Nobia

Annual Report • Mar 21, 2016

ANNUAL REPORT 2015

Nobia 2015
1 2015 in fgures
3 This is Nobia
4 CEO's comments
6 Financial targets
8 Strategy
10 Product development
12 Market
Operations
14 Business overview
16 Nordic region
18 UK region
20 Central Europe region
Sustainability
22 Nobia's sustainability work
24 Care of employees
26 Effcient use of resources
28 Product responsibility and responsible sourcing
Financial statements
32 Financial overview
37 Risks and risk management
42 Consolidated income statement and consolidated statement of comprehen sive income and comments
46 Consolidated balance sheet and comments
48 Change in consolidated shareholders' equity
49 Consolidated cash-fow statement and comments
50 Parent Company income statement, balance sheet and cash-fow statement
52 Notes
80 Board of Directors' assurance
81 Audit report
Corporate governance and the Nobia share
82 Corporate Governance Report
86 Board of Directors
88 Group management
90 The Nobia share and shareholders
92 Five-year overview
93 2016 Annual General Meeting
93 Defnitions

Nobia develops and sells kitchen solutions through some twenty strong brands in Europe, including Magnet in the UK, HTH, Marbodal, Sigdal, Norema, Petra and A la Carte in the Nordic region, ewe, Intuo and FM in Austria, as well as Poggenpohl globally. Every week, we manufacture more than 140,000 cabinets and meet around 70,000 consumers in our stores. Nobia creates proftability through attractive offers and economies of scale, and has the ambition to consolidate Europe's kitchen market. The Group has approximately 6,500 employees and net sales of about SEK 13 billion.

The Board of Directors and President of Nobia AB, Corporate Registration Number 556528-2752, hereby present the Annual Report and consolidated fnancial statements for the 2015 fscal year. The audited Annual Report, signed by the Board of Directors and reviewed by the auditors, can be found on pages 32–85. The kitchen on the front cover is Newbury and is sold through Magnet.

Nobia 2015 Operations Sustainability Financial statements

Corporate governance and the Nobia share

BRANDS
2015 IN FIGURES	Net sales, SEK m	Operating proft, SEK m	Proft after tax, SEK m
	13,336	1,241	828
	Operating cash fow, SEK m	Return on operating capital, %	Debt/equity ratio, %
All of the fgures except for proft after tax, operating cash fow and return on operating capital are presented excluding items affecting comparability.	770	26.9	20

1

❞ Nobia's sales increased in 2015 as a result of organic growth, acquisitions and positive currency effects. The operating margin improved to 9.3 per cent, which is the highest level in the company's history.

Morten Falkenberg, President and CEO

2

Nobia 2015

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Sustainability

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Nobia is Europe's leading kitchen specialist

300 Nobia's operations span the entire value chain, from development and manufacturing to distribution and sales. Kitchen solutions are sold under some twenty brands as well as under private labels.

Nobia has production facilities in seven European countries, where the kitchens are manufactured and assembled.

Sales to private individuals are conducted through own stores and a network of franchise stores and retailers, including furniture stores, builders' merchants, DIY stores and independent kitchen specialists.

Nobia's products are also sold to professional players such as construction companies and property developers, which, in turn, sell the kitchens to their end customers.

Operations are organised into three regions: Nordic, the UK and Central Europe. The former two are the largest regions, jointly representing close to 90 per cent of income.

Nobia has 14 production facilities

Nobia develops, manufactures and sells kitchen solutions

Around 300 own stores and a network of retailers

Operations are organised into three regions

Nobia offers attractive kitchen solutions under strong local brands. We generate value for customers by offering high-quality function and design in both complete kitchens and individual kitchen products, and through related services such as advice, design, and delivery. Behind the scenes, sourcing is co-ordinated and effcient production capitalises on economies of scale.

Our vision is to be the leading and most proftable kitchen specialist that inspires people to realise their kitchen dreams. We help our customers invest in kitchens they feel happy in. No matter what a customer's ideal kitchen looks like, Nobia can offer a solution. We produce functional and aesthetically pleasing kitchen solutions based on a solid understanding of both kitchens and modern consumers.

Ever since the company was founded, Nobia has focused on kitchens. This focus makes it possible to leverage joint knowhow throughout the entire value chain – across national boundaries and brands. As a dedicated kitchen specialist, Nobia is taking the lead in the kitchen industry both in terms of developing new products and services and industry consolidation.

Near the target, but much left to do

2015 was a year of growth. Our decisive efficiency work also continued to deliver results. Profitability improved for the sixth consecutive year. In 2016, we will achieve an operating margin target of 10 per cent.

As I summarise developments over the past few years, I note that our targeted work to reduce costs and raise earnings has yielded positive results. Our processes have been streamlined and we have consolidated operations, resulting in a reduced number of plants, stores and employees. One important change was the divestment of the French kitchen chain Hygena in March 2015. This considerably improved the Group's proftability.

The sales trend turned towards growth in 2015. Our sales increased in part due to positive currency effects and acquisitions, but also as a result of organic growth of 6 per cent. The total market situation was better than the previous year, with growth in the UK market and an improved Nordic kitchen market. Increased sales volumes contributed to the improved operating proft. The operating margin improved for the sixth consecutive year, amounting to 9.3 per cent. Poggenpohl was impaired by SEK 96 million during the four th quar ter, and was recognised under items affecting comparability. The background to the impairment was that we had discovered that accounting at Poggenpohl USA had been conducted incorrectly over several years. Measures have been taken to restore confdence in Poggenpohl.

Margin target and fnancial position

Since 2005, Nobia has had the target of achieving an operating margin of 10 per cent, and it is towards this target that I am leading and steering the business. The margin target has never been achieved, however – not even during the boom period between 2006-2008 – and I have been told at times that it would be impossible. It therefore pleases me greatly that we have gradually approached the target

and that we expect to achieve an operating margin of 10 per cent in 2016, which will represent an important milestone in Nobia's development.

The company's fnancial position is very favourable. At the beginning of the year, the debt/equity ratio was 20 per cent and net debt consisted primarily of pension liabilities. The Board proposes a dividend corresponding to 51 per cent of net proft after tax.

The strong balance sheet and generally reduced cost level have equipped Nobia well for future economic downturns and created good scope to invest in growth creation. This means it is now the fun begins. However, we will not compromise on effciency, nor lose control of costs.

Acquisitions strengthen our position

Since the end of 2014, we have made two acquisitions that have strengthened our position in the UK, which is now our largest region in terms of sales. Nobia is currently the leading kitchen company on the UK kitchen market and the only player to have a comprehensive offering in every market segment. The majority of the UK business still comprises the well-known kitchen chain Magnet and supplying private label kitchens for building materials chains, but thanks to the latest acquisition, operations have also been supplemented by kitchen sales to professional customers involved in both renovation and new construction.

Rixonway, which supplies kitchens to UK social housing, was acquired at the end of 2014. Rixonway's market was negatively affected in 2015 by reduced public fnancial aid. We are working to compensate for this market development and have begun to realise synergies, par ticular within the area of sourcing.

Nobia's change process is in no way complete – we still have much left to do to achieve the company's full potential. We need to consolidate operations further and drive our business forward.

Nobia 2015

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Financial statements Corporate governance and the Nobia share

In November 2015, we also acquired Commodore and CIE Kitchens, two companies operating as kitchen suppliers to professional private developers in London and South East England. Commodore designs, manufacturers and installs kitchens in the mid-price segment, while CIE sells kitchens in the luxury segment. With these acquisitions, we have entered an attractive market segment for private development and have strengthened our presence in the UK project market. We are now working to integrate these operations.

Continued change process

Nobia's change process is in no way complete – we still have much left to do to achieve the company's full potential. We need to consolidate operations further and drive our business forward. The strategy remains based on the Effciency and Growth platforms. The aim is to achieve organic growth that is 2–3 per cent higher than market growth. We are also assessing potential acquisitions in order to expand into markets and segments that complement our current operations, when the right opportunity presents itself.

As a leading European kitchen specialist, major gains can be made through increased coordination. We have been implementing a Group-wide common standard over the past few years, but we need to continue to reduce complexity and increase overlap in our range. Larger volumes enable savings in terms of sourcing and effcient production, and amidst the tough competition in the kitchen market, larger scale operations are a decisive advantage. We consistently review opportunities to streamline the Group's production and logistics, and I cannot rule out that we may need to make further structural changes over the coming years.

On the agenda in 2016

In 2016 we will open new stores, mainly in the UK, but also in the Nordic region. We are differientiating the brands and strengthening our position by investing in product development, so that we can continuously present new and exciting products and solutions. We are working constantly to improve customer experience, not least via digital solutions and services. Our products and services should always be available for consumers, and within a couple of years I expect a signifcant proportion of sales to have migrated to our digital channels.

We are also developing our business for the lower price segments. The introduction of the fat-pack range, Simply Magnet, has had very positive results and made a strong contribution to the increased sales and earnings seen in the UK in 2015. We are now going to try and replicate this experience in our other regions. Under the HTH brand, we will market well-designed and high-quality kitchens for the economy segment in all Nordic countries in 2016. As we introduce these attractively priced kitchens, we do so on the basis of a solid range, good service and a calculation that does not threaten proftability.

As a manufacturing company with many employees, customers and suppliers, Nobia has an important environmental, social and ethical responsibility. Our Sustainability Report details how we view this responsibility. We prioritise being able to offer our employees a safe and secure work environment and we will increase

investment in order to retain and recruit highly skilled employees. We see increased interest from our professional customers in sustainability issues, and we value this dialogue about how we can work together to create a positive impact. We offer ecolabelled kitchens and develop products that help consumers live more environmentally friendly lives. We have much left to do in this area, too, however.

Nobia's success is ultimately a result of employees' tremendous effor ts and commitment. I would therefore like to warmly thank all employees for the past year, as well as our shareholders and customers for their confdence in us.

Morten Falkenberg President and CEO

Targets and target fulflment

Nobia's operations are steered towards three financial targets that aim to generate favourable returns for shareholders and long-term value growth.

9.3%

The operating margin continued to improve. For 2015, the operating margin excluding items affecting comparability amounted to 9.3 per cent.

Net sales Operating proft and operating margin*

*) Excluding items affecting comparability

Earnings per share

Earnings per share excluding items affecting comparability

Earnings per share including items affecting comparability

Nobia 2015

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COMMENTS ON PERFORMANCE

Net sales Nobia's sales are impacted by demand in European kitchen markets. In 2015, several of Nobia's markets reported growth despite consistently challenging market conditions. In total, organic growth was 6 per cent. Currency effects had an impact on net sales of 7 per cent and acquired operations of 4 per cent. Since 2010, average sales growth per year has amounted to negative 1 per cent.

SALES GROWTH, %

	2011	2012	2013	2014	2015
Organic change	-2	-5	0	2	6
Acquisition, divestments
and currency	-5	0	-5	5	11
Total growth	-7	-6	-5	7	17
Average annual growth *	-7	-6	-6	-5	-1

* Based on the base year of 2010.

OPERATING MARGIN EXCLUDING ITEMS AFFECTING COMPARABILITY, %

2011 2012 2013 Nordic 8.8 10.5 12.6 UK 5.0 4.5 6.0 Central Europe -2.1 -0.3 -1.7	Group total	3.9	4.6	5.9	8.5	9.3
					7.8	5.1
					7.5	9.3
					12.8	13.3
					2014	2015

Operating margin Nobia's proftability has improved every year since 2009. For 2015, operating proft excluding items affecting comparability of negative SEK 96 million amounted to SEK 1,241 million, corresponding to an operating margin of 9.3 per cent. Earnings improved primarily as a result of increased sales volumes and positive currency effects. Over the past fve years, the Nordic region has reported the highest margin out of all the regions. The UK region's operating margin has been improving since 2012. Following the divestment of Hygena in 2015, the Central Europe region has reported proftability.

Financial position Borrowing declined in 2015 despite the acquisition of Commodore and CIE Kitchens and increased investment. Net debt amounted to SEK 774 million, of which SEK 732 million pertained to pension liabilities. The debt/equity ratio at year-end was 20 per cent. Operating cash fow declined slightly in 2015, adversely affected by a negative change in working capital and higher investments, and positively impacted by higher earnings generation.

Dividend to shareholders The Board of Directors proposes a dividend of SEK 2.50 per share to the Annual General Meeting, corresponding to 51 per cent of net proft after tax. The proposal entails a total dividend of approximately SEK 421 million. For the 2014 fscal year, the dividend amounted to SEK 1.75 per share, while the dividend for 2013 was SEK 1.00 per share. For 2012, the dividend was SEK 0.50 per share.

INDEBTEDNESS AND CASH FLOW

	2011	2012	2013	2014	2015
Net debt, SEK m	1,586	1,707	1,176	1,206	774
Operating cash fow, SEK m	9	237	601	779	770
Equity/assets ratio, %	42	37	44	41	47
Debt/equity ratio, %	45	64	37	38	20

DIVIDEND TO SHAREHOLDERS

	2011	2012	2013	2014	2015
Earnings/loss per share, SEK	0.42	-3.27	2.10	-0.17	4.92
Dividend per share, SEK	0	0.50	1.00	1.75	2.50*
Dividend as a per cent of net proft after tax	n/a	n/a	48	n/a	51

* Board's proposal.

Proftability trend

Return on operating capital Return on shareholders' equity

Dividend per share

* Board's proposal

Net debt and net debt/equity

Net debt Debt/equity ratio 51%

The proposed dividend of SEK 2.50 per share corresponds to 51 per cent of net proft after tax.

Nobia creates value through growth and effciency

Nobia endeavours to fulfil the vision of being the leading and most profitable kitchen specialist that inspires and realises kitchen dreams and creates a fantastic customer experience.

Nobia's long-term strategy is to create synergies by introducing a uniform standard and a partially Group-wide range, effcient production and co-ordinated sourcing. In parallel to these effciency enhancements, increasing impor tance is being placed on growth-promoting initiatives.

The strategy for proftable growth is based on the Group's strengths in the form of strong brands, established sales channels, cost awareness and economies of scale throughout the value chain.

In order to create growth, Nobia is focusing on improving the customer experience both in stores and online, and is differentiating its brands by way of new products and solutions. Opportunities for effciency enhancements can be found throughout the value chain, but mainly within product development, sourcing and production. The knowledge and skills of Nobia's employees are both vital for its continued success.

In parallel to efficiency enhancements, increasing importance is being placed on growth-promoting initiatives.

FOCUS AREAS IN 2016

New products and innovations are key to differentiating Nobia's kitchens from those of competitors. Nobia is focusing on product development and strives to take an innovative lead in the kitchen industry by continuously presenting new products. We should be frst to market with new concepts and solutions that satisfy customers' needs. New products serve as incitements and encourage renewal of or updates to existing kitchen fttings.

Digital solutions are a key component of the growth strategy since kitchen consumers today conduct an increasing amount of their purchasing online. The websites of Nobia's brands are at the cutting edge and the aim is to facilitate customers' purchases by migrating a portion of sales to digital channels. An e-commerce platform has been created for HTH that contains a new, digital design tool. HTH's e-commerce began in Denmark in 2015, and will also be implemented in 2016 in the Norwegian, Swedish and Finnish markets.

The economy segment is a new focus area. Nobia has not historically targeted the lower price segments to any great extent, but now has production economies of scale that makes it possible to explore this large and growing share of the market. A number of the brands complement the range by offering good-value ready-toassemble kitchen solutions. The Simply Magnet range contributed to increased sales in the UK in 2015, and during 2016 a similar range will be introduced for HTH

and marketed in the Nordic region. The economy segment will also be examined in Norway, Finland and Denmark through a collaboration with electronics chain Expert, which will sell Nobia's Nordic range of ready-to-assemble kitchen solutions.

Acquisitions are another way to create growth. In the past two years, the UK kitchen businesses Rixonway Kitchens, Commodore and CIE Kitchens have been acquired and consolidated. As a result of these additions, Group sales increased and Nobia has strengthened its position in the UK project market. Nobia maintains its ambition of growing through acquisitions that complement the company's current structure.

Harmonising the range into a uniform standard with identical product items creates the conditions for economies of scale, par ticularly within sourcing and production. In 2015, Magnet in the UK and the Finnish operations conver ted to Nobia's common standard dimension. Most of the kitchens Nobia manufactures now follow the same standard dimension. A Groupwide core range exists in several markets, but the aim is to reduce complexity further in the range as a whole. The target for 2016 is that 12 platforms, or the front designs, are to represent 80 per cent of total sales of the Group-wide range.

Effcient production is a focus area that involves leveraging economies of scale and creating improved proftability. The trend

Nobia 2015

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Sustainability

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is towards large-scale and brand-independent production. Several production facilities were closed or divested between the years 2008-2013, and the production structure could be consolidated further in the future. Co-ordinated effor ts are also made in production to optimise the fows and increase effciency using a Lean-based programme called Nobia Production and Logistics System, in which best practice from different parts of the Group are implemented in all units.

Highly skilled employees are vital to the success of the company. To strengthen the company's ability to retain and attract skilled and committed employees, the Group's HR effor ts will be lifted to the next level. A range of improvement activities will be implemented in areas such as the work environment, career development, skills development, leadership and recruitment, with the aim of strengthening the company's ability to retain and attract skilled employees.

BRAND STRATEGy

Nobia's brand por tfolio primarily consists of strong, local consumer brands in the mid-price and premium segments, but also of a couple of international brands in the luxury segment.

The brands enjoy a high level of recognition and appeal in their respective local markets. As an example, consumers' spontaneous recognition of Magnet in the UK, Marbodal in Sweden, HTH in Denmark, Sigdal in Norway and ewe in Austria has been above 80 per cent over time.

The brand strategy is based on a segmentation of the market by consumer attitudes and needs. Based on comprehensive consumer analyses and market surveys, Nobia has identifed two main segments in Europe's

kitchen market that form the basis of the brands' marketing.

Nobia is working to clarify the brands' positioning and differentiate them in terms of range and target group, while behind the scenes there are in fact joint processes.

The brands enjoy a high level of recognition and appeal in their respective local markets. ❞

New solutions strengthen our position in the market

Nobia endeavours to take an innovative lead in the kitchen industry. We will continuously present new kitchen solutions that meet customers' needs and serve to stir up interest. The ambition is to be first to market with new products and solutions that make the Group's brands stand out among the competition.

New products are produced centrally

The overall strategy for Nobia's product range is to increase the basis of bestselling platforms and limit the number of local adjustments, as well as generate a strong fow of new products and solutions that differentiate Nobia's brands. All product development for the Group-wide range is managed centrally. The new products and kitchen concepts can be added to the brands' ranges, while the marketing can be differentiated for different customers segments by way of local market adjustments.

New products contribute new sales and can ultimately also generate higher sales of other kitchen products. These create interest in the brand and give consumers a reason to visit the brand's store or website, and also enable existing kitchen fttings to be updated.

Development areas for new concepts

Work on producing new products is focused on a number of areas that meet specifc customer requirements and within which new concepts are created. Nobia has identifed the following development areas:

Size 0 creates effcient and functional kitchen solutions for small spaces. New solutions within this area were marketed during the year for several Nordic brands as part of the much discussed "Space for the great things in life in a small kitchen" campaign. Another generation of Size 0 is currently being developed.

Logical workfow brings together product developments focused on effciency, fexibility, accessibility and functionality. A kitchen concept called Easy Flow was launched at the end of 2015 in this area, offering solutions that satisfy customers' needs to have everything close to hand when cooking while also having clear work surfaces.

Multi kitchen is about making the kitchen the social hub of the home using clever solutions. To make the kitchen the heart of the home, products and solutions are needed for many activities other than just cooking.

Sustainability is the latest addition to the development areas. In this area, Nobia produces products from the perspective of sustainability that will help consumers live more environmentally friendly lives in their kitchens.

Feedback during the entire process

Extensive consumer insight forms the basis of the development work and prototypes are developed during the process that are tested on consumers. Nobia also arranges product expos at one of its production facilities twice a year. The aim of these expos is to present new products that will be introduced, but also to get feedback on potential new concepts and new solutions as part of the work to refne the product range.

The visitors are mainly sellers from the Group, retailers, customers and kitchen designers. Their viewpoints are collected and analysed for future development of new concepts and products. Nobia's frst product expo opened in Tidaholm, Sweden in June 2015, while a new product fair opened in Darlington, UK in January 2016.

consumer insight that is analysed together with prevailing market trends and the kitchen's development options seen from a broad perspective. Possible development areas are identifed to begin with, followed by a creative phase in which concepts and new solutions are developed. Depending on the level of innovation and type of product, the time it takes from creating an idea to launching a new product is six months to two years.

Nobia 2015

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Pull-down Unit is an electronically lowerable shelf that uses the rear section of a top cabinet and can be concealed or displayed depending on the occasion and requirement. Along with other products within the Easy Flow concept, this solution creates a more effcient and easily accessible kitchen.

Frame Flex ID is a fexible shelf with a modern and functional design that exploits the depth of the worktop to help keep the worktop clear and clean, while also keeping everything close at hand for the cook.

Worktop Extender is a space-effcient and fexible solution for a small kitchen that provides extra work space and is easy to hide under a worktop when it is not needed. This product has been awarded the Red Dot Award for its excellent design.

Plinth Ladder is a collapsible and attractive stepladder adapted for storage in a plinth cabinet, making it easy to reach even the highest parts of the kitchen.

Shallow shelves for storing groceries provide a clear view and easy access. Dry goods can also be organised in a clearly visible way in glass jars inspired by 1950s functionalism.

Nobia has two product development design centres where new products and concepts are displayed and feedback is gathered from visitors. The product fair in Tidaholm was the frst of its kind and was extremely positively received.

Drivers and trends on the kitchen market

The number of people and households in Europe is deemed to increase as our metropolitan areas become more urbanised and concentrated. This indicates that there will be an increase in residential construction and a growing European kitchen market. Urbanisation and the increased number of small households is also driving demand for clever solutions for small kitchens.

Alongside long-term demographic trends, kitchen demand is impacted by such factors as general economic conditions, consumer confdence, disposable income, furnishing trends, the property market trend and the construction of new housing.

New kitchens are assembled during either renovation or new construction. The most common reasons for investing in a kitchen are that consumers' previous kitchens are worn or outdated, that changing personal situations have led to new requirements or that the current kitchen in a new home is out of sync with the new owners' taste or requirements. The main reason for investment in a new kitchen is due to a move, and on average, European consumers purchase new kitchens every 15–20 years.

Increased digitisation is leading to new consumer behaviour. Constantly connected, consumers require kitchen companies to always be available in order to remain relevant, regardless of channel or location and throughout the entire purchasing process. This places increased requirements on the kitchen industry, which is relatively immature in terms of digital development compared with the retail industry for example, even though the long-term trend in terms of kitchen sales is towards increased e-commerce.

The kitchen is the heart of the home

Today's European kitchens are larger in area and fulfl more functions than they used to in the past. Open plan solutions between the kitchen, dining room and living room are now common. The kitchen has gone from being a place for preparing food to the heart of the home.

We spend more time in our kitchens and it has become a natural place for many of the household's activities. New functionalities and designs in terms of kitchen solutions, technology and decor refect the greater signifcance of the kitchen in our homes and encourage consumers to update existing kitchen fttings.

For households, buying a new kitchen is a relatively complex and major investment in which design and function play a key role in the decision-making process. When renovating a kitchen, in addition to buying the actual kitchen products, consumers also have to pay labour costs for installation, plumbing and fooring. Tax deductions for home improvements are therefore deemed to have a positive impact on the kitchen renovation market. From 2016, the Swedish tax deduction for labour costs will be reduced from 50 per cent to 30 per cent, with a maximum amount of SEK 50,000 per person. The maximum tax deduction in Finland is lower, while in Denmark the option to make a tax deduction for kitchens will be removed entirely from 2016.

Professional customers

Nobia's professional customers operating within residential renovation need to be in a position to offer their customers kitchens with an attractive design and many optional extras. Additionally, for companies working within property development and new construction, appealing and high-quality kitchen solutions are a part of the marketing process for new items. In recent years, sustainability issues have also become increasingly important for Nobia's professional customers.

The new construction sector is cyclical and affected by political decisions regarding rules and subsidies for housing construction. Lead-times from construction start to kitchen delivery are an average of eight to ten months. In Nobia's largest markets, the UK and the Nordic region, kitchens are considered building accessories and included in the sale of an apartment or a house, while a home in Central Europe is usually sold without kitchen fttings.

The market is local and fragmented

The kitchen market in Europe is highly fragmented and consumers principally recognise and are offered local kitchen brands. However, there is a slow move towards a more consolidated European kitchen market. Nobia is playing an important role in this development. As a leading

SELECTED COMPETITORS

Market	Players
UK	Howdens, B&Q, Wren, IKEA
Sweden	IKEA, Ballingslöv, Vedum, Kvik
Norway	IKEA, Kvik, Drømmekjøkkenet, Strai
Denmark	IKEA, Kvik, Svane, Vordingborg Køkkenet
Finland	IKEA, Puustelli, Topi Keittiöt
Austria	DAN Küchen, Nobilia, Häcker, Schüller

Nobia 2015

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Sustainability

Financial statements Corporate governance and the Nobia share

kitchen specialist, Nobia is striving to consolidate the European kitchen market by making acquisitions and capitalising on economies of scale.

The competition

There is a highly level of competition in European kitchen markets. Just like Nobia, many kitchen companies have a complete value chain ranging from production to sales via different distribution channels, including own stores. Nobia is Europe's leading kitchen specialist with strong brands and established sales channels. Its size also makes it possible to capitalise on synergies.

