NAXS — Interim / Quarterly Report 2014

Jul 17, 2014

NAXS Nordic Access Buyout Fund AB (publ) Interim Report January – June 2014

First half-year 2014

• Net profit for the period amounted to MSEK 44.7 (20.3).
• Earnings per share amounted to SEK 3.00 (1.36).
• Net asset value amounted to MSEK 667 (SEK 44.86 per share) at June 30, 2014, compared to MSEK 654 (SEK 43.92 per share) at year-end 2013.
• Net cash amounted to MSEK 128 (SEK 8.59 per share) at June 30, 2014, compared to MSEK 131 (SEK 8.80 per share) at year-end 2013.

Second quarter 2014

• Net profit/loss for the quarter amounted to MSEK 10.9 (25.0).
• Earnings per share amounted to SEK 0.73 (1.68).
• NAXS paid a dividend of SEK 2.00 per share for the fiscal year 2013.

Comments by the CEO

There were two highlights for NAXS during the second quarter: first, the 2014 annual general meeting approved the payment of a dividend of SEK 2.00 per share in May; second, the NAXS share continued on its positive trajectory and traded with a premium to NAV during most of the quarter, making the Company one of the best performers in the listed private equity sector in Europe. These developments, as well as our confidence in the quality of our portfolio, continue to foster our positive views on NAXS' prospects.

Lennart Svantesson

Financial summary

	2014 1/1–6/30	2013 1/1–6/30	2014 4/1–6/30	2013 4/1–6/30
Net profit/loss for the period, KSEK	44 656	20 281	10 876	24 998
			2014	2013
			6/30	12/31
Private equity fund investments, KSEK			537 832	522 428
Private equity fund investments in % of equity			81	80
Remaining commitments, KSEK			156 579	163 776
Total exposure to private equity fund investments, KSEK			694 411	686 204
Net cash, KSEK			127 840	131 008
Private equity fund investments per share, SEK			36.16	35,09
Net cash per share, SEK			8.59	8.80
Net asset value per share, SEK			44.86	43.92
Share price, SEK			47.10	38.80

Operations

NAXS Nordic Access Buyout Fund AB (publ) ("NAXS" or the "Company") is an investment company listed on the NASDAQ OMX Stockholm exchange and focusing on investments in Nordic buyout funds.

The objective is to make the Nordic private equity market accessible for a broader range of investors, while offering liquidity through the Company's publicly traded shares. Operations commenced on April 17, 2007, and the Company was listed on First North on May 14, 2007, where it traded until its change of listing to the NASDAQ OMX Stockholm on June 8, 2010.

NAXS is the Group's parent company and is headquartered in Stockholm. In addition to the parent company, the Group consists of an operational Danish subsidiary, NAXS Nordic Access Buyout A/S, headquartered in Copenhagen, and a Norwegian subsidiary, NAXS Nordic Access Buyout AS, headquartered in Oslo. The Danish subsidiary operates as the holding company for the Group's private equity fund investments.

Naccess Partners AB has been contracted as the investment advisor to the Danish subsidiary.

Market review

Private equity activity continued at a relatively high level in the Nordic region during the second quarter of 2014, as buyout managers are making use of the dry powder at their disposal to acquire new companies and are also seizing the opportunity of generally positive market conditions to divest assets. In addition, accommodating credit markets are favorable to the financing of new acquisitions, as well as to distributions to private equity investors under the form of recapitalizations.

Fund portfolio

As of June 30, 2014, NAXS had commitments to 8 underlying funds.

At the end of the reporting period:

• private equity fund investments amounted to MSEK 538, which corresponds to 81 percent of the Company's equity;
• remaining commitments amounted to MSEK 157, which can be used by the underlying funds for new investments;
• total exposure to private equity fund investments amounted to MSEK 694, which corresponds to 104 percent of the Company's equity.

Private equity fund investments and total exposure to private equity fund investments (in % of equity)

Evolution of private equity fund investments (in % of equity)

The net asset value (NAV) per share increased by 6.7% during the first half-year of 2014, and by 12.4% during the past 12 months (including the dividends paid).

