NIBE Industrier — Interim / Quarterly Report 2012

Aug 15, 2012

– world-class solutions in sustainable energy

• § SALES totalled SEK 4,425.1 million (Q2 2011: SEK 3,080.9 million)
• § PROFIT AFTER NET FINANCIAL ITEMS was SEK 385.7 million (SEK 274.3 million)
• § PROFIT AFTER TAX was SEK 288.1 million (SEK 203.9 million)
• § EARNINGS per share totalled SEK 2.62 (SEK 2.17)
• § ACQUISITION OF
• remaining 1.3% of Schulthess Group AG, Switzerland
• Eltwin Group, Denmark

Interim report 2012

1 January – 30 June

Gerteric Lindquist Managing Director and CEO

Financial targets

• § Average annual sales growth of 20%
• § Average operating profit of at least 10% of sales over a full business cycle in each business area
• § Average return on equity of at least 20% after standard deductions for tax over a full business cycle
• § Equity/assets ratio of at least 30%.

Financial calendar

15 August 2012

Interim Report Jan – June 2012

11.00 (C.E.T.) Telephone conference (in English). The CEO presents the interim report by phone and answers questions. Tel. +46 (0)8-505 629 32

15 November 2012 Interim Report Jan – Sept 2012

19 February 2013

Summary of Annual Report 2012

April 2013

Annual Report 2012

15 May 2013

Interim Report Jan – March 2013 Annual General Meeting

Chief Executive's Report

Strong first half – outlook for the year as a whole remains cautiously positive

The NIBE Group grew its business by 43.6% in the first six months of 2012, with organic growth accounting for 2.3%. During the corresponding period last year sales grew by 12.0% and organic growth was 6.8%.

In the first half of the year demand has been uneven in terms of both markets and products. The main reason for this is widespread caution among consumers as a result of the unsettled global economy and uncertainty about how this current state of affairs can be resolved. Demand in Southern Europe has been weak, whereas markets in Germany, North America and Eastern Europe have continued to show good growth. In Sweden demand has fallen significantly below last year's first-half levels, despite the underlying stability in the Swedish economy. The unusually mild winter at the start of the year also had a detrimental effect on sales of our products. Nevertheless, all three business areas have maintained and, in most instances, continued to increase their market share during the reporting period.

The two major acquisitions we made in 2011 have also developed according to plan.

The integration of the Schulthess heating technology group is proceeding as anticipated. The synergy projects are developing well and we are on track to achieve our targets for the anticipated synergies in purchasing, internal product supply and cross-selling by the end of 2013. The acquisition of Alpha-InnoTec (Schulthess) has given NIBE Energy Systems a stronger than ever position in the European heat-pump market, with collaboration between the respective R&D units paving the way towards further accelerating the pace of product development. The washing machine and tumble-dryer segments of Schulthess operations are continuing to deliver good levels of profitability, although the current strength of the Swiss franc is having a negative effect on sales outside Switzerland.

The integration of the element division of Emerson Heating Products has also proceeded as planned. Farreaching changes have been introduced at NIBE Element's North American manufacturing facilities in Mexico to create a larger and more rational production unit to serve the volume sector and three smaller units to manufacture products for industry. In China the two manufacturing units have been merged into just one larger plant for the more rational production of volume products. It is anticipated that these measures will have a positive effect on the business area's operating profit during the second half of the year.

In June agreement was reached on the acquisition of the Danish Eltwin Group. This company, which reports annual sales of some SEK 85 million and an operating margin of approximately 9%, will be consolidated into the NIBE Group with effect from the first quarter of 2013.

Since most of our sales and profits are weighted to the second half of the year, we have again followed our standard practice of using the first six months of the year to build up stocks. In the second half of the year these measures will be supplemented by seasonal working hours to safeguard delivery reliability, productivity levels and quality during the peak season.

Operating profit has risen by 52.2% compared with the first six months of 2011, chiefly as a result of higher sales volumes. Positive trends in terms of productivity and a firm grip on fixed production costs have enabled us to improve our gross margin despite the fact that material costs have been higher than during the corresponding period last year.