Nobia's competitors include small, local players as well as major kitchen producers and furniture companies. About ten kitchen suppliers are considered to have market shares of around 2 per cent of the European kitchen market, while the fve largest players – Nobia, IKEA, Nobilia, Howdens Joinery and Alno – jointly account for about 35 per cent of the market.

6.5

Total kitchen consumption in Nobia's main markets is estimated to be about EUR 6.5 billion.

EUROPE'S KITCHEN MARKET IN FIGURES

The estimated value of the European market for kitchen products is about EUR 11.7 billion. The four largest European markets are Germany, Italy, the UK and France, which jointly account for 73 per cent of kitchen production and 66 per cent of kitchen consumption. Overall, Europe net exports kitchens and the main exporting country is Germany, followed by Italy and Denmark.

Total kitchen consumption in Nobia's main markets – the UK, Sweden, Norway, Denmark, Finland, Austria and Germany – is estimated to be

about EUR 6.5 billion. The UK alone accounts for around 16 per cent of Europe's total kitchen consumption.

The markets in Sweden, Norway, Denmark, Finland and Austria are estimated to jointly account for about 15 per cent of the European kitchen market. Of these countries, Sweden is the largest kitchen market, while Finland is the smallest market. The German kitchen market, where Nobia is a minor player, is deemed to account for approximately 25 per cent of Europe's kitchen market.

Business overview

Explanation of overview

Net sales and operating proft have been adjusted for items affecting comparability and net sales for the regions do not include sales to other regions. Commodore and CIE Kitchens were consolidated into Nobia's fnancial statements from 1 November 2015 and thus two months of their net sales and operating proft are included. In addition to the regions' operating proft, the Group's operating proft includes operating proft from Group-wide items and eliminations. The Group's employees also include employees in the Parent Company.

Nobia 2015 Operations

Sustainability

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Corporate governance and the Nobia share

Production units	Own stores	Operational description	Sales channels
6	55	In the Nordic region, Nobia manufactures and sells kitchens to consumers and professional customers under several brands, of which a number can be found on several mar kets. In Sweden, Nobia sells kitchens under the Marbodal, HTH and uno form brands, and in Norway under the Sigdal, Norema, HTH, Marbodal and uno form brands. In Denmark, Nobia operates under the HTH, Invita and uno form brands. Laminated worktops are also manufactured in Denmark. In Finland, Nobia sells kitchens under the A la Car te, Petra and HTH brands.	66% 15% 15% 4% Kitchen specialists* Construction companies Builders' merchants/DIy chains Other retailers
5	206	Nobia's operations in the UK include Magnet, Gower, Interior Solutions, Rixonway Kitchens, Commodore and CIE Kitchens. Nobia sells kitchens via these business units to British consumers, builders, DIy and construction chains as well as to proper ty developers, construction companies and social housing administrators. Magnet is the largest op eration in terms of sales, with 202 stores across the UK.	30% 27% 29% 14% Kitchen specialist Retail Kitchen specialist Trade Builders' merchants/DIy chains Project
3	36	The Central Europe region comprises Nobia's Austrian and German brands. In Austria, Nobia manufactures kitchens under the brands ewe, FM and Intuo, which are mainly sold to Austrian furniture chains and independent kitchen specialists. In Germany, Nobia manufactures exclusive Poggenpohl kitchens for the global market. Poggenpohl targets consumers and professional customers in Europe, the US and Asia. Kitchens under the brand Goldreif are also sold via Poggenpohl's store network.	29% 29% 28% 14% Kitchen specialists* Independent kitchen specialists Furniture stores Construction companies
14	297

* Own stores and franchise.

NORDIC REGION

2015

Net sales SEK 5,652 m SEK 749 m

Organic growth

8%

KEy FIGURES

In Finland, the Group's common standard dimension was introduced and the previous range began to be phased out. Operating proft

uno form C-series

Operating margin

13.3%

HTH in Denmark introduced e-commerce and an online design tool.

ORGANIC SALES GROWTH, %

	2014	2015	Change, %
Net sales, SEK m	5,215	5,652	8
Gross proft excluding items affecting comparability, SEK m	2,112	2,254	7
Gross margin excluding items affecting comparability, %	40.5	39.9	–
Operating proft excluding items affecting comparability, SEK m	666	749	13
Operating margin excluding items affecting comparability, %	12.8	13.3	–
Operating proft, SEK m	660	749	14
Operating margin, %	12.7	13.3	–
Operating capital, SEK m	640	666	4
Return on operating capital, %	104	115	–
Investments, SEK m	133	159	20
Average number of employees	2,640	2,639	0
Number of employees at year-end	2,569	2,596	1

POSITION AND MARKET TREND

Nobia is a leading kitchen supplier in the Nordic region, operating both in consumer sales and professional segments. Nobia has a par ticularly strong position as a supplier of kitchens for renovation and new construction projects in the Nordic countries, and has strong, well-known brands. Sales are conducted directly through both franchise stores and retailers, although Nobia also has its own stores in the region.

Distribution varies between Nobia's eight brands in the region. In Norway, for example, kitchens are sold to consumers from Norema via own stores, while Sigdal kitchens are sold via franchise stores and independent retailers. Marbodal is principally sold through a retailer organisation. In Finland, Nobia does not have its own stores.

The Nordic kitchen market grew during the course of 2015. Sweden was the strongest market, with growth both in consumer demand and in the professional customer segment. Demand also grew in Norway and Denmark, while the Finnish kitchen market shrank.

BRANDS AND
OPERATIONS

HTH offers complete kitchen solutions in the mid-price segment to both consumers and professional customers. HTH kitchens are mainly delivered rigid, but there is also a range of fat-pack kitchen series. Sales are conducted in 102 stores throughout Denmark, Sweden and Norway, more than half of which are franchise stores, and via e-commerce.

Invita mainly operates in Denmark and sells kitchens with a high design content and a high level of service. Kitchen solutions from Invita are in the premium segment and are sold via franchise stores.

uno form offers exclusive and exper tly handcrafted kitchens with a timeless design. The kitchens are in the luxury segment and are sold via own stores and franchise-run stores in Scandinavia.

Marbodal is a well-known brand on the Swedish market offering complete kitchen solutions in the mid-price segment. The brand is sold in Sweden and Norway to

consumers and professional customers. The stores are franchise-run and there is also a large number of retailers.

Sigdal offers rigid kitchens in the midprice segment to both professional customers in the Norwegian market and Norwegian consumers via franchise stores and independent retailers.

Norema operates in Norway and sells rigid kitchens in the mid-price segment to consumers and professional customers. For consumers, there is also a range of fatpack kitchens in the lower price segment.

A la Carte offers rigid kitchen solutions in the premium segment that are primarily sold via Nobia's Finnish franchise chain Keittiömaailma ("kitchen world").

Petra is sold in Finland to professional customers and consumers via the building materials trade and Nobia's Keittiömaailma franchise chain. Petra's kitchens are in the mid-price segment.

OWN KITCHENS STORES

KITCHENS STORES By COUNTRy

Denmark	38
Norway	14
Sweden	3

SALES PER PRODUCT, % SALES CHANNELS, %

2015

Net sales

SEK 6,099 m

6%

KEy FIGURES

The Simply Magnet range launched at the end of 2014 was received positively by customers and contributed to the increase in sales.

Operating proft SEK 567 m

9.3% Organic growth Operating margin

Nobia acquired the kitchen companies Commodore and CIE Kitchens, who both operate on the UK private development market.

ORGANIC SALES GROWTH, %

	2014	2015	Change, %
Net sales, SEK m	4,707	6,099	30
Gross proft excluding items affecting comparability, SEK m	1,927	2,463	28
Gross margin excluding items affecting comparability, %	40.9	40.4	–
Operating proft excluding items affecting comparability, SEK m	353	567	61
Operating margin excluding items affecting comparability, %	7.5	9.3	–
Operating proft, SEK m	270	567	110
Operating margin, %	5.7	9.3	–
Operating capital, SEK m	853	1,636	92
Return on operating capital, %	33	46	–
Investments, SEK m	86	168	95
Average number of employees	2,365	2,868	21
Number of employees at year-end	2,755	3,042	10

Operations
Sustainability
Financial statements
Corporate governance and the Nobia share

POSITION AND MARKET TREND

Nobia is a leading player in the UK kitchen market and operates in all market segments. Nobia has own stores through Magnet, of which the majority are targeted at both consumers and builders. On the project market, Nobia supplies kitchens to companies within proper ty development and residential construction mainly via Commodore and CIE but also Magnet, and supplies social housing via Rixonway. Nobia also supplies kitchens to UK DIy and building materials chains via Gower and Interior Solutions.

Demand in the UK kitchen market grew for the third year in a row during 2015, although volumes remained at a lower level than they were before the extensive contraction of the market following the fnancial crisis. Competition was ferce and growth mainly increased in the low-price segments. Consumer demand and sales to privately-fnanced new builds increased, while investment in social housing renovation subsided as a result of reduced public fnancial aid.

Magnet is a nationwide kitchen chain that targets UK consumers and professional builders. Magnet is the UK's largest kitchen brand, offering supply-only and fully-installed kitchen solutions in the midprice segment, with a full service proposition. At the end of 2014, the core range of rigid kitchens was expanded to include an offering of ready-to-assemble kitchens, Simply Magnet. A full range of kitchen products is kept in stock for builders, while a range of doors, windows and accompanying joinery products is also offered.

Gower and Interior Solutions manufacture and supply ready-to-assemble kitchens to retailers operating in the UK building materials trade and to DIy chains. Alongside kitchen products, retailers are provided with full category management

service, which entails service with in-store displays, product development and staff training.

Rixonway is a leading supplier of kitchen solutions for social housing in the UK. The kitchens are in the economy segment and are primarily sold to construction companies and purchasing organisations, but also via a large number of builders' merchant stores.

Commodore and CIE sell kitchens to companies active in private development and residential construction, primarily in London and South East England. The kitchen solutions sold by Commodore are self-manufactured and positioned in the mid-price segment, while CIE is a kitchen retailer in the luxury segment.

OWN KITCHENS STORES

206

7 stores were opened during the year and 9 closed.

SALES PER PRODUCT, % SALES CHANNELS, %

2015 Operating proft excluding items Net sales excluding items affecting comparability

SEK1,588 m SEK 81m

KEy FIGURES

Nobia divested the French kitchen chain Hygena on 2 March 2015.

affecting comparability

Organic growth Operating margin excluding items affecting comparability

-2 % 5.1%

SEK 96 million was impaired in Poggenpohl in the four th quar ter as a result of incorrect accounting in the US for several years.

ORGANIC SALES GROWTH, %

	2014	2015	Change, %
Net sales excluding items affecting comparability, SEK m	1,493	1,588	6
Gross proft excluding items affecting comparability, SEK m	621	662	7
Gross margin excluding items affecting comparability, %	41.6	41.7	–
Operating proft excluding items affecting comparability, SEK m	117	81	-31
Operating margin excluding items affecting comparability, %	7.8	5.1	–
Operating proft/loss, SEK m	117	-15	113
Operating margin, %	7.8	-0.9	–
Operating capital, SEK m	573	424	-26
Return on operating capital, %	27	-3	–
Investments, SEK m	85	59	-31
Average number of employees	1,575	909	-42
Number of employees at year-end	1,546	844	-45

Operations
Sustainability
Financial statements
Corporate governance and the Nobia share

POSITION AND MARKET TREND

Nobia has a small share of the total kitchen market in Central Europe. Following the divestment of the French kitchen chain Hygena in March 2015, Nobia's main markets are in the region Austria and Germany. Nobia is also one of the leading kitchen suppliers in Austria, with three strong brands and sales to furniture chains and kitchen specialists. Nobia is a relatively minor player in Germany, although Poggenpohl in Germany is a strong brand in the global kitchen market. Poggenpohl sells kitchens to consumers and project customers in Europe, the US and Asia both directly and through 36 own stores and a large network of retailers.

Demand was weak on Nobia's markets

in Central Europe in 2015. The Austrian kitchen market declined, par ticularly in the higher price segments.

BRANDS AND
OPERATIONS

ewe is a kitchen brand in Austria that represents modern design in the mid-price and premium segments. The rigid kitchen solutions are mainly sold through furniture chains and independent kitchen specialists in Austria and neighbouring countries.

FM offers rigid kitchens in the mid-price and premium segments with traditional design and a high degree of functionality, such as solid-wood doors and heightadjustable cabinets. Sales are conducted through furniture chains and kitchen specialists in Austria.

Intuo offers kitchen solutions for quality and design-conscious consumers in the premium segment, and are principally sold through kitchen specialists in Austria.

Poggenpohl is one of the few internationally well-known kitchen brands. Poggenpohl kitchens are in the luxury segment, have a high design content and are manufactured in Germany.

Goldreif offers rigid kitchen solutions in the premium segment. The products are manufactured in Austria and sold through Poggenpohl's store network.

OWN KITCHENS STORES

36 1 store opened during the year.

KITCHENS STORES By COUNTRy

US	12
UK	9
Germany	7
Switzerland	3
Other countries	5

SALES PER PRODUCT, % SALES CHANNELS, %

Sustainable development that starts with our impact

Nobia's sustainability initiatives are based on the Group's economic, environmental and social impact. Key figures and focus areas are defined at Group level, with work on social environmental and ethical issues integrated into all units and functions.

Impact and responsibility

Nobia has a fundamental responsibility to all of its stakeholders to maintain and develop a sustainable business. The impact of the operations varies across the value chain. Activities depending on the type and scope of the impact are initiated to minimise negative consequences and maximise the positive, and this responsibly develops a sustainable business.

The company's environmental impact primarily arises from the manufacturing, surface treatment, installation and transportation of kitchens, in the form of emissions from energy consumption and transportation of wood, wood products, chemicals, packaging materials and waste.

In total, Nobia has approximately 6,500 employees, of which around 3,000 work with production or logistics and around 3,500 work with administration or sales. The products are manufactured at 14 production facilities in seven countries, and all of these meet the environmental requirements that apply in each country.

Governing documents

In 2013, Nobia's Board of Directors adopted a Code of Conduct that forms the basis for how the company should be run. All employees and partners are expected to adhere to this central policy. The Code of Conduct is based on the UN Universal Declaration of Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work and the OECD guidelines for multinational enterprises.

The Code contains principles governing fair competition, anti-corruption, impartiality and conficts of interest, respect for the individual, fair labour conditions, safety at the workplace and environmental protection. It thereby supports the UN Global Compact in terms of human rights, labour, environment, anti-corruption and the precautionary principle with regard to the environment.

All production facilities with the exception of two, one in Norway and one in the UK, have ISO 14001 environmental management system cer tifcation. This entails an annual review of environmental impact, new environmental targets and specifc action plans.

Nobia also has other policies for specifc areas of sustainability, such as an operating sourcing procedure and a forest policy for wood suppliers.

About the report

Nobia has been preparing a Sustainability Report in accordance with the Global Reporting Initiative (GRI) since 2012. In 2015, work was carried out to adapt the report to the GRI's G4 framework. Nobia's assessment is that the information included in the Annual Report and on the company's website meets to the requirements set by GRI G4 level, Core. The Sustainability Report has not been subject to review or audit by an external party. A GRI index can be found on page 31.

Sustainability aspects reported here are based on the materiality analysis conducted during the year. Environmental data, measurements and key fgures are collected from the production units at least once per year, and Group management receives reports on trends in these indicators twice a year. Environmental data from the supplier chain along with information from Hygena, which was divested during the frst quarter of 2015, and from Commodore and CIE Kitchens, which were acquired during the fourth quarter of 2015, are not included in the report.

Nobia's activities that are subject to a permit in Sweden are described in the Financial overview on page 34.

Nobia 2015 Operations

Sustainability

Financial statements

Corporate governance and the Nobia share

Stakeholder dialogue

An important aspect of the sustainability work is the company's communication with its stakeholders. Nobia has an ongoing dialogue with its stakeholders in different forums concerning sustainability issues.

During the year, personal interviews were also carried out with representatives for a selection of key customers, major shareholders, union representatives, relevant stakeholder organisations and major suppliers to add input to Nobia's ongoing sustainability efforts. 16 external parties responded to questions and ranked aspects of sustainability. In addition, all Nobia employees were given the opportunity to provide their view about which sustainability aspects were signifcant in a survey on the Group's intranet.

ExAmPLES OF AREAS CONSIDERED ImPORTANT By STAKEHOLDERS

Customers	Taking environmental responsibility for the product over its entire life cycle
	Reducing climate impact by limiting CO² emissions
Owners	Streamlining the value chain and identifying environmental improvements
	Offering employees training, development and career opportunities
Employees	Offering employees fair labour conditions and ensuring that satisfactory safety equipment is used
	Safe and healthy products
Stakeholder	Taking environmental responsibility for the product over its entire life cycle
organisations	Diversity and respect for the individual
Suppliers	Reducing climate impact through effcient use of resources
	Fair business methods and good business ethics

NOBIA'S VALUE CHAIN

	Product development	Sourcing	Manufacturing	Transportation	Sales	Use
Nobia's value creation	Nobia produces attractive solutions with a low envi ronmental impact based on consumer insight.	Nobia purchases materials and components from around 820 suppliers.	The kitchens are manufactured, surface treated, assembled and packaged in 14 plants in seven countries.	The kitchens are primarily distrib uted to customers using lorries.	The kitchens are sold by employees and via partners.	Nobia's kitchens are used in many homes on a daily basis over a long period.
Signifcant sustainability aspects	Choice of materials	Responsible sourcing Supplier audits Human rights Anti corruption Legal compliance	Safe work place and fair labour conditions Employee de velopment and career opportu nities Reduced climate impact Effcient use of resources Waste manage ment and recycling	Safe work place and fair labour conditions Effcient use of resources	Diversity and respect for the individual Employee development and career opportunities	Customer health and safety
How Nobia manages these aspects	Nobia aims to avoid unnecessary envi ronmental impact. Sustainability is a focus area for product development.	Nobia operates under generally accepted business practice and carries out supplier audits.	Nobia strives to reduce emissions and takes responsibility for its local environment, a safe workplace and effcient resource utilisation.	Transportation is primarily provided by established logistics companies, although in the case of several brands, the products are distributed using our own feet of vehicles.	Business methods comply with gener ally accepted busi ness practice. Employees and partners are obliged to follow the principles con tained in the Code of Conduct.	Tests and documentation guarantee that the products are safe and that they satisfy customer requirements and applicable environment aspects.

Financial responsibility Social responsibility Environmental responsibility

Care of employees

The commitment and efforts of employees are a vital part of Nobia's success. The company is able to retain and recruit competent employees by offering a safe and secure workplace that offers opportunities for career development.

Nobia supports and respects international conventions governing human rights as well as local legislation. The company mainly operates in Europe, where people have generally made progress in the areas of business ethics, human rights and labour conditions. Employees are covered by collective agreements in every country except the UK.

Nobia mainly has permanent employees, with only 1 per cent of employees being temporarily employed. The workforce can be divided up according to whether the employees work in production and logistics or alternatively in administration and sales.

Values and respect for the individual

Employees are expected to maintain a high ethical standard and observe the principles described in the company's Code of Conduct in their daily activities. Nobia promotes a healthy work-life balance and encourages its employees to achieve such a balance.

Nobia has respect for the individual, is committed to diversity and equal treatment and aims to increase the proportion of women in senior positions. Out of Nobia's 144 senior executives, the proportion of women amounts to 15 per cent, compared with 28 per cent of the Group's total employees. The Code of Conduct maintains that no employee should be discriminated against due to age, ethnicity, social or national origin, skin colour, gender, sexual orientation, religion, political views, disability or any other reason.

Nobia respects legislation governing fair trade, competition and anti-corruption and applicable business ethics codes. Sourcing and sales should be conducted in a professional manner and with integrity.

To ensure compliance with the Code of Conduct, an anonymous communication channel has been established for employees who want to report suspected breaches of the Code. Three matters were reported via this communication

channel in 2015. The reported matters and other issues relating to the principles in the Code of Conduct have been handled and reported to the Board.

Safe and secure work environment

The safety of employees is the highest priority, and Nobia works according to a vision of zero accidents in the workplace and work-related injuries. Preventive measures are taken to minimise the risk of accidents, injuries and sickness absence. Workplaces are inspected on a regular basis to ensure a safe work environment and that the necessary equipment is in place. In 2015, one of the production facilities in the UK received the Sword of Honour health and safety prize awarded by the British Safety Council.

The total number of workplace-related accidents amounted during the year to 101 (98) and the number of workplace accidents per million hours worked amounted to 16.8. Each workplace accident is followed up and corrective measures are taken.

Employees per country, number

UK	3,091
Denmark	1,308
Sweden	648
Finland	363
Austria	358
Germany	341
Norway	298
Other countries	93
Employees of subsidiaries	6,500
Employees of Parent Company	39
Employees of the Group	6,539

Production facilities

PRODUCTION FACILITIES	ISO 14001
Tidaholm, Sweden	yes
Ølgod, Denmark	yes
Bjerringbo, Denmark	yes
Farsø, Denmark	yes
Eggedal, Norway	–
Nastola, Finland	yes
Darlington, UK	yes

PRODUCTION FACILITIES ISO 14001

Halifax, UK	yes
morley, UK	yes
Dewsbury, UK	yes
Grays, UK	–
Herford, Germany	yes
Wels, Austria	yes
Freistadt, Austria	yes

Nobia 2015

Operations

Sustainability

Financial statements

Corporate governance and the Nobia share

Employee development

Regular employee performance evaluations are carried out at Nobia, during which individual goals and development plans are drawn up. This process has involved all employees since 2014, both offce employees and employees in production and logistics.

For employees in production and logistics, there is a programme for operational and employee development named Nobia Production and Logistic System. The programme is based on the employees and leadership and contains guidelines and Lean tools. The aim is to strengthen, engage and motivate employees to improve processes and reduce the risk of accidents in the operations.

many of the Group's units also offer internal skills development so that employees can learn about products, sales, design and drawing systems. These courses are managed by the Training Academies of each brand. The aim is to transition over

to more e-learning based training, and so in 2015 marbodal launched a new e-learning-based training course under the name Köksakademien (The Kitchen Academy).

Business development

Nobia's employee survey, myVoice, was carried out in 2013 in the Scandinavian part of the Group and in central Group functions. The survey was introduced across the whole Group in 2014 and the results formed the basis for around 580 improvement activities in total within areas such as information, conduct, roll distribution and training.

The employee survey is being expanded in 2016 to include a battery of questions regarding leadership at Nobia. The results of this survey are intended to form the basis for ongoing improvement initiatives in the areas of work environment, leadership, career development and employees' commitment.

Talent management

Wherever possible, Nobia tries to apply internal recruitment and internal promotion. The identifcation and development of internal talent is key to the company's continued success. The company has a centrally controlled talent-management process, where some 400 employees have been assessed with the objective of identifying leadership potential, development requirements and future succession solutions.

Leadership development

managers at Nobia are offered training in such felds as project management and leadership. A Group-wide programme, the Nobia Leadership Acceleration Programme, is also offered to selected talents from different parts of the business. As in previous years, one element of 2015's programme was project work surrounding a number of real challenges facing the company, as defned by Group management.

Employees by gender, number

Employees by function, number Workplace-related accidents, number

Effcient use of resources

Nobia's overall environmental impact is relatively minor, both in terms of products and manufacturing processes. Nevertheless, the company strives to reduce its environmental impact.

FOCUS AREAS FOR

ENVIRONMENTAL ACTIVITIES

6 Packaging – volumes and types of materials.

Nobia strives to reduce its environmental impact by restricting the use of hazardous chemicals, conserving resources, introducing more effcient heating systems and optimising transportation.

Environmental activities at Nobia are delegated and integrated into the operations of each region and production unit. Focus areas for environmental activities, to which selected indicators are linked, have been defned at Group-level. The regions set goals and priorities using the Groupwide direction as a basis.

Continuous efforts are made in production to optimise the fows using a Leanbased programme called Nobia Production and Logistics System.

More effcient resource utilisation is achieved through such optimised processes, meaning energy, emissions and costs can be reduced. Error-free deliveries are positive both for environmental reasons and for Nobia's customers.

The Group's delivery reliability, defned as the proportion of error-free and complete deliveries, amounted to 97 per cent (98) in 2015, and was negatively affected by the transition to the Group's common standard dimension in Finland.

CO² emissions

Climate impact mainly occurs through emissions of greenhouse gases. Nobia strives to reduce CO² emissions, which are mainly caused by heating and cooling buildings, and electricity use in manufacturing. To reduce both costs and our environmental impact, Nobia is continuously introducing modern systems for cooling, heat recovery and ventilation.

CO² emissions also arise through the transportation of materials, components and kitchen products, as well as through employee business travel. About 5 per cent (5) of Nobia's total expenses are attributable to transportation, making this a key focus for resource optimisation. Surveys and analyses of transpor t fows are implemented in close collaboration with logistics companies but also with the assistance of external experts, to identify economic and environmental benefts. Freight load optimisation can help reduce both costs and CO² emissions.

Nobia's CO² emissions per produced cabinet declined 6 per cent (6) in 2015, mainly as a result of increased production volumes. New targets for energy consumption and transportation for 2016

Greenhouse gas emissions, heating and manufacturing, thousands of tonnes CO²

Energy consumption, electricity, GWh

were adopted to reduce costs and CO² emissions.

Nobia has been reporting to CDP since 2007 – an independent organisation promoting transparency in terms of companies' CO² emissions and climate strategies in order to convey this knowledge to investors. Each year, companies that take part are ranked in terms of reporting quality, thoroughness and activities implemented to counteract climate change. Nobia's reporting includes emissions from heating production facilities, electricity consumption, transportation of kitchen products to customers and, to some extent, employees' business trips. In 2015, Nobia's ranking improved to 89D up from 75D the previous year. The average for Nordic companies was 84C. Nobia's ranking shows that its emissions performance is somewhat below the average of participating Nordic companies, but that reporting and governance have improved.

