Equipment	100	30
	Eco Analytics AG	Special Products	22	8
April	Rubin Medical AB	Industrial Components	100	18
June	Conroy Medical AB	Industrial Components	30	17
	Topflight AB	Special Products	60	42
August	Hydnet AB	Industrial Components	80	10
September	Euroflon Tekniska Produkter AB	Flow Technology	40	16
October	Krämer AG	Special Products	70	35
December	Nolek AB	Special Products	160	75
			727	283

*Estimated annual sales and number of employees at the time of acquisition.

Further information about company acquisitions can be found on page 15 of this year-end report.

In November, Indutrade sold the company AB Novum, which is active in cables and electrical components. Annual sales of the company, which was part of the Special Products business area, totalled approximately SEK 50 million during the last 12-month period, with 13 employees. The sale had a marginal impact on earnings.

EVENTS AFTER THE END OF THE FINANCIAL YEAR

Effective 1 January 2013, the Indutrade Group is organised in five business areas, instead of four as previously. The change was carried out by splitting away a grouping of companies in the area of Fluids & Mechanical Solutions from the Special Products business area, forming a separate business area. In connection with this, a number of companies have been moved between the Group's various business areas. The motive for the change is to strengthen focus and thus the conditions for continued growth in the Group. Pro forma figures for the 2011 and 2012 financial years according to the new structure are provided on page 19 of this year-end release.

In early January, the acquisition of Thermotech AS (Norway) was completed, with annual sales of approximately SEK 70 million. The company sells products and services in heat treatment, machine service and bolt tension. Customers are mainly in the Norwegian oil and gas industry, both on- and offshore.

In other respects, no significant events for the Group have occurred after the end of the financial year.

TAXES

The Swedish corporate tax rate was lowered from 26.3% to 22% as from 1 January 2013. As a result, the Group received deferred tax revenue of SEK 30 million due to a decrease in deferred tax liabilities.

PARENT COMPANY

The main functions of Indutrade AB are to take responsibility for business development, acquisitions, financing, business control and analysis. The Parent Company's sales, which consist exclusively of intercompany invoicing of services, amounted to SEK 3 million (4) during the year. The Parent Company's financial assets consist mainly of shares in subsidiaries. During the year, the Parent Company acquired shares in four new companies. The Parent Company did not make any major investments in intangible non-current assets or in property, plant and equipment. The number of employees on 31 December was 10 (10).

RISKS AND UNCERTAINTIES

The Indutrade Group conducts business in 25 countries in four world regions, through some 180 companies. This diversification, together with a large number of customers in various industries and a large number of suppliers, mitigates the business and financial risks. Apart from the risks and uncertainties described in Indutrade's 2011 Annual Report, no significant risks or uncertainties are judged to have emerged or been eliminated. Since the Parent Company is responsible for the Group's financing, it is exposed to financing risk.

The Parent Company's other activities are not exposed to risks other than indirectly via subsidiaries. For a more detailed report on risks that affect the Group and Parent Company, please see the 2011 Annual Report.

RELATED PARTY TRANSACTIONS

No transactions took place during the year between Indutrade and related parties that have significantly affected the Company's financial position or result of operations.

ACCOUNTING PRINCIPLES

Indutrade reports in accordance with International Financial Reporting Standards (IFRS). This year-end report has been prepared in accordance with IAS 34 and RFR 1. The Parent Company applies RFR 2. The same accounting principles and calculation methods are used in this report as those used in Indutrade's 2011 Annual Report.

Starting in 2013 the Group will be applying the revised IAS 19 Employee Benefits. This will have a marginal impact on the Group, since the Group already reports actuarial gains and losses in other comprehensive income.

Apart from IAS 19, there are no new IFRSs or IFRIC interpretations that have been adopted by the EU that will be applicable for Indutrade or that will have any material impact on the Group's result of operations or financial position in 2013.

