NAXS — Interim / Quarterly Report 2016

Jul 19, 2016

NAXS AB (publ) Interim Report January-June 2016

First half-year 2016

• Net profit/loss for the first half-year amounted to MSEK 45.2 (58.4).
• Earnings per share amounted to SEK 3.04 (3.92).
• Net asset value amounted to MSEK 793 (SEK 53.30 per share) at June 30, 2016, compared to MSEK 785 (SEK 52.78 per share) at year-end 2015.
• Net cash amounted to MSEK 333 (SEK 22.37 per share) at June 30, 2016, compared to MSEK 351 (SEK 23.60 per share) at year-end 2015.

Second quarter 2016

• Net profit/loss for the quarter amounted to MSEK 20.0 (34.6).
• Earnings per share amounted to SEK 1.35 (2.33).
• NAXS paid a dividend of SEK 2.50 per share for the fiscal year 2015.

Comments by the CEO

NAXS continued to grow its net asset value during the second quarter, increasing it by 2.4% including the dividend paid.

The Annual General Meeting which took place on June 1 approved the payment of a dividend of SEK 2.50 per share for FY 2015. The dividend represents 4.7% of the net asset value per share at December 31, 2015 and an increase of over 8% in comparison to the dividend paid for FY 2014. With the FY 2015 dividend, NAXS has distributed in excess of SEK 7.70 per share over the last 5 years through dividends and share buy

backs.

The Annual General Meeting also approved the change of the Company's name from NAXS Nordic Access Buyout Fund AB to NAXS AB.

Lennart Svantesson

Financial summary

	2016	2015	2016	2015
	1/1–6/30	1/1–6/30	4/1–6/30	4/1–6/30
Net profit/loss for the period, KSEK	45 208	58 362	20 014	34 585

	2016 06/30	2015 12/31
Private equity fund investments, KSEK	460 642	434 246
Private equity fund investments in % of equity	58	55
Remaining commitments, KSEK	80 495	104 748
Total exposure to private equity fund investments, KSEK	541 137	538 994
Net cash, KSEK	332 705	350 970
Private equity fund investments per share, SEK	30.98	29.20
Net cash per share, SEK	22.37	23.60
Net asset value per share, SEK	53.30	52.78
Share price, SEK	48.10	54.00

Operations

NAXS AB (publ) ("NAXS" or the "Company") is an investment company listed on NASDAQ Stockholm. NAXS primarily invests in private equity funds with a Nordic focus, but may also make direct investments or co-investments alongside private equity or other alternative assets funds. In addition, NAXS may, to a limited extent, make other types of investments.

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 NASDAQ 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 investments.

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

Market review

Volatility on the financial and credit markets continued to be high during the second quarter, and surged as a result of the UK vote to leave the European Union. Prior to the vote, the IPO window remained open and was used by private equity managers to divest companies during the quarter, as reflected in NAXS' s portfolio.

Fund portfolio

As of June 30, 2016, NAXS had commitments to 8 underlying funds.

At the end of the reporting first quarter:

• private equity fund investments amounted to MSEK 461, which corresponds to 58 percent of the Company's equity;
• remaining commitments amounted to MSEK 80;
• total exposure to private equity fund investments amounted to MSEK 541, which corresponds to 68 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 2.4% during the second quarter of 2016, and by 7.2% over 12 months (including the dividend paid).

NAV per share in SEK

Acquisitions and liquidity events

Acquisitions

No new acquisition was announced during the quarter, although a number of add-on acquisitions were completed.

Liquidity events

2 new full exits were announced during the quarter, with Valedo I signing the divestment of plastic surgery clinics chain Akademikliniken, and Herkules III signing the divestment of Harding, a lifeboats supplier. Nordic Capital also fully exited Thule, which it had initially listed on Nasdaq Stockholm in November 2014, while Intera sold its remaining shares in Consti, which had initially listed on Nasdaq Helsinki in December 2015.

Portfolio Company	Sector	Year of initial investment	Fund
Akademikliniken	Healthcare	2011	Valedo I
Consti	Building & Construction	2008	Intera I
Harding	Industry	2013	Herkules III
Thule	Consumer goods	2010	Nordic Capital VII

In addition, Nordic Capital VII successfully listed during the quarter Resurs Holding on Nasdaq Stockholm, and Tokmanni on Nasdaq Helsinki.

As of June 30, 2016, NAXS underlying funds had acquired a total of 110 companies, 41 of which had been fully divested. These 41 exits have generated an average gross IRR of 23%.