Energy consumption

Energy consumption is another prioritised area in Nobia's environmental initiatives. Energy is mainly used to operate production equipment, ventilation, fans, lighting, and to heat and cool buildings. Costs for energy account for less than 1 per cent (1) of Nobia's total expenses. Efforts to reduce energy consumption include training and involving employees in conserving resources. Other measures include replacing old equipment with energy-effcient alternatives and equipping fans with frequency converters and heat recovery units.

Materials

Wood and wood products in the form of chipboard and mDF are main components in Nobia's products. During the year, the amount of wood, chipboard and mDF amounted to some 216 thousands of tonnes (184). Nobia endeavours to increase the proportion of wood materials cer tifed by the Forest Stewardship Council (FSC), which amounted to 45 per cent (37) in 2015.

Nobia's suppliers of wood and wood products are mainly based in Europe, but also in Asia. All wood suppliers are informed about the Nobia's sustainable forest management policy and must sign a timber declaration containing requirements relating to. This declaration contains requirements relating to: compliance with forest legislation, known origin and details of source, and not illegally harvested timber, not wood from intact natural forests or high conservation value forest, not timber from protected areas or from plantations in tropical and sub-tropical regions and not wood from tropical trees except those cer tifed by the Forest Stewardship Council (FSC).

Nobia is a member of the Global Forest & Trade Network in the UK. GFTN is a part of the World Wide Fund for Nature, WWF, and a union of companies and organisations that have committed to pursue or support responsible forest management. GFTN works to coordinate national and regional initiatives in order to increase responsible forest management, and its members undertake to increase sourcing of wood and wood products from sustainable sources and to disassociate themselves from forest products that are illegal or originate from controversial sources.

Emissions of solvents

The reduction of solvents is a key issue in Nobia's environmental work. Solvents are mainly used in surface treatment and when cleaning painting facilities. Initiatives to reduce the use of solvents include replacing them with water-based and UVtempered surface coatings and reducing the number of changeovers in production equipment, which reduces the amount of cleaning required and raises productivity. In 2014, the percentage of water-based and UV-tempered surface coatings totalled about 53 per cent (51).

Waste

Timber pallets, corrugated board, shrinkwrap and plastic tape are the main components of the packaging materials used by Nobia. About 79 per cent (84) of this packaging materials is recyclable. A certain amount of waste is produced from the manufacture of products, primarily in the form of timber pallets, and plastic packaging and corrugated board from materials received. This waste is sent for recycling or incineration. Other types of waste include paint, oil and residue from cleaning, which are sor ted for combustion or for landfll.

During the year, wood waste amounted to about 29 thousands of tonnes (21). The amount of waste excluding wood waste was about 8 thousands of tonnes (9), of which some 29 per cent (22) went to external recycling, about 63 per cent (71) to landfll or incineration and about 8 per cent (7) comprised hazardous waste.

Energy consumption, heating, GWh

Use of materials, wood and FSC-labelled wood, thousands of tonnes

Emissions of solvents, tonnes

Product responsibility and responsible sourcing

Nobia offers kitchens that satisfy both customers' needs and applicable safety and environmental aspects. Purchased materials and components are carefully specified and the suppliers are audited in terms of work environment, human rights and environmental issues.

Safe and environmentally friendly products

Nobia's products should be safe to use throughout their entire useful life. Kitchen products are generally classifed as "home environment" during tests and when setting requirements. Before a new product enters the production phase, relevant tests are carried out both in-house and by accredited testing institutions in line with EU standards. Common tests include stress and durability tests to minimise the risk of accidents and guarantee a high level of safety and quality.

Sustainability aspects are becoming increasingly important for Nobia's customers. The construction of eco-friendly

45

45 supplier audits were carried out during the year. New suppliers and those considered high-risk are prioritised in this process.

buildings has increased over the past few years, which has led to an increase in demand for eco-labelled kitchens and products that live up to eco-building standards. Today, Nobia has 18 Nordic Ecolabelled kitchen platforms in different colours that are sold by marbodal, Norema and Sigdal, and the range includes products that live up to eco-building standards such as BREEAm (BRE Environmental Assessment method) and Nordic Ecolabelled single-family houses, apartment blocks and preschool buildings. Nordic Ecolabelled products will also be introduced at HTH in 2016, and sustainability is a new focus area for central product development.

Nobia is represented in the technical committees of Trä and möbelföretagen, TmF (a trade association for the Swedish wood processing and furniture industry). TmF is a member organisation of the Confederation of Swedish Enterprise, and the work of the technical committees includes participation in the development of standards governing product safety, resistance and environmental performance as well as participation in the EU's standardisation committees. Nobia's involvement in TmF is based on a desire to be at the forefront of product design and products that meet rigorous requirements in terms of safety, lifespan and low environmental impact.

Supplier chain

Nobia has around 820 suppliers, of which most are based in Europe and only around 5 per cent (5) are in Asia. The core components of the products, such as chipboard, mDF, paint, hinges, drawer units, edging and worktops, are supplied by European companies. Nobia has several suppliers

of appliances depending on the customer segment and in line with the aim to always be in a position to supply products from the leading appliance companies. Product categories manufactured in Asia include screws, some interior fttings and LED lighting, and these products are purchased principally via European wholesalers based on detailed product specifcations that include EU requirements and local regulations.

Responsible sourcing

Nobia's suppliers are inspected and assessed in accordance with the company's guidelines for the environment, work environment, and other social and ethical issues. All suppliers must comply with laws and requirements, the UN Declaration of Human Rights and Nobia's Code of Conduct.

The assessment process aims to develop Nobia's suppliers and answer questions about quality and environmental management systems, products, social and ethical issues, and health and safety conditions. An assessment template with an internal rating system is used. A low rating leads to corrective measures or not entering into a business relationship. The results of the audits are reviewed together with each supplier.

There is a quality control department responsible for supplier assessments within Nobia's central sourcing organisation. Audits of new suppliers and those considered high-risk are prioritised in this process.

Over the past three years, 148 suppliers in total have been assessed in terms of work environment, human rights and the environment. All new suppliers were audited in 2015. In total, 45 supplier audits (42) were carried out in different countries and across several product categories.

Nobia 2015 Operations

Sustainability

Financial statements

Corporate governance and the Nobia share

NORDIC ECOLABELLED PRODUCTS

,n , Marbodal was the frst kitchen company to begin offering Nordic Ecolabelled kitchens. This decision required changes in production and major investment in surface treatment machines as well as development resources. Today, several Nobia brands offer Nordic Ecolabelled kitchen series, and demand for eco labelled kitchens is increasing.

The government-owned company Miljömärkning Sverige is responsible for the Nordic Ecolabel, and it was the Nordic Council of Ministers that launched the Nordic Ecolabel in 1989 to help consumers make good product choices while also reducing their environmental impact. The Nordic Ecolabel is the Nordic region's best known ecolabel and can be found on over 10,000 products and services today.

The Nordic Ecolabel is an integrated part of Nobia's product development, with decisions on eco labelling taken at an early stage. Materials for products destined for eco labelling are selected carefully based on an analysis of their environmental impact. Documenta- tion, certifcation and tests are sent to Miljömärkning Sverige for auditing and approval. Depending on the materials the product is made of, the components are audited against established requirements.

• &hemicals added should contain minimal dangerous substances.
• :ood products should haYe a traceable origin and contain wood from certifed forest management.
• :ood products should haYe low emissions of hazardous substances.
• Surface treatment should be carried out in controlled systems using waterbased paints and UV-cured paint.

The risk of health problems when using the products as well as damaging environmental effects are both reduced due to the minimal dangerous substances in and low emissions of Nordic Ecolabelled products. Products with traceable origins and wood content from certifed forest management reduce the risk of deforestation and illegal logging.

Water-based and UV-cured paints reduce emissions of solvents and improve the work environment.

A lifecycle analysis is also included in the audit, with requirements being placed on how the products are handled once they have been used, entailing accompanying source sorting instructions for waste management and environmentally friendly packaging materials for collection and recycling.

Leif Lång, Furniture Product Manager for Miljömärking Sverige:

It will be even more important for the consumers of tomorrow to take responsibility for their purchases, and choosing the best products from an environmental perspective is made easy with the help of Nordic Ecolabel. Companies who work strategically to reduce their environmental impact will be the winners of the future.

Specifcation of the *roup³s costs as a percentage of net sales

Value generated

Nobia generates value for its stakeholders. Employees share this value through their salaries and other benefts, suppliers are paid for the purchases they make, customers receive high-quality kitchen products, countries and municipalities receive tax revenue, and shareholders receive dividends and returns on their shares. Some of the generated value remains within the company and is used for investment and the development of new products.

In 2015, Nobia's total value added, or net sales less costs for materials and services, amounted to SEK 4,601 million (3,963).

SUMMARY - SUSTAINABILITY INDICATORS

GRI indicators	Economic Performance Indicators, SEKm1)	2013	2014	2015
G4-EC1	Net sales	11,773	11,411	13,332
G4-EC1	Operating expenses	8,060	7,448	8,731
G4-EC1	Payroll expenses	2,240	2,385	2,653
G4-EC1	Social security contributions and pensions	582	616	589
G4-EC1	States and municipal taxes	159	194	216
G4-EC1	Payment to lenders	53	37	15
G4-EC1	Dividends to shareholders	84	167	194
G4-EC1	Retained in operations	595	564	934

Environmental Performance Indicators

G4-EN1	materials used: Wood, thousands of tonnes	182	184	216
G4-EN1	materials used: Packaging materials, kg/cabinet	1.2	1.4	1.3
G4-EN1	materials used: Recyclable packaging materials, %	82	84	79
G4-EN5	Energy intensity: Electricity consumption, kWh/cabinet	10.7	9.9	8.6
G4-EN5	Energy intensity: Heating, kWh/cabinet	10.6	9.1	7.5
G4-EN182)	Greenhouse gas emissions: Transportation, kg/cabinet	3.2	3.1	3.0
G4-EN182)	Greenhouse gas emissions: Heating and manufacturing, kg/cabinet	5.0	4.6	4.3
G4-EN213)	Air emissions: Volatile organic compounds, kg VOC/100 laquered details	3.8	3.6	4.4
G4-EN23	Waste (excluding wood waste), kg/cabinet	1.2	1.3	1.0
G4-EN23	Wood waste, thousands of tonnes	20	21	29

Social Performance Indicators including Society indicators

G4-LA64)	Work-related accidents in production facilities, number	82	98	101
G4-EN32, LA14,
HR10	Audited suppliers and subcontractors, number	61	42	45

1) Economic performance indicators for 2014 have been

re-measured as a result of the reclassifcation of Hygena as

discontinued operations.

²⁾ Includes Scope 1, 2 and 3 emissions. 3) Only VOC is reported.

⁴⁾ Only accident intensity is reported.

Nobia 2015

Operations

Sustainability Financial statements

Corporate governance and the Nobia share

GRI INDEX

STANDARD DISCLOSURES

SPECIFIC STANDARD DISCLOSURES

	Description	Reference
G4-1	CEO's comments	pp. 4-5
G4-3	The name of the organisation	Front inside cover
G4-4	The primary brands, products and services	pp. 1, 3, 15, 17, 19, 21
G4-5	The location of the organisation's headquarters	Back inside cover
G4-6	Number of countries where the organisation operates	pp. 24, 61, 64
G4-7	Nature of ownership and legal form	pp. 34, 90
G4-8	markets served	pp. 12-21
G4-9	Scale of the organization	pp. 3, 14-15
G4-10	Number of employees	pp. 24, 64
G4-11	Percentage of employees covered by collective bargaining agreements	pp. 24
G4-12	The organisation's supply chain	pp. 23, 28
G4-13	Signifcant changes during the repor ting period	pp. 32-33
G4-14	The precautionary approach	pp. 22
G4-15	Externally developed initiatives subscribed to by the organisation	pp. 22, 27-28
G4-16	memberships of associations held by the organisation	pp. 27-28
G4-17	Entities included in the report	pp. 22, 24
G4-18	Process for defning the repor t's content	pp. 22-23
G4-19	material aspects	pp. 23
G4-20	Aspect boundaries for each material aspect within the organisation	pp. 23
G4-21	Aspect boundaries for each material aspect outside the organisation	pp. 23
G4-22	Effects of any restatements of information in previous reports	pp. 22
G4-23	Signifcant changes from previous repor ting periods	pp. 22
G4-24	Stakeholder groups engaged by the organisation	pp. 23
G4-25	Identifcation and selection of stakeholders	pp. 23
G4-26	The organisation's approach to stakeholder engagement	pp. 23
G4-27	Key topics raised through stakeholder engagement and how the organisation has responded to these topics	pp. 23
G4-28	Reporting period	Fiscal year 2015
G4-29	Date of most recent previous report	24 march 2015
G4-30	Reporting cycle	Annually
G4-31	Contact point for questions regarding the report	pp. 91
G4-32	The "in accordance" option and GRI index	pp. 22, 31
G4-33	External assurance	pp. 22
G4-34	Report of the governance structure of the organisation	pp. 82-85
G4-56	The organisation's values, principles, standards and norms of behaviour	pp. 22, 24 Code of Conduct on Nobia's website

	Description	Reference
G4-DmA	Economic performance	pp. 6-9
G4-EC1	Value generated and distributed	pp. 30
G4-DmA	materials	pp. 26-27
G4-EN1	materials used	pp. 26-27
G4-DmA	Energy	pp. 26-27
G4-EN3	Energy consumption	pp. 26-27
G4-EN5	Energy intensity	pp. 30
G4-DmA	Emissions	pp. 26-27
G4-EN15	Direct greenhouse gas emissions (Scope 1)	Nobia's website
G4-EN16	Indirect greenhouse gas emissions (Scope 2)	Nobia's website
G4-EN18	Greenhouse-gas emissions intensity	pp. 30
G4-EN21	Signifcant air emissions	pp. 27, 30
G4-EN23	Waste	pp. 27, 30
G4-DmA	Supplier environmental assessment	pp. 28, 30
G4-EN32	Percentage of new suppliers screened using environmental criteria	pp. 28
G4-DmA	Health and safety	pp. 24-25, 30
G4-LA6	Type of injury and rates of injury	pp. 24-25, 30
G4-DmA	Supplier environmental assessment	pp. 28, 30
G4-LA14	Percentage of new suppliers screened using labour practices criteria	pp. 28
G4-DmA	Supplier human rights assessment	pp. 28, 30
G4-HR10	Percentage of new suppliers screened using human rights criteria	pp. 28
G4-DmA	Anti-corruption	pp. 24
G4-SO5	Total number of confrmed incidents of corruption and actions taken	pp. 24

Financial overview

The operation

Nobia AB (Corporate Registration Number 556528-2752) is the leading kitchen specialist in Europe. Nobia sells kitchens under some twenty strong brands, and as a contract manufacturer. The operation covers the entire value chain, from development, manufacturing and installation to sales and distribution, as well as associated service. A kitchen focus makes it possible to leverage the joint know-how of the business units throughout the entire value chain.

Sales to consumers are conducted through own and franchise stores and through a network of retailers, including furniture stores, builders' merchants, DIY stores and independent kitchen specialists. The products are also sold to professional construction companies which, in turn, sell the kitchens to their end customers.

Nobia is organised in three geographic regions: the UK, Nordic and Central Europe regions.

Financial targets

Nobia's operations are steered towards three fnancial targets that aim to generate favourable returns for shareholders and long-term value growth.

Proftability; The Nobia Group's operating margin (EBIT margin) is to amount to at least 10 per cent over a business cycle. Furthermore, Nobia aims at organic growth that is 2–3 per cent higher than market growth and also growth through acquisitions.

NOBIA GROUP

SUMMARY

All of the fgures except for proft/loss after tax, operating cash fow, return on operating capital and return on shareholders' equity have been adjusted for items affecting comparability.

1) Hygena's operations are recognised from 2015 as discontinued operations in accordance with IFRS 5 and comparative fgures for 2014 have been restated according to the same accounting policy.

Financing; The debt/equity ratio (net debt/shareholders' equity) is not to exceed 100 per cent. A temporary elevation of the debt/equity ratio is acceptable in conjunction with acquisitions.

Dividends; Dividends are, on average, to be within the interval of 40–60 per cent of net proft after tax. When decisions about the amount of the dividend are made, the company's capital structure is to be taken into consideration.

Strategy

Nobia endeavours to create proftable growth by capitalising on economies of scale and synergy effects, and developing the company's customer offering and sales channels. The strategy is based on the Effciency and Growth platform, which includes effciency-enhancing measures and activities to drive increased sales.

2015

Nobia was further consolidated and proftability improved. Organic sales growth amounted to 6 per cent (2) and the operating margin continued to strengthen. Operating proft for the year improved primarily as a result of increased sales volumes and favourable exchange-rate fuctuations.

Signifcant events

On 23 February, Nobia announced that the French competition authority had approved the divestment of French kitchen chain Hygena and that the transaction was to take place on 2 March 2015. At the same time, it was announced that the Continental Europe region was to be renamed the Central Europe region after the divestment of Hygena.

Tomas Billing was elected Chairman of the Board at the Annual General Meeting on 14 April. Former Chairman Johan Molin had declined re-election. Christina Ståhl was elected a new member of the Nobia Board at the same Meeting. KPMG AB, with George Pettersson as Auditor-in-Charge, was re-elected as the company's auditors for the period until the conclusion of the following Annual General Meeting. The Annual General Meeting appointed a Nomination Committee comprising Viveca Ax:son Johnson (Chairman) representing Nordstjernan, Fredrik Palmstierna representing Latour, Torbjörn Magnusson representing If Skadeförsäkring, Evert Carlsson representing Swedbank Robur funds and Lars Bergqvist representing Lannebo funds, and adopted the instruction for the Nomination Committee.

At the end of April, the Board of Nobia decided to transfer bought-back shares under the employee share option scheme resolved at the 2011 Annual General Meeting, based on the authorisation granted by the 2015 Annual General Meeting, and the Performance Share Plan 2012 adopted at the 2012 Annual General Meeting.

	20141)	2015	Change, %
Net sales, SEK m	11,411	13,336	17
Gross margin, %	41.0	40.5	–
Operating margin before depreciation/amortisation and impairment (EBITDA), %	11.3	11.8	–
Operating proft, SEK m (EBIT)	975	1,241	27
Operating margin, % (EBIT margin)	8.5	9.3	–
Proft after fnancial items, SEK m	899	1,183	32
Proft/loss after tax, incl. items affecting comparability, SEK m	-27	828	–
Earnings per share after dilution, excl. items affecting comparability, SEK	3.20	5.36	68
Earnings/loss per share after dilution, incl. items affecting comparability, SEK	-0.17	4.92	–
Operating cash fow, SEK m	779	770	-1
Return on operating capital, %	23.2	26.9	–
Return on shareholders' equity, %	-0.9	24.1	–
Number of employees at year-end	6,925	6,539	-5

Operations
Sustainability
Financial statements
Corporate governance and the Nobia share

On 1 October, Patrick Heinen was employed as Executive Vice President and Head of Poggenpohl.

In November, Nobia acquired Commodore and CIE Kitchens, two kitchen companies active in the private developer market in the UK.

Michael Larsen, Executive Vice President, Supply Chain Operations, left Nobia on 30 November.

Consolidated net sales

Net sales including items affecting comparability amounted to SEK 13,332 million (11,411) and were distributed as follows: UK region, SEK 6,099 million (4,707); Nordic region, SEK 5,652 million (5,215) and Central Europe region, SEK 1,584 million (1,493). Sales to other regions are also included in net sales for the region.

The Group's organic growth, meaning the change in net sales for comparable units and adjusted for currency effects, totalled 6 per cent (2). Organic growth in the Nordic region was 8 per cent (2), while organic growth was 6 per cent (1) in the UK region and negative 2 per cent (pos: 4) in the Central Europe region.

The Group's earnings

The Group's operating proft including items affecting comparability amounted to SEK 1,145 million (878). Items affecting comparability that impacted operating proft amounted to an expense of SEK 96 million (expense: 97). The operating margin was 8.6 per cent (7.7). Operating proft excluding items affecting comparability amounted to SEK 1,241 million (975) and the corresponding operating margin was 9.3 per cent (8.5).

In the UK region, operating proft increased to SEK 567 million (270). The earnings improvement was primarily a result of higher sales volumes and positive currency effects. No items affecting comparability impacted operating proft for the year (expense: 83). Currency effects had a positive impact of SEK 120 million (60) on operating proft excluding items affecting comparability.

In the Nordic region, operating proft rose to SEK 749 million (660). The improvement was mainly due to higher sales. No items affecting comparability were charged to operating proft for the year (expense: 6). Currency effects had a negative impact of SEK 25 million (neg: 60) on operating proft excluding items affecting comparability.

In the Central Europe region, the operating result weakened to a loss of SEK 15 million (proft: 117). The decline in earnings was mainly due to lower sales volumes, increased costs and items affecting comparability. Items affecting comparability amounting to an expense of SEK 96 million were charged to operating proft for the year (–). Currency effects had a positive impact of SEK 15 million (10) on operating proft excluding items affecting comparability.

Group-wide items and eliminations amounted to an operating loss of SEK 156 million (loss: 169). Financial items amounted to an expense of SEK 58 million (expense: 78). Net fnancial items included the net of return on pension assets and interest expense for pension liabilities corresponding to an expense of SEK 43 million (expense: 41). Net interest expense totalled SEK 15 million (expense: 37). Proft after fnancial items improved to SEK 1,087 million (800).

Tax expense amounted to SEK 262 million (205). Proft from discontinued operations, net after tax, amounted to SEK 3 million (loss: 622), of which a gain of SEK 58 million pertained to the divestment of Hygena, a loss of SEK 51 million to Hygena's current earnings and a loss of SEK 4 million (loss: 17) referred to the stores that Nobia acquired from franchisees with the intention of subsequently selling on. Proft after tax increased to SEK 828 million (loss: 27).

Earnings per share for the year after dilution amounted to SEK 4.92 (loss: 0.17). Earnings per share for the year after dilution and excluding items affecting comparability amounted to SEK 5.36 (3.20).

Items affecting comparability

Items affecting comparability refer to certain nonrecurring costs that were referred to as restructuring costs in previous annual reports.

Items affecting comparability of a loss of SEK 96 million were charged to operating proft for 2015. These items were attributable to impairment losses in Poggenpohl due to incorrect accounting in Poggenpohl USA for a number of years. The cost items do not impact cash fow.

Approved and implemented restructuring measures of SEK 23 million (76) from previous years were charged to cash fow in 2015.

Items affecting comparability in 2014 amounted to a net expense of SEK 564 million, and were charged to proft after tax. These items primarily pertained to impairment of goodwill and expenses related to the divestment of Hygena, but also the transition to the Group's common standard dimension in Magnet in the UK and in Finland as well as costs related to the divestment of Rixonway Kitchens.

Investments, cash fow and fnancial position

Investments in fxed assets amounted to SEK 410 million (316), of which SEK 93 million (135) pertained to investments in the store network.

Operating cash fow amounted to SEK 770 million (779), adversely affected by a negative change in working capital and higher investments, and positively impacted by improved earnings generation.

The Group's capital employed amounted to SEK 5,369 million (4,880) at the end of the period. At year-end, net debt totalled SEK 774 million (1,206). Provisions for pensions, which are included in net debt, amounted to SEK 732 million (869) at the end of the period, while net borrowing amounted to SEK 42 million (337). At year-end, the debt/ equity ratio was 20 per cent (38). Shareholders' equity at year-end amounted to SEK 3,822 million (3,196). The equity/assets ratio at year-end was 47 per cent (41).

Nobia's credit frameworks, which are valid until 2019 and 2017, respectively, amounted to SEK 1.8 billion, excluding overdraft facilities, at year-end. The Swedish Export Credit Corporation granted a loan of SEK 800 million in 2010 and it expires in 2017. In 2014, Nobia agreed on a new syndicated loan of SEK 1 billion, valid until 2019, with a small group of banks. At the end of December 2015, the entire credit frameworks had been unutilised.

Earnings from discontinued operations

Hygena's operations are recognised as discontinued operations from 1 January 2015 in accordance with IFRS 5, and the income statement, organic growth, specifcation of items affecting comparability, cash-fow statement and comparative data per region for 2014 have been restated in this Annual Report. Restatements are presented in the appendix available from Nobia's website under Investor Relations/Reports and presentations.

Proft after tax from discontinued operations in 2015 amounted to SEK 3 million (loss: 622), of which a gain of SEK 58 million pertained to the divestment of Hygena, a loss of SEK 51 million to Hygena's current earnings and a loss of SEK 4 million (loss: 17) referred to the stores that Nobia acquired from franchisees with the intention of subsequently selling on.

Acquisition of Commodore and CIE Kitchens

In November, Nobia acquired Commodore and CIE Kitchens, two kitchen companies that primarily target private developers in London and South East England. Commodore designs, manufacturers and installs mid range kitchens and has a production facility in Grays, around 30 km east of London. CIE is a niche kitchen reseller that designs and

installs high-end kitchens in London and has offces in London and in Kent. This acquisition strengthens Nobia's position in the UK project market and creates additional synergy effects.

The purchase consideration consisted of an up-front payment of GBP 28 million, on a cash and debt-free basis, and a variable cash consideration of a maximum of GBP 4 million, conditional upon the business performance and that key management remain with the operation for at least the next two years. Commodore and CIE Kitchens have joint annual net sales of approximately GBP 40 million and an operating margin of about 10 per cent and were consolidated into Nobia's fnancial statements on 1 November 2015.