DIVIDEND

The Board proposes a dividend of SEK 7.05 per share (6.75), or SEK 282 million. The proposed dividend is in line with Indutrade's dividend policy to pay out a minimum of 50% of profit after tax over time.

FINANCIAL CALENDAR

• The 2012 Annual Report will be published in early April 2013.
• The interim report for the period 1 January–31 March 2013 will be published on 6 May 2013.
• The Annual General Meeting will be held in Stockholm on 6 May 2013.
• The interim report for the period 1 January–30 June 2013 will be published on 24 July 2013.
• The interim report for the period 1 January–30 September 2013 will be published on 5 November 2013

Stockholm, 14 February 2013

Indutrade AB (publ)

Johnny Alvarsson President and CEO

NOTE

The information provided herein is such that Indutrade AB (publ) is obligated to publish pursuant to the Securities Market Act, the Financial Instruments Trading Act, and/or in accordance with the Issuers Rules and Regulations for the Nasdaq OMX Stockholm. Submitted for publication 11 a.m. on 14 February 2013.

FURTHER INFORMATION

For further information, please contact: Johnny Alvarsson, President and CEO, tel: +46 70 589 17 95.

The report will be commented upon as follows:

• through a conference call/webcast today at 2 p.m. at the following link: https://www.anywhereconference.com/?Conference=137345644&PIN=386379
• Participants call SE +46 (08) 505 564 76, UK +44 (0) 203 364 5371 or US +1 877 679 2993.
• through a videotaped version at the following link: http://www.indutrade.se

10

REPORT OF REVIEW OF INTERIM FINANCIAL INFORMATION

Introduction

We have reviewed this report for the period 1 January 2012 to 31 December 2012 for Indutrade AB (publ). The board of directors and the CEO 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 report based on our review.

Scope of Review

We conducted our review in accordance with the Swedish Standard on Review Engagements SÖG 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.

Stockholm, 14 February 2013

PricewaterhouseCoopers AB

Lennart Danielsson Authorised Public Accountant

Indutrade consolidated income statement

• condensed

	2012	2011	2012	2011
SEK million	Oct-Dec	Oct-Dec	Jan-Dec	Jan-Dec
Net Sales	2,267	2,158	8,384	7,994
Cost of goods sold	-1,492	-1,427	-5,545	-5,268
Gross profit	775	731	2,839	2,726
Development costs	-26	-24	-95	-74
Selling costs	-410	-389	-1,527	-1,430
Administrative expenses	-109	-99	-426	-398
Other operating income and expenses	1	7	6	-2
Operating profit	231	226	797	822
Net financial items	-23	-19	-87	-93
Profit after financial items	208	207	710	729
Income Tax	-19	-52	-145	-189
Net profit for the period	189	155	565	540
Net profit, attributable to:
Equity holders of the parent company	189	155	565	540
Non-controlling interests	0	0	0	0
	189	155	565	540
Earnings per share for the period, attributable
to equity holders of the parent company 1)	4.73	3.88	14.13	13.50
EBITA	260	251	905	917
Operating profit includes:
Amortisation of intangible assets	-32	-27	-118	-104
Depreciation of property,
plant and equipment	-27	-25	-107	-102

1) Earnings for the period divided by 40,000,000 shares. There is no dilutive effect.

Indutrade consolidated statement of comprehensive income

Net profit for the period	189	155	565	540
Other comprehensive income
Fair value adjustments of hedge instruments	-2	-7	-13	-33
Tax attributable to fair value adjustments	-1	2	2	9
Actuarial gains/losses	-12	15	-12	15
Tax on actuarial gains/losses	2	-5	2	-5
Exchange rate differences	26	-38	-48	-2
Other comprehensive income for the period,	13	-33	-69	-16
net of tax
Total comprehensive income for the period	202	122	496	524
Net profit, attributable to:
Equity holders of the parent company	202	122	496	524
Non-controlling interests	0	0	0	0