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

• 61 portfolio companies acquired since inception
• 41 companies fully exited
• Average holding period of the remaining 69 portfolio companies is approx. 4.7 years

		2007 2008 2009		2010	2011		2012 2013			2014 2015 2016 Total
No of new portfolio companies	12	16	12	18	16	15	9	7	4	1	110
No of exits during the year				4		4	11	9	9	4	41
No of companies acquired in the year that are now fully exited	7	10	6	7	5	3	3				41

June 30, 2016

• Total exposure to private equity fund investments: 68% of total equity
• Private equity fund investments: 58% of total equity
• Number of full exits since inception: 41
• Average gross IRR generated by the 41 full exits since inception: 23%

Portfolio composition/diversification

As of June 30, 2016, NAXS provided the following exposure:

8 buyout 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):

69 portfolio companies (remaining after 41 exits) acquired over a period of approx. 9 years, with the 10 largest holdings accounting for less than 32% of the total equity and no single portfolio company accounting for more than 8% 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	3	6
Intera I	MEUR 125	small cap	2007	Finland	3	4
Apax VII	MEUR 11,000	large cap	2008	Europe/Global	19	16
FSN III	MEUR 375	mid cap	2008	Norway/Nordic	5	5
Herkules III	MNOK 6,000	mid cap	2008	Norway/Nordic	6	5
Nordic Capital VII	MEUR 4,300	mid/large cap	2008	Primarily Nordic	15	3
Intera II	MEUR 200	small cap	2011	Finland	11	1
Valedo II	MSEK 2,000	small cap	2011	Sweden	7	1

Group

Financial performance, Second quarter 2016

Operating profit

The operating profit amounted to KSEK 20,521 (34,632) for the quarter. The operating profit includes a change in value of KSEK 23,890 (37,721). Operating expenses amounted to KSEK 3,369 (3,089).

Financial performance, First half-year 2016

Operating profit/loss

The operating profit/loss amounted to KSEK 46,684 (58,280) for the first half-year. The operating profit/loss includes a change in value of private equity fund investments of KSEK 53,066 (64,373). The currency effects are included in the changes in value, and amounted to KSEK 8,031 (-9,896) for the first half-year. Operating expenses amounted to KSEK 6,382 (6,093).

January 1 – June 30, 2016

Changes in value of private equity fund investments: KSEK 53,066, whereof currency effects on private equity fund investments KSEK 8,031.

Financial items

Financial items net totaled KSEK -1,476 (82) for the first half-year. The net interest income amounted to KSEK -762 (137). Exchange rate profit/loss amounted to KSEK -714 (-55).

Tax and net profit

The Group's profit/loss after financial items for the first half-year amounted to KSEK 45,208 (58,362). Income taxes amounted to KSEK 0 (0). Net profit/loss after tax amounted to KSEK 45,208 (58,362). Earnings per share were SEK 3.04 (3.92).

Investments, financing and liquidity

Private Equity Fund Investments

During the first half-year, net repayments from private equity funds amounted to KSEK 1,720 (24,147). As of June 30, 2016, private equity fund investments amounted to KSEK 460,642 (525,691).

June 30, 2016

Private equity fund investments per share: SEK 30.98

Financing

The Group is financed with shareholders' equity. Shareholders' equity amounted to KSEK 792,604 (784,768) at the end of the interim period, corresponding to SEK 53.30 (52.78) per share and an equity/asset ratio of 100 (100) percent.

June 30, 2016 Equity per share: SEK 53.30

Net cash

At the end of the interim period, net cash amounted to KSEK 332,705 (350,970), which corresponds to SEK 22.37 (23.60) per share. During the first half-year, 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, 2016

Net cash per share: SEK 22.37

Significant risks and uncertainty factors

Significant risks and uncertainty factors are described in the Annual Report 2015. There has been no significant change in relation to risks and uncertainty factors since the publication of the Annual Report.

Future prospects

NAXS expects that market volatility will remain high in the coming quarters, which could lead to a slowdown in exits and to a possible downward adjustment in private equity valuations.

Parent company

The parent company has not had any sales during the first half-year. Operating profit/loss amounted to KSEK -1,880 (-1 867). The net interest income amounted to KSEK -225 (303) and exchange rate profit/loss amounted to KSEK 798 (-815). Income tax amounted to KSEK 0 (0). The net profit/loss amounted to KSEK 1,307 (-2,379).

Organization

The Company's CEO is Lennart Svantesson. The Board of Directors consists of John D. Chapman (chairman), Tony Gardner-Hillman 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 NASDAQ Stockholm. The share trades under the designation "NAXS".

The number of outstanding shares in the Company at the beginning and end of the interim period was 14,869,552.

At the end of the interim period, the NAXS share price was SEK 48.10 and the total shareholders' equity per share was SEK 53.30. The Company's market capitalization was MSEK 715 and the number of shareholders was 811.

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 report are described in the Annual Report 2015. 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

Lennart Svantesson, CEO

lennart.svantesson@naxs.se

+46 73 311 00 11

Interim Report (9 months): October 21, 2016

Ticker codes

NAXS SS in Bloomberg NAXS.ST in Reuters

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

This information is information that Naxs AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out above, at 8.30 CET on July 19, 2016.