NAV per share in SEK

Acquisitions and liquidity events

During the second quarter of 2014, NAXS' underlying funds signed or closed 1 new acquisition, with Intera Fund II purchasing Silmäasema, a Finnish optical product and services provider.

Portfolio Company	Sector	Geography	Fund
Silmäasema	Healthcare	Finland	Intera Fund II

3 liquidity events occurred during the second quarter of 2014, with 2 exits and 1 recapitalization.

Apax Europe VII signed during the quarter an agreement for the divestment of Tnuva, a dairy manufacturer acquired in 2008, and for the divestment of Advantage Sales & Marketing, a sales and marketing agency acquired in 2010. Both transactions are expected to close later in the year.

Portfolio Company	Sector	Year of initial investment	Fund
Advantate Sales & Marketing	Services	2010	Apax Europe VII
Tnuva	Dairy industry	2008	Apax Europe VII

FSN Capital III proceeded during the quarter to a recapitalization of a portfolio company acquired in 2013.

As of June 30, 2014, NAXS underlying funds had acquired a total of 101 companies, 20 of which had been fully divested. The 20 exits have generated gross average returns of 21% per year.

No. of portfolio companies acquired per year (exited companies in grey)

• 101 portfolio companies acquired since inception
• 20 companies fully exited
• Average holding period of the remaining 81 portfolio companies is approx. 3.5 years

No of new portfolio companies	12	16	12	18	16	15	9	3	101
No of exits during the period				4		4	10	2	20
No of companies acquired in the year that are now exited	6	6	3	2	1				18

2007 2008 2009 2010 2011 2012 2013 2014 Total

June 30, 2014

• Total exposure to private equity fund investments: 104 % of total equity
• Private equity fund investments: 81 % of total equity
• Number of full exits since inception: 20
• Average gross returns generated by the 20 full exits since inception: 21% per year

Portfolio composition/diversification

As of June 30, 2014, NAXS provided the following exposure to the private equity buyout sector:

8 funds from 6 managers

Fund	Commitment Year	Commitment Currency	Initial Commitment Amount (in 000s)
Apax Europe VII LP	2007	EUR	15,000
FSN Capital III LP	2008	EUR	10,000
Herkules Private Equity Fund III LP	2008	NOK	40,000
Intera Fund I KY	2007	EUR	7,000
Intera Fund II KY	2011	EUR	7,250
Nordic Capital Fund VII LP	2008	EUR	20,000
Valedo Partners Fund I AB	2007	SEK	60,000
Valedo Partners Fund II AB	2011	SEK	65,000

3 different fund vintages and a diversification in terms of size segments, with small cap being the largest, as illustrated below (based on current commitments):

81 portfolio companies (remaining after 20 exits) acquired over a period of approx. 7 years, with the 10 largest holdings accounting for less than 30% of the total equity and no single portfolio company accounting for more than 10% of the total equity.

a diversification per geography and sector as illustrated below (based on the fair value of the current portfolio companies):

Underlying funds

Summary information regarding NAXS' underlying funds is provided below:

Fund	Fund size	Segment		Vintage Geographic focus	# of portfolio companies	# of exited portfolio companies
Valedo I	MSEK 1,000	small cap	2007	Sweden	5	4
Intera I	MEUR 125	small cap	2007	Finland	5	2
Apax VII	MEUR 11,000	large cap	2008	Europe /Global	23	10
FSN III	MEUR 375	mid cap	2008	Norway /Nordic	10	0
Herkules III	MNOK 6,000	mid cap	2008	Norway /Nordic	9	2
Nordic Capital VII	MEUR 4,300	mid/large cap	2008	Primarily Nordic	16	2
Intera II	MEUR 200	small cap	2011	Finland	8	0
Valedo II	MSEK 2,000	small cap	2011	Sweden	5	0

Group

Financial performance, Second quarter 2014

Operating profit

The operating profit amounted to KSEK 10,829 (25,407) for the quarter. The operating profit includes a change in value of KSEK 14,442 (28,130). Operating expenses amounted to KSEK 3,613 (2,723).