Signifcant events after the end of the year

Lars Bay-Smidt, Executive Vice President, EVP Nordic Region and Head of Commercial Denmark, left Nobia on 18 January 2016.

Rune Stephansen took offce as Executive Vice President and Head of Commercial Denmark on 1 February 2016. Rune Stephansen previously served as Executive Vice President, Head of Commercial Sweden. Annica Hagen took offce as Executive Vice President and Head of Commercial Sweden on 1 March 2016. Annica Hagen was previously Executive Vice President, Brand Portfolio and Innovation. Kim Lindqvist took offce as Executive Vice President, Chief Marketing Offcer on 1 March 2016. Kim Lindqvist previously served as Executive Vice President, Digital and Media Strategy.

Future outlook

Demand for kitchens normally follows the same business cycle as other consumer discretionary products. Given the prevailing economic climate, market conditions and demand trends for 2016 are deemed to remain challenging. Nobia will continue to focus on increasing effciency over time, and taking greater advantage of the Group's size, while also making signifcant investments in order to generate proftable growth.

Personnel

In 2015, the average number of employees was 6,473 (6,636). The number of employees at year-end was 6,539 (6,925). The decrease in the number of employees was mainly due to the divestment of Hygena. The acquisition of Commodore and CIE Kitchens increased the number of employees by 144.

Environment and sustainability

34 Nobia conducts activities that require a permit under the Swedish Environmental Code through Nobia Production Sweden AB, which includes Nobia's Swedish operations in production, logistics and sourcing. In 2015, the production facility in Tidaholm affected the external environment through mainly noise and emissions to air in conjunction with the surface treatment of wooden items. The County Administrative Board of Västra Götaland is the regulatory authority and decision-making body regarding permit applications. Nobia Production Sweden AB is certifed to the ISO 14001 environmental management standard.

All of Nobia's 14 production units, located in seven European countries, satisfy the environmental requirements determined by each country and 12 of these have been awarded ISO 14001 certifcation.

Nobia works consistently to reduce the Group's CO^² emissions. In 2015, the Group's CO^² emissions per produced cabinet declined 6 per cent. The Group's CO^² emissions increased a total of about 5 per cent due to a higher number of produced cabinets. Other key sustainability-related performance indicators for Nobia, such as the number of workplace-related accidents and number of supplier audits, are presented on pages 22-30.

Product development

All product development for the Groupwide range is managed centrally. Work on producing new products is focused on a number of areas that meet specifc customer requirements. During the course of the process, prototypes are developed that are tested on consumers.

Parent Company

The Parent Company Nobia AB's operations comprise Group-wide functions and the ownership of subsidiaries. The limited liability company is domiciled in Sweden and the head offce is located in Stockholm.

The Parent Company's proft after net fnancial items amounted to SEK 305 million (153) and mainly consisted of Group contributions received and dividends from subsidiaries.

The share and ownership structure

The Nobia share has been listed on the Nasdaq Stockholm since 2002. Nobia's share capital amounts to SEK 58,430,237, divided between 175,293,458 shares with a quotient value of SEK 0.33. Nobia has only one class of share. Each share, with the exception of bought-back treasury shares, entitles the holder to one vote, and carries the same entitlement to the company's capital and profts.

In 2007 and 2008, Nobia bought back a

total of 8,162,300 own shares at a value of SEK 468,056,934 under the authorisation mandate granted by the 2007 and 2008 Annual General Meetings. The aim was to enable whole or partial acquisition fnancing through payment using treasury shares, but also to adjust the company's capital structure and thereby contribute to higher shareholder value.

The 2015 Annual General Meeting authorised the Board to make a decision regarding a buy-back of up to 10 per cent of the company's own shares. No shares were bought back during the year.

The 2015 Annual General Meeting also authorised the Board, for the period until the 2016 Annual General Meeting, to decide on the transfer of bought-back shares for the purpose of delivering shares under the employee share option scheme resolved at the 2011 Annual General Meeting and the Performance Share Plan resolved in 2012. In 2015, Nobia's Board decided to transfer 755,147 bought-back shares, comprising 0.43 per cent of the Parent Company' share capital, based on this authorisation. Nobia received SEK 33,542,000 for these shares. At the end of 2015, the number of treasury shares after sales amounted to 7,012,153, corresponding to 4.0 per cent of the total number of shares. These shares were acquired in 2007 and 2008 for a total amount of SEK 402,045,159.

At the beginning of 2015, the ten largest owners held about 60 per cent of the shares. The single largest shareholder, Nordstjernan, represented 20.0 per cent of the shares. If Skadeförsäkring held 10.1 per cent of the shares, Lannebo funds 8.3 per cent and the Fourth Swedish National Pension Fund 5.2 per cent.

Nobia's lenders have the option of terminating all loans if the control of the company were to be signifcantly altered. If any one party, or jointly with other parties (under formal or informal forms) gains control of the company, the lenders are entitled to terminate all outstanding loans for payment. The term "control of the company" pertains to control of more than half of the total number of votes or capital, or the acquisition of direct and decisive infuence over the appointment of the Board of Directors or members of Group management. Control of the company is also deemed to arise if a party, alone or jointly with other parties, can exercise direct and decisive infuence over the company's fnancial and strategic position. If such a situation were to arise whereby the control of the company were to be signifcantly altered, the lender and Nobia shall begin negotiations that shall last for a maximum of 30 days. The aim of these negotiations is to reach an agreement

between the lenders and Nobia. If an agreement is not reached, the lender is entitled to terminate all outstanding loans for immediate payment.

More information on the share and shareholders is presented on pages 90–91.

Remuneration guidelines and other employment conditions for Group management 2015

The guidelines for 2015 essentially correspond with the proposed guidelines for 2016, except for the changed structure, in certain respects, of the Performance Share Plan 2016 long-term remuneration scheme.

Remuneration Committee

The Board of Directors appoints a Remuneration Committee from within its ranks. The Committee's tasks include preparing proposals with respect to remuneration for the President, and to reach decisions on remuneration proposals for managers who report directly to the President. The Remuneration Committee performs annual follow-ups and evaluations of the ongoing variable-remuneration programmes, and the programmes completed during the year. The Remuneration Committee also monitors and evaluates the application of the principles resolved by the Annual General Meeting for remuneration and other employment conditions for Group management concerning remuneration structures and remuneration levels, and otherwise considers needs for changes.

Following on from its evaluations, the Remuneration Committee stated that remuneration to senior executives in 2015 conformed to the remuneration guidelines resolved at the 2015 Annual General Meeting. In the opinion of the Remuneration Committee, the guidelines were appropriate and the application of them was correct.

To strengthen senior executives' commitment to and ownership in the company, and to attract, motivate and retain key employees in the Group, Nobia has implemented long-term performance-based remuneration schemes since 2005, following resolutions by each Annual General Meeting.

The remuneration schemes adopted for the years 2005–2011 were based on employee share options. The employee share option scheme resolved on in 2011 expired in 2015.

A resolution was made at the 2012, 2013, 2014 and 2015 Annual General Meetings to establish a long-term, share-based remuneration scheme based on matching and performance shares (Performance Share Plans 2012–2015) rather than employee share options. The Remuneration Committee's evaluation shows that the conditions

established for the Performance Share Plans are deemed appropriate and relevant and, in the Remuneration Committee's opinion, there is reason to continue with a long-term share-based remuneration scheme. The Remuneration Committee believes that the structure of the Performance Share Plan can be changed in certain respects, for example, for the purpose of further strengthening the performance requirement from participants for entitlement to share allotment.

Proposal on remuneration guidelines and other employment conditions for Group management 2016

The Board of Directors of Nobia AB proposes that the 2016 Annual General Meeting decide on the following proposal pertaining to guidelines for determining remuneration and employment conditions for the President and other members of Group management. Group management, including the President, currently comprises 12 persons.

Basing its opinion on, for example, the evaluation performed by the Remuneration Committee, the Board believes that the proposed proposal on remuneration guidelines and other employment conditions for Group management – which essentially conform to those guidelines adopted by the 2015 Annual General Meeting – represents an appropriate balance between fxed cash salary, variable cash salary, long-term sharebased remuneration, pension conditions and other benefts. Nobia's salary policy stipulates that total remuneration is to correspond to market levels. A continuous position evaluation is carried out to ensure market levels in each country.

Members of Group management receive both a fxed and a variable salary portion. The fundamental principle is that the variable salary portion may amount to a maximum of 30 per cent of fxed annual salary. The exception to this principle is the President whose variable salary portion may amount to a maximum of 55 per cent of fxed annual salary. Exceptions may also be made for other senior executives following a resolution by the Board. As stated in the separate proposal for resolution to the Annual General Meeting regarding a long-term performance share plan, participation in the plan entails that the maximum variable salary portion is adjusted downwards for this specifc plan participant. The fxed salary portion for the President for 2016 will remain unchanged as compared with the preceding year. The variable salary portion is normally divided between several targets, such as the Group's earnings, earnings in the business unit for which the manager is responsible and individual/quantitative targets. The variable salary portion is based on a period of service of one year. The targets for the President are determined by the Board. The targets for the other senior executives are established by the President following recommendations by the Board's Remuneration Committee.

In the event of a maximum outcome, which presupposes that all bonus-related targets are fulflled, the variable salary costs for Group management are estimated to amount to approximately SEK 11,700,000 (excluding social security contributions). The calculation is based on the current composition of Group management and does not take into account any decreases in the maximum variable salary portion associated with participation in the long-term performance share plan.

Members of Group management employed in Sweden are entitled to a pension under the ITP system or equivalent. The age of retirement is 65. In addition to the ITP plan, following a resolution by the Board, members of Group management are entitled to an increased occupational pension premium on salary portions amounting to more than 30 basic amounts.

Employment contracts for Group management include provisions regulating remuneration and termination of employment. According to these contracts, employment may ordinarily be terminated upon the employee's request with a six-month period of notice and at the company's request, with a 12-month period of notice.

A resolution was made at the 2012, 2013, 2014 and 2015 Annual General Meetings to establish a long-term, share-based remuneration schemes based on matching and performance shares. The schemes, which encompass some 100 individuals comprising senior executives and managers appointed by senior management, are based on the participants investing in Nobia shares that are "locked into" the plan. Each Nobia share invested in under the framework of the plan entitles the participant, following a vesting period of about three years and provided that certain conditions are fulflled, to allotment (for no consideration) of matching and performance shares in Nobia. The conditions are linked to the participant's continued employment and ownership of invested shares, and to fulflment of a fnancial performance target. The maximum level adopted by the Board for allotment of performance share rights under the Performance Share Plan 2014 was accumulated earnings per share excluding items affecting comparability of SEK 7.00. Since the accumulated earnings per share excluding items affecting comparability for the 2014 fscal year and

including items affecting comparability for the 2015 fscal year amounted to SEK 8.13, 100 per cent of the Board's target fgure was achieved and thus performance share rights under the Performance Share Plan 2014 will be allotted after the interim report for the frst quarter of 2017. The costs for the scheme are reported prior to each Annual General Meeting and in Nobia's Annual Reports. The Board is entitled to deviate from the guidelines described above if the Board fnds that particular reasons warrant this in a specifc case.

According to calculations, Nobia will have an obligation to deliver matching shares to participants of the Performance Share Plan 2013 after the interim report for the frst quarter of 2016.

The Board has proposed that the 2016 Annual General Meeting resolve on a new share-based, long-term remuneration scheme ("Performance Share Plan 2016"). Performance Share Plan 2016 comprises approximately 100 employees consisting of senior executives and managers within the Nobia Group. Participants will be awarded performance-based share rights that carry entitlement to allotment of shares. At the end of the vesting period, the participants will be allotted shares in Nobia free of charge, provided that certain conditions are fulflled. Entitlement to allotment of shares requires that the participant remain an employee of the Nobia Group during the vesting period. Allotment of shares also requires that a fnancial performance target linked to accumulated earnings per share for Nobia during the 2016–2017 fscal years is achieved.

Unlike previous years, no matching share rights will be allotted to participants. Participants of the Performance Share Plan 2016 are not required to acquire shares in Nobia. Participation in the Performance Share Plan 2016 entails that the maximum variable remuneration for participants in 2016 is adjusted downwards by ten percentage points (for the President), fve percentage points (Group management) and three percentage points (other senior executives and managers). The number of share rights that a participant can be allocated depends on the participant's annual salary (based on the participant's monthly salary in March 2016) and the category to which the participant belongs. The Board determines an allocation value for each participant relative to the participant's annual salary. The allocation value for the President amounts to 50 per cent of annual salary and for the other members of Group management the allocation value is 30 per cent of annual salary. The allocation value for other managers in senior positions amounts to 20 per cent of annual

salary. The share price forming the basis of the calculation of the number of share rights is to correspond to an average volumeweighted price paid during a specifc time period. This time period is the frst ten trading days after the day of publication of Nobia's interim report for the frst quarter of 2016. The individual allocation value is subsequently divided by the share price to obtain the total number of share rights per participant. Allocation of Nobia shares shall normally take place within two weeks after announcement of Nobia's interim report for the frst quarter of 2019, which begins when the participant signs an agreement on participant in the plan.

The following conditions apply to share rights: The share rights are allocated free of charge and to be entitled to receive shares under the share rights, it is required, with certain exemptions, that the participant remains employed within the Nobia Group. In addition, allotment of shares requires that Nobia has fulflled a fnancial performance target condition. The participants are not entitled to transfer, pledge or dispose of the share rights or exercise any shareholders' rights regarding the share rights during the Vesting Period. Nobia will not compensate the participants in the plan for standard dividends made in respect of the shares that the respective share right qualifes for.

The number of Nobia shares that will be awarded on the basis of the share rights depends on the degree of fulflment of a range established by the Board of Directors in relation to Nobia's cumulative earnings per share in the 2016 and 2017 fscal years. The level of fulflment will be measured linearly, whereby 25 per cent of the share rights will entitle allocation of shares if the established minimum level is achieved. If the minimum level in the range is not achieved, the share rights will not give entitlement to any shares and if the maximum level in the range is achieved, each share right gives entitlement to one Nobia share.

The share rights cannot be pledged or transferred to other parties. However, an estimated value for each right can be calculated. The Board has estimated the average value for each share right to be SEK 66.60. The estimate is based on generally accepted valuation models by applying the closing price of the Nobia share on 26 February 2016, with deductions for the present value of the estimated dividend for the 2016- 2018 fscal years. On the assumption that all individuals who were offered participation in the Plan actually participate, 100 per cent fulflment of the fnancial performance target and estimates regarding personnel turnover, the total estimated value of the share

rights is approximately SEK 20.6 million. This value corresponds to approximately 0.1 per cent of Nobia's market capitalisation as per 26 February 2016.

Costs are recognised as employee benefts in proft or loss over the vesting period in accordance with IFRS 2 Share-based Payment. Social security contributions will be expensed in proft or loss in accordance with UFR 7 over the vesting period. The amount of these costs will be calculated based on Nobia's share-price trend over the vesting period and allotment of share rights. Given the aforementioned assumptions, and based on a constant share price during the plan, and a Vesting Period of approximately three years, the cost of Performance Share Plan 2016 including social security contributions is estimated to amount to approximately SEK 26.8 million which, on an annual basis, is approximately 0.3 per cent of Nobia's total costs for employee benefts during the 2015 fscal year. The plan has no limitation on maximum profts per share right for the participants and therefore no maximum social security costs can be calculated.

The Board is entitled to deviate from the guidelines described above if the Board fnds that particular reasons warrant this in a specifc case.

Proposed appropriation of profts

The following profts in the Parent Company are at the disposition of the Annual General Meeting:

Total SEK	2,026,477,917
Net proft for the year	305,043,487
Unappropriated proft brought forward	1,669,208,944
Share premium reserve	52,225,486

The Board of Directors proposes that all profts at the disposition of the Annual General Meeting be appropriated as follows:

Total SEK	2,026,477,917
To be carried forward	1,605,774,655
Dividend of SEK 2.50 per share to be paid to shareholders	420,703,262

The Board proposes a dividend of SEK 2.50 per share (1.75) for the 2015 fscal year. The record date to be entitled to receive dividend is proposed as Wednesday, 13 April 2016. If the Annual General Meeting resolves in accordance with the proposal, the dividend is expected to be paid on Monday, 18 April 2016.

Operations Sustainability

Financial statements

Corporate governance and the Nobia share

Risks and risk management

Nobia is exposed to both commercial and financial risks. Commercial risks can be divided into strategic, business development-related, operating, sustainability-related and political and legal risks. Financial risks are attributable to currencies, interest rates, liquidity, borrowing and credit granting, financial instruments and pensions.

All business operations are associated with risks. Risks that are well-managed can create opportunities, whereas risks that are not managed correctly may lead to damage and losses. The aim of Nobia's risk management is to create awareness of risks and consequently limit, control and manage them, while safeguarding business oppor tunities and strengthening proftability.

Identifed materials risks are managed on an ongoing basis at all levels in Nobia and in strategic planning. The Board of Directors is responsible to the shareholders for the company's risk management. Company management regularly reports on risk issues to the Board.

Strategic risks

Corporate-governance and policy risks Corporate-governance and policy risks are managed by Nobia continuously developing its internal control.

The internal dissemination of appropriate information is ensured through the company's management systems and processes. A more detailed description is provided in the Group management section of the Corporate Governance Repor t on page 84.

Business-development risks

Risks associated with business development, such as acquisitions and major structural changes, are managed by the Group's M&A department and central programme offce and by specifc project groups organised for the various projects. Continuous follow-ups are carried out compared with plans and expected outcomes. More long-term risks are initially addressed by the Board in its Group strategy planning. In conjunction with this, Nobia's business development is evaluated and discussed based on external and internal considerations.

Operating risks Market and competition

Nobia operates in markets exposed to competition and mature markets, which means that underlying demand in normal market circumstances is relatively stable. However, price competition remains intense. In Austria and Finland, for example, competition increased and the weak economic trend in 2015 had a negative impact on demand.

Demand for Nobia's products is infuenced by trends in the housing market, whereby prices, the number of transactions and access to fnancing are key factors. Four-ffths of the European kitchen market is estimated to comprise purchases for renovation, and one-ffth for new builds. Nobia's strategy is based on largescale product supply, product development and the utilisation of the positioning of the Group's strong brands in the various markets and sales channels. Nobia's various offerings are also based on the strategy of providing added value to customers in the form of complete solutions with accessories and installation.

In 2015, overall demand in the Nordic countries showed an improvement, while demand in the UK increased. Demand in Central Europe remained weak during the year. The company's cyclical nature does not deviate from that of other companies in the industry. Nobia has a structured and proactive method for following demand fuctuations. Robust measures and costsaving programmes for adjusting capacity have proven that Nobia can adjust its cost level when demand for the Group's products declines. In 2015, Nobia increased the number of kitchens sold and continued to increase its prices where possible, which had a positive impact on net sales and proftability compared with 2014.

Customers

Kitchens to end-customers are sold through 297 own stores and a network of franchise stores, as well as DIY stores, furniture chains and other retailers. Conducting sales through own and franchise stores is a deliberate strategy to achieve greater infuence over the kitchen offering to endcustomers, which contributes to better co-ordination of the Group's supply chain. Own stores allow the concepts to be profled with higher added value. A risk is that retailers are unable to fulfl their commitments under established contracts, which may have a negative effect on sales.

Sales to professional customers, also known as project sales, are conducted directly with regional and local construction companies via a specialised sales organisation or directly through the store network. Concentrating on these large separate customers entails an elevated risk of losing sales if a large customer is lost as well as increased credit risk.

Supply chain

Nobia's cost structure in 2015 comprised about 60 per cent variable costs (raw materials, components, accessories), about 30 per cent semi-variable costs (personnel costs, marketing and maintenance) and about 10 per cent fxed costs (rents, depreciation, insurance). The division of costs is relatively equal between the main markets, except that the UK region has a slightly higher percentage of fxed costs due to its extensive store networks.

Nobia's proprietary manufacturing mainly comprises the production and installation of cabinets and doors, together with purchased components.

In 2015, Nobia purchased materials and components valued at about SEK 5.6 billion, of which some 20 per cent pertained to raw materials (such as chipboard and packaging materials), about 55 per cent to components (such as handles, worktops and hinges) and about 25 per cent to goods for resale (such as appliances). The underlying raw materials that the Group is primarily exposed to are wood, steel, aluminium and plastics. Cost variations can be caused by changes in the prices of raw materials in the global market or suppliers' ability to deliver. Nobia's sourcing organisation works closely with its suppliers to ensure effcient fows of materials. Average market prices of raw materials and components fell slightly in 2015

with markedly lower prices for steel and packaging materials. Compared with 2014, the cost of chipboard was about 1 per cent lower in both the Nordic and the UK regions, while it was 0.5 per cent higher in the Central Europe region. Market prices of chipboard are expected to increase due to such reasons as higher demand from the housing construction industry and weak competition among suppliers. The group's sourcing and production functions are continuously evaluated to reduce product costs.

Property risks in the form of loss of production, for example, in the event of a fre at manufacturing units, are minimised by Nobia conducting annual technical risk inspections jointly with the Group's insurers and the risk consulting frm AON that reports on deviations from Nobia's "Standard for Loss-Prevention Measures." Preventive measures are continuously implemented to reduce the risk of disruptions in the operations.

Strategy and restructuring

Nobia's ability to increase proftability and returns for shareholders is heavily dependent on the Group's success in developing innovative products, maintaining cost-effcient manufacturing and capitalising on synergies. Managing restructuring measures is a key factor in maintaining and enhancing Nobia's competitiveness. In 2015, the Group's brand por tfolio, innovation, product-range development, production and sourcing continued to be co-ordinated. In 2015, Nobia in Denmark launched a drawing design tool and ecommerce service that allows customers to draw and purchase their kitchen online. An e-commerce service was launched in Sweden at the start of 2016. The strategic direction is described in more detail on pages 8–9. The implementation of these plans entails operating risks, which are addressed every day in the ongoing change process. Restructuring is a complex process that requires the management of a series of different activities and risks.

Human capital risks

Nobia endeavours to be an attractive employer, which is a key success factor. To ensure availability of and skills development for motivated employees, manager sourcing and managerial development is administered by a central unit at Nobia.

Sustainability-related challenges and opportunities

Nobia's products are encompassed by international and local regulations regarding environmental impact and other effects arising in the production and transportation of kitchens, for example, the release of exhaust fumes and emissions, noise, waste and safety. Nobia works continuously with its operations to adjust to the necessary expectations and requirements. The company is well aware of the demands in these areas for the near future and, provided that they do not signifcantly change, the current products and ongoing development activities are deemed to be suffcient to meet such requirements. For further information, see the sustainability section on pages 22–31.

Political and legal risks

Changes in local tax legislation in the countries in which Nobia conducts operations may affect demand for the company's products. Subsidies for new builds and/or renovation or changes to the taxation of residential proper ties may infuence demand. Tax deductions on labour for home renovations, for example, have had a positive effect on demand in several Nordic countries.

Financial risks

In addition to strategic and operating risks, Nobia is exposed to various fnancial risks. These are mainly attributable to currencies, interest rates, liquidity, borrowing and credit granting, fnancial instruments and pensions. All of these risks are managed in accordance with the fnance policy, which has been adopted by the Board.

Currency exposure

Nobia's manufacturing and sales presence in several countries balances currency effects to a certain extent. Transaction fows have the greatest impact on currency – when sourcing and/or production is conducted in one currency, and sales are conducted in another. The Group uses currency derivatives to hedge a portion of the currency exposure that arises. Currency hedging means that the impact of currency movements occurring today will be delayed to some extent. Nobia is also affected by translation differences when consolidated sales and operating income are translated into SEK.

EUR/GBP

EUR/SEK

NOK/DKK

NOK/SEK

Sensitivity analysis – transaction effects of currencies

The diagrams shows the major currency pairs and the trend since 2010. The impact of a weak EUR and DKK, and a strong NOK and GBP, on Nobia's earnings is generally favourable.

A signifcant por tion of the UK operation's components are purchased in EUR, while fnished products are subsequently sold in GBP. For a transition period, one of the UK operation's production facilities is delivering to French kitchen company Fournier Group, which acquired Hygena from Nobia. Sales are conducted in EUR, which par tly offsets the Group's exposure to EUR. The net effect of this currency pair means that a weak EUR against the GBP is positive for the Group.

A proportion of the Swedish operation's costs for material purchases are conducted in EUR. A strong SEK against the EUR is therefore positive for the Group. A signifcant portion of the Swedish production of components and fnished products is sold in Norway. A weak SEK against the NOK is therefore positive for the Group.

The Danish unit conducts a signifcant portion of its sales in Norway, but also in Sweden. A weak DKK against the NOK and the SEK is therefore positive for the Group.

For a more detailed description and a sensitivity analysis, refer to Note 2 Financial risks on page 58.

Changes in value in balance sheet

In addition to the fnancial risks that are regulated in the fnance policy adopted by the Board, there is also a risk for changes in value in the balance sheet.

A structured work model is applied to test the value of assets and liability items in the balance sheet.

Impairment testing of goodwill

Nobia's balance sheet includes acquisition goodwill totalling SEK 2,551 million (2,278). The value of this asset item is tested annually and more often if there is any indication of impairment requirement. In 2015, goodwill did not indicate any impairment requirement. For a more detailed description, refer to Note 1 Signifcant accounting policies on pages 52–58 and Note 14 Intangible assets on page 66.