	2012	2011	2012	2011
Net sales, SEK million	Oct-Dec	Oct-Dec	Jan-Dec	Jan-Dec
Engineering & Equipment	402	424	1,584	1,560
Flow Technology	555	515	2,015	1,930
Industrial Components	405	401	1,531	1,488
Special Products	927	833	3,308	3,052
Parent company and Group items	-22	-15	-54	-36
	2,267	2,158	8,384	7,994
	2012	2011	2012	2011
EBITA, SEK million	Oct-Dec	Oct-Dec	Jan-Dec	Jan-Dec
Engineering & Equipment	21	34	117	121
Flow Technology	49	52	186	221
Industrial Components	45	43	165	167
Special Products	156	129	486	452
Parent company and Group items	-11	-7	-49	-44
	260	251	905	917
	2012	2011	2012	2011
EBITA margin, %	Oct-Dec	Oct-Dec	Jan-Dec	Jan-Dec
Engineering & Equipment	5.2	8.0	7.4	7.8
Flow Technology	8.8	10.1	9.2	11.5
Industrial Components	11.1	10.7	10.8	11.2
Special Products	16.8	15.5	14.7	14.8
	11.5	11.6	10.8	11.5

		2012			2011
Net sales, SEK million	Oct-Dec	Jul-Sep	Apr-Jun	Jan-Mar	Oct-Dec	Jul-Sep	Apr-Jun	Jan-Mar
Engineering & Equipment	402	384	418	380	424	409	388	339
Flow Technology	555	491	490	479	515	513	479	423
Industrial Components	405	357	403	366	401	350	366	371
Special Products	927	764	844	773	833	740	788	691
Parent company and Group items	-22	-8	-8	-16	-15	-7	-6	-8
	2,267	1,988	2,147	1,982	2,158	2,005	2,015	1,816

		2012			2011
EBITA, SEK million	Oct-Dec	Jul-Sep	Apr-Jun	Jan-Mar	Oct-Dec	Jul-Sep	Apr-Jun	Jan-Mar
Engineering & Equipment	21	40	29	27	34	39	29	19
Flow Technology	49	46	53	38	52	71	56	42
Industrial Components	45	41	44	35	43	38	42	44
Special Products	156	105	121	104	129	107	124	92
Parent company and Group items	-11	-13	-13	-12	-7	-10	-13	-14
	260	219	234	192	251	245	238	183

		2012			2011
EBITA-margin, %	Oct-Dec	Jul-Sep	Apr-Jun	Jan-Mar	Oct-Dec	Jul-Sep	Apr-Jun	Jan-Mar
Engineering & Equipment	5.2	10.4	6.9	7.1	8.0	9.5	7.5	5.6
Flow Technology	8.8	9.4	10.8	7.9	10.1	13.8	11.7	9.9
Industrial Components	11.1	11.5	10.9	9.6	10.7	10.9	11.5	11.9
Special Products	16.8	13.7	14.3	13.5	15.5	14.5	15.7	13.3
	11.5	11.0	10.9	9.7	11.6	12.2	11.8	10.1

Indutrade consolidated balance sheet

• condensed

	2012	2011
SEK million	31 Dec	31 Dec
Goodwill	1,190	822
Other intangible assets	1,215	888
Property, plant and equipment	741	706
Financial assets	59	45
Inventories	1,472	1,328
Accounts receivable, trade	1,411	1,263
Other receivables	204	149
Cash and cash equivalents	243	264
Total assets	6,535	5,465
Equity	2,290	2,064
Non-current interest-bearing liabilities and pension liabilities	1,158	837
Other non-current liabilities and provisions	335	255
Current interest-bearing liabilities	1,424	1,083
Accounts payable, trade	586	556
Other current liabilities	742	670
Total equity and liabilities	6,535	5,465

Estimated earn-outs from acquisitions have been reclassified to interest-bearing liabilities. The comparative year has been adjusted.

