NAXS — Interim / Quarterly Report 2018

Oct 19, 2018

NAXS AB (publ) Interim Report January-September 2018

Nine months 2018

• Net profit/loss for the period amounted to MSEK 22.2 (43.4).
• Earnings per share amounted to SEK 1.70 (3.07).
• Net asset value amounted to MSEK 743 (SEK 62.31 per share) at September 30, 2018, compared to MSEK 821 (SEK 60.17 per share) at year-end 2017. The fact that the total net asset value decreased, while the net asset value per share increased is due to the shares repurchases made during the period.
• Net cash amounted to MSEK 277 (SEK 23.26 per share) at September 30, 2018, compared to MSEK 450 (SEK 32.97 per share) at year-end 2017.
• The 2018 Annual General Meeting resolved that a dividend of 2.53 SEK per share to the shareholders for FY 2017.

Third quarter 2018

• Net profit/loss for the quarter amounted to MSEK 10.6 (-16.4).
• Earnings per share amounted to SEK 0.86 (-1.19).
• The Extraordinary General Meeting held on August 30 resolved to cancel the 1,355,340 own shares held by the company

Comments by the CEO

The net asset value per share increased by 2.6% during the third quarter.

NAXS added on its existing position in Awilco Drilling during the quarter, acquiring 31,122 shares on the market.

NAXS continued during the quarter to repurchase its own shares. Notably, the company acquired in July a block representing 5% of the total number of shares. Having reached the maximum legal threshold of 10% of own shares held by the company further to this purchase, NAXS

held an extraordinary shareholders meeting on August 30, where it was resolved to cancel all own shares held by the company. Subsequently, NAXS repurchased in September two blocks of shares representing 1.1% and 1.4% of the total number of shares. During the first 3 quarters of 2018, NAXS has repurchased 12.2% of the total number of shares and, as of the date of its report, NAXS held 303 019 own shares, representing 2.5% of the total number of shares.

Lennart Svantesson

Financial summary

	2018	2017	2018	2017
	1/1–9/30	1/1–9/30	7/1–9/30	7/1–9/30
Net profit/loss for the period, KSEK	22 180	43 403	10 611	-16 426

	2018 09/30	2017 12/31
Private equity fund investments, KSEK	415 242	357 780
Private equity fund investments in % of equity	56	44
Remaining commitments, KSEK	100 415	92 928
Total exposure to private equity fund investments, KSEK	515 657	450 708
Other investments, KSEK	50 813	13 930
Net cash, KSEK	277 165	449 671
Private equity fund investments per share, SEK	34.85	26.24
Other investments per share, SEK	4.26	1.02
Net cash per share, SEK	23.26	32.97
Net asset value per share, SEK	62.31	60.17
Share price, SEK	49.50	50.25

Operations

NAXS AB (publ) ("NAXS" or the "Company") is a company listed on NASDAQ Stockholm and investing primarily in private equity funds with a Nordic focus. NAXS 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 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

Private equity investment activity in the Nordic region remained largely unaffected by the geopolitical and trade tensions that were felt during the third quarter. However, access to the initial public offering markets became markedly more restricted than during the previous quarters.

Investments

Private equity fund investments

As of September 30, 2018, NAXS had commitments to 11 private equity funds (10 buyout funds and 1 special situations fund):

• private equity fund investments amounted to MSEK 415, which corresponds to 56 percent of the Company's equity;
• remaining commitments amounted to MSEK 100.

Other investments

As of September 30, 2018, NAXS held 2 direct investments in listed shares:

• 350,000 shares in Scout Gaming Group AB (publ), a provider of Fantasy Sport and Daily Fantasy Sports solutions to online gaming operators. As of September 30, 2018, the holding of NAXS in Scout Gaming Group was valued at MSEK 14.7;
• 720,604 shares in Awilco Drilling Plc, a UK-based drilling contractor. The shares are listed on the Oslo Stock Exchange. As of September 30, 2018, the holding of NAXS in Awilco Drilling was valued at MSEK 36,1.

Exposure to private equity fund investments and other investments

As of September 30, 2018, the total exposure to private equity fund investments and other investments amounted to MSEK 566, which corresponds to 77 percent of the Company's equity

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

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

The net asset value (NAV) per share increased by 2.6% during the third quarter of 2018, and by 7.1% over 12 months (including dividend paid).