Calculation of pension liabilities

Nobia's balance sheet includes pension liabilities of SEK 732 million (869) that per tain to defned-beneft pension plans in the UK, Germany and Sweden. All pension plans are calculated every year by actuaries in accordance with IAS 19.

For a more detailed description, refer to Note 1 Signifcant accounting policies on pages 52–58 and Note 25 Provisions for pensions on page 72.

Deferred tax assets

The Group's loss carryforwards for which deferred tax assets were recognised in the amount of SEK 74 million (94). The value of this asset item is tested annually and more often if there is any indication of impairment requirement. The taxable proft in the par ts of the Group that generate tax-loss carryforwards is expected to improve in future years. The Group's restructuring measures over the past years are generating considerable cost savings that are expected to result in an improvement in earnings. However, there is a risk that it will not be possible to utilise portions of the carrying amount of deferred tax assets against taxable surpluses in the future. For more information about tax, refer to Note 26 Deferred tax on page 74 and Note 1 Signifcant accounting policies on pages 52–58.

Operations

Sustainability

Financial statements

Corporate governance and the Nobia share

FINANCIAL STATEMENTS THE GROUP AND PARENT COMPANY

	Consolidated income statement	42
	Consolidated statement of comprehensive income	43
	Comments and analysis of income statement	44
	Consolidated balance sheet	46
	Comments and analysis of balance sheet	47
	Change in consolidated shareholders' equity	48
	Consolidated cash-fow statement and comments	49
	Parent Company income statement, balance sheet and cash-fow statement	50
	Parent Company change in shareholders' equity	51
	Note 1 Signifcant accounting policies	52
	2 Financial risks	58
3	Operating segments	60
	4 Costs for employee benefts and remuneration to senior executives	61
	5 Average number of employees	64
	6 Remuneration to auditors	65
	7 Depreciation and impairment losses by activity	65
	8 Other operating income	65
	9 Other operating expenses	65
10	Specifcation by type of costs	65
11	Operating leases	65
12	Financial income and expenses	65
13	Tax on net proft for the year	66
14	Intangible assets	66
15	Tangible fxed assets	67
16	Financial fxed assets	68
17	Shares and par ticipations in subsidiaries	69
18	Derivative instruments	70
19	Prepaid expenses and accrued income	70
20	Cash and cash equivalents	71
21	Share capital	71
22	Reserves in shareholders' equity	71
23	Earnings per share	71
24	Dividend	72
25	Provisions for pensions	72
26	Deferred tax	74
27	Other provisions	75
28	Liabilities to credit institutions	75
29	Accrued expenses and deferred income	75
30	Financial assets and liabilities	76
31	Pledged assets, contingent liabilities and commitments	77
32	Discontinued operations	77
33	Assets held for sale	78
34	Company acquisitions	78
35	Related-par ty transactions	79
36	Events after the closing date	79

CONSOLIDATED INCOME STATEMENT

SEK m	Note	2014	2015
Net sales	3	11,411	13,332
Cost of goods sold	4, 7, 10, 11, 25	-6,794	-7,974
Gross proft		4,617	5,358
Selling expenses	4, 7, 10, 11, 25	-3,055	-3,470
Administrative expenses	4, 6, 7, 10, 11, 25	-688	-767
Other operating income	8	51	86
Other operating expenses	9	-47	-62
Operating proft		878	1,145
Financial income	12	12	34
Financial expenses	12	-90	-92
Proft after fnancial items		800	1,087
Tax on net proft for the year	13, 26	-205	-262
Net proft for the year from continuing operations		595	825
Proft/loss from discontinued operations, net after tax	32	-622	3
Net proft/loss for the year		-27	828
Net proft/loss for the year attributable to:
Parent Company shareholders		-28	829
Non-controlling interests		1	-1
Net proft/loss for the year		-27	828
Earnings/loss per share before dilution, SEK1)	23	-0.17	4.93
Earnings/loss per share, after dilution, SEK1)	23	-0.17	4.92
Earnings per share from continuing operations, before dilution, SEK	23	3.55	4.91
Earnings per share from continuing operations, after dilution, SEK	23	3.54	4.90
Number of shares before dilution2)	23	167,526,158	168,281,305
Average number of shares before dilution2)	23	167,334,491	168,059,727
Number of shares after dilution2)	23	167,932,673	168,656,683
Average number of shares after dilution2)	23	167,733,829	168,516,820

1) Earnings/loss per share attributable to Parent Company shareholders.

2) Shares outstanding, less bought-back shares.

Operations

Sustainability

Financial statements Corporate governance and the Nobia share

CONSOLIDATED STATEMENT OF COMPREhENSIvE INCOME

SEK m	Note	2014	2015
Net proft/loss for the year		-27	828
Other comprehensive income
Items that may be reclassifed subsequently to proft or loss
Exchange-rate differences attributable to translation of foreign operations	22	369	-89
Cash-fow hedges before tax	22	-5	4
Tax attributable to hedging reserve for the period	22	1	-1
		365	-86
Items that will not be reclassifed to proft or loss
Remeasurements of defned-beneft pension plans	25	-202	170
Tax attributable to remeasurements of defned-beneft pension plans		41	-34
		-161	136
Other comprehensive income for the year		204	50
Total comprehensive income for the year		177	878
Total comprehensive income for the year attributable to:
Parent Company shareholders		176	879
Non-controlling interests		1	-1
Total comprehensive income for the year		177	878

COMMENTS AND ANALySIS OF INCOME STATEMENT

Net sales rose 17 per cent to SEK 13,332 million (11,411). For comparable units and adjusted for currency effects, the change in net sales was 6 per cent. The relationship is shown in the table below.

	2015					2015
Analysis of net sales, %	I	II	III	Iv	%	SEK m
2014						11,411
Organic growth	5	7	9	3	6	673
– of which Nordic region1)	6	10	12	5	8	421
– of which UK region1)	8	8	5	3	6	283
– of which Central Europe region1)	-9	-6	9	-4	-2	-31
Currency effect	11	8	7	3	7	813
Sale to hygena	0	0	0	0	0	-16
Acquired operations	5	3	4	3	4	451
2015	21	19	19	10	17	13,332

1) Organic growth for each organisational region.

Net sales and proft by region

		Nordic	Region			Central	Group-wide and
	region		UK		Europe region		eliminations		Group
SEK m	2014	2015	2014	2015	2014	2015	2014	2015	2014	2015
Net sales from external customers	5,213	5,651	4,707	6,099	1,491	1,586	–	–	11,411	13,336
Net sales from other regions	2	1	–	–	2	2	-4	-3	–	–
Total net sales	5,215	5,652	4,707	6,099	1,493	1,588	-4	-3	11,411	13,336
Gross proft excl. IAC	2,112	2,254	1,927	2,463	621	662	17	16	4,677	5,395
Gross margin excl. IAC, %	40.5	39.9	40.9	40.4	41.6	41.7	–	–	41.0	40.5
Operating proft excl. IAC	666	749	353	567	117	81	-161	-156	975	1,241
Operating margin excl. IAC, %	12.8	13.3	7.5	9.3	7.8	5.1	–	–	8.5	9.3
Operating proft	660	749	270	567	117	-15	-169	-156	878	1,145
Operating margin, %	12.7	13.3	5.7	9.3	7.8	-0.9	–	–	7.7	8.6

Depreciation/amor tisation and impairment of fxed assets for the year amounted to SEK 346 million (326).

Specifcation of items affecting comparability (IAC)1)

Group	-97	-96
Group-wide and eliminations	-8	–
Central Europe	–	-963)
UK	-832)	–
Nordic	-6	–
Items affecting comparability by region
Total items affecting comparability	-97	-96
Other income/expenses	-20	0
Selling and administrative expenses	-17	-59
Cost of goods sold	-60	-33
Net sales	–	-4
Items affecting comparability by function
SEK m	2014	2015

1) Per tains to costs that impact operating proft.

2) This amount includes impairment of kitchen displays of SEK 17 million.

3) This amount includes impairment of kitchen displays of SEK 10 million.

Operations

Sustainability

Financial statements

Corporate governance and the Nobia share

items affecting comparability)		Translation effect		Transaction effect			Total effect
	2014		2015	2014	2015		2014	2015
Nordic region	15		5	-75	-30		-60	-25
UK region	35		70	25	50		60	120
Central Europe region	5		0	10	15		15	15
Group	55		75	-40	35		15	110
Quarterly data per region		2014				2015
Net sales excluding items affecting comparability, SEK m	I	II	III	Iv	I	II	III	Iv
Nordic	1,262	1,448	1,123	1,382	1,385	1,609	1,237	1,421
UK	1,099	1,173	1,208	1,227	1,522	1,571	1,535	1,471
Central Europe	335	387	364	407	345	396	432	415
Group-wide and eliminations	-1	-1	0	-2	-1	-1	0	-1
Group	2,695	3,007	2,695	3,014	3,251	3,575	3,204	3,306
Net sales, SEK m Nordic	1,262	1,448	1,123	1,382	1,385	1,609	1,237	1,421
UK	1,099	1,173	1,208	1,227	1,522	1,571	1,535	1,471
Central Europe	335	387	364	407	345	396	432	411
Group-wide and eliminations	-1	-1	0	-2	-1	-1	0	-1
Group	2,695	3,007	2,695	3,014	3,251	3,575	3,204	3,302
Gross proft excluding items affecting comparability, SEK m
Nordic UK	503 444	599 477	457 505	553 501	550 604	659 636	491 631	554 592
Central Europe	131	151	168	171	140	170	184	168
Group-wide and eliminations	3	6	5	3	5	4	5	2
Group	1,081	1,233	1,135	1,228	1,299	1,469	1,311	1,316
Gross margin excluding items affecting comparability, %
Nordic UK	39.9 40.4	41.4 40.7	40.7 41.8	40.0 40.8	39.7 39.7	41.0 40.5	39.7 41.1	39.0 40.2
Central Europe	39.1	39.0	46.2	42.0	40.6	42.9	42.6	40.5
Group	40.1	41.0	42.1	40.7	40.0	41.1	40.9	39.8
Operating proft excluding items affecting comparability, SEK m
Nordic	128	207	138	193	151	254	172	172
UK Central Europe	51 18	103 22	108 43	91 34	94 7	156 27	163 39	154 8
Group-wide and eliminations	-41	-39	-33	-48	-41	-37	-31	-47
Group	156	293	256	270	211	400	343	287
Operating margin excluding items affecting comparability, %
Nordic	10.1	14.3	12.3	14.0	10.9	15.8	13.9	12.1
UK Central Europe	4.6 5.4	8.8 5.7	8.9 11.8	7.4 8.4	6.2 2.0	9.9 6.8	10.6 9.0	10.5 1.9
Group	5.8	9.7	9.5	9.0	6.5	11.2	10.7	8.7
Operating proft, SEK m Nordic	128	207	138	187	151	254	172	172
UK	51	103	108	8	94	156	163	154
Central Europe	18	22	43	34	7	27	39	-88
Group-wide and eliminations	-41	-39	-33	-56	-41	-37	-31	-47
Group	156	293	256	173	211	400	343	191
Operating margin, %
Nordic UK	10.1 4.6	14.3 8.8	12.3 8.9	13.5 0.7	10.9 6.2	15.8 9.9	13.9 10.6	12.1 10.5
Central Europe	5.4	5.7	11.8	8.4	2.0	6.8	9.0	-21.4
Group	5.8	9.7	9.5	5.7	6.5	11.2	10.7	45 5.8

CONSOLIDATED bALANCE ShEET

SEK m	Note		31 Dec 2014 31 Dec 2015
ASSETS
Intangible assets	14
Goodwill		2,278	2,551
Other intangible assets		158	146
		2,436	2,697
Tangible fxed assets	15
Land and buildings		816	779
Investments in progress and advance payments		34	46
Machinery and other technical equipment		543	565
Equipment, tools, fxtures and fttings		279	332
		1,672	1,722
Interest-bearing long-term receivables (Ib)	16	7	3
Other long-term receivables	16	28	34
Deferred tax assets	26	303	241
Total fxed assets		4,446	4,697
Inventories
Raw materials and consumables		272	302
Products in progress		77	78
Finished products		415	434
Goods for resale		89	120
		853	934
Current receivables
Tax assets		17	28
Accounts receivable	2	1,091	1,269
Derivative instruments	2,18	20	18
Interest-bearing current receivables (Ib)		1	5
Other receivables	2	118	87
Prepaid expenses and accrued income	19	247	258
Assets held for sale	33	592	8
		2,086	1,673
Cash and cash equivalents (Ib)	20	470	765
Total current assets		3,409	3,372
Total assets		7,855	8,069
Of which interest-bearing items (IB)		478	773

SEK m	Note	31 Dec 2014 31 Dec 2015
SHAREHOLDERS' EQUITY AND LIABILITIES
Attributable to Parent Company shareholders
Share capital	21	58	58
Other contributed capital		1,470	1,478
Reserves	22	7	-79
Proft brought forward		1,656	2,361
		3,191	3,818
Non-controlling interests		5	4
Total shareholders' equity		3,196	3,822
Provisions for guarantees Provisions for pensions (Ib)	25	12 869	12 732
Deferred tax liabilities	26	143	133
Other provisions	27	147	110
Liabilities to credit institutions (Ib)	2, 28	804	802
Other liabilities (Ib)	2	7	9
Total long-term liabilities		1,982	1,798
Liabilities to credit institutions (Ib)	2, 28	1	1
Overdraft facilities (Ib)	2, 20	0	0
Other liabilities (Ib)	2	3	3
Advance payments from customers		179	256
Accounts payable	2	1,053	1,089
Current tax liabilities		85	117
Derivative instruments	2, 18	24	14
Other liabilities	2	365	365
Accrued expenses and deferred income	29	607	601
Liabilities attributable to assets held for sale	33	360	3
Total current liabilities		2,677	2,449
Total shareholders' equity and li
abilities		7,855	8,069
Of which interest-bearing items (IB)		1,684	1,547

Information on consolidated pledged assets and contingent liabilities is provided in Note 31 on page 77.

Operations Sustainability

Financial statements

Corporate governance and the Nobia share

COMMENTS AND ANALySIS OF bALANCE ShEET

Goodwill

Information on goodwill, including comments, is provided in Note 14 on page 66.

Financing

Net debt declined to SEK 774 million (1,206) at the end of the period. A positive operating cash fow of SEK 770 million, remeasurements of defned-beneft pension plans of SEK 170 million and the divestment of operations of SEK 230 million reduced net debt. The increase in net debt derived from acquisition of operations with a total effect of SEK 353 million, interest paid of SEK 14 million, change in pension liabilities of SEK 87 million and dividends of SEK 294 million. The debt/equity ratio amounted to 20 per cent at the end of the year (38 per cent at the beginning of the year). The change in net debt is shown in the table below.

Analysis of net debt

	Group
SEK m	2014	2015
Opening balance	1,176	1,206
Acquisition of operations	361	353
Divestment of operations	16	-230
Translation differences	14	24
Operating cash fow	-779	-770
Interest	37	14
Remeasurements of defned-beneft pension plans	195	-170
Change in pension liabilities	40	87
Dividend	167	294
Sale of bought-back shares	-21	-34
Closing balance	1,206	774

The components of net debt are shown in the table below.

Components of net debt

	Group
SEK m	2014	2015
bank loans, etc.	806	804
Provisions for pensions	869	732
Leasing	9	11
Cash and cash equivalents	-470	-765
Other fnancial receivables	-8	-8
Total	1,206	774

ChANGE IN CONSOLIDATED SHAREHOLDERS' EQUITy

		Attributable to Parent Company shareholders
SEK m	Share capital	Other contributed capital	Exchange rate differences attributable to translation of foreign operations	Cash-fow hedges after tax	Proft brought forward	Total	Non-control ling interests	Total shareholders' equity
Opening balance, 1 January 2014	58	1,463	-361	3	1,991	3,154	4	3,158
Net proft/loss for the year	–	–	–	–	-28	-28	1	-27
Other comprehensive income for the year	–	–	369	-4	-161	204	0	204
Total comprehensive income for the year	–	–	369	-4	-189	176	1	177
Dividend	–	–	–	–	-167	-167	0	-167
Allocation of employee share option schemes and performance share plans	–	7	–	–	–	7	–	7
Sale of bought-back shares¹)	–	–	–	–	21	21	–	21
Closing balance, 31 December 2014	58	1,470	8	-1	1,656	3,191	5	3,196
Opening balance, 1 January 2015	58	1,470	8	-1	1,656	3,191	5	3,196
Net proft/loss for the year	–	–	–	–	829	829	-1	828
Other comprehensive income for the year	–	–	-89	3	136	50	0	50
Total comprehensive income for the year	–	–	-89	3	965	879	-1	878
Dividend	–	–	–	–	-294	-294	0	-294
Allocation of employee share option schemes and performance share plans	–	8	–	–	–	8	–	8
Sale of bought-back shares¹)	–	–	–	–	34	34	–	34
Closing balance, 31 December 2015	58	1,478	-81	2	2,361	3,818	4	3,822

1) Attributable to the employee share option scheme 2011.

Operations Sustainability

Financial statements

Corporate governance and the Nobia share

CONSOLIDATED CASh-FLOw STATEMENT AND COMMENTS

SEK m	Note	2014	2015
Operating activities
Operating proft		878	1,145
Operating proft/loss for discontinued operations		-484	3
Depreciation/amor tisation/impairment		722	346
Other adjustments for non-cash items		99	66
Income tax paid		-194	-216
Change in inventories		-51	-99
Change in operating receivables		-5	-161
Change in operating liabilities		68	61
Cash fow from operating activities		1,033	1,145
Investing activities
Investments in tangible fxed assets		-257	-360
Investments in intangible assets		-59	-50
Sale of tangible fxed assets		58	36
Interest received		6	6
Increase/decrease in interest-bearing assets		1	-1
Other items in investing activities		4	-1
Acquisition of operations	34	-250	-348
Divestment of operations		-16	230
Cash fow from investing activities		-513	-488
Operating cash fow before acquisitions/divestment of operations, interest and increase/decrease in interest-bearing assets		779	770
Operating cash fow after acquisitions/divestment of operations, interest and increase/decrease in interest-bearing assets		520	657
Financing activities
Interest paid		-43	-20
Decrease in interest-bearing liabilities		-190ñ)	-30²)
Sale of bought-back shares		21	34
Dividend		-167	-294
Cash fow from fnancing activities		-379	-310
Cash fow for the year excluding exchange-rate differences in cash and cash equivalents		141	347
Cash and cash equivalents at the beginning of the year		278	470
Cash fow for the year		141	347
Exchange-rate differences in cash and cash equivalents		51	-52
Cash and cash equivalents at year-end		470	765

Comments on the cash-fow statement

The cash fow from operating activities amounted to SEK 1,145 million (1,033). working capital reduced cash fow by SEK 199 million (12) and was primarily attributable to higher current receivables. Adjustments for non-cash items amounted to SEK 66 million (99) as specifed in the table below.

Adjustments for non-cash items

	92
Other		-3
Provisions	19	85
assets	-12	-16
Capital gains/losses on fxed
SEK m	2014	2015

Investments in fxed assets amounted to SEK 410 million (316).

Operating cash fow, that is, the cash fow after investments but excluding the acquisitions and divestments of operations, interest and increases/ decreases in interest-bearing assets, amounted to SEK 770 million (779).

1) Repayment of loans comprising SEK 100 million.

2) No repayment or loans raised.

PARENT COMPANy

Parent Company income statement

SEK m	Note	2014	2015
Net sales		118	200
Administrative expenses	4, 6, 11, 25	-238	-262
Other operating expenses	8,9	–	–
Operating proft		-120	-62
Proft from par ticipations in Group companies	12	312	416
Financial income	12	29	3
Financial expenses	12	-68	-52
Proft after fnancial items		153	305
Tax on net proft for the year	13	1	0
Net proft/loss for the year		154	305
Parent Company statement of comprehensive income
SEK m	Note	2014	2015
Net proft/loss for the year		154	305
Other comprehensive income for the year		–	–
Comprehensive income for the year		154	305
Parent Company cash-fow statement
SEK m	Note	2014	2015
Operating activities
Operating proft		-120	-62
Adjustments for
non-cash items Dividend received	12	6 312	4 416
Interest received	12	29	3
Interest paid	12	-68	-52
Tax paid		0	0
Cash fow from operating activities before
changes in working capital		159	309
Change in liabilities		719	-250
Change in receivables		-702	487
Cash fow from operating activities		176	546
Investing activities
Provisions for pensions		2	2
Cash fow from investing activities		2	2
Financing activities
Dividend		-167	-294
Decrease in item bought-back shares		21	34
Cash fow from fnancing activities		-146	-260
Cash fow for the year		32	288
Cash and cash equivalents at the beginning
of the year		152	184
Cash fow for the year		32	288
Cash and cash equivalents at year-end		184	472

Parent Company balance sheet

		31 Dec	31 Dec
SEK m	Note	2014	2015
ASSETS
Fixed assets
*inancial fxed assets
Shares and participations in Group
companies	16,17	2,234	2,084
Other securities held as fxed assets		0	0
Total fxed assets		2,234	2,084
Current assets
Current receivables
Accounts receivable		8	1
Receivables from Group companies		3,195	2,863
Other receivables		12	13
Prepaid expenses and accrued income	19	54	59
Cash and cash equivalents	20	184	472
Total current assets		3,453	3,408
Total assets		5,687	5,492
SHAREHOLDERS' EQUITY, PROVI
SIONS AND LIABILITIES
Shareholders' equity
6estricted shareholders´ eUuity
Share capital1)	21	58	58
Statutory reserve		1,671	1,671
		1,729	1,729
Non-restricted shareholders' equity
Share premium reserve		52	52
buy-back of shares		-447	-402
Proft brought forward		2,215	2,071
Net proft/loss for the year		154	305
		1,974	2,026
Total shareholders' equity		3,703	3,755
Provisions for pensions	25	13	15
Long-term liabilities
Liabilities to credit institutions	28	800	800
Current liabilities
Liabilities to credit institutions		0	0
Accounts payable		22	18
Liabilities to Group companies		1,110	864
Other liabilities		2	11
Accrued expenses and deferred income	29	37	29
Total current liabilities		1,171	922
Total shareholders' equity,
provisions and liabilities		5,687	5,492
Pledged assets	31	–	–
Contingent liabilities	31	179	177

1) The number of shares outstanding was 168,281,305 (167,526,158).

Operations

Sustainability

Financial statements

Corporate governance and the Nobia share

Parent Company change in shareholders' equity

			Share		Proft	Total
		Statutory	premium	buy-back of	brought	shareholders'
SEK m	Share capital	reserve1)	reserve	shares	forward	equity
Opening balance, 1 January 2014	58	1,671	52	-468	2,374	3,687
Net proft/loss for the year	–	–	–	–	154	154
Comprehensive income for the year	–	–	–	–	154	154
Dividend	–	–	–	–	-167	-167
Treasury shares, reissued	–	–	–	21	–	21
Allocation of employee share option schemes and performance share plans	–	–	–	–	8	8
Shareholders' equity, 31 December 2014	58	1,671	52	-447	2,369	3,703
Opening balance, 1 January 2015	58	1,671	52	-447	2,369	3,703
Net proft/loss for the year	–	–	–	–	305	305
Comprehensive income for the year	–	–	–	–	305	305
Dividend	–	–	–	–	-294	-294
Treasury shares, reissued	–	–	–	45	-11	34
Allocation of employee share option schemes and performance share plans	–	–	–	–	7	7
Shareholders' equity, 31 December 2015	58	1,671	52	-402	2,376	3,755

1) Of the Parent Company statutory reserve, SEK 1,390 million (1,390) comprises contributed shareholders' equity.

NOTE1 SIGNIFICANT ACCOUNTING POLICIES

Compliance with standards and legislation

Nobia's consolidated fnancial statements are prepared in accordance with International Financial reporting Standards, IFRS, as approved by the International Accounting Standards board (IASb) as adopted by the European Union (EU). The Swedish Financial Repor ting Board's recommendation RFR 1 Supplementary Accounting Rules for Groups was also applied.

The Parent Company applies the same accounting policies as the Group except in the cases described below under the section entitled "Parent Company accounting policies." The Annual Report and the consolidated fnancial statements were approved for issue by the Board of Directors and President on 21 March 2016.

Principles applied in the preparation of the fnancial statements

Assets and liabilities are recognised at historic acquisition value (cost), except for cer tain fnancial assets and liabilities and fxed assets held for sale. Financial assets and liabilities measured at fair value comprise derivative instruments. Fixed assets held for sale are recognised at the lower of the carrying amount and fair value, less selling expenses.

Receivables and liabilities and income and expenses are offset only if required or expressly permitted in an accounting recommendation.

The Parent Company's functional currency is Swedish kronor (SEK), which is also the presentation currency for the Parent Company and Group. Accordingly, the fnancial statements are presented in SEK. All amounts are stated in SEK million (SEK m), unless otherwise stated.

The most signifcant accounting policies stated below are applied consistently to all of the periods presented in the consolidated fnancial statements.

Preparing the fnancial statements in accordance with IFRS requires that company management make assessments, estimates and assumptions that affect the application of accounting policies and the recognised amounts of assets, liabilities, income and expenses. The actual outcome may differ from these estimates and assessments. Estimates and assumptions are regularly reviewed. Changes to estimates are recognised in the period in which the change is made if the change affects only that period, or in the period in which the change is made and future periods if the change affects both current periods and future periods. Assessments made by company management in the application of IFRS that have a material impact on the fnancial statements and estimates made that may lead to signifcant adjustments in the fnancial statements of future fscal years are primarily the following:

¯ Impairment testing of goodwill

Goodwill is recognised at cost less any accumulated impairment. The Group regularly performs impairment tests of goodwill in accordance with the accounting policies described under Note 14 Intangible assets on page 66. The assumptions and assessments made pertaining to expected cash fows and the discount rate in the form of weighted average cost of capital are described under Note 14 Intangible assets.