Financial performance, First half-year 2014

Operating profit

The operating profit amounted to KSEK 44,116 (19,232) for the interim period. The operating profit includes a change in value of KSEK 50,240 (24,202). The currency effects are included in the changes in value, which amounted to KSEK 13,468 (4,883) in total for the period. Operating expenses amounted to KSEK 6,124 (4,970).

January 1–June 30, 2014

Changes in value of private equity fund investments: KSEK 50,240, whereof currency effects on private equity fund investments amounted to KSEK 13,468.

Financial items

Financial items net totaled KSEK 324 (161) for the interim period. The net interest income amounted to KSEK 422 (352). Exchange rate profit amounted to KSEK -98 (-191).

Tax and net profit

The Group's profit after financial items for the interim period amounted to KSEK 44,440 (19,393). Income taxes amounted to KSEK 216 (888). Net profit after tax amounted to KSEK 44,656 (20,281). Earnings per share were SEK 3.00 (1.36).

Investments, financing and liquidity

Private Equity Fund Investments

During the interim period, net repayments (net investments) in private equity funds amounted to KSEK 12,174 (31,480). As of June 30, 2014, private equity fund investments amounted to KSEK 537,832 (536,956).

June 30, 2014

Private equity fund investments per share: SEK 36.16

Financing

The Group is financed with shareholders' equity. Shareholders' equity amounted to KSEK 667,313 (653,803) at the end of the interim period, corresponding to SEK 44.86 (43.92) per share and an equity/asset ratio of 100 (100) percent. During the interim period 13,563 shares were repurchased, amounting to KSEK 578.

June 30, 2014

Equity per share: SEK 44.86

Net cash

At the end of the interim period, net cash amounted to KSEK 127,840 (131,008), which corresponds to SEK 8.59 (8.80) per share. During the period, cash and cash equivalents were invested in interest-bearing instruments or held on interest-bearing bank accounts, in accordance with the Company's policy.

June 30, 2014

Net cash per share: SEK 8.59

Significant risks and uncertainty factors

Significant risks and uncertainty factors are described in the Annual Report 2013. There has been no significant change in relation to risks and uncertainty factors since the publication of the Annual Report.

Future prospects

Private equity activity in general, and NAXS' portfolio in particular, are expected to exhibit in the coming quarters the same patterns as during the first half-year of 2014.

Parent company

The parent company has not had any sales during the period. The profit/loss after financial items amounted to KSEK 60,464 (-4,046). During the period, dividend from subsidiaries amounting to KSEK 61,470 was received. The Net interest income amounted to KSEK 457 (1,086) and exchange rate profit/loss amounted to KSEK 670 (-3,388). Income tax amounted to KSEK 216 (888). The net profit/loss amounted to KSEK 60,680 (-3,158).

Organization

The Company's CEO is Lennart Svantesson. The Board of Directors consists of John D. Chapman (chairman), Tony Gardner-Hillman, Ramanan Raghavendran and Andrew Wignall.

The share

The NAXS share was initially listed on First North on May 14, 2007. Since June 8, 2010, the share is traded on the NASDAQ OMX Stockholm. The share trades under the designation "NAXS".

The number of outstanding shares in the Company at the beginning of the year was 14,887,642. During the interim period 13,563 shares were repurchased. The number of outstanding shares at the end of the period was 14,874,079.

At the end of the interim period, the NAXS share price was SEK 47.10 and the total shareholders' equity per share was SEK 44.86. The Company's market capitalization was MSEK 701 and the number of shareholders was 586.

Evolution of the share price during first half-year 2014

Accounting principles

The condensed consolidated financial statements have been established in accordance with the International Financial Reporting Standards (IFRS), as recognized by the EU. This report has been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Reporting legislation.

The accounting principles applied in this interim report are described in the Annual Report 2013.

The Parent Company follows the Swedish Annual Reporting legislation and the Swedish Financial Reporting Board RFR 2 for legal entities, which provides that the IFRS principles shall apply.

Financial information Contact persons

Interim Report (9 months): October 22, 2014

Lennart Svantesson, CEO +46 73 311 00 11 lennart.svantesson@naxs.se

Ticker codes

NAXS SS in Bloomberg NAXS.ST in Reuters

Gösta Lundgren, CFO +46 70 710 47 88 gosta.lundgren@naxs.se

NAXS Nordic Access Buyout Fund AB discloses the information provided herein pursuant to the Swedish Securities Markets Act.