To ensure continuity in our marketing, the costs for sales promotion measures have been permitted to rise by more than the increase in sales for the first six months would otherwise warrant. Together with a stronger Swedish krona, this has resulted in a slightly lower operating margin.

Profit after net financial items has, however, risen by 40.6%. In the first half of 2011 net financial items were positively affected by exchange gains of SEK 16.3 million following the repayment of bank loans in foreign currencies. If the effect of this non-recurring item is excluded, earnings for the first six months have actually grown by 49.5%.

When comparing first-half key figures for 2012 and 2011, it should be borne in mind that two – for us, large – corporate acquisitions were made in the second half of 2011.

Investment in the first half of 2012 totalled SEK 88.7 million, all in the form of extensive investments in existing operations. During the corresponding period last year investments amounted to SEK 228.6 million, with SEK 121.3 million of this total invested in existing operations. The rate of investment for 2012 as a whole is expected to be slightly below the planned rate of depreciation.

Outlook for 2012

Previous wording

Our corporate philosophy and our product programme with their focus on sustainability and saving energy are well suited to the times in which we are living.

In terms of markets, most of our exposure is towards countries with strong economies.

Our financial position remains robust, which means that we are well placed to make new acquisitions.

Although the financial markets remain in turmoil, our own strengths, high oil prices and hints of a recovery in optimism in various parts of the world encourage us to be cautiously positive about the prospects for 2012.

New wording

Our corporate philosophy and our product programme with their focus on sustainability and saving energy are well suited to the times in which we are living.

In terms of markets, most of our exposure is towards countries with strong economies.

Our financial position remains robust, which means that we are well placed to make new acquisitions.

If the Swedish krona maintains its current strength throughout the year, this will have a negative effect on both sales and profits. However, our own strengths, high oil prices and signs of some optimism in various parts of the world encourage us to remain cautiously positive about the prospects for 2012.

Markaryd, Sweden – 15 August 2012

Gerteric Lindquist Managing Director and CEO

Sales

Group net sales for the period January–June 2012 totalled SEK 4,425.1 million (Q1–2 2011: SEK 3,080.9 million). This represents overall growth of 43.6% and organic growth for the period of 2.3%. Acquired sales accounted for SEK 1,271.6 million of the total growth in sales of SEK 1,344.2 million.

Profit

Profit for the reporting period after net financial items was SEK 385.7 million. Compared with the figure of SEK 274.3 million for the corresponding period in 2011, this represents a 40.6% growth in profit. However, net financial items for the first quarter last year were affected positively by exchange gains of SEK 16.3 million relating to the repayment of bank loans in foreign currencies. If the effect of this is disregarded, growth in earnings rises to 49.5%.

Return on equity was 17.2% (23.8%).

Acquisitions

In April NIBE acquired the remaining 1.3% of the shares in the Schulthess Group AG for a consideration of SEK 58.6 million through a process of compulsory redemption. In part-payment for 40% of this consideration, a directed issue of 214,201 new class B shares at a price of SEK 102.00 per share was made on 20 April. The remaining 60% of the consideration was paid in cash, reflecting the same acquisition model as that used for NIBE's earlier acquisition of its 98.7% stake in Schulthess. Following the new issue, the total number of NIBE shares has now risen to 110,253,638.

In June NIBE reached agreement on the acquisition of the Danish Eltwin Group, which produces steering and control technology for customers in the energy sector. The Eltwin Group reports annual sales of some SEK 85 million and an operating margin of approximately 9%. It will be consolidated into the NIBE Element business area with effect from the first quarter of 2013.

Investments

Group investments for the period January–June totalled SEK 88.7 million (SEK 228.6 million). In contrast to the corresponding period last year, which included investments of SEK 107.3 million in corporate acquisitions, all investment for the first six months of 2012 has been in existing operations.

Profit after financial items Past nine quarters (in millions of SEK)

Cash flow and financial position

Cash flow from operating activities before changes in working capital amounted to SEK 437.5 million (SEK 230.3 million). Cash flow after changes in working capital was SEK 94.0 million (SEK 11.6 million).