¯ Deferred tax assets

The Group's loss carryforwards for which deferred tax assets have been capitalised have a carrying amount of SEK 74 million (94). Deferred tax assets per taining to loss carryforwards are capitalised to the extent it is probable that carryforwards can be offset against surpluses in future taxation. Particularly high demands are placed on the assessment if the company, to which the loss carryforwards are attributable, has recognised losses in recent years. The amounts of capitalised and non-capitalised loss carryforwards in the Group are presented in Note 26 Deferred tax. If the probability that non-capitalised loss carryforwards could be utilised in future taxation in future annual accounts is deemed to be high, additional amounts may be capitalised, with a corresponding positive amount recognised in proft or loss. The reverse applies if markets were to signifcantly deteriorate in forthcoming years. The current assessment is that the probability of such increases or declines in the value in the balance sheet during the forthcoming year is not high, although this cannot be ruled out if conditions in the kitchen markets were to change more than expected.

Changed accounting policies

The changed accounting policies applied by the Group from 1 January 2015 are described below. Other IFRS changes applied from 1 January 2015 did not have any material effect on the consolidated fnancial statements.

I*6IC 0evies describes how to recognise a levies imposed by a government. IFRIC 21 applies to levies the fall within the framework of IAS 37 and for those where the timing and amount of the levy is certain. IFRIC 21 does not apply to income taxes (IAS 12) or fnes. The interpretation address only the liabilities side and not whether an asset or expense arises on the debit side. The interpretation meant that liabilities for property tax are recognised on 1 January when the obligation to pay the tax arises. The entire liability is recognised on 1 January at the same time as a prepaid expense for property tax is recognised. The expense is then evenly allocated over the year.

New IFRSs that have not yet been applied

A number of new or amended IFRSs will come into effect during the current fscal year, and have not been applied in advance when preparing these fnancial statements. There are no plans to apply any new or amended accounting policies with future application in advance.

Amendments to IAS 7 Statement of Cash Flows, to be applied not later than from 2017, entail that disclosures are to be provided on changes in liabilities that in the statement of cash fows are attributable to fnancing activities. Disclosures can be provided in an opening-balance/closing-balance analysis and are to be divided between loans and repayments, changes related to acquisitions and disposals of subsidiaries, currency effects, effects of remeasurement of fair value and other changes. The difference compared with the analysis of net debt that Nobia already discloses is that liabilities attributable to the fnancing activities in accordance with IAS 7 must be presented separately from changes in other assets and liabilities included in net debt.

IFRS 9 Financial Instruments will replace IAS 39 Financial Instruments: Recognition and Measurement. Through IFRS 9, the IASB has made a number of changes to the recognition of fnancial instruments. The amendments contain new requirements for recognition and measurement of fnancial instruments, an expected loss impairment model and simplifed requirements for hedge accounting. IFRS 9 comes into effect on 1 January 2018.

Nobia's preliminary assessment is as follows: the amendments of recognition and measurement will not impact the consolidated fnancial statements impairment of fnancial assets affects the recognition of bad debt losses, but since bad debt losses have been and are expected to be very small, the potential effect is expected to be immaterial and that the new rules for hedge accounting are not expected to have any material effect on the recognition that currently takes place in the primary fnancial statements.

IFRS 15 Revenue from Contracts with Customers entails that IFRS will contain a single, principles based model for all industries, which is to replace existing standards and statements on revenue. IFRS 15 comes into effect in 2018.

Nobia's preliminary assessment is that IFRS 15 will not have material effects on the fnancial statements. An investigation is under way, primarily into the extent to which project sales, including the installation of kitchens, may be affected. Such sales comprise only a small percentage of the Group's sales, meaning that the potential total effect of the Group's recognised sales is not deemed to be material. The possible effect regarding the recognition of variable income and other changes in policies in IFRS 15 are also preliminarily deemed to be immaterial.

IFRS 16 Leases will replace IAS 17 Leases, IFRIC 4 Determining Whether an Arrangement Contains a Lease and related rules with application from 2019. The new standard entails for lessees that all leases that meet the defnition in the standard of a lease are to be recognised as an asset and liability in the balance sheet, with depreciation and interest expense recognised in proft or loss. Agreements for primarily the lease of premises, which currently comprise operating leases (see Note 11), are not recognised in the balance sheet as an asset and liability except for the interim items arising in connection with the annual accounts. Calculations of the effects, in terms of amounts, that capitalisation of these leases may give rise to have not yet been performed.

Corporate governance and the Nobia share

Other amendments to accounting policies with future application are not deemed to have any material effect on the consolidated fnancial statements.

Classifcation, etc.

Fixed assets essentially comprise amounts that are expected to be recovered more than 12 months after the closing date. Current assets essentially comprise amounts that are expected to be recovered within the 12 months after the closing date. Long-term liabilities comprise amounts that Nobia intends, and has an unconditional right, to pay later than 12 after the closing date. Other liabilities comprise current liabilities.

Consolidation principles and business combinations Subsidiaries

Subsidiaries are companies subject to the controlling infuence of Nobia AB. A controlling infuence entails the direct or indirect right to shape a company's fnancial or operational strategies in a bid to receive fnancial benefts. When assessing whether a controlling infuence exists, potential voting shares that can be immediately utilised or converted must be taken into account.

Business combinations are recognised in accordance with the acquisition method. According to this method, an acquisition of a subsidiary is considered a transaction through which the Group indirectly acquires the subsidiary's assets and assumes its liabilities and contingent liabilities. The Group-wise cost is determined by an acquisition analysis in conjunction with the acquisition. The analysis determines the cost of the par ticipations or business activities, and the fair value of the acquired identifable assets and assumed liabilities and contingent liabilities on the acquisition date.

As of 2010, goodwill in business combinations is calculated as the total of the consideration transferred, any non-controlling interests (previously termed minority interests) and fair value of previously owned par ticipations (for step acquisitions) less the fair value of the subsidiary's identifable assets and assumed liabilities. when the difference is negative, it is recognised directly in net proft for the year. Goodwill from acquisitions prior to 2010 is calculated as the total of the consideration transferred and acquisition costs less the fair value of acquired identifable net assets for each par t acquisition, whereby the costs for goodwill from all potentially historic part acquisitions are aggregated. As of 2010, transaction costs arising from business combinations are expensed but for acquisitions prior to 2010, transaction costs are included in goodwill.

As of 2010, contingent consideration in acquisitions is measured at fair value on both the acquisition date and continuously thereafter, with changes in value recognised in proft or loss. For acquisitions prior to 2010, contingent consideration is only recognised when a probable and reliable amount can be calculated and any later adjustments are recognised against goodwill.

For acquisitions of subsidiaries as of 2010 involving non-controlling interests, the Group recognises net assets attributable to non-controlling interests either at fair value of all of the net assets except goodwill, or at fair value of all net assets including goodwill. The principle is decided individually for each acquisition.

Ownership in companies that grow through acquisitions on several occasions are recognised as step acquisitions. For step acquisitions that lead to a controlling interest in 2010 or later, the previously acquired participations are remeasured according to the most recent acquisition and the arising gains or losses are recognised in proft or loss. For acquisitions prior to 2010, step acquisitions are recognised as an aggregation of costs from each acquisition date, and any remeasurement at the acquisition of control is recognised against the revaluation reserve in shareholders' equity.

When controlling interests are achieved, changes in ownership are recognised as a reallocation of shareholders' equity between the Parent Company's owners and the non-controlling interest, without any remeasurement of the subsidiary's net assets. For changes in ownership with retained controlling interests that took place prior to 2010, the difference between consideration and the transaction's share of recognised, identifable net assets was recognised against goodwill.

From 2010 or later, if ownership is reduced to such an extent that controlling interests are lost, any remaining holdings are recognised at fair value and the change in value is recognised in proft or loss. For changes in ownership prior to 2010, no remeasurement was carried out if the remaining holdings comprised a joint venture or associated company.

when acquisitions of subsidiaries involve acquisitions of net assets that are not par t of the operations, the acquisition cost is distributed between the individual identifable assets and liabilities based on their fair value on the acquisition date.

The fnancial statements of subsidiaries are included in the consolidated fnancial statements from the date that the controlling interest arises and are included in the consolidated fnancial statements until the date on which the controlling interest ceases.

Transactions that are eliminated through consolidation

Intra-Group receivables and liabilities, income or expenses and unrealised gains or losses that arise from intra-Group transactions between Group companies, are eliminated in their entirety in the preparation of the consolidated fnancial statements.

8ranslation of foreign subsidiaries

The fnancial statements of subsidiaries are prepared in the local currency, or the functional currency used in the country in which the company conducts operations. Swedish kronor, SEK, is utilised in the consolidated fnancial statements, which is the Parent Company's functional currency and also the Group's presentation currency. This means that the earnings and fnancial position of all Group companies that have a functional currency that is different to the presentation currency are translated to the Group's presentation currency of SEK. Foreign subsidiaries' assets and liabilities are translated at the closing-date rate and all items recognised in proft or loss and other comprehensive income are translated at the average exchange rate for the year. Translation differences are recognised in other comprehensive income and are accumulated in a separate reserve in consolidated shareholders' equity.

	Closing-date rate		Average rate
Signifcant exchange rates	31 Dec 2014	31 Dec 2015	2014	2015
DKK	1.28	1.22	1.22	1.25
EUR	9.52	9.14	9.10	9.36
GbP	12.14	12.38	11.29	12.9
NOK	1.05	0.96	1.09	1.05
USD	7.81	8.35	6.86	8.44

Segment reporting

An operating segment is a part of the Group that conducts business activities from which it can generate income and incur expenses and for which independent fnancial information is available. Fur thermore, the results of an operating segment are monitored by the company's chief operating decision-maker to evaluate them and to allocate resources to the operating segment. Nobia's operating segments are the Group's three regions: the UK, Nordic and Central Europe regions. The division of the units per region is based on the geographic domicile of the units. Refer to Note 3 on pages 60–61 for a more detailed description of this divisions and a presentation of the operating segments.

Revenue recognition

The company recognises revenue when the risk and beneft associated with the goods has been transferred to the customer in accordance with the terms of delivery. In cases where installation services are provided, revenue is recognised when the service has been completed. Sales are recognised net after vAT, discounts and exchange-rate differences for sales in foreign currency and returns.

Government assistance

Government subsidies are recognised in the balance sheet as deferred income when there is reasonable assurance that the subsidy will be received and the Group will fulfl the conditions associated with the subsidy. Subsidies are allocated systematically in the income statement in the same manner and over the same periods as the costs for which the subsidies are intended to cover.

Financial income and expenses

Financial income and expenses comprise interest income on bank balances and receivables, dividend income, interest expense on loans and pension liabilities, as well as exchange-rate differences on fnancial items.

Interest income on receivables and interest expense on liabilities are calculated in accordance with the effective interest rate method. The effective interest rate is the interest rate that results in the present value of all future receipts and disbursements during the fxed-interest term becoming equal to the carrying amount of the receivable or liability. The calculation includes all fees paid or received by contractual parties that are part of the effective interest rate, meaning transaction costs and surplus and defcit values.

Tax

Tax costs for the year comprise current tax and deferred tax. Income taxes are recognised in proft or loss except when the underlying transaction is recognised in other comprehensive income or in shareholders' equity, whereby the associated tax effects are recognised in other comprehensive income or in shareholders' equity.

Current tax is tax that is to be paid or received regarding the current year, by applying the tax rates determined or that have been determined in principle on the closing date. This item also includes adjustments to current tax attributable to previous periods.

Deferred tax is calculated according to the balance-sheet method on all temporary differences arising between recognised and fscal values of assets and liabilities.

The tax effect attributable to tax loss carryforwards that could be utilised against future profts is capitalised as a deferred tax asset. This applies to both accumulated loss carryforwards at the acquisition date and losses arising thereafter.

valuations take place at the tax rate applying on the closing date. Deferred tax is recognised in the balance sheet as a fxed asset or long-term liability. The income tax liability is recognised as a current receivable or liability.

If the actual outcome differs from the amounts frst recognised, the differences will affect current tax and deferred tax in the period in which these calculations are made.

Tangible fxed assets

Tangible fxed assets are recognised at cost with deductions for depreciation and any impairment. Cost includes expenses that can be directly attributed to the acquisition. The borrowing costs of the cost of any assets established that comprise qualifying assets are expensed. Costs for repairs, maintenance and any interest expenses are recognised as costs in proft or loss in the period in which they arise.

In the event that an asset's carrying amount exceeds its estimated recoverable amount, the asset is written down to its recoverable amount, which is charged to operating proft.

In the income statement, operating proft is charged with straight-line depreciation, which is calculated on the original cost and is based on the estimated useful lives of the assets as follows:

Kitchen displays	2–4 years
Offce equipment and vehicles	3–5 years
buildings	15–40 years
Machinery and other technical equipment	6-12 years
Equipment, tools, fxtures and fttings	6-12 years
Land is not depreciated.

Fixed assets/disposal groups held for sale and discontinued operations

Discontinued operations comprise important operations that have been divested or comprise a divestment group held for sale as well as subsidiaries that are acquired for the purpose of subsequently being sold. Proft after tax from discontinued operations is recognised on a separate line in proft or loss.

The signifcance of a group of assets and liabilities being classifed as held for sale is that the carrying amounts are recovered primarily by being sold and not by being used. All assets included in the group are presented on a separate line among assets and all of the group's liabilities are presented on a separate line among liabilities. The group is valued at the lower of the carrying amount and fair value, less selling expenses. Changes in value are recognised in proft or loss.

Intangible assets

Goodwill comprises the amount by which the cost of the acquired operation exceeds the established fair value of identifable net assets, as recognised in the acquisition analysis. In connection with the acquisition of operations, goodwill is allocated to cash-generating units. Since goodwill has an indeterminable useful life, it is not amor tised annually. Instead, goodwill is subject to impairment testing either annually or when an indication of an impairment requirement arises. The carrying amount comprises the cost less any accumulated impairment losses. A description of the method and assumptions applied when conducting impairment tests is found under Note 14 Intangible Assets on page 66.

Other intangible assets are recognised at cost less accumulated amortisation and any impairment. It also includes capitalised costs for purchases and internal and external costs for the development of software for the Group's IT operations, patents and licences. Amortisation takes place according to the straight-line method based on the estimated useful life of the asset (three to six years).

Research and product development

Costs for product development are expensed immediately as and when they arise.

Product development within the Group is mainly in the form of design development and is conducted continuously to adapt to current style trends. This development is relatively fast, which is the reason that no portion of the costs for product development is recognised as an intangible asset. The Group does not carry out research and development in the true sense of such work, or to any signifcant extent.

Leases

Leases concerning fxed assets in which the Group essentially carries the same risks and enjoys the same benefts that direct ownership would entail are classifed as fnancial leasing. Financial leases are recognised at the start of the leasing period at the lower of the leasing object's fair value and the present value of minimum leasing fees. Financial leases are recognised in the balance sheet as fxed assets and fnancial liabilities, respectively. Future leasing payments are divided between repayment of the liabilities and fnancial expenses whereby each accounting period is charged with an amount of interest corresponding to a fxed-interest rate on the liability recognised during the respective period. Leasing assets are amortised according to the same principles that apply to other assets of the same type. Costs for leases are divided between amortisation and interest in the income statement.

Leasing of assets, where the lessor essentially remains the owner of the asset, is classifed as operational leasing. Leasing fees are recognised on a straight-line basis during the leasing period. Operating leases are recognised in proft or loss as an operating expense. Leasing of cars and computers is normally treated as operational leasing. The value of these leases is not considered to be signifcant.

Inventories

Inventories comprise fnished and semi-manufactured products and raw materials. Inventories are valued according to the frst-in, frst-out (FIFO) principle, at the lower of the cost and net sales value on the closing date. The net sales value comprises the estimated sales value in the ongoing operations less selling expenses. Finished and semi-manufactured products are valued at manufacturing cost including raw materials, direct labour, other direct expenses and production-related overheads based on normal production.

Deductions are made for inter-Group profts arising in conjunction with deliveries between companies in the Group.

Operations Sustainability Financial statements

Corporate governance and the Nobia share

Financial instruments

Financial instruments recognised in the balance sheet include cash and cash equivalents, loans receivable, accounts receivable and derivative instruments on the asset side. On the liability side, there are accounts payable, loan liabilities and derivative instruments.

¯ 6ecognition in and derecognition from the balance sheet

A fnancial asset or a fnancial liability is entered in the balance sheet when the company becomes a par ty in accordance with the contractual terms of the instrument. A receivable is recognised when the company has performed a service and a contractual payment obligation arises for the counterparty, even if an invoice has not been sent. Accounts receivable are recognised in the balance sheet when an invoice has been sent. A liability is recognised when the counterpar ty has performed a service and a contractual payment obligation arises, even if an invoice has not been received. Accounts payable are recognised when an invoice has been received.

A fnancial asset is derecognised from the balance sheet when the rights resulting from the agreement have been realised, expire or the company loses control over them. The same applies to a par t of a fnancial asset. A fnancial liability is derecognised from the balance sheet when the obligation resulting from the agreement has been realised or is extinguished in some other manner. The same applies to a par t of a fnancial liability.

A fnancial asset and a fnancial liability may only be offset against each other and recognised net in the balance sheet if there is a legal right to offset the amounts and the intention is to settle the items in a net amount or to simultaneously sell the asset and settle the debt.

The acquisition or divestment of fnancial assets is recognised on the date of transaction for on demand transactions, which is the date when the company undertakes to acquire or sell the asset.

¯ 6ecognition and measurement

Financial instruments that are not derivative instruments are initially recognised at cost corresponding to the instrument's fair value plus transaction costs. Transaction costs for derivative instruments are immediately expensed. On initial recognition, a fnancial instrument is classifed on the basis of the purpose underlying the acquisition of the instrument. This classifcation determines how the fnancial instrument is measured after initial recognition, in the manner described below. For the recognition of derivative instruments, refer to Cash-fow hedges below.

¯ 6eceivables and liabilities in foreign currencies

Receivables and liabilities in foreign currencies are valued at the closingdate rate. Exchange-rate fuctuations per taining to operating receivables and liabilities are recognised in operating proft, while exchange-rate fuctuations per taining to fnancial receivables and liabilities are recognised in net fnancial items.

¯ 0oans and accounts receivable

The category of loans and accounts receivable comprises fnancial assets that are not derivative instruments, that have fxed or fxable payments and that are not listed on an active market. For Nobia, this category includes long-term loans receivable recognised as fxed assets and accounts receivable and other receivables recognised as current assets. These assets are valued at amortised cost. Amortised cost is determined based on the effective rate calculated on the acquisition date. Loan and accounts receivable are recognised at the amounts that are expected to be received, meaning less any provisions for decreases in value. Receivables with short maturities are not discounted.

¯ Cash and cash eUuivalents

Cash and cash equivalents are defned as cash and bank balances and shor t-term investments with maturities not exceeding three months from the acquisition date.

¯ *inancial liabilities

All transactions per taining to fnancial liabilities are recognised on the settlement date. Liabilities (except for derivative instruments with negative values) are measured at amortised cost.

¯ Cash-¾ow hedges of uncertainty in forecasted sales and material purchases in foreign currency

The currency forward contracts used for hedging highly probable forecasted sales and material purchases in foreign currency are recognised in the balance sheet at fair value. Changes in their value are recognised in other comprehensive income and the accumulated changes in value in a separate component of shareholders' equity (the hedging reserve) until the hedged fow impacts net proft for the year, whereby the accumulated changes in value of the hedging instrument are reclassifed to net proft for the year.

¯ Cash-¾ow hedges interest-rate risk

Interest swaps can be used to hedge the uncer tainty of highly probable forecasted interest-rate fows for borrowing at variable interest, whereby the company receives variable interest and pay fxed interest. Interest swaps are measured at fair value in the statement of fnancial position. The interest coupon por tion is continuously recognised in proft or loss as a por tion of interest expense. Unrealised changes in fair value of interest swaps are recognised in other comprehensive income and are included as a por tion of the hedging reserve until the hedged item impacted net proft for the year and as long as the criteria for hedge accounting and effectiveness are fulflled. The gain or loss attributable to the ineffective por tion of unrealised changes in value of interest swaps is recognised in proft or loss.

Impairment

The carrying amounts of the Group's assets are tested annually for indications of any impairment requirement. IAS 36 is applied for the impairment testing of assets other than fnancial assets, which are tested according to IAS 39, assets held for resale and disposal groups that are recognised according to IFRS 5, inventories, plan assets used for the fnancing of employee benefts and deferred tax assets. For the exempted assets mentioned above, the carrying amount is tested in accordance with the relevant standard.

¯ Impairment testing of tangible and intangible assets and participations in subsidiaries

If there is an indication of an impairment requirement, the recoverable amount of the asset is tested in accordance with IAS 36 (see below). For goodwill, the recoverable amount is calculated annually. When testing for impairment requirements, if it is not possible to establish essentially independent cash fows for an individual asset, the assets must be grouped at the lowest level at which it is possible to identify essentially independent cash fows, known as cash-generating units.

Impairment losses are recognised when the carrying amount of an asset or a cash-generating unit (group of units) exceeds the recoverable amount. Impairment losses are charged against proft or loss. Impairment losses related to assets attributable to a cash-generating unit are primarily allocated to goodwill. Subsequently, a propor tional impairment of other assets included in the unit (group of units) is effected.

The recoverable amount is the higher of fair value less selling expenses and value in use. When calculating the value in use, future cash fows are discounted using a discounting factor that takes into account the risk-free interest rate and the risk associated with the specifc asset or cash-generating unit (group of units).

¯ Impairment testing of fnancial assets

At every repor ting occasion, the company evaluates whether there is any objective evidence to suggest that a fnancial asset or group of assets is subject to an impairment requirement. Objective evidence comprises observable conditions that have occurred and that have had a negative impact on the ability to recover the cost. For accounts receivable, objective evidence comprises, for example, payment diffculties among customers or imminent corporate reconstructions. Accounts receivable that require impairment are recognised at the present value of expected future cash fows.

¯ Impairment reversal

An impairment loss on assets that come under the scope of IAS 36 is reversed if there is an indication that the impairment requirement is no longer pertinent and that there has been a change in the assumptions upon which the calculation of the recoverable amount was based. However, an impairment loss on goodwill is never reversed. A reversal is only performed to the extent that the carrying amount of the asset after the reversal does not exceed the carrying amount that would have been recognised, less depreciation wherever applicable, if no impairment had been posted.

An impairment loss on loans and accounts receivable recognised at amortised cost is reversed if the previous reasons for the impairment loss no longer exist and full payment can be expected to be received from the customer.

Provisions

Provisions are recognised in the balance sheet among current and longterm liabilities, when the Group has a legal or informal obligation deriving from an occurred event and that it is probable that an outfow of resources will be required to settle the obligation and the amount concerned can be reliably estimated. A provision differs from other liabilities since the date of payment or the amount required to settle the provision is uncertain.

¯ 6estructuring

A provision for restructuring is recognised once a detailed and formal restructuring plan has been adopted and the restructuring process has either commenced or been publicly announced. No provisions are established for future operating expenses.

¯ +uarantees

A provision for guarantees is recognised when the underlying products or services are sold. The provision is based on historical data and a total appraisal of the potential outcomes in relation to the probabilities associated with the outcomes.

Contingent liabilities

A contingent liability is disclosed when the company has a possible obligation deriving from an occurred event whose existence will be confrmed only by one or more uncertain future events, or when there is an obligation that has not been recognised as a liability or provision because it is not probable that an outfow of resources will be required, or alternatively because it is not possible to suffciently reliably estimate the amount concerned.

Shareholders' equity

when shares are bought back, shareholders' equity is reduced by the entire amount paid. Dividends are recognised as a liability after the Annual General Meeting has approved the dividend.

Earnings per share

The calculation of earnings per share is based on consolidated net proft attributable to the Parent Company shareholders and on the weighted average number of shares outstanding during the year. when calculating earnings per share after dilution, the average number of shares outstanding is adjusted to take into account the dilutive effects of potential ordinary shares. During the recognised periods, potential ordinary shares comprise employee share options issued to employees and share rights (matching and performance share rights). The options are dilutive if the proft targets of the share option scheme have been fulflled on the reporting date and if the exercise price is lower than the share price. Dilution is greater, the greater the difference between the exercise price and the share price. Matching share rights held by employees on the reporting date are considered dilutive. Performance share rights are dilutive to the extent that proft targets have been fulflled on the reporting date. For the options, the exercise price is adjusted by a supplement to the value of future services calculated as remaining cost to recognise in accordance with IFRS 2. A corresponding adjustment is carried out for the share rights, but without the existence of an underlying exercise price.

Employee benefts

¯ Pensions

The Group has both defned-contribution and defned-beneft pension plans. In Sweden, the UK and in some Group companies in Germany, employees are covered by defned-beneft pension plans. In other countries and companies, employees are covered by defned-contribution plans. Effective 2010, all new vesting in the UK comes under defned-contribution plans. As previously, all new vesting in Germany comes under defnedcontribution plans. The defned-beneft pension plan in Norway was discontinued in 2014 and replaced by a defned-contribution pension plan.

Plans for which the company's obligations are limited to the fees the company has undertaken to pay are classifed as defned-contribution pension plans. The company's obligations for defned-contribution plans are recognised as a cost in earnings at the rate at which they are vested by the employees performing services on behalf of the company for a period of time.