NAV per share in SEK

New investments, acquisitions and liquidity events

Investments

During the third quarter, NAXS acquired 31,122 additional shares in Awilco Drilling PLC on the market for a total amount of KSEK 1,319.

Acquisition

1 new investment was made by underlying funds during the quarter, with the JAB Consumer Fund II gaining an exposure to JAB Beech, a JAB Holding's global consumer goods company.

Company	Sector	Country	Fund
JAB Beech	Consumer goods & services	Global	JAB Consumer Fund II

Liquidity events

1 full exit took place during the fourth quarter, with Nordic Capital Fund VII divesting its remaining shares in Saferoad, a provider of road safety and infrastructure solutions, which it had initially listed on the Oslo Stock Exchange in 2017.

Portfolio Company	Sector	Year of initial investment	Fund
Saferoad	Building & construction	2008	Nordic Capital Fund VII

As of September 30, 2018, NAXS underlying funds had acquired a total of 127 companies, 73 of which had been fully divested. These 73 exits have generated an average gross IRR of 20%. The average holding period for the remaining 54 portfolio companies is approx. 4.25 years.

No. of portfolio companies acquired per year

September 30, 2018

• Total exposure to private equity fund investments: 69% of total equity
• Private equity fund investments: 56% of total equity
• Number of full exits since inception: 73
• Average gross IRR since inception generated by the 73 full exits: 20%

Portfolio composition/diversification

As of September 30, 2018, NAXS provided the following exposure:

• 11 private equity funds (10 buyout funds and 1 special situations fund) from 8 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 III LP	2008	NOK	40,000
Intera Fund I KY	2007	EUR	7,000
Intera Fund II KY JAB Consumer Fund – Global	2011	EUR	7,250
Consumer Brands II	2018	USD	5,000*
Mimir Invest AB	2017	SEK	50,000
Nordic Capital Fund VII LP	2008	EUR	20,000
Nordic Capital CV1	2018	EUR	14,654
Valedo Partners Fund I AB	2007	SEK	60,000
Valedo Partners Fund II AB	2011	SEK	65,000

* as part of a consortium

• 5 different fund vintages and a diversification in terms of size segments, as illustrated below (based on current commitments):

• 54 portfolio companies (remaining after 73 exits) acquired by underlying funds over a period of approx. 11 years, with the 10 largest holdings accounting for less than 36% of the total equity and no single portfolio company accounting for more than 5.5% of the total equity.

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

• direct investments in 2 listed companies:

Company	Sector	Exchange	Timing of initial investment	Acquisition cost
Scout Gaming Group	iGaming	NASDAQ First North	Q4 2017	MSEK 8
Awilco Drilling	Energy	Oslo Exchange	Q1 2018	MNOK 25

Underlying funds

Summary information regarding NAXS' underlying funds is provided below:

Fund	Fund size	Segment	Vintage	Geographic focus	# of portfolio companies	# of exits
Apax Europe VII	MEUR 11,000	large cap	2008	Europe/Global	11	22
FSN Capital III	MEUR 375	mid cap	2008	Norway/Nordic	2	8
Herkules PE III	MNOK 6,000	mid cap	2008	Norway/Nordic	4	7
Intera Partners I	MEUR 125	small cap	2007	Finland	3	4
Intera Partners II	MEUR 200	small cap	2011	Finland	8	4
JAB Consumer Fund – GCB II	MEUR 5,000	large cap	2018	Global	2	0
Nordic Capital VII	MEUR 4,300	mid/large cap	2008	Primarily Nordic	2	18
Nordic Capital CV1	MEUR 2,500	mid/large cap	2018	Primarily Nordic	9	0
Mimir Invest	<msek 500<="" td="">	small cap	2017	Sweden/Nordic	3	0	small cap	2017	Sweden/Nordic	3	0
Valedo Partners I	MSEK 1,000	small cap	2007	Sweden	0	9
Valedo Partners II	MSEK 2,000	small cap	2011	Sweden	10	1

Group

Financial performance, Third quarter 2018

Operating profit/loss

The operating profit/loss amounted to KSEK 10,474 (-16,748) for the quarter. The operating profit/loss includes a change in value of KSEK 13,497 (-13,014), whereof KSEK 11,730 (-13,014) is a change in value of private equity fund investments, and KSEK 1,767 (-) is a change in value of other investments. Operating expenses amounted to KSEK 3,022 (3,734).