Indutrade change in group equity

• condensed

Attributable to equity holders of the parent company SEK million	2012 Jan-Dec	2011 Jan-Dec
Opening equity	2,062	1,742
Total comprehensive income for the period	496	524
Dividend	-2701)	-2041)
Closing equity	2,288	2,062
1) Dividend per share for 2011 is SEK 6.75 (5.10).
Equity, attributable to:
Equity holders of the parent company	2,288	2,062
Non-controlling interests	2	2
	2,290	2,064

Indutrade consolidated cash flow statement

• condensed

	2012	2011	2012	2011
SEK million	Oct-Dec	Oct-Dec	Jan-Dec	Jan-Dec
Cash flow from operating activities
before change in working capital	202	223	720	764
Change in working capital	90	58	-201	-55
Cash flow from operating activities	292	281	519	709
Net capital expenditures in non-current assets	-43	-27	-127	-139
Company acquisitions and divestments	-212	-18	-572	-467
Change in other financial assets	-3	-1	-5	13
Cash flow from investing activities	-258	-46	-704	-593
Net borrowings	-7	-211	442	134
Dividend paid out	-	-	-270	-204
Cash flow from financing activities	-7	-211	172	-70
Cash flow for the period	27	24	-13	46
Cash and cash equivalents at start of period	214	245	264	219
Exchange rate differences	2	-5	-8	-1
Cash and cash equivalents at end of period	243	264	243	264

Key data

	2012	2011	2010	2009
Moving 12 mos	31 Dec	31 Dec	31 Dec	31 Dec
Net sales, SEK million	8,384	7,994	6,745	6,271
Sales growth, %	5	19	8	-8
EBITA, SEK million	905	917	703	594
EBITA margin, %	10.8	11.5	10.4	9.5
Operating capital, SEK million	4,629	3,720	3,307	2,763
Return on operating capital, %	22	25	19	18
Return on equity, %	27	29	24	21
Interest-bearing net debt, SEK million 1)	2,339	1,656	1,562	1,119
Net debt/equity ratio, %	102	80	90	68
Net debt/EBITDA, times	2.3	1.6	2.0	1.6
Equity ratio, %	35	38	36	41
Average number of employees	3,939	3,778	3,420	3,122
Number of employees at the end of the period	4,086	3,807	3,444	3,040
Attributable to equity holders of the parent company
Key ratios per share 2)
Earnings per share, SEK	14.13	13.50	10.18	8.53
Equity per share, SEK	57.20	51.55	43.55	41.10
Cash flow from operating activities per share, SEK	12.98	17.73	16.40	13.95

1) Interest-bearing net debt and related key ratios include earn-outs from acquisitions from year-end 2012. Comparative years have been adjusted.

2) Based on 40,000,000 shares which corresponds to the number of shares outstanding during all periods in the table. There is no dilutive effect.

Acquisitions

ACQUISITIONS 2012

All of the shares have been acquired in the Swedish companies Rostfria VA-system i Storfors AB, Dasa Control Systems AB, Rubin Medical AB, Conroy Medical AB, Topflight AB, Hydnet AB, Euroflon Tekniska Produkter AB and Nolek AB; in Eco Analytics AG and Krämer AG (Switzerland); and in Geotrim Oy (Finland).

ENGINEERING & EQUIPMENT

Geotrim Oy, in Helsinki, Finland, supplies instruments, systems and software for geospatial solutions in qualified, satellite-based positioning. The company provides networks with nationwide coverage in Finland. Geotrim Oy has annual sales of approximately SEK 100 million and is consolidated in the Group as from 1 March 2012.

FLOW TECHNOLOGY

Rostria VA-system i Storfors AB, with annual sales of approximately SEK 15 million, is consolidated in the Group as from 1 January 2012. The company supplies pump stations and pipe systems to water treatment plants. Euroflon Tekniska Produkter AB, with annual sales of approximately SEK 40 million, is consolidated in the Group as from 1 September 2012. The company is a supplier of customised metal, PTFE and silicon tubing, compensators and quickconnect fittings.