The Group's defned-beneft pension plans state the amount of pension beneft that an employee, or a former employee, will receive after retirement based upon their salary and the number of years of service. Pension liabilities for defned-beneft plans are recognised according to common principles and calculation methods and are calculated by considering future salary increases and infation, among other factors. The Group carries the risk that the promised beneft will be paid.

There are both funded and unfunded defned-beneft pension plans within the Group. Funded pension plans are mainly fnanced on the basis of contributions paid to pension funds.

Regarding defned-beneft plans, the pension commitment is calculated in accordance with the Projected Unit Credit method. This method allocates the cost of pension at the rate at which the employees perform services for the company that increase their entitlement to future remuneration. This calculation is performed annually by independent actuaries. The company's obligations are valued at the present value of expected future cash fows using a discount rate. This discount rate corresponds to the interest on high-quality corporate bonds, where a market with suffcient depth exists, or government bonds if no such market exists.

The rate in Sweden is determined based on mor tgage bonds, while in the UK and Germany, the rate is based on corporate bonds.

Actuarial gains and losses may arise when the present value of commitments is established and a difference arises when the actual return on plan assets is established compared with the return calculated at the beginning of the period, based on the discount rate of the commitments. These actuarial gains and losses and this different in the return on plan assets are entitled remeasurements. These remeasurement effects arise either because the fair value differs from the previously made assumption or because the assumptions have changed. The remeasurement effects are recognised in other comprehensive income.

For funded plans, the Group recognises pension commitments in the consolidated balance sheet as a liability comprising the net of the estimated present value of the commitments and the fair value of plan assets. Funded plans with net assets, that is, plans with assets exceeding the pension commitment, are recognised as fxed assets.

The net amount of interest on pension liabilities and the expected return on accompanying plan assets is recognised as par t of net fnancial items.

The special employer's contribution comprises a portion of the actuarial assumptions and thus is recognised as a por tion of the net commitment/ asset. The portion of the special employer's contribution that is calculated based on the Swedish Pension Obligations Vesting Act in legal entities is recognised, for simplicity, as accrued expenses instead of as a portion of net commitment/asset.

Tax on returns is recognised continuously in proft or loss for the period to which the tax per tains and thus is not included in the liability calculation. For funded plans, the tax is charged to the return on plan assets and recognised in other comprehensive income. For unfunded or partly unfunded plans, tax is charged to proft or loss.

¯ 3ther long-term remuneration

The Group operates schemes for remuneration to employees for long service.

Actuarial gains and losses may arise when the present value of commitments and the fair value of plan assets are established, which are recognised in operating proft.

The discount rate is established on the basis of high-quality corporate bonds issued in the same currency as the remuneration that is to be paid and with maturities equivalent to the commitments in question.

Operations Sustainability Financial statements

Corporate governance and the Nobia share

¯ Share-based remuneration schemes

Share-based remuneration per tains to employee benefts, including senior executives in accordance with the employee share option scheme, allotted by Nobia between 2005 and 2011 and the Performance Share Plans that were initiated in 2012 and 2015. Costs for employee benefts are recognised as the value of services received, allocated over the vesting periods for the plans, calculated as the fair value of the allotted equity instruments (IFRS 2). The fair value is determined on the allotment date, or the date on which Nobia and the employees have agreed on the terms and conditions of the plans. Since the plans are regulated with equity instruments, they are classifed as "equity settled" and an amount corresponding to the recognised cost for employee benefts is recognised directly in shareholders' equity (other contributed capital).

The vesting of share options depends on the scheme participant remaining in employment and that Nobia's earnings per share show a suffciently positive trend. The Performance Share Plan contains two types of rights. Matching share rights give entitlement to Nobia shares if the participant remains in employment and retains the saving share that must initially be purchased. Performance share rights give entitlement to shares under the same conditions and if the accumulated earnings per share are suffciently high during the vesting period. The recognised cost is initially based on, and regularly adjusted in relation to, the number of share options/share rights that are expected to be vested by considering how many par ticipants are expected to remain in service during the vesting period and the expected and actual fulflment of the terms and conditions for earnings per share. No such adjustment is carried out for the number of share options that are expected to be exercised and are actually exercised depending on whether the level of the exercise price gives rise to the exercise. Neither is such an adjustment carried out when par ticipants lose share rights due to selling the saving shares that they were required to purchase and must retain. In this case, the entire remaining cost is immediately recognised instead.

when share options are exercised or shares are matched, social security contributions are paid in certain countries for the value of the employee's benefts. An expense and a provision are recognised, allocated over the vesting period, for these social security contributions. The provision for social security contributions is based on the number of share options/share rights that are expected to be vested and the fair value of the share options/ share rights on each reporting date and fnally, for the exercise/matching.

¯ Short-term remuneration

Shor t-term remuneration to employees is calculated without discounting and is recognised as a cost when the related services are obtained. A provision is posted for the anticipated cost of proft shares and bonus payments when the Group has a current legal or informal obligation to make such payments, due to the services being obtained from the employees and it being possible to reliably estimate the obligation.

¯ Payments in connection with employment termination

A cost for payments arising in connection with the laying-off of employees is recognised only if the company is legally obliged to terminate employment in advance of the normal date. when such payment is made as an offering to encourage voluntary retirement, it is recognised as a cost if it is probable that the offer will be accepted and the number of employees who will accept the offering can be reliably estimated.

Parent Company accounting policies

The Parent Company has prepared its Annual Repor t in accordance with the Swedish Annual Accounts Act (1995:1554) and the Swedish Financial Reporting board's recommendation RFR 2 Accounting for Legal Entities. The Financial Repor ting Board's statements for listed companies were also applied. RFR 2 entails that the Parent Company applies all IFRSs adopted by the EU and statements to the Annual Repor t of the legal entity as far as possible under the framework of the Annual Accounts Act and the Swedish Pension Obligations Vesting Act and with respect to the connection between accounting and taxation. The recommendation states the exceptions and additions to IFRS that are to be made. Overall, the recommendation entails differences between the Group's and the Parent Company's

accounting policies in the areas stated below. The accounting policies for the Parent Company described below were applied consistently to all periods presented in the Parent Company's fnancial statements.

¯ Changed accounting policies

Changes to accounting policies applied from 2015 did not have any effect on the Parent Company's fnancial statements.

¯ Classifcation and presentation form

An income statement and statement of comprehensive income are presented for the Parent Company and the Group. The Parent Company's income statement and balance sheet are presented following the format stipulated in the Annual Accounts Act, while the statement of comprehensive income, the statement of changes in shareholders' equity and cash-fow statement are based on IAS 1 presentation of Financial Statements and IAS 7 Statement of Cash Flows. The differences in the Parent Company's income statement and the balance sheet compared with the presentation of the consolidated fnancial statements primarily per tain to the recognition of fnancial income and expenses, fxed assets, shareholders' equity and the existence of provisions as a separate heading in the balance sheet.

¯ Subsidiaries

Participations in subsidiaries are recognised in the Parent Company in accordance with the cost method. This means that transaction costs are included in the carrying amount of the holdings in subsidiaries. In the consolidated fnancial statements, transaction costs are recognised directly in proft or loss when they arise.

Contingent consideration is valued based on the probability of the consideration being paid. Any changes to the provisions/receivable are added to/deducted from the cost. In the consolidated fnancial statements, contingent considerations are measured at fair value with changes in value recognised in proft or loss.

bargain purchases corresponding to future losses and costs are reversed during the expected periods in which the losses and costs arise. Bargain purchases arising for other reasons are recognised as a provision to the extent that the purchase does not exceed the fair value of the acquired, identifable non-monetary assets. The por tion that exceeds this fair value is recognised in proft or loss immediately. The por tion that does not exceed the fair value of acquired, identifable non-monetary assets is recognised in proft or loss systematically over a period calculated as the remaining weighted average useful life of the acquired identifable assets that are depreciable. In the consolidated fnancial statements, bargain purchases are recognised directly in proft or loss.

¯ 0eased assets

All leases in the Parent Company are recognised in accordance with operational leasing regulations.

¯ )mployee benefts

The Parent Company applies other principles for the calculation of defnedbeneft plans than those stipulated in IAS 19. The Parent Company follows the provisions of the pension obligations Vesting act and the Swedish Financial Supervisory authority's regulations since this is a condition for eligibility for rights to tax deductions. The signifcant differences compared with the IAS 19 regulations pertain to how the discount rate is determined, that the calculation of defned-beneft commitments based on current salary levels with no assumptions regarding future salary increases and that all actuarial gains and losses are recognised in proft or loss when they arise.

The Parent Company recognises the fair value of employee share options and performance share plan issued to employees of subsidiaries as shareholders' contributions by recognition in shareholders' equity and the value of the shares in the subsidiary.

¯ +roup contributions

The Parent Company recognises Group contributions received as dividends and Group contributions paid as investments in shares in subsidiaries. Prior to 2011, Group contributions were recognised directly in shareholders' equity.

¯ %nticipated dividends

Anticipated dividends from subsidiaries are recognised if the Parent Company has the sole right to decide the amount of the dividend and the Parent Company has made a decision on the amount of the dividend prior to the publication of the Parent Company's fnancial statements.

¯ *inancial instruments

Due to the connection between repor ting and taxation, the regulations regarding fnancial instruments and hedge accounting provided in IAS 39 are not applied in the Parent Company.

Foreign exchange risk

Nobia's policy is to hedge approximately 80 per cent of the forecast fows, 0-3 months in the future, 60 per cent 4-6 months in the future, 40 per cent 7-9 months in the future and 100 per cent of contracted projects. The principal currency combinations were the EUR against the GBP, the NOK against the SEK and NOK against the DKK. Total exposure in 2015, expressed in SEK and after offsetting counteracting fows, amounted to SEK 2,504 million (2,251), of which SEK 1,485 million (1,356) was hedged. At year-end 2015, the hedged volume amounted to SEK 865 million (774). Unrealised gains and losses recognised as cash-fow hedges in shareholders' equity will be transferred to the income statement at various points in time within 12 months.

Translation exposure

The Group's policy is not to hedge translation exposure in foreign currencies. A 10-per cent strengthening of the SEK compared with other currencies on 31 December 2015 would entail a decrease in shareholders' equity of SEK 450 million (decrease: 433) and a decrease in proft of SEK 60 million (increase: 3). The sensitivity analysis is based on the assumption that all other factors (for example, interest) are unchanged. The same conditions were applied to 2014.

Credit risk

Nobia is active in many markets and in several distribution channels. Depending on the type of distribution channel, the customer base comprises both professional customers and consumers. For these reasons, credit management and payment terms must be adapted to each business unit's business logic and distribution channels within the framework of the credit policy established by the Group. The credit policy stipulates that credit ratings are to be based on at least one credit report from a reputable credit rating institute. Credit assessments are continuously performed on customers who make regular purchases. Credit insurance is utilised for certain markets and customer categories. Collateral is often required when credit is granted to customers with low buying frequencies. Counterparty risk pertaining to banks is deemed to be very minor. The total credit risk amounted to SEK 2,163 million (1,715). The credit quality of fnancial assets that have neither fallen due for payment or that are subject to impairment is high.

Financial exposure

Nobia's policy for fnancing foreign assets involves fnancing capital employed with external borrowings in the corresponding currency in order to minimise the impact of exchange-rate fuctuations on the debt/ equity ratio. Group loans are handled by Nobia's head offce. The head offce supplies the subsidiaries with funds through an internal bank. These loans are raised in local currencies, which minimises the effects of exchange-rate fuctuations on profts. As a supplementary measure, currency contracts may be entered into to avoid exposure. Given the current debt/equity ratio and currency distribution of capital employed, approximately 12 per cent of foreign capital employed must be fnanced through borrowing in local currencies. In combination with this policy, other forms of capitalisation may be utilised in each country to optimise the Group's tax situation. Nobia's fnancial exposure policy does not involve hedging equity.

¯ *inancial guarantees

The Parent Company's fnancial guarantee agreements primarily comprise guarantees on behalf of subsidiaries. Under a fnancial guarantee, the company has an obligation to compensate the holder of a debt instrument for losses incurred by this holder due to a specifc debtor not fulflling their payment duties that are due in accordance with the terms and conditions of the agreement. In the recognition of fnancial guarantee agreements, the Parent Company applies a relaxation rule permitted by the Financial Reporting board, in contrast to the provisions of IAS 39. This relaxation rule pertains to fnancial guarantee agreements issued on behalf of subsidiaries, associated companies and joint ventures. The Parent Company recognises fnancial guarantee agreements as a provision in the balance sheet when the company has a commitment for which it is probable that payment will be required to settle the commitment.

		2014		2015
SEK m	Capital employed per currency	Interest-bearing loans and lease liabilities	Capital employed per currency	Interest-bearing loans and lease liabilities
SEK	-495	914	107	914
EUR	1,288	69	1,111	109
GbP	2,317	698	2,954	521
DKK	1,272	3	777	3
USD	144	0	78	0
NOK	339	0	308	0
Other	15	0	34	0
Total	4,880	1,684	5,369	1,547

Interest-rate risk

Interest-rate exposure is managed centrally, meaning that the head offce is responsible for identifying and managing interest-rate risks. Nobia normally uses shor t, fxed-interest terms. Nobia's approach is that times of high interest rates usually coincide with healthy demand in society at large. The company has had an interest swap of SEK 400 million since 2011 which expires in November 2016. The fxed-interest term for remaining loans was 3 months.

Refnancing risk

Nobia applies a centralised approach to the Group's fnancing, which means that all fnancing takes place in Nobia AB or Nobia Sverige AB. In 2010, Nobia raised a bond loan of SEK 800 million from Ab SEK Securities (Swedish Expor t Credit Corporation), which has a term of seven years. In 2014, the company also raised a syndicated loan facility of SEK 1,000 million with three banks. The term is fve years. The loan has three covenants: leverage (net debt to EbITDA), gearing (net debt to equity) and interest cover (EBITDA to net interest expenses). Nobia meets all covenants with a satisfactory margin. Nobia's policy is to obtain long-term lines of credit that are compatible with Nobia's long-term strategy, while simultaneously balancing the needs for low credit costs. In addition to these loans, Nobia has access to local cash advances.

The table below shows the maturity of all of Nobia's loans:

year of maturity,		2014		2015
SEK m	2015	2017	2019	2016	2017	2019
Loans and lines of credit	–	800	1,000	–	800	1,000
Of which, utilised	–	800	–	–	800	–

Capital management

The debt/equity ratio is not to exceed 100 per cent. A temporary elevation of the debt/equity ratio is acceptable. Dividends are, on average, to be within the interval of 40-60 per cent of net proft after tax. The debt/ equity ratio at year-end amounted to 20 per cent (38). Nobia considers recognised shareholders' equity of SEK 3,822 million (3,196) to be capital.

Operations

Sustainability

Financial statements Corporate governance and the Nobia share

Liquidity risk

Daily liquidity is tracked with the help of carefully prepared liquidity forecasts. Liquidity is controlled centrally with the aim of using available liquidity effectively, at the same time as necessary reserves are available. Available liquidity including unutilised overdraft facilities comprised SEK 2,164 million on 31 December 2015.

Fixed-interest
terms – borrowing		2014		2015
	0–3	two	three	0–3	two	three
Group, SEK m	months	years	years	months	years	years
SEK	400	–	400	400	400	–
EUR	–	4	–	–	2	–

				2014							2015
Commercial exposure	USD	EUR	NOK	ChF	GbP	SEK	DKK	USD	EUR	NOK	ChF	GbP	SEK	DKK
Currency contracts on closing date
Local currency	-1	40	-248	-1	-2	-52	–	0	49	-278	-1	-1	-82	–
Total, SEK m1)	-4	376	-260	-10	-20	-52	–	-3	444	-265	-8	-16	-82	–
Fair value, SEK m	-1	-3	14	0	-1	1	–	0	1	13	0	0	-1	–
Net fow calendar year
Net fow, local currency	-10	-853)	635	3	2	200	-37	-2	-984)	685	2	4	336	-28
Net fow, SEK m2)	-68	-7763)	691	21	28	200	-45	-17	-9194)	717	14	55	336	-35
hedged volume, SEK m2)	4	-567	550	21	28	111	–	4	-711	501	17	36	111	–

1) Flows restated at closing-date rate, SEK. 2) Restated at average rate in 2014, 2015.

3) In addition, EUR 33 million per tains to fows against DKK, corresponding to SEK 300 million. 4) In addition, EUR 35 million per tains to fows against DKK, corresponding to SEK 325 million.

Sensitivity analysis		2014		2015
Currencies1) and interest rates2)	Change	Impact on proft before tax, SEK m	Impact on sharehol ders' equity3), SEK m	Change	Impact on proft before tax, SEK m	Impact on sharehol ders' equity3), SEK m
EUR/SEK	5%	8.9	6.9	5%	10.6	8.2
NOK/SEK	5%	7.9	6.2	5%	7.5	5.9
EUR/GBP	5%	15.2	12.2	5%	19.9	15.9
NOK/DKK	5%	12.3	9.4	5%	11.8	9.2
SEK/DKK	5%	4.2	3.2	5%	6.1	4.7
Interest-rate level	100 points	4.0	3.1	100 points	4.3	3.4

1) Transaction effects after hedges. 2) After interest-rate hedging. 3) Corresponds to proft after tax

Analysis of maturity for fnancial liabilities including accounts payable

					2014							2015
		Nominal							Nominal
		amount,						5 years	amount,						5 years
	Cur	original		within	1–3	3 months	1–5	or	original		within	1–3	3 months	1–5	or
Group, SEK m	rency	currency	Total	1 month	months	–1 year	years	longer	currency	Total	1 month	months	–1 year	years	longer
Bank loans (IB)
bank loans	SEK	800	867	2	4	15	846	–	800	820	1	3	13	803	–
bank loans	EUR	0	4	0	0	2	2	–	0	2	0	0	2	–	–
Other liabilities
Forward agreements1)	SEK		0	0	0	0	–	–		1	0	0	1	–	–
Forward agreements1)	EUR		7	2	2	3	–	–		3	1	0	2	–	–
Forward agreements1)	GbP		1	0	0	1	–	–		0	0	0	0	–	–
Forward agreements1)	NOK		0	0	0	0	–	–		0	0	0	0	–	–
Forward agreements1)	ChF		0	0	0	0	–	–		0	0	0	0	–	–
Forward agreements1)	USD		2	0	1	1	–	–		1	0	0	1	–	–
Current account credit (Ib) SEK			0	–	–	–	–	–		–	–	–	–	–	–
Financial lease liabilities (Ib) DKK		2	3	–	–	–	3	–	2	3	–	–	2	1	–
Financial lease liabilities (Ib) GbP		1	6	0	1	1	4	–	1	10	0	0	5	5	–
Other liabilities (Ib)	SEK		2	–	2	–	–	–	0	0	–	–	–	–	–
Other liabilities (Ib)	EUR		–	–	–	–	–	–	0	1	–	1	–	–	–
Other liabilities (Ib)	GbP		–	–	–	–	–	–	0	1	–	1	–	–	–
Accounts payable and
other liabilities	SEK		1,418	1,083	243	89	3	–		1,454	1,081	223	142	8	–
Total			2,310	1,087	253	112	858	–		2,296	1,083	228	168	817	–
Interest-bearing liabilities (Ib)			815							815

1) The value of forward agreements is included in the item "Derivative instruments" in the balance sheet.

Age analysis, accounts receivable and other receivables

	2014			2015
		Of which, impair		Of which, impair
SEK m	Gross	ment	Gross	ment
Non-due accounts receivable	930	–	1,053	–
Past due accounts receivable 0–30 days	211	1	238	2
Past due accounts receivable "30 days–90 days	52	4	47	3
Past due accounts receivable "90 days–180 days	22	6	17	5
Past due accounts receivable >180 days–360 days	13	8	30	24
Past due accounts receivable >360 days	24	24	20	15
Total receivables	1,252	43	1,405	49

Deposit account for impairment of accounts receivable and other receivables

SEK m	2014	2015
Opening balance	71	43
Reversal of previously recognised impairment losses	-26	-5
Impairment for the year	8	14
Confrmed losses	-1	-3
Translation differences	4	-1
Acquisition of operations	–	1
Impairment reclassifed to assets held for sale	-13	–
Closing balance	43	49

NOTE3 OPERATING SEGMENTS

The Group's business activities are divided into operating segments based on a management approach, meaning the parts of the operations monitored by the company's chief operating decision-maker. The Group's operations are organised such that Group management monitors the earnings, returns and cash fow generated by the Group's regions. These regions comprise the Group's operating segments since Group management monitors the operations' earnings and decides on the allocation of

Net sales and proft by region

An impairment loss is recognised when obvious reasons are deemed to exist that the company will not receive the entire or par t of the amount due. Obvious reasons may, in this context, pertain to external information that establishes that a receivable is doubtful. An impairment loss is initially recognised for each individual receivable. Collective impairment losses are recognised for a group of receivables with similar credit proper ties and characteristics.

Offsetting of fnancial instruments

Nobia has binding framework agreements for derivatives trading, which entails that fnancial liabilities can be offset – or "netted" – in the event of insolvency or similar situation. The tables below show the amounts encompassed by netting agreements at 31 December 2015 and 31 December 2014.

Offset agreements

2015 SEK m	Financial assets	Financial liabilities
Recognised amounts in statement of fnancial position	18	14
Amounts encompassed by netting	-14	-14
Amounts after netting	4	0
2014 SEK m	Financial assets	Financial liabilities
Recognised amounts in statement of fnancial position	20	24
Amounts encompassed by netting	-20	-20
Amounts after netting	0	4

resources based on the regions. Accordingly, the Group's internal reporting is structured so that Group management can monitor the performance and earnings of all of the regions. The following operating segments were identifed: UK region, Nordic region and Central Europe region.

Nobia considers the Group's income from kitchens, bathrooms and storage to comprise a single product group since bathrooms and storage represent such a small percentage of the Group's total balance sheet, income statement and cash-fow statement.

	Nordic region		region	UK	Central Europe region		eliminations	Group-wide and	Group
SEK m	2014	2015	2014	2015	2014	2015	2014	2015	2014	2015
Net sales from external customers	5,213	5,651	4,707	6,099	1,491	1,586	–	–	11,411	13,336
Net sales from other regions	2	1	–	–	2	2	-4	-3	–	–
Total net sales	5,215	5,652	4,707	6,099	1,493	1,588	-4	-3	11,411	13,336
Depreciation/amor tisation	-118	-127	-131	-146	-42	-46	-19	-22	-310	-341
Operating proft/loss	660	749	270	567	117	-15	-169	-156	878	1,145
Financial income									12	34
Financial expenses									-90	-92
Proft before tax and discontinued operations									800	1,087
Impairment	0	-1	-16	6	0	-10	0	0	-16	-5
Items affecting comparability in EbIT	-6	–	-83	–	–	-96	-8	–	-97	-96

Operations

Sustainability

Financial statements

Corporate governance and the Nobia share

Total liabilities and assets per region

	Nordic	Region	UK	Region	Europe region	Central	eliminations	Group-wide and	Group
SEK m	2014	2015	2014	2015	2014	2015	2014	2015	2014	2015
Total operating assets	1,685	1,752	1,844	2,727	1,234	775	2,614	2,0411)	7,377	7,295
Total operating assets include:
Investments in fxed assets	133	159	86	168	85	59	12	24	316	410
Total operating liabilities	1 045	1,085	992	1,091	661	351	277	1722)	2,975	2,699

1) Primarily comprises goodwill of SEK 1,605 million (2,021) and consolidated surplus values on fxed assets of SEK 228 million (233). Elimination of internal receivables amounted to negative SEK 21 million (neg. 24).

2) Elimination of internal liabilities amounted to negative SEK 21 million (neg. 24).

Geographic areas, Group

	Income from external customers1)	Fixed assets2)
SEK m	2014	2015	2014	2015
Sweden	1,153	1,422	279	305
Denmark	1,868	2,012	689	670
Norway	1,486	1,449	132	123
Finland	775	775	179	165
UK	4,757	6,207	2,178	2,531
France	135	114	–	–
Germany	132	132	238	216
Austria	457	432	335	329
Netherlands	15	22	1	1
USA	181	341	68	66
Other countries	452	426	9	13
Total	11,411	13,332	4,108	4,419

1) Net sales from external customers based on customers' geographic domicile.

2) Fixed assets that are not fnancial instruments, deferred tax assets, assets associated with post-employment benefts or rights under insurance agreements.

NOTE4 COSTS FOR EMPLOyEE BENEFITS AND REMUNERATION TO SENIOR E<ECUTIVES

		2014		2015
SEK m	Salaries and other remuneration	Social security costs	Total	Salaries and other remuneration	Social security costs	Total
Total subsidiaries1)	2,319	582	2,901	2,582	558	3,140
– of which pension costs		190	190		221	221
Parent Company1)	57	34	91	56	31	87
– of which pension costs		15	15		16	16
Group1)	2,376	616	2,992	2,638	589	3,227
– of which pension costs		205	205		237	237

1) Excludes costs for share-based remuneration.

Total costs for employee benefts

SEK m	2014	2015
Salaries and other remuneration	2,376	2,638
Social security costs	411	352
Pension costs – defned-contribution plans	161	179
Pension costs – defned-beneft plans	35	51
Costs for special employer's contributions and tax on returns from pension	9	7
Costs for allotted employee share options
2011–2015	1	3
Costs for the Performance Share Plan
2012–2015	2	1
2013–2016	4	5
2014–2017	2	4
2015–2018	–	2
Total costs for employees	3,001	3,242

Salaries and other remuneration for the Parent Company

SEK m	2014	2015
Senior executives1)	23	17
Other employees	34	39
Total Parent Company2)	57	56

1) In 2015, the number of individuals was 5 (5).