Interest-bearing liabilities totalled SEK 4,965.6 million at the end of the period, compared with SEK 4,850.3 million at the start of the year.

At the end of June, the Group had liquid funds of SEK 1,360.7 million as against SEK 1,659.8 million at the beginning of the year.

The equity/assets ratio at the end of the period was 38.2%, a figure that remains unchanged since the start of the year. The equity/assets ratio at the corresponding point last year was 44.8%.

Parent

Parent activities comprise Group executive management functions, certain shared Group functions and the financing of corporate acquisitions. Sales for the period January–June amounted to SEK 2.9 million (SEK 2.0 million) and profit after financial items was SEK 354.2 million (SEK 255.1 million). At the end of the period, the parent had liquid funds of SEK 122.9 million, compared with SEK 403.1 million at the start of the year. Group sales by geographical region

Key Figures – Group	Rest of Europe	2012 Q 1-2	2011 Q 1-2	past 12 mths	2011 full year
Group sales by geographical region Net sales	Other markets SEK m	4,425.1	3,080.9	9,484.0	8,139.8
Growth	%	43.6	12.0	38.6	25.0
of which acquired	%	41.3	5.2	35.9	20.4
Nordic countries Operating profit	SEK m	421.7	277.1	1,135.9	991.3
Rest of Europe Operating margin	%	9.5	9.0	12.0	12.2
Other markets Profit after net financial items	SEK m	385.7	274.3	1,052.6	941.2
Profit margin	%	8.7	8.9	11.1	11.6
Equity/assets ratio	%	38.2	44.8	38.2 Group sales by geographical region	38.2
Return on equity	%	17.2	23.8	22.1	19.9

NIBE share performance

NIBE Energy Systems

Sales and profits

Sales for the reporting period totalled SEK 2,852.2 million, compared with SEK 1,754.1 million for the corresponding period last year. SEK 1,008.7 million of this SEK 1,098.1 million increase relates to sales in acquired businesses, which means that organic growth for the period was 5.1%.

Operating profit totalled SEK 338.2 million, compared with SEK 213.7 million for the corresponding period last year. The operating margin was 11.9%, compared with 12.2 % last year. This brings the operating margin for the past 12 months to 14.7%.

Market

In Europe the overall market for heat pumps has remained more or less stable, albeit with certain local variations.

We have strengthened our position in the expanding German market both through organic growth and through last year's acquisition of the German heatpump manufacturer, Alpha-InnoTec (Schulthess). All our operations in Eastern Europe are also expanding their business, and the situation in Switzerland, France and our Nordic neighbours is stable.

In the UK and the Netherlands, however, the market remains sluggish. A widespread 'wait-and-see' attitude to the economic situation, reduced numbers of new builds and continued uncertainty about economic growth appear to be the main reasons for this caution.

The second quarter saw a partial recovery in the Swedish heat-pump market after a significant contraction in the first three months. The number of new homes being built remains very low, so it is the replacement market that accounts for by far the greatest proportion of heat-pump sales. Persistent economic uncertainty at home and abroad and a further decline in new builds as a result of tougher mortgage rules both continue to play their part in the weak market.

On a more pleasing note, however, we can report that our shares of the market in all segments have remained high throughout the reporting period and that our overall market share is satisfactory. Once again the steepest fall has been in sales of air/water heat pumps, and while there has also been some contraction in the market's biggest segment, ground-source and geothermal heat pumps for private homes, this has not been as great. Similarly, the market

Business Area trends

Business area contributions to sales

for exhaust-air heat pumps has contracted less than the overall heat-pump market, and demand for heat pumps for larger properties remains more or less unchanged since last year.

The market for electric water-heaters remains stable in the Nordic countries as in the rest of Europe, while sales of pellets products and conventional domestic boilers continue to be weak. Ever stricter energy-efficiency requirements in Europe are fuelling interest for heat pumps used solely to heat domestic hot water, and we see plenty of potential for the business area to grow in this segment.

Operations

With the integration of the business activities of the Schulthess Group proceeding according to plan and cooperation between the various units running smoothly, the prospects for achieving the targets for synergies in the areas identified appear to be good.