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

The undersigned declare 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 19, 2016

John D. Chapman Chairman

Tony Gardner-Hillman Director

Andrew Wignall Director

Lennart Svantesson Chief Executive Officer

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

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

NAXS 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

	2016	2015	2016	2015
	1/1-6/30	1/1-6/30	4/1-6/30	4/1–6/30
Change in value	53 066	64 373	23 890	37 721
Operating costs Note 1	-6 382	-6 093	-3 369	-3 089
Operating profit/loss	46 684	58 280	20 521	34 632
Net financial items	-1 476	82	-508	-47
Profit/loss after financial items	45 208	58 362	20 014	34 585
Income taxes	-	-	-	-
Net profit/loss	45 208	58 362	20 014	34 585
Earnings per share, SEK*	3,04	3.92	1,35	2.33
Average number of shares, 000s Basic and diluted	14 870	14 870	14 870	14 870

Consolidated Statement of Comprehensive Income

Amounts in SEK 000s

	2016	2015	2016	2015
	1/1-6/30	1/1-6/30	4/1-6/30	4/1–6/30
Net income	45 208	58 362	20 014	34 585
Other comprehensive income
Items which will be reversed to the income statement
Exchange differences	-198	-1 408	-909	1 436
Total comprehensive income	45 010	56 954	19 105	36 021
Consolidated Balance Sheet Amounts in SEK 000s
	2016	2015
	6/30	12/31
Assets
Private equity fund investments	460 642	434 246
Total non-current assets	460 642	434 246
Other receivables	250	114
Cash and cash equivalents	332 705	350 970
Total current assets	332 955	351 084
Total assets	793 597	785 330
Equity	792 604	784 768

Current liabilities 993 562 Total equity and liabilities 793 597 785 330

Consolidated Net cash Amounts in SEK 000s

	2016	2015
	6/30	12/31
Cash, bank and short-term investments	332 705	350 970
Total net cash	332 705	350 970

Consolidated Statement of Changes in Equity

Amounts in SEK 000s

	2016	2015	2015
	1/1-6/30	1/1-12/31	1/1-6/30
Equity at the beginning or the year	784 768	751 319	751 319
Dividend	-37 174	-34 200	-34 200
Total comprehensive income for the period	45 010	67 649	56 954
Shareholder's equity at the end of the period	792 604	784 768	774 073

Consolidated Statement of cash flows analysis

Amounts in SEK 000s

	2016	2015
	1/1-6/30	1/1-6/30
Profit/loss after financial items	45 208	58 362
Adjustment for non-cash items, etc.	-27 598	35 914
Income tax paid	-	-
Cash flow from operating activities before changes
in working capital	17 610	94 276
Cash flow changes in working capital	293	-2 749
Cash flow from operating activities	17 903	91 527
Acquisitions/disposals of private equity fund
investments, net	1 720	24 147
Cash flow from investing activities	1 720	24 147
Dividend	-37 174	-34 200
Cash flow from financing activities	-37 174	-34 200
Cash flow during the period	-17 551	81 474
Cash and cash equivalents, beginning of the year *	350 970	167 447
Exchange-rate differences in cash and cash
equivalents	-714	-55
Cash and cash equivalents at the end of the
period	332 705	248 866

* Including short-term investments

Parent Company Income Statement

Amounts in SEK 000s

	2016	2015	2016	2015
	1/1-6/30	1/1-6/30	4/1-6/30	4/1–6/30
Operating costs	-1 880	-1 867	-985	-823
Operating profit/loss	-1 880	-1 867	-985	-823
Net financial items	573	-512	346	-38
Profit /loss after financial items	-1 307	-2 379	-639	-861
Income taxes	-	-	-	-
Net profit/loss for the period	-1 307	-2 379	-639	-861

Parent Company Statement of Comprehensive Income Amounts in SEK 000s

Total comprehensive income for the period	-1 307	-2 379	-639	-861
Net profit/loss for the period	-1 307	-2 379	-639	-861
	1/1-6/30	1/1-6/30	4/1-6/30	4/1–6/30
	2016	2015	2016	2015

Parent Company Balance Sheet

Amounts in SEK 000s

	2016	2015
	6/30	12/31
Assets
Shares in subsidiaries	481 802	481 802
Receivables on group companies	24 222	23 424
Total non-current assets	506 024	505 226
Other receivables	238	114
Cash and cash equivalents	189 820	229 087
Total current assets	190 058	229 201
Total assets	696 082	734 427
Equity	695 532	734 013
Current liabilities	550	414
Total equity and liabilities	696 082	734 427

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

	2016	2015	2015
	1/1-6/30	1/1–12/31	1/1-6/30
Equity at the beginning of the year	734 013	606 456	606 456
Dividend	-37 174	-34 200	-34 200
Total comprehensive income for the period	-1 307	161 757	-2 379
Shareholder's equity at the end of the period	695 532	734 013	569 877

Note 1

Operating costs Amounts in SEK 000s

	2016	2015	2016	2015
	1/1-6/30	1/1-6/30	4/1-6/30	4/1–6/30
Fee to the investment advisor	-4 010	-3 792	-2 045	-1 928
Carried interest to the investment advisor	-	-47	-	-47
Personnel expenses	-855	-830	-443	-416
Other operating costs	-1 518	-1 423	-882	-697
	-6 382	-6 093	-3 370	-3 089

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's 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 market approach generally uses earnings multiples of comparable companies, while the income-based approach generally uses 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

Gross IRR

The internal rate of return generated annually at the underlying private equity funds' level, before the deduction of the management fees and carried interest

Net asset value

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

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