INDUSTRIAL COMPONENTS

Rubin Medical AB supplies medical technology products with a focus on diabetes therapy in Scandinavia. The company has annual sales of approximately SEK 100 million and is consolidated in the Group as from 1 April 2012. Conroy Medical AB, with annual sales of approximately SEK 30 million, is consolidated in the Group as from 1 June 2012. The company manufactures and sells medical technology products mainly for blood handling. Hydnet AB supplies hydraulic components and industrial shock absorbers from leading manufacturers in hydraulics and motion control. The company has annual sales of approximately SEK 80 million and is consolidated in the Group as from 1 August 2012.

SPECIAL PRODUCTS

Dasa Control Systems AB, with annual sales of approximately SEK 50 million, supplies proprietary advanced control and communication systems for heavy vehicles. The company is consolidated in the Group as from 1 January 2012. Eco Analytics AG, with annual sales of approximately SEK 22 million, is active in gas and water analysis and offers a comprehensive production programme of gas meters for toxic or explosive gases. Eco Analytics AG is consolidated in the Group as from 1 March 2012. Topflight AB develops, manufactures and supplies labelling solutions for industrial use. The company has annual sales of approximately SEK 60 million and is consolidated in the Group as from 1 June 2012. Krämer AG, with annual sales of approximately SEK 70 million, is a leading manufacturer of equipment for the pharmaceutical market and specialises in tablet dedusters and related equipment for pharmaceutical manufacturers. The company is consolidated in the Group as from 1 October 2012. Nolek AB is a leading producer of instruments and machines for leak testing, leak detection and proof testing, with annual sales of approximately SEK 160 million. Nolek AB is consolidated in the Group as from 1 December 2012.

Acquired assets in Rostfria VA-system i Storfors AB, Dasa Control Systems AB, Eco Analytics AG, Geotrim Oy, Rubin Medical AB, Conroy Medical AB, Topflight AB, Hydnet AB, Euroflon Tekniska Produkter AB, Krämer AG and Nolek AB.

Purchase price allocation SEK million

Purchase price, incl. contingent earn-out payment totalling SEK 261 million			943
	Book	Fair value
Acquired assets	value	adjustment	Fair value
Goodwill	-	378	378
Agencies, trademarks, customer relations, licences, etc.	11	413	424
Property, plant and equipment	45	13	58
Financial assets	0	-	0
Inventories	159	5	164
Other current assets	146	-	146
Cash and cash equivalents	163	-	163
Deferred tax liability	-18	-100	-118
Interest-bearing loans and pension liabilities	-37	-6	-43
Other operating liabilities	-229	-	-229
	240	703	943

Agencies, customer relationships, licences, etc. are amortised over a period of 10-20 years, while trademarks are assumed to have an indefinite lifetime. Trademarks are included in the amount of SEK 32 million.

Indutrade normally uses an acquisition structure entailing a base level of consideration plus a contingent earn-out payment. Initially, the contingent earn-out payments are valued at the present value of the likely outcome, which for the acquisitions made during the year amount to SEK 261 million. The earn-out payments fall due for payment within 1 to 3 years and can amount to a maximum of SEK 280 million. If the conditions are not met, the outcome can be in the range of SEK 0-280 million.

Transaction costs for the acquisitions carried out during the year totalled SEK 2 million (2) and are included in "Other income and expenses" in the income statement. Contingent earn-out payments have been revalued at SEK 9 million (0), including SEK 6 million during the fourth quarter. The income is reported among Other income and expenses in the income statement.

The purchase price allocation calculations for Rostfria VA-system i Storfors AB and Dasa Control Systems AB are definitive. For other acquisitions, the PPA calculations are preliminary. Indutrade regards the calculations as preliminary during the time there is uncertainty about matters such as the outcome of guarantees in the acquisition agreements concerning inventories and trade receivables.