Schulthess companies are meeting the targets set for them in terms of sales and profitability.

During the first six months NIBE Energy Systems has been involved in a large number of marketing activities in its major European markets and successfully launched a new generation of heat pumps intended for larger premises. The growth potential for this kind of product, which can meet needs for both heating and cooling large properties, is deemed to be good in Europe.

NIBE Energy Systems		2012	2011	Past	2011
Key Figures		Q 1-2	Q 1-2		12 mths full year
Net sales	SEK m	2,852.2	1,754.1	6,085.7	4,987.7
Growth	%	62.6	11.9	55.6	33.9
Operating profit	SEK m	338.2	213.7	895.3	770.8
Operating margin	%	11.9	12.2	14.7	15.5
Assets	SEK m	8,423.0	2,826.3	8,423.0	8,187.3
Liabilities	SEK m	7,407.2	1,708.0	7,407.2	7,098.0
Investments (fixed assets)SEK m		75.7	64.1	203.3	191.7
Depreciation	SEK m	124.3	55.3	236.8	167.8

13% Business area contributions to profit

Operating profit by business area

NIBE Element

Sales and profits

Sales for the reporting period totalled SEK 1,228.2 million. This is SEK 254.2 million more than the corresponding period last year (SEK 974.0 million). However, as a total of SEK 262.9 million of first-half sales were reported by acquired businesses, organic growth for the period was negative at -0.9%.

Operating profit totalled SEK 83.6 million, compared with SEK 66.3 million for the corresponding period last year. The operating margin of 6.8% is the same as last year, bringing the operating margin for the past 12 months to 6.7%.

Market

International demand for heating elements has been very uneven during the first six months of the year, reflecting the state of the economy in different parts of the world. Demand remained strong in Central Europe, while sales in Southern Europe continued to be weak. In North America, which has become our largest market following our acquisitions there last year, sales trends for many of our product areas have been good.

After an exceptionally weak start to the year, sales for the indoor comfort segment gradually improved during the second quarter. The effect of this was positive for countries such as France, Norway and Sweden, which still have extensive manufacturing operations for electric heating products.

Development in the resistors product area, which has a large proportion of customers in the energy-efficiency and renewable energy sectors, has been highly encouraging. We are continuing to launch new products for these sectors, where we see very good potential for future growth.

Project-related operations, most of which are linked to the oil and gas industries, have also developed positively. We are especially pleased to report that we have now also succeeded in establishing ourselves as a supplier for this segment in the Asian market.

We are continuing our work of developing and marketing products with an enhanced system content, and we are gradually increasing the proportion of products that incorporate measurement and control functions in addition to the actual heating element.

NIBE Stoves

Sales and profits

Sales for the reporting period totalled SEK 401.9 million, compared with SEK 414.5 million for the corresponding period last year. As there is no acquired business to affect the comparison, this means that sales fell by SEK 12.6 million and that organic growth was negative at -3.0%.

Operating profit totalled SEK 15.5 million, compared with SEK 21.0 million for the corresponding period in 2011. The operating margin was 3.9%, compared with 5.1% last year, bringing the operating margin for the past 12 months to 13.7%.

Market

The uncertainty that is currently affecting the global economy has, with only one or two exceptions, impacted on the market for wood-stove products throughout Europe.

Demand in Sweden has fallen sharply so far this year. Consumers have adopted a more cautious attitude to investing in capital goods and home renovation projects, despite the underlying strength of the Swedish economy. This reaction has exacerbated the effect on sales of the already historically record low numbers of newly built private homes.

In Norway demand remains relatively good even if here, too, there are signs of a slight dip in sales compared with last year. Demand for free-standing wood stoves in contemporary sheet metal designs is increasing, while those with more traditional styling appear to be losing their appeal.

The Danish market has contracted, with a steep drop in second-quarter sales reflecting Denmark's faltering economy.

In contrast, the past six months have seen a rise in sales of wood-stove products in Germany, where the nation's economy remains fundamentally strong.