Financial performance, Nine months 2018

Operating profit/loss

The operating profit/loss amounted to KSEK 29,873 (43,591) for the interim period. The operating profit/loss includes a change in value of KSEK 42,950 (54,287), whereof KSEK 31,415 (53,781) is a change in value of private equity fund investments and KSEK 11,535 (504) is a change in value of other investments. Realized profit/loss in private equity fund investments amounts to KSEK 35,295 (128,504), and unrealized profit/loss amounted to KSEK -3,880 (-74,723). The currency effects are included in the changes in value and amounted to KSEK 8,347 (3,563) for the interim period. Realized profit/loss in other investments amounts to KSEK 1,230 (-), and unrealized profit/loss amounted to KSEK 10,305 (-). Operating expenses amounted to KSEK 13,077 (10,696).

January 1–September 30, 2018

• Changes in value of private equity fund investments: KSEK 31,415, whereof currency effects on private equity fund investments: KSEK 8,347
• Changes in value of other investments: KSEK 11,535

Financial items

Financial items net totaled KSEK -7,693 (-188) for the interim period. Interest expenses on cash in banks amounted to KSEK -1,482 (-1,525). Exchange rate profit/loss amounted to KSEK -6,211 (1,337).

Tax and net profit

The Group's profit/loss after financial items for the interim period amounted to KSEK 22,180 (43,403). Income taxes amounted to KSEK 0 (0). Net profit/loss after tax amounted to KSEK 22,180 (43,403). Earnings per share were SEK 1.70 (3.07).

Investments, financing and liquidity

Private Equity Fund Investments

During the first half-year, net investments (-)/repayments from (+) private equity funds amounted to KSEK -49,592 (142.444), whereof KSEK 35,295 (128.504) is realized gains. As of September 30, 2017, private equity fund investments amounted to KSEK 415,242 (357,780).

September 30, 2018

Private equity fund investments per share: SEK 34.85

Other investments

During the third quarter, NAXS acquired 31,122 additional shares in Awilco Drillling PLC on the market for a total amount of KSEK 1,319. As of September 30, 2018, Other Investments amounted to KSEK 50,813.

Financing

The Group is financed with shareholders' equity. Shareholders' equity amounted to KSEK 742,564 (820,567) at the end of the interim period, corresponding to SEK 62,31 (60,17) per share and an equity/asset ratio of 100 (100) percent.

September 30, 2018 Equity per share: SEK 62.31

Net cash

At the end of the interim period, net cash amounted to KSEK 277,165 (449,671), which corresponds to SEK 23.26 (32.97) 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.

September 30, 2018

Net cash per share: SEK 23.26

Significant risks and uncertainty factors

Significant risks and uncertainty factors are described in the Annual Report 2017. 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 the market and investment conditions that prevailed during the first three quarters of 2018 will remain largely unchanged until the end of the year.

Parent company

The parent company has not had any sales during the period. The profit/loss after financial items amounted to KSEK 17,901 (10,471). During the period, dividend from subsidiaries amounting to KSEK 20,675 (14,466) was received. The net interest income amounted to KSEK -659 (-889) and exchange rate profit/loss amounted to KSEK 1,100 (-29). Income tax amounted to KSEK 0 (0). The net profit/loss amounted to KSEK 17,901 (10,471).

Organization

The Company's CEO is Lennart Svantesson. The Board of Directors consists of John D. Chapman (chairman), Damhnait Ni Chinneide, Tony Gardner-Hillman and Andrew Wignall, who were re-elected at the 2018 Annual General Meeting.

Nomination Committee

The Nomination Committee consists of Meg Eisner, representing QVT Fund LP, Amaury de Poret representing himself, and NAXS's chairman John D. Chapman. The Nomination Committee can be contacted via e-mail to: chapman.jd@gmail.com.

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 of the year was 13,637,387. During the interim period 1,720,976 shares were repurchased. The number of outstanding shares in the Company at the end of the interim period was 11,916,411. In June and August, the company cancelled 491,761 and 1,355,340 repurchased shares. Prior to such cancellations, there was a total of 14,066,531 shares and voting rights in NAXS. The number of shares and voting rights decreased by a total of 1,847,101 shares through the two share cancellations, further to which a total of 12,219,430 shares and voting rights remained.