Cash flow impact

Purchase price, incl. contingent earn-out payment	943
Contingent earn-out payments not paid out	-261
Cash and cash equivalents in acquired companies	-163
Contingent earn-out payments pertaining to previous years' acquisitions	72
Total cash flow impact	591

EFFECTS OF ACQUISITIONS CARRIED OUT IN 2011 AND 2012

SEK million	Net Sales	EBITA
Business area	Oct-Dec	Jan-Dec	Oct-Dec	Jan-Dec
Engineering & Equipment	28	95	2	16
Flow Technology	9	42	-1	2
Industrial Components	51	136	12	23
Special Products	66	146	12	21
Effect on Group	154	419	25	62
Acquisitions carried out in 2011	0	55	0	4
Acquisitions carried out in 2012	154	364	25	58
Effect on Group	154	419	25	62

If all of the acquired units had been consolidated as from 1 January 2012, net sales for the year would have amounted to SEK 8,742 million and EBITA would have amounted to SEK 973 million.

ACQUISITIONS AFTER THE END OF THE REPORTING PERIOD

Thermotech AS ( Norway), with annual sales of approximately SEK 70 million, is consolidated in the Group as from 1 January 2013. Thermotech sells products and services in heat treatment, machine service and bolt tension. Customers are mainly in the Norwegian oil and gas industry, both on- and offshore. The company will be part of Indutrade's Industrial Components business area.

Parent company income statement

• condensed

			2011
Oct-Dec	Oct-Dec	Jan-Dec	Jan-Dec
3	4	3	4
3	4	3	4
-9	-10	-49	-47
0	0	-1	0
-6	-6	-47	-43
-12	-9	-31	-39
281	501	656	767
263	486	578	685
-62	-106	-62	-106
-63	-99	-48	-82
			497
0	-1	0	-1
	2012 138	2011 281	2012 468

Parent company balance sheet

• condensed

	2012	2011
SEK million	31 Dec	31 Dec
Intangible assets	1	1
Property, plant and equipment	1	1
Financial assets	2,578	2,031
Current receivables	1,719	1,294
Cash and cash equivalent	0	7
Total assets	4,299	3,334
Equity	1,675	1,477
Untaxed reserves	221	160
Non-current interest-bearing liabilities and pension liabilities	837	534
Current interest-bearing liabilities	1,464	1,094
Current noninterest-bearing liabilities	102	69
Total equity and liabilities	4,299	3,334

Estimated earn-outs from acquisitions have been reclassified to interest-bearing liabilities. The comparative year has been adjusted.

PRO FORMA BUSINESS AREAS ACCORDING TO NEW STRUCTURE VALID FROM 1 JAN 2013

Net Sales, SEK Million	2012 Oct-Dec	2011 Oct-Dec	2012 Jan- Dec	2011 Jan-Dec
Engineering & Equipment	339	355	1,325	1,304
Flow Technology	577	543	2,123	2,032
Industrial Components	405	402	1,531	1,489
Special Products	696	613	2,444	2,206
Fluids & Mechanical Solutions	273	263	1,020	1,007
Parent company and Group items	-23	-18	-59	-44
	2,267	2,158	8,384	7,994
	2012	2011	2012	2011
EBITA, SEK Million	Oct-Dec	Oct-Dec	Jan- Dec	Jan-Dec
Engineering & Equipment	20	33	105	114
Flow Technology	51	52	196	225
Industrial Components	44	43	165	168
Special Products	124	97	364	320
Fluids & Mechanical Solutions	33	32	125	134
Parent company and Group items	-12	-6	-50	-44
	260	251	905	917
	2012	2011	2012	2011
EBITA margin, %	Oct-Dec	Oct-Dec	Jan- Dec	Jan-Dec
Engineering & Equipment	5.9	9.3	7.9	8.7
Flow Technology	8.8	9.6	9.2	11.1
Industrial Components	10.9	10.7	10.8	11.3
Special Products	17.8	15.8	14.9	14.5
Fluids & Mechanical Solutions	12.1	12.2	12.3	13.3
	11.5	11.6	10.8	11.5