Overall, the French market continues to contract. This is most obvious, however, for traditional designs. The appeal of more modern and more efficient products is increasing, and this has contributed to ensuring that our own sales have developed positively.

Operations

The past six months have seen extensive efforts to integrate the acquisitions made in 2011. For example, the North American units have been transformed into specialist manufacturing plants and our various operations in China have been merged into a single unit. In addition, operations in Backer ELC in Switzerland have moved into new, more rational premises. These changes are all expected to have a positive effect on the business area's earnings for the second half of the year.

In view of the current turmoil around raw material prices and exchange rates, two factors that have significant impact on our pricing and competitiveness, it is a great advantage for us to have manufacturing units in different currency zones.

In June agreement was reached on the acquisition of the Danish Eltwin Group, which develops, produces and sells electronic technology to industrial customers. The Eltwin Group has approximately 50 employees, annual sales of some SEK 85 million and an operating margin of approximately 9%. This acquisition is in line with NIBE Element's ambition to complement its product programme with technologies for measuring and control within the energy sphere. Operations will be consolidated into the NIBE Element business area with effect from the first quarter of 2013.

NIBE Element		2012	2011	Past	2011
Key Figures		Q 1-2	Q 1-2	12 mths full year
Net sales	SEK m	1,228.2	974.0	2,378.4	2,124.1
Growth	%	26.1	14.2	26.5	20.7
Operating profit	SEK m	83.6	66.3	158.6	141.3
Operating margin	%	6.8	6.8	6.7	6.7
Assets	SEK m	2,392.5	1,660.9	2,392.5	2,354.1
Liabilities	SEK m	2,224.6	1,505.9	2,224.6	2,192.0
Investments (fixed assets) SEK m		23.7	33.9	66.5	76.7
Depreciation	SEK m	40.2	30.1	75.4	65.3

Although very slow demand in Sweden has had a significant impact on the business area's overall sales, the negative effects of this have been offset, to a great degree, by improved success in our export markets. This is the result not only of our long-term investment in establishing and extending a dealer network abroad, but also of our vigorous product development work and of a number of strategic corporate acquisitions.

Operations

During the first six months of the year we have launched a large number of new products on our prioritised markets, specifically in the freestanding wood-stoves segment. Most of these are new designs and new surrounds based on existing fire-boxes, several of which also offer the option of extra heat storage.

In Sweden a series of brand new fire-boxes for open fires has been launched under the Contura brand. These products are highly efficient in terms of combustion technology and heating output and are the first fire-boxes for open fires to be eco-labelled with the Swan mark in Sweden. All of the new products will be ready for delivery for the all-important autumn season.

NIBE Stoves Key Figures		2012 Q 1-2	2011 Q 1-2	Past 12 mths full year	2011
Net sales	SEK m	401.9	414.5	1,140.5	1,153.0
Growth	%	– 3.0	5.4	– 2.1	0.8
Operating profit	SEK m	15.5	21.0	155.8	161.4
Operating margin	%	3.9	5.1	13.7	14.0
Assets	SEK m	1,075.8	1,111.7	1,075.8	1,074.3
Liabilities	SEK m	626.8	675.6	626.8	553.4
Investments (fixed assets)SEK m		12.6	20.3	31.1	38.8
Depreciation	SEK m	21.2	20.4	42.2	41.4