At the end of the interim period, the NAXS share price was SEK 49.50 and the total shareholders' equity per share was SEK 62.31. The Company's market capitalization was MSEK 590 and the number of shareholders was 961.

Evolution of the share price to September 30, 2018

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 2017. IFRS 9 och 15 which entered into force on 1 January 2018, have not had a material effect on the Group's financial results and position.

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.

Alternative performance measures

The definitions for the net asset value, net cash/net debt and gross IRR performance measures are provided in the 2017 Annual Report and in the definitions on page 19 of this report. The equity ratio is defined as equity in relation to total assets. These alternative performance measures are essential for the understanding and evaluation of NAXS's business.

Financial information Contact persons

Year-End Report: January 29, 2019 Lennart Svantesson, CEO Annual report 2017: Week 5, 2019 +46 73 311 00 11 Interim Report (3 months): April 25, 2019 lennart.svantesson@naxs.se Annual General Meeting: June 4, 2019 Gösta Lundgren, CFO Interim Report (6 months): July 16, 2019 +46 70 710 47 88 Interim Report (9 months): October 18, 2019 gosta.lundgren@naxs.se

Ticker codes

NAXS SS in Bloomberg NAXS.ST in Reuters

This information is information that NAXS AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 8.30 CET on October 19, 2018.

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

Interim Report January-September 2018 Page 13 of 19

Stockholm, October 19, 2018

John D. Chapman Chairman

Tony Gardner-Hillman Director

Damhnait Ni Chinneide Director

Andrew Wignall Director

Lennart Svantesson Chief Executive Officer

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

	2018	2017	2018	2017
	1/1-9/30	1/1-9/30	7/1-9/30	7/1–9/30
Change in value	42 950	54 287	13 497	-13 014
Operating costs Note 1	-13 077	-10 696	-3 022	-3 734
Operating profit/loss	29 873	43 591	10 474	-16 748
Net financial items	-7 693	-188	136	322
Profit/loss after financial items	22 180	43 403	10 611	-16 426
Income taxes	-	-	-	-
Net profit/loss	22 180	43 403	10 611	-16 426
Attributable to:
Parent company shareholders	22 180	43 403	10 611	-16 426
Earnings per share, SEK*	1,70	3,07	0,86	-1.19
Average number of shares, 000s*	13 028	14 125	12 324	13 853
* Basic and diluted

Consolidated Statement of Comprehensive Income

Amounts in SEK 000s

	2018	2017	2018	2017
	1/1-30/9	1/1-30/9	1/7-30/9	1/7-30/9
Net income	22 180	43 403	10 611	-16 426
Other comprehensive income
Items which will be reversed to the income statement
Exchange differences	20 330	-1 106	-602	-3 425
Net income	42 510	42 297	10 009	-19 851
Attributable to:
Parent company shareholders	42 510	42 297	10 009	-19 851
Total comprehensive income	42 510	42 297	10 009	-19 851

Consolidated Balance Sheet Amounts in SEK 000s

	2018	2017
	9/30	12/31
Assets
Private equity fund investments	415 242	357 780
Other financial investments	50 813	13 930
Total non-current assets	466 055	371 710
Other receivables	233	161
Cash and cash equivalents	277 165	449 671
Total current assets	277 398	449 832
Total assets	743 453	821 542
Equity	742 564	820 567
Current liabilities	889	975
Total equity and liabilities	743 453	821 542

Consolidated Net cash

Amounts in SEK 000s

	2018	2017
	9/30	12/31
Cash, bank and short-term investments	277 165	449 671
Total net cash	277 165	449 671

Consolidated Statement of Changes in Equity Amounts in SEK 000s

	2018	2017	2017
	1/1-9/30	1/1-12/31	1/1-9/30
Equity at the beginning or the year	820 567	841 816	841 816
Repurchases of own shares	-88 304	-60 234	-59 915
Dividend	-32 209	-	-
Total comprehensive income for the period	42 510	38 985	42 297
Shareholder's equity at the end of the period	742 564	820 567	824 198