	2012					2011
Net Sales, SEK million	Oct-Dec	Jul-Sep	Apr-Jun	Jan-Mar	Oct-Dec	Jul-Sep	Apr-Jun	Jan-Mar
Engineering & Equipment	339	320	341	325	355	332	321	296
Flow Technology	577	516	524	506	543	539	504	446
Industrial Components	405	357	403	366	402	350	367	370
Special Products	696	564	632	552	613	548	563	482
Fluids & Mechanical Solutions	273	240	257	250	263	243	270	231
Parent company and Group items	-23	-9	-10	-17	-18	-7	-10	-9
	2,267	1,988	2,147	1,982	2,158	2,005	2,015	1,816
			2012			2011
EBITA, SEK million	Oct-Dec	Jul-Sep	Apr-Jun	Jan-Mar	Oct-Dec	Jul-Sep	Apr-Jun	Jan-Mar
Engineering & Equipment	20	36	24	25	33	36	26	19
Flow Technology	51	48	57	40	52	73	57	43
Industrial Components	44	41	45	35	43	39	42	44
Special Products	124	76	91	73	97	79	86	58
Fluids & Mechanical Solutions	33	30	31	31	32	29	40	33
Parent company and Group items	-12	-12	-14	-12	-6	-11	-13	-14
	260	219	234	192	251	245	238	183
			2012			2011
EBITA margin, %	Oct-Dec	Jul-Sep	Apr-Jun	Jan-Mar	Oct-Dec	Jul-Sep	Apr-Jun	Jan-Mar
Engineering & Equipment	5.9	11.3	7.0	7.7	9.3	10.8	8.1	6.4
Flow Technology	8.8	9.3	10.9	7.9	9.6	13.5	11.3	9.6
Industrial Components	10.9	11.5	11.2	9.6	10.7	11.1	11.4	11.9
Special Products	17.8	13.5	14.4	13.2	15.8	14.4	15.3	12.0
Fluids & Mechanical Solutions	12.1	12.5	12.1	12.4	12.2	11.9	14.8	14.3

11.5 11.0 10.9 9.7 11.6 12.2 11.8 10.1

Definitions

Earnings per share	Net profit for the period divided by the average number of shares outstanding.
EBITA	Operating profit before amortisation of intangible assets arising in connection with company acquisitions (Earnings Before Interest, Tax and Amortisation).
EBITA margin	EBITA as a percentage of net sales for the period.
EBITDA	Operating profit before depreciation and amortisation (Earnings Before Interest, Tax, Depreciation and Amortisation).
Equity per share	Equity divided by the number of shares outstanding.
Equity ratio	Shareholders' equity as a percentage of total assets.
Gross margin	Gross profit divided by net sales.
Interest-bearing net debt	Borrowings including pension liability and estimated earn-outs from acquisitions, less cash and cash equivalents.
Net capital expenditures	Purchases less sales of intangible assets, and of property, plant and equipment, excluding those included in acquisitions and divestments of subsidiaries and operations.
Net debt/equity ratio	Interest-bearing net debt divided by shareholders' equity.
Operating capital	Interest-bearing net debt and shareholders' equity.
Return on equity	Net profit for the period divided by average equity per quarter.
Return on operating capital	EBITA as a percentage of average operating capital per quarter.

Indutrade in brief

Indutrade markets and sells components, systems and services with a high-tech content to industrial customers in selected niches. The Group creates value for its customers by structuring the value chain and increasing the efficiency of its customers' use of technological components and systems. For the Group's suppliers, value is created through the offering of an efficient sales organisation with high technical expertise and well developed customer relations.

Indutrade's business is distinguished by the following factors, among others:

• High-tech products for recurring needs
• Growth through a structured and tried-and-tested acquisition strategy
• A decentralised organisation characterised by an entrepreneurial spirit.

The Group is structured into five business areas:

Engineering & Equipment, Flow Technology, Fluids & Mechanical Solutions, Industrial Components and Special Products.

The Group's financial targets (per year across a business cycle) are to grow by 10%, to attain a minimum EBITA margin of 10% and a return on operating capital exceeding 25%.