Group Financial Trends

Income statements		Group						Parent
(in millions of SEK)	Q 2 2012	Q 2 2011	Jan – June 2012	Jan – June 2011	Past 12 mths	Full year 2011	Jan – June 2012	Jan – June 2011
Net sales	2,318.4	1,618.6	4,425.1	3,080.9	9,484.0	8,139.8	2.9	2.0
Cost of goods sold	– 1,521.9	– 1,082.8	– 2,951.3	– 2,092.1	– 6,200.9	– 5,341.7	0.0	0.0
Gross profit	796.5	535.8	1,473.8	988.8	3,283.1	2,798.1	2.9	2.0
Selling expenses	– 436.3	– 295.3	– 853.6	– 564.4	– 1,718.5	– 1,429.3	0.0	0.0
Administrative expenses	– 137.0	– 118.8	– 271.1	– 208.6	– 589.6	– 527.1	– 14.9	– 11.6
Other income	40.7	30.3	72.6	61.3	160.9	149.6	0.0	0.0
Operating profit	263.9	152.0	421.7	277.1	1,135.9	991.3	– 12.0	– 9.6
Net financial items	– 24.6	– 11.6	– 36.0	– 2.8	– 83.3	– 50.1	366.2	264.7
Profit after net financial items	239.3	140.4	385.7	274.3	1,052.6	941.2	354.2	255.1
Tax	– 59.5	– 36.6	– 97.6	– 70.4	– 276.9	– 249.7	0.0	0.0
Net profit	179.8	103.8	288.1	203.9	775.7	691.5	354.2	255.1
Net profit attributable to
Parent shareholders	179.8	103.8	288.1	203.5	775.7	691.1	354.2	255.1
Non-controlling interest	0.0	0.0	0.0	0.4	0.0	0.4	0.0	0.0
Net profit	179.8	103.8	288.1	203.9	775.7	691.5	354.2	255.1
Includes depreciation according to plan as follows	93.2	53.1	185.7	105.7	354.5	274.5	0.0	0.0
Net profit per share, in SEK*	1.63	1.11	2.62	2.17	7.13	6.87
*There are no programmes that entail dilution
Net profit	179.8	103.8	288.1	203.9	775.7	691.5	354.2	255.1
Other recognised income
Market value of future currency contracts	– 4.2	– 3.0	3.6	– 5.8	2.0	– 7.4	0.0	0.0
Market value of future commodity contracts	– 1.0	– 0.7	– 0.9	– 1.4	– 0.5	– 1.0	0.0	0.0
Currency hedge	7.7	– 13.3	19.8	– 30.0	247.5	197.7	19.7	– 26.2
Translation of loans to subsidiaries	2.4	3.4	– 0.7	1.1	7.9	9.7	0.0	0.0
Translation of foreign subsidiaries	– 47.5	57.0	– 54.7	31.8	– 466.5	– 380.0	0.0	0.0
Tax attributable to other recognised income	– 0.7	4.0	– 5.6	9.3	– 64.5	– 49.6	– 5.2	6.9
Total other recognised income	– 43.3	47.4	– 38.5	5.0	– 274.1	– 230.6	14.5	– 19.3
Total recognised income	136.5	151.2	249.6	208.9	501.6	460.9	368.7	235.8
Total recognised income attributable to
Parent shareholders	136.5	151.2	249.6	208.5	501.7	460.6	368.7	235.8
Non-controlling interest	0.0	0.0	0.0	0.4	– 0.1	0.3	0.0	0.0
Total recognised income	136.5	151.2	249.6	208.9	501.6	460.9	368.7	235.8

Balance Sheet summaries		Group			Parent
	30 June	30 June	31 Dec	30 June	30 June	31 Dec
(in millions of SEK)	2012	2011	2011	2012	2011	2011
Intangible assets	5,579.9	1,256.4	5,642.4	0.0	0.0	0.0
Tangible assets	1,846.6	1,301.3	1,897.6	0.0	0.0	0.0
Financial assets	138.1	74.3	135.5	7,050.5	1,913.4	6,991.8
Total non-current assets	7,564.6	2,632.0	7,675.5	7,050.5	1,913.4	6,991.8
Inventories	1,859.1	1,419.5	1,679.6	0.0	0.0	0.0
Current receivables	1,633.7	1,173.1	1,377.7	9.2	24.8	14.5
Cash equivalents	820.1	342.3	1,007.1	53.0	31.6	203.1
Total current assets	4,312.9	2,934.9	4,064.4	62.2	56.4	217.6
Total assets	11,877.5	5,566.9	11,739.9	7,112.7	1,969.8	7,209.4
Equity	4,538.2	2,494.0	4,487.2	2,827.5	749.0	2,657.4
Non-current liabilities and provisions, non-interest bearing	851.1	386.8	937.1	153.4	100.5	152.3
Non-current liabilities and provisions, interest bearing	4,451.8	1,314.6	4,320.5	3,744.5	1,035.7	3,946.4
Current liabilities and provisions, non-interest bearing	1,522.6	1,182.1	1,465.3	8.8	9.3	72.5
Current liabilities and provisions, interest bearing	513.8	189.4	529.8	378.5	75.3	380.8
Total equity and liabilities	11,877.5	5,566.9	11,739.9	7,112.7	1,969.8	7,209.4