The report was submitted for publication at 08.30 CET on July 17, 2014.

This report is an in-house translation of the original report in Swedish

Interim Report Jan-June, 2014 Page 13 of 18

The undersigned declares that the half-year report provides a true and fair overview of the Parent Company's and the Group's operations, their financial position and performance, and describes material risks and uncertainties facing the Parent Company and other companies in the Group.

Stockholm, July 17, 2014

John D. Chapman Chairman

Tony Gardner-Hillman Director

Ramanan Raghavendran Director

Andrew Wignall Director

Lennart Svantesson Chief Executive Officer

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

This interim report and other information are available on www.naxs.se

NAXS Nordic Access Buyout Fund AB (publ) Corp. Reg. No. 556712-2972 Grev Turegatan 10 114 46 Stockholm, Sweden Tel: +46 8 611 33 25, E-mail: info@naxs.se

Consolidated Income Statement

Amounts in SEK 000s

	2014	2013	2014	2013
	1/1-6/30	1/1-6/30	4/1-6/30	4/1–6/30
Change in value	50 240	24 202	14 442	28 130
Operating costs Note 1	-6 124	-4 970	-3 613	-2 723
Operating profit	44 116	19 232	10 829	25 407
Net financial items	324	161	-1	-59
Profit after financial items	44 440	19 393	10 828	25 348
Income taxes	216	888	48	-350
Net profit	44 656	20 281	10 876	24 998
Earnings per share, SEK*	3.00	1.36	0.73	1.68
Average number of shares, 000s*	14 880	14 902	14 877	14 895
* Basic and diluted

Consolidated Statement of Comprehensive Income

Amounts in SEK 000s

	2014	2013	2014	2013
	1/1-6/30	1/1-6/30	4/1-6/30	4/1–6/30
Net income	44 656	20 281	10 876	24 998
Other comprehensive income
Items which will be reversed to the income statement
Exchange differences	-809	0	104	0
Total comprehensive income	43 847	20 281	10 980	24 998

Consolidated Balance Sheet

Amounts in SEK 000s

	2014	2013
	6/30	12/31
Assets
Private equity fund investments	537 832	522 428
Deferred tax asset	1 630	1 414
Total non-current assets	539 462	523 842
Other receivables	612	204
Cash and cash equivalents	127 840	131 008
Total current assets	128 452	131 212
Total assets	667 914	655 054
Equity	667 313	653 803
Current liabilities	601	1 251
Total equity and liabilities	667 914	655 054

Consolidated Net cash

Amounts in SEK 000s

	2014	2013
	6/30	12/31
Cash, bank and short-term investments	127 840	131 008
Total net cash	127 840	131 008

Consolidated Statement of Changes in Equity Amounts in SEK 000s

	2014	2013	2013
	1/1-6/30	1/1-12/31	1/1-6/30
Equity at the beginning or the period	653 803	609 310	609 310
Repurchase of own shares	-578	-1 194	-913
Dividend	-29 759	-7 447	-7 447
Total comprehensive income for the period	43 847	53 134	20 281
Shareholder's equity at the end of the period	667 313	653 803	621 231

Consolidated Statement of cash flows analysis

Amounts in SEK 000s

	2014	2013
	1/1-6/30	1/1-6/30
Profit after financial items	44 440	19 393
Adjustment for non-cash items, etc.	-27 485	-17 901
Income tax paid	-	-
Cash flow from operating activities before changes in working capital	16 955	1 492
Cash flow changes in working capital	-1 058	-417
Cash flow from operating activities	15 897	1 075
Acquisitions/disposals of private equity fund investments, net	12 174	-31 480
Cash flow from investing activities	12 174	-31 480
Repurchase of own shares	-578	-913
Dividend	-29 759	-7 447
Cash flow from financing activities	-30 337	-8 360
Cash flow during the period	-2 266	-38 765
Cash and cash equivalents, beginning of period *	131 008	122 624
Exchange-rate differences in cash and cash equivalents	-902	-402
Cash and cash equivalents at the end of the period	127 840	83 457