Consolidated Statement of cash flows analysis Amounts in SEK 000s

	2018	2017
	1/1-9/30	1/1-9/30
Profit/loss after financial items	22 180	43 403
Adjustment for non-cash items, etc.	-457	73 620
Income tax paid	-	-
Cash flow from operating activities before changes in working capital	21 723	117 023
Cash flow changes in working capital	-168	148
Cash flow from operating activities	21 555	117 171
Acquisitions/disposals of private equity fund
investments, net	73 945	13 939
Cash flow from investing activities	-73 945	13 939
Repurchases of own shares	-88 304	-59 915
Dividend	-32 209	-
Cash flow from financing activities	-120 513	-59 915
Cash flow during the period	-172 903	71 195
Cash and cash equivalents, beginning of the year *	449 671	383 807
Exchange-rate differences in cash and cash
equivalents	397	-3
Cash and cash equivalents at the end of the period*	277 165	454 999

* Including short-term investments

Parent Company Income Statement

Amounts in SEK 000s

	2018	2017	2018	2017
	1/1-9/30	1/1-9/30	7/1-9/30	7/1-9/30
Operating costs	-3 216	-3 077	-1 018	-714
Operating profit/loss	-3 216	-3 077	-1 018	-714
Income from shares in group companies	20 675	14 466	-	-
Net financial items	441	-918	-507	-586
Profit /loss after financial items	17 900	10 471	-1 524	-1 299
Income taxes	-	-	-	-
Net profit/loss for the period	17 900	10 471	-1 524	-1 299

Parent Company Statement of Comprehensive Income Amounts in SEK 000s

	2018	2017	2018	2017
	1/1-9/30	1/1-9/30	7/1-9/30	7/1-9/30
Net profit/loss for the period	17 900	10 471	-1 524	-1 299
Total comprehensive income for the period	17 900	10 471	-1 524	-1 299

Parent Company Balance Sheet

Amounts in SEK 000s

	2018	2017
	9/30	12/31
Assets
Shares in subsidiaries	481 802	481 802
Receivables on group companies	26 413	25 312
Total non-current assets	508 215	507 114
Other receivables	291	161
Cash and cash equivalents	182 530	286 330
Total current assets	182 821	286 491
Total assets	691 036	793 605
Equity	690 317	792 930
Current liabilities	719	675
Total equity and liabilities	691 036	793 605

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

	2018	2017	2017
	1/1-9/30	1/1–12/31	1/1-9/30
Equity at the beginning of the year	792 930	843 372	843 372
Repurchases of own shares	-88 304	-60 234	-59 915
Dividend	-32 209	-	-
Total comprehensive income for the period	17 900	9 792	10 471
Shareholder's equity at the end of the period	690 317	792 930	793 928

Note 1

Operating costs Amounts in SEK 000s

	2018	2017	2018	2017
	1/1-9/30	1/1-9/30	7/1-9/30	7/1-9/30
Fee to the investment advisor	-5 376	-6 682	-1 551	-2 922
Carried interest to the investment advisor	-4 018	-409	-337	-
Personnel expenses	-1 328	-1 190	-418	-418
Other operating costs	-2 355	-2 415	-716	-394
	-13 077	-10 696	-3 022	-3 734

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

Buyout fund

A private equity fund, whose strategy is to acquire a controlling interest in the targeted companies

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

Cash per share

Cash & cash equivalents in relation to the number of outstanding shares at the end of the period

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. The calculation includes all payments to the funds and all distributions from the funds since their inception, but excludes the management fees and carried interest

Net asset value (NAV)

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

Net asset value (NAV) per share

The fair value of total assets, less net debt (corresponds to equity) in relation to the number of outstanding shares at the end of the period

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

Other investments Investments in financial instruments other than private equity funds

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

Special situations fund

A private equity fund, whose strategy is to acquire companies, where an active ownership is required, such as under-performing companies, and/or imply complex transactions, such as carve-outs from larger conglomerates.

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 and other investments Private equity funds investments and remaining commitments to private equity funds, as well as other investments

THIS IS A TRANSLATION FROM THE SWEDISH ORIGINAL

Review report

NAXS AB (publ), corporate identity number 556712-2972

Introduction

We have reviewed the condensed interim report for NAXS AB (publ) as at September 30, 2018 and for the nine months period then ended. The Board of Directors and the Managing Director 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 International Standard on Review Engagements, ISRE 2410 Review of Interim Financial Statements 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 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 in accordance with the Swedish Annual Accounts Act regarding the Parent Company.

Stockholm

Ernst & Young AB

Jesper Nilsson Authorized Public Accountant