Statement of cash flow

	Jan – June	Jan – June	Full year
(in millions of SEK)	2012	2011	2011
Cash flow from operating activities	437.5	230.3	882.2
Change in working capital	– 343.5	– 218.7	237.9
Investment activities	– 88.7	– 228.6	– 3,815.2*
Financing activities	– 160.1	143.6	3,300.9*
Exchange rate difference in liquid assets	– 32.2	6.2	– 8.2
Change in liquid assets	– 187.0	– 67.2	597.6

Data per share 1)	Jan – June	Jan – June Full year
		2012	2011	2011
Net profit per share
(total 110,253,638 shares)	SEK	2.62	2.17	6.87
Equity per share	SEK	41.16	26.55	40.78
Closing day share price	SEK	94.25	109.50	101.75

1) Directed issue of 214,201 shares in April 2012. Net profit per share has been calculated on a weighted average of the number of shares outstanding.

* Investments for the full year 2011 were financed in part via a non-cash issue recognised net in the statement of cash flow.

Change in equity

	Jan – June	Jan – June	Full year
(in millions of SEK)	2012	2011	2011
Equity brought forward	4,487.2	2,482.7	2,482.7
Directed issue	21.9	0.0	1,744.9
Transaction expenses, new issue	0.0	0.0	– 3.8
Shareholders' dividend	– 220.5	– 164.4	– 164.4
Dividend to non-controlling interests	0.0	– 0.7	– 0.6
Acquisition of participations from
non-controlling interests	0.0	– 32.5	– 32.5
Total recognised income for the period	249.6	208.9	460.9
Equity carried forward	4,538.2	2,494.0	4,487.2

Key figures		Jan – June 2012	Jan – June 2011	Full year 2011
Growth	%	43.6	12.0	25.0
Operating margin	%	9.5	9.0	12.2
Profit margin	%	8.7	8.9	11.6
Investments in fixed assets	SEK m	88.7	228.6	5,560.2
Unappropriated liquid assets SEK m		1,360.7	1,345.5	1,659.8
Working capital, incl. cash and bank	SEK m	2,276.6	1,563.4	2,069.2
Working capital/net sales	%	24.0	22.9	25.4
Interest-bearing liabilities/ Equity	%	109.4	60.3	108.1
Solidity (Equity/Assets ratio)	%	38.2	44.8	38.2
Return on capital employed	%	12.4	23.0	16.0
Return on equity	%	17.2	23.8	19.9
Net debt/EBITDA	times	2.8	1.1	3.0
Interest coverage ratio	times	8.4	10.2	10.7

Quarterly data

Consolidated Income Statements

		2012			2011			2010
(in millions of SEK)	Q 1	Q 2	Q 1	Q 2	Q 3	Q 4	Q 2	Q 3	Q 4
Net sales	2,106.7	2,318.4	1,462.3	1,618.6	2,281.6	2,777.3	1,448.4	1,712.6	2,047.3
Operating expenses	– 1,948.9	– 2,054.5	– 1,337.2	– 1,466.6	– 1,967.0	– 2,377.7	– 1,320.7	– 1,466.1	– 1,732.0
Operating profit	157.8	263.9	125.1	152.0	314.6	399.6	127.7	246.5	315.3
Net financial expenses	– 11.4	– 24.6	8.8	– 11.6	– 31.2	– 16.1	– 16.3	– 12.1	– 12.2
Profit after net financial expenses	146.4	239.3	133.9	140.4	283.4	383.5	111.4	234.4	303.1
Tax	– 38.1	– 59.5	– 33.8	– 36.6	– 66.2	– 113.1	– 29.0	– 62.3	– 74.7
Group	108.3	179.8	100.1	103.8	217.2	270.4	82.4	172.1	228.4