* Including short-term investments

Parent Company Income Statement

Amounts in SEK 000s

	2014	2013	2014	2013
	1/1-6/30	1/1-6/30	4/1-6/30	4/1–6/30
Operating costs	-2 133	-1 743	-1 105	-989
Operating profit/loss	-2 133	-1 743	-1 105	-989
Income from shares in group companies	61 470	-	61 470	-
Net financial items	1 127	-2 303	878	2 575
Profit /loss after financial items	60 464	-4 046	61 243	1 586
Income taxes	216	888	48	-350
Net profit/loss for the period	60 680	-3 158	61 291	1 236

Parent Company Statement of Comprehensive Income Amounts in SEK 000s

	2014	2013	2014	2013
	1/1-6/30	1/1-6/30	4/1-6/30	4/1–6/30
Net profit/loss for the period	60 680	-3 158	61 291	1 236
Total comprehensive income for the period	60 680	-3 158	61 291	1 236

Parent Company Balance Sheet

Amounts in SEK 000s

	2014	2013
	6/30	12/31
Assets
Shares in subsidiaries	481 802	481 802
Receivables on group companies	23 604	22 934
Deferred tax asset	1 630	1 414
Total non-current assets	507 036	506 150
Other receivables	586	273
Cash and cash equivalents	101 310	72 507
Total current assets	101 896	72 780
Total assets	608 932	578 930
Equity	608 595	578 252
Current liabilities	337	678
Total equity and liabilities	608 932	578 930

Parent Company Statement of Changes in equity Amounts in SEK 000s

	2014	2013	2013
	1/1-6/30	1/1–12/31	1/1-6/30
Equity at the beginning of the period	578 252	591 098	591 098
Repurchase of own shares	-578	-1 194	-913
Dividend	-29 759	-7 447	-7 447
Total comprehensive income for the period	60 680	-4 205	-3 158
Shareholder's equity at the end of the period	608 595	578 252	579 580

Note 1

Operating costs Amounts in SEK 000s

	2014	2013	2014	2013
	1/1-6/30	1/1-6/30	4/1-6/30	4/1–6/30
Fee to the investment advisor	-3 602	-3 002	-2 205	-1 539
Carry to the investment advisor	-244	-	0	-
Personnel expenses	-788	-783	-408	-380
Other operating costs	-1 492	-1 185	-1 001	-804
	-6 124	-4 970	-3 613	-2 723

No related party transaction occurred during the period, except for remunerations to the board members and the managing director.

Note 2

Financial assets and liabilities

NAXS' financial instruments consist of fund investments, cash and cash equivalents and accounts payable. Level 3 investments includes only the Company's publicly traded share of the fund holdings / securities of unlisted companies (in some cases, also listed companies). When observable prices are not available for these securities, the fund manager uses one or more valuation techniques (e.g. yield methods or income-based methods), or a combination of techniques, for which sufficient and reliable data are available. Within Level 3, the use of market approach generally consists of earnings multiples of comparable companies, while the use of income-based approach generally consists of the present value of estimated future cash flows, adjusted for liquidity, credit, market and / or other risk factors.

For NAXS, the book value of all financial assets and liabilities corresponds to fair value. All amounts are shown in the reported balance sheets.

Definitions

Cash & cash equivalents Cash, bank and short-term investments

Cash per share Cash & cash equivalents in relation to the number of shares

Commitment The maximum amount that a limited partner agrees to invest in a fund

Current commitments

Acquisition cost for private equity fund investments, plus remaining commitments to private equity funds

Net asset value

The fair value of total assets, less net debt (corresponds to equity)

Net asset value per share (Equity per share) Equity in the relation to the weighted number of shares

Net cash/Net debt

Cash and cash equivalents, short-term investments and interest-bearing current and longterm receivables, less interest-bearing current and long-term liabilities

Private equity fund investments Fair value of investments in private equity funds

Total assets

All assets and liabilities not included in net debt or net cash, which is the same as the balance sheet total, less asset items included in net debt or net cash and less non-interestbearing liabilities

Total exposure to private equity fund investments Private equity funds investments and remaining commitments to private equity funds