Net Sales – Business Areas

		2012		2011				2010
(in millions of SEK)	Q 1	Q 2	Q 1	Q 2	Q 3	Q 4	Q 2	Q 3	Q 4
NIBE Energy Systems	1,303.4	1,548.8	784.4	969.7	1,498.5	1,735.1	868.5	1,016.0	1,142.1
NIBE Element	603.8	624.4	483.3	490.7	500.0	650.1	425.4	412.7	493.9
NIBE Stoves	226.0	175.9	222.1	192.4	313.9	424.6	184.2	307.9	443.2
Elimination of Group transactions	– 26.5	– 30.7	– 27.5	– 34.2	– 30.8	– 32.5	– 29.7	– 24.0	– 31.9
Group	2,106.7	2,318.4	1,462.3	1,618.6	2,281.6	2,777.3	1,448.4	1,712.6	2,047.3

Operating profit – Business Areas

	2012		2011				2010
(in millions of SEK)	Q 1	Q 2	Q 1	Q 2	Q 3	Q 4	Q 2	Q 3	Q 4
NIBE Energy Systems	111.6	226.6	77.1	136.6	275.9	281.2	107.0	177.7	196.8
NIBE Element	37.0	46.6	36.2	30.1	33.7	41.3	27.1	25.7	40.8
NIBE Stoves	15.1	0.4	17.1	3.9	49.7	90.7	3.2	47.4	86.1
Elimination of Group transactions	– 5.9	– 9.7	– 5.3	– 18.6	– 44.7	– 13.6	– 9.6	– 4.3	– 8.4
Group	157.8	263.9	125.1	152.0	314.6	399.6	127.7	246.5	315.3

NIBE · INTERIM REPORT Q2 2012 7

Accounting principles

NIBE Industrier's consolidated accounts are drawn up in accordance with International Financial Reporting Standards (IFRS). NIBE Industrier's Interim Report for the second quarter of 2012 has been drawn up in accordance with IAS 34 "Interim Financial Reporting". The same accounting principles as those adopted for this interim report are described in the company's Annual Report for 2011 (pp. 66–68). Reporting for the parent follows the Swedish Annual Accounts Act and recommendation RFR 2 of the Swedish Financial Accounting Standards Council ("Reporting for Legal Entities").

In the case of transactions with associates, the same accounting principles apply as those described on page 67 of the company's Annual Report for 2011.

Risks and uncertainties

NIBE Industrier is an international industrial group that is represented in around 40 countries. As such, it is exposed to a number of business and financial risks. Risk management is therefore an important process with regard to the goals that the company has set up. Throughout the NIBE Group, efficient risk management routines are an ongoing process within the framework of the Group's operational management and a natural part of the continual follow-up of activities. It is our opinion that no significant risks or uncertainties have arisen in addition to those described in NIBE Industrier's Annual Report for 2011.

This interim report provides an accurate picture of the business activities, financial position and earnings of the parent and the Group, and describes any significant risks and uncertainties faced by the parent and the companies that form part of the Group.

Markaryd, Sweden – 15 August 2012

Arvid Gierow Chairman of the Board

Hans Linnarson Director

Georg Brunstam Director

Anders Pålsson Director

Eva-Lotta Kraft Director

Gerteric Lindquist CEO

This interim report has not been subjected to scrutiny by the company's auditors. For other information and definitions, please refer to the company's Annual Report for 2011.

NIBE Industrier AB is obliged by Swedish law (The Securities Market Act and/or The Financial Instruments Trading Act) to publish the information in this interim report. This information was made available to the media for publication at 7.00 (C.E.T.) on 15 August 2012.

Please e-mail any questions you may have with regard to this interim report to: Gerteric Lindquist, MD and Group CEO, gerteric.lindquist@nibe.se; Hans Backman, CFO, hans.backman@nibe.se

NIBE Industrier AB (publ) · Box 14, SE-285 21 Markaryd, SWEDEN Tel +46 (0)433 - 73 000 · Fax +46 (0)433 - 73 192 www.nibe.com · Corporate identity number: 55 63 74 - 8309