2) Excludes costs for share-based remuneration.

Salaries and other remuneration for subsidiaries

Total subsidiaries2)	2,319	2,582
Other employees of subsidiaries	2,282	2,543
Presidents of subsidiaries1)	37	39
SEK m	2014	2015

1) In 2015, the number of individuals was 16 (15). 2) Excludes costs for share-based remuneration.

Remuneration and other benefts, 2015	basic salary,	variable			Share-ba	Other			Number
	Directors'	remu	Other	Pension	sed remu	remu		Pension com	of
SEK m	fees	neration	benefts	costs	neration	neration	Total	mitments	individuals
Chairman of the Board
Tomas billing (from 14 April 2015)	0.75	–	–	–	–	–	0.75	–	0.75
Johan Molin (until 14 April 2015)	0.23	–	–	–	–	–	0.23	–	0.25
Board members
Nora Førisdal Larssen	0.37	–	–	–	–	–	0.37	–	1.00
Lilian Fossum biner	0.37	–	–	–	–	–	0.37	–	1.00
Stefan Jacobsson	0.37	–	–	–	–	–	0.37	–	1.00
Fredrik Palmstierna	0.37	–	–	–	–	–	0.37	–	1.00
Thore Ohlsson	0.37	–	–	–	–	–	0.37	–	1.00
Ricard wennerklint	0.37	–	–	–	–	–	0.37	–	1.00
Christina Ståhl	0.28	–	–	–	–	–	0.28	–	0.75
President
Morten Falkenberg	7.73	2.13	0.21	2.37	1.18	–	13.62	–	1.00
Other members of Group management	27.54	4.69	1.09	4.39	3.10	–	40.81	0.57	14.00
– of whom, from subsidiaries	19.18	3.05	0.87	2.42	1.84	–	27.36	–	10.00
Total	38.75	6.82	1.30	6.76	4.28	–	57.91	0.57	22.75

Remuneration and other benefts, 2014	basic salary,	variable			Share-ba	Other			Number
	Directors'	remu	Other	Pension	sed remu	remu		Pension com	of
SEK m	fees	neration	benefts	costs	neration	neration	Total	mitments	individuals
Chairman of the Board
Johan Molin	0.93	–	–	–	–	–	0.93	–	1.0
Board members
Nora Førisdal Larssen	0.35	–	–	–	–	–	0.35	–	1.0
Lilian Fossum biner	0.35	–	–	–	–	–	0.35	–	1.0
Stefan Jacobsson	0.26	–	–	–	–	–	0.26	–	0.8
Fredrik Palmstierna	0.35	–	–	–	–	–	0.35	–	1.0
Thore Ohlsson	0.35	–	–	–	–	–	0.35	–	1.0
Ricard wennerklint	0.26	–	–	–	–	–	0.26	–	0.8
President
Morten Falkenberg	7.38	3.48	0.19	2.29	1.28	–	14.62	–	1.0
Other members of Group management	22.14	4.39	0.75	4.16	1.61	–	33.05	0.25	10.0
– of whom, from subsidiaries	13.36	2.39	0.60	1.47	0.58	–	18.40	–	6.0
Total	32.37	7.87	0.94	6.45	2.89	–	50.52	0.25	17.6

The average number of employees and number of men and women among board members and senior executives are described in Note 5, see page 64.

Remuneration to senior executives

¯ &oard and Chairman of the &oard

Remuneration to the Chairman and members of the board is determined by resolutions taken at the Annual General Meeting. No special fees are paid for committee work. Board members who are employed by Nobia do not receive a separate Directors' fee. board members elected by the Annual General Meeting received a fxed fee of SEK 375,000 per member and the Chairman received SEK 1,000,000. The board received a total of SEK 3,480,000. Employee representatives receive a study and preparation fee of SEK 26,000 per person per year.

¯ President

In the 2015 fscal year, the President received SEK 7,942,864 in salary and benefts, plus a variable salary por tion related to results for 2015 of SEK 2,130,445. In addition to the normal pension in accordance with the Swedish National Insurance Act (ATP and AFP), the President has pension benefts corresponding to 30 per cent of pensionable salary. Pensionable

salary means fxed annual salary. For 2015, the premium cost was SEK 2,353,740 The age of retirement is 65. The President has the right to 12 months' notice if employment is terminated by Nobia. If employment is terminated by the President, six months' notice must be given.

¯ 3ther +roup management

Group management, which comprised 12 individuals (eight) in 2015, of whom four (three) are employed in the Parent Company, received salaries and benefts during the fscal year amounting to SEK 27,543,859 plus variable salary por tions based on results for 2015 of SEK 4,690,542. Group management has the right to ITP pensions or an equivalent scheme. The age of retirement is 65. In addition, management in Sweden has the right to an increased occupational pension premium of 20 per cent on salary portions amounting to more than 30 basic amounts, following a Board decision.

¯ :ariable salary portion

The fundamental principle for the variable salary portion for the unit managers and Group management is that such portions may amount to a maximum bonus of 30 per cent of fxed annual salary. The exception is the President whose variable salary portion may amount to a maximum bonus of 50 per

Operations Sustainability

Financial statements

Corporate governance and the Nobia share

cent of fxed annual salary. Exceptions may also be made for other senior executives following a decision by the Board. The variable portion is based on an earning period of one year. The outcome depends on the extent to which predetermined targets are met. The targets for the President are set by the board of Directors. The President sets the targets for other senior managers following recommendations from the Board Remuneration Committee.

¯ 6emuneration Committee

The Board of Directors appoints a Remuneration Committee from within its ranks. The Committee's tasks include preparing proposals with respect to remuneration for the President, and to reach decisions on remuneration proposals for managers that report directly to the President. For information about the Committee and its members, see page 84.

¯ +roup management´s employee contracts

The contracts include provisions regarding remuneration and termination of employment. Under these agreements, employment may be terminated by the employee with a six-month period of notice and by the company with a 12-month period of notice.

¯ Share option scheme -

At the 2011 Annual General Meeting, a resolution was made in accordance with the Board's proposal to continue the same incentive scheme implemented in previous years in the form of a performance-based employee share option scheme. This means that approximately 100 senior executives in the Nobia Group were allotted a total of 1,640,000 employee share options. Each employee share option carried entitlement to the acquisition of shares in Nobia Ab during the period from and including 31 May 2014 up to and including 31 December 2015 at an exercise price of SEK 54.10. The right to utilise these employee share options required that on the exercise date the holder was an employee of the Nobia Group and that, during the 2011– 2013 fscal years, the Nobia Group increased its earnings per share compared with the average for the 2009 and 2010 fscal years, adjusted for items affecting comparability, such that the total increase in earnings per share corresponded to an average annual increase in earnings per share of at least 5.0 per cent and a maximum of 15.0 per cent. The annual increase in earnings per share infuenced the number of options that could be exercised. Group management received SEK 11,809,472 in benefts during the 2015 fscal year in connection with the exercise of the options in the share option scheme 2011, of which SEK 2,645,300 was a beneft for the President.

¯ Performance Share Plans ¯

At the 2012, 2013, 2014 and 2015 Annual General Meetings, resolutions were made in accordance with the Board's proposal to introduce remuneration schemes in the form of Performance Share Plans. The Performance Share Plans encompass about 100 individuals, consisting of senior executives and managers, as appointed by Nobia senior management. Participation in the plans requires an investment in Nobia shares corresponding to 50, 75 or 100 per cent of the employee's monthly salary (gross) for the 2012 Plan, and an investment corresponding to 25, 50, 75 or 100 per cent of the employee's monthly salary (gross) for the 2013, 2014 and 2015 Plans. At the end of the vesting period, the participants will be allotted shares in Nobia free of charge, provided that certain conditions are fulflled. A participant's entitlement to receive shares in Nobia for matching share rights requires continued employment in the Nobia Group during the vesting period, and that entire investment in Nobia shares has remained during the same period. Matching takes place at a ratio of 1:1. Allotment of shares based on performance share rights also requires fulflment of a fnancial performance target linked to accumulated earnings per share for current and future fscal years, adjusted for items affecting comparability during the same period. Participants are not compensated for dividends paid during the vesting period.

The maximum number of shares that can be allocated under the four plans amounts to 1,500,000.

The President is entitled to a maximum of four performance shares for every saving share. Other members of Group management are entitled to three performance shares. For the 2013-2016 and the 2014-2017 Plans, an additional fve to six individuals subordinate to the President are entitled to two performance shares. Other plan par ticipants are entitled to one performance share. Group management received SEK 5,543,140 in benefts during the 2015 fscal year in connection with the matching of shares under the framework of the Performance Share Plan 2012, of which SEK 2,159,924 was a beneft for the President.

	Performance Share Plan
Plan	2012–2015	2013–2016	2014–2017	2015–2018
vesting period	May 2012 – May 2015	May 2013 – April/May 2016	May 2014 – April/May 2017	May 2015 – April/May 2018
Performance targets	Accumulated earnings per share 2012-2013	Accumulated earnings per share 2013–2014	Accumulated earnings per share 2014–2015	Accumulated earnings per share 2015–2016
Fair value per share right	SEK 19.76	SEK 33.30	SEK 53.50	SEK 82.60

The fair value is calculated as the share price on the plan's date of the allotment, in May at the start of the vesting period, reduced by the present value of expected dividends during the vesting period.

The costs of the share option scheme and the Performance Share Plans are presented in the table below:

		Accumulated costs			20141)		20152)
	IFRS 23)	Social security con	Total	IFRS 23)	Social security con	Total	IFRS 23)	Social security con	Total
Plan	cost	tributions	cost	cost	tributions	cost	cost	tributions	cost
2011–2015	9	5	14	1	0	1	–	3	3
2012–2015	3	3	6	1	1	2	0	1	1
2013–2016	6	5	11	2	2	4	2	3	5
2014–2017	4	2	6	2	0	2	3	1	4
2015–2018	2	0	2	–	–	–	2	0	2
	24	15	39	6	3	9	7	8	15

1) Price on 31 December 2014 ! SEK 69.75 per share

2) Price on 31 December 2015 = SEK 106.00 per share

3) See Note 1 on page 57.

Changes in the number of outstanding share options and their weighted average exercise price were as follows:

	2014		2015
	Average exercise price, SEK per share	Number of options	Average exercise price, SEK per share	Number of options
As per
1 January	54.10	1,075,000	54.10	640,000
Allotted	–	0	–	0
Expired	–	0	–	0
Forfeited	54.10	-40,000	54.10	-20,000
Exercised	54.101)	-395,000	54.101)	-620,000
As per 31 December	54.10	640,000	54.10	0

1) Average share price on exercise was SEK 87.34 per share (57.16).

No. of share rights	2014	2015
As per 1 January	508,724	544,454
Allotted	185,765	143,901
Exercised	0	-135,1471)
Forfeited	-150,035	-37,856
As per 31 December	544,454	515,352

1) Share price on exercise was SEK 89.75 per share.

Outstanding share rights at year-end had the following expiry dates:

	No. of share rights
Expiry date	2014	2015
April/May 2015	140,356	0
April/May 2016	238,951	214,780
April/May 2017	165,147	160,261
April/May 2018	0	140,311
	544,454	515,352

Of the outstanding share rights, 203,003 are matching shares and 312,349 are performance shares.

NOTE5 AVERAGE NUMBER OF EMPLOyEES

	2014		2015
Subsidiaries in:	Average number of employees	Of whom, men	Average number of employees	Of whom, men
Sweden	711	510	716	509
Denmark	1,244	882	1,275	909
Norway	311	118	301	113
Finland	395	278	368	259
Germany	337	237	337	237
Austria	397	314	367	293
UK	2,408	1,794	2,914	2,180
France	713	337	71	34
USA	50	16	51	22
Switzerland	27	18	29	19
Poland	1	0	1	0
Netherlands	2	2	2	2
Japan	3	1	3	1
Total subsidiaries	6,599	4,507	6,435	4,578
Parent Company	37	16	38	13
Group	6,636	4,523	6,473	4,591

		2014	2015
	Number on closing date	Of whom, men, %	Number on closing date	Of whom, men, %
board members	60	95	68	84
President and other senior executives	84	83	92	87
Group	144	84	160	86

Several people are members of more than one of the subsidiaries' boards of Directors or management groups.

		2014	2015
	Number on closing date	Of whom, men, %	Number on closing date	Of whom, men, %
board members	10	70	11	64
President and other senior executives	9	89	13	85
Parent Company	19	79	24	75

Operations Sustainability Financial statements

Corporate governance and the Nobia share

NOTE6 REMUNERATION TO AUDITORS

Specifcation by type of costs

	Group		Parent Company
SEK m	2014	2015	2014	2015
KPMG
Audit assignment	9	9	3	2
Audit activities other than audit assignment	1	0	0	0
Tax advice	1	1	0	0
Other assignments	2	4	1	3
Other auditors
Audit assignment	0	0	–	–

Audit assignment refers to the statutory audit of the annual and consolidated fnancial statements and accounting, the administration of the Board and the President and other examinations performed by agreement or contract. This includes other duties that fall upon the company's auditor to perform and providing advisory services or other assistance due to observations made during such an audit or while performing other such duties.

NOTE7 DEPRECIATION/AMORTISATION AND IMPAIRMENT by ACTIvITy

	Depreciation/ amortisation		Impairment
Group, SEK m	2014	2015	2014	2015
Cost of goods sold	-154	-164	–	–
Selling expenses	-130	-142	-14	5
Administrative expenses	-26	-35	-2	-10
Total depreciation/ amortisation and impairment	-310	-341	-16	-5

NOTE8 OThER OPERATING INCOME

	Group		Parent Company
Group, SEK m	2014	2015	2014	2015
Gains attributable to sale of fxed assets	0	17	–	–
Exchange-rate gains from operating receivables/liabilities	33	50	–	–
Other	18	19	–	–
Total other operating income	51	86	–	–

NOTE9 OTHER OPERATING E<PENSES

	Group		Parent Company
SEK m	2014	2015	2014	2015
Exchange-rate losses from operating receivables/liabilities	-40	-39	–	–
Capital loss attributable to divestment of subsidiaries	–	–	–	–
Loss attributable to sale of fxed assets	0	0	–	–
Other	-7	-23	–	–
Total other operating expenses	-47	-62	–	–

NOTE10 SPECIFICATION by TyPE OF COST

SEK m	2014	2015
Costs for goods and materials	-4,552	-5,400
Costs for remuneration to employees	-2,654	-3,139
Depreciation and impairment (Note 7)	-326	-346
Freight costs	-537	-592
Operational leasing costs, primarily stores (Note 11)	-548	-543
Other operating expenses	-1,967	-2,253
Total operating expenses	-10,584	-12,273

NOTE11 OPERATING LEASES

The nominal values of contracted future leasing fees where the remaining term exceeds one year, are specifed as follows (per tains mainly to rental contracts for premises):

	Group		Parent Company
SEK m	2014	2015	2014	2015
Expensed during the year	548	543	1	1
Falling due for payment within one year	499	509	0	0
Falling due for payment between one and fve years	1,240	1,335	0	0
Falling due for payment later	847	798	0	0
Total	2,586	2,642	0	0

The nominal values of rental contracts that are re-let, where the remaining term exceeds one year, are specifed as follows:

	Group		Parent Company
SEK m	2014	2015	2014	2015
Falling due for payment within one year	48	48	–	–
Falling due for payment between one and fve years	84	78	–	–
Falling due for payment later	3	3	–	–
Total	135	129	–	–

NOTE12 FINANCIAL INCOME AND E<PENSES

	Group		Parent Company
SEK m	2014	2015	2014	2015
Proft from participations in Group companies
Dividends	–	–	161	200
Group contributions received	–	–	151	216
Financial income
Interest income, current	7	6	29	3
Exchange-rate differences	5	28	–	–
Financial expenses
Interest expense	-44	-25	-64	-28
Interest expense pertaining to pension liabilities	-41	-43	–	–
Exchange-rate differences	-5	-24	-4	-24
Total	-78	-58	273	367

Note 13 tax oN Net profit for the year

		Group	parent Company
SeK m	2014	2015	2014	2015
Current tax expenses
for the period	-187	-239	–	–
Deferred tax	-18	-23	1	0
Tax on net proft for the year	-205	-262	1	0

Reconciliation of effective tax

parent Company, %	2014	2015
tax rate in the parent Company	22.0	22.0
taxes attributable to earlier periods	–	–
Non-tax deductible income	–	0.0
Non-deductible costs	0.5	1.0
Non-tax deductible dividend	-23.1	-14.3
Non-capitalised loss carryforwards	0.4	–
Utilisation of non-capitalised loss carryforwards	–	-8.8
other	-0.4	0.0
Recognised effective tax	-0.6	-0.1

the difference between the nominal and effective tax rates for the parent Company primarily pertains to dividends from subsidiaries and utilisation of non-capitalised loss carryforward.

Tax expense on net proft for the year for the Group comprised 24.0 per cent of proft before tax. In 2014, tax expense accounted for 25.7 per cent of proft before tax. On 1 January 2016, corporation tax in Denmark was lowered from 23.5 per cent to 22.0 per cent, and in Norway from 27.0 per cent to 25.0 per cent. Nobia's deferred tax liabilities and assets from these countries are thus recognised at these new tax rates as per 31 December 2015, with a marginal effect in the income statement and the balance sheet. the difference between recognised tax (24.0 per cent) and anticipated tax in consolidated proft before tax calculated using the local tax rate for Sweden (22.0 per cent) is explained in the table below.

Reconciliation of effective tax

Recognised effective tax	25.7	24.0
other	0	0
Non-capitalised loss carryforwards	0.4	1.0
Changed tax rate	-0.2	-0.1
Non-deductible costs	2.3	1.9
Non-tax deductible income	-1.0	-0.9
taxes attributable to earlier periods	0.2	-0.2
Different local tax rates	2.0	0.3
Local tax rate in Sweden	22.0	22.0
Group, %	2014	2015

Note 26 on page 74 explains the calculation of deferred tax assets and liabilities.

Note 14 iNtaNGibLe aSSetS

Closing carrying amount	2,278	2,551
translation differences	193	-24
impairment of discontinued operations	-328	–
acquisition of operations	260	297
opening carrying amount	2,153	2,278
Goodwill, SeK m	2014	2015

Impairment testing of goodwill

at the end of 2015, recognised goodwill amounted to SeK 2,551 million (2,278). The carrying amount of goodwill is specifed by cash-generating units as follows:

Total	2,278	2,551
other	349	337
Nobia SweNo	147	139
Nobia DK	327	313
Nobia UK	1,455	1,762
SeK m	2014	2015

Goodwill has been allocated to cash-generating units (CGU) when these units were acquired. Nobia has six CGUs, which in organisational terms correspond to the company's business units. Goodwill is subject to an annual impairment test by calculating the expected recoverable amount of each CGU. the recoverable amount is calculated as the expected cash fow discounted by a weighted average cost of capital (WACC) after tax for each CGU. the recoverable amount calculated in conjunction with this is compared with the carrying amount, including goodwill, for each CGU.

The star ting point of the calculation is the estimated future cash fows based on the fnancial budget for the for thcoming fscal year. A forecast for the next four years is prepared based on this budget and expectations regarding market trends in the years ahead, which refects previous experience.

When calculating the expected cash fow, signifcant assumptions applied include expected demand, growth in net sales, operating margin and working capital requirements. Various economic indicators are used to analyse the business climate, as well as external and internal analyses of these. the assumptions are also based on the effects of the Group's longterm strategic initiatives, comprising differentiated brands, a Group-wide range, central sourcing and product development. in order to extrapolate the cash fows outside the frst fve years, a growth rate of 2 per cent is applied to all CGUs.

the weighted average cost of capital is calculated on the average debt/equity ratio for large companies in similar industries and costs for borrowed and shareholders' equity. the cost of shareholders' equity is determined on the basis of the assumption that all investors require at least the same level of return as for risk-free government bonds, with an additional risk premium for the estimated risks assumed when they invest in cash-generating units. The risk premium has been established based on the long-term historical return on the stock market for large companies in similar industries by taking into consideration the risk profle of each business unit. The required return on debt-fnanced capital is also calculated on the return on risk-free government bonds and by applying a borrowing margin based on an estimated company-specifc risk. The required return and tax rate for each CGU is infuenced by the interest and tax rates in different countries.

in 2015, the Group's weighted cost of capital before tax amounted to 10.0 per cent (10.8) and after tax to 8.1 per cent (8.6). in total, the utilised cost of capital after tax for 2015 is in the interval 7.4-8.6 per cent (7.9-9.2). testing of goodwill did not lead to any impairment in 2015.

Operations Sustainability Financial statements Corporate governance and the Nobia share

assumptions for calculating recoverable amounts:

Discount rate before tax, %

%	2014	2015
Nobia UK	11.1	10.4
Nobia DK	10.4	9.7
Nobia SweNo	11.7	10.0
other	9.5–10.8	9.2–9.9
Other intangible assets
SeK m	2014	2015
opening cost	494	411
investments for the year	59	50
Sales and scrapping	-3	0
acquisition of operations	2	–
Reclassifcation	-173	14
translation differences	32	-7
Closing accumulated cost	411	468
opening amortisation	318	253
Sales and scrapping	-2	0
amortisation for the year	0	74
Reclassifcation	-84	5
impairment	2	–
translation differences	19	-10
Closing accumulated amortisation	253	322
Closing carrying amount	158	146
of which:
Software	123	115
brands	23	22
other	12	9
Closing carrying amount	158	146

Note 15 taNGibLe fixeD aSSetS

	Group
Buildings, SeK m	2014	2015
opening cost	1,810	1,920
investments for the year	25	52
Sales and scrapping	-29	-247
acquisition of operations	75	–
Reclassifcation	-101	3
translation differences	140	-18
Closing cost including written-up amount	1,920	1,710
opening depreciation and impairment	1,184	1,261
Sale and scrapping	-20	-247
Reclassifcation	-66	-1
Depreciation for the year	74	81
Depreciation for the year, discontinued operations	4	–
impairment	-7	1
translation differences	92	-10
Closing depreciation and impairment	1,261	1,085
Closing carrying amount	659	625
Closing accumulated depreciation	1,257	1,080
	Group

Land and land improvements, SeK m	2014	2015
opening cost	183	184
investments for the year	1	1
Sales and scrapping	-2	–
acquisition of operations	11	–
Reclassifcation	-20	–
translation differences	11	-3
Closing cost including written-up amount	184	182
opening depreciation and impairment	25	27
Reclassifcation	0	–
Depreciation for the year	1	1
translation differences	1	0
Closing depreciation and impairment	27	28
Closing carrying amount	157	154
Closing accumulated depreciation	25	26

	Group
Investments in progress, SeK m	2014	2015
opening balance	13	34
investments initiated during the year	34	33
investments completed during the year1)	-15	-28
translation differences	2	-1
Closing carrying amount	34	38

1) Assets reclassifed as other tangible fxed assets.

	Group
Machinery and other technical equipment, SeK m	2014	2015
opening cost	2,494	2,213
investments for the year	61	124
Sales and scrapping	-37	-411
acquisition of operations	14	5
Reclassifcation	-474	15
translation differences	155	-20
Closing cost including written-up amount	2,213	1,926
opening depreciation and impairment	1,769	1,670
Sales and scrapping	-35	-409
Reclassifcation	-325	0
Depreciation for the year	108	114
Depreciation for the year, discontinued operations	39	–
impairment	0	1
translation differences	114	-15
Closing depreciation and impairment	1,670	1,361
Closing carrying amount	543	565
Closing accumulated depreciation	1,654	1,352

	Group
Equipment, tools, fxtures and fttings, SeK m	2014	2015
opening cost	1,408	1,395
investments for the year	123	139
Sales and scrapping	-165	-384
acquisition of operations	12	4
Reclassifcation	-107	-6
translation differences	124	-1
Closing cost	1,395	1,147
opening depreciation and impairment	1,054	1,116
Sales and scrapping	-135	-371
Reclassifcation	-57	-6
Depreciation for the year	127	71
Depreciation for the year, discontinued operations	11	–
impairment	21	3
translation differences	95	2
Closing depreciation and impairment	1,116	815
Closing carrying amount	279	332
Closing accumulated depreciation	1,061	764

	Group
Advance payments for tangible fxed assets, SeK m	2014	2015
opening balance	0	0
expenses during the year	0	8
Reclassifcation	0	–
Closing carrying amount	0	8

Reclassifcations for the year amounted to a negative SEK 9 million and per tained to reclassifcations to Other intangible assets. Impairment of tangible fxed assets for the year amounted to SEK 12 million (14) and reversals of previous impairment amounted to negative SeK 7 million. of this amount, negative net SeK 6 million (pos: 14) was charged to the UK region and per tained to machinery and kitchen displays. SEK 1 million (0) was charged to the Nordic region and pertained to buildings. SeK 10 million (0) was charged to the Central europe region and pertained to kitchen displays. No impairment was charged to Group-wide and eliminations (–). impairment was recognised at fair value less selling expenses.

Note 16 fiNaNCiaL fixeD aSSetS

		Group
Other long-term receivables, SeK m	2014	2015
Deposits	27	32
Long-term loans to retailers	1	1
other interest-bearing receivables	6	3
other	1	1
Total	35	37

	parent Company
Shares and participations in Group companies, SeK m	2014	2015
opening cost	2,231	2,234
intra-Group sale	–	-154
other changes	3	4
Closing cost	2,234	2,084

Operations Sustainability

Financial statements

Corporate governance and the Nobia share

Note 17 ShareS aND partiCipatioNS iN SUbSiDiarieS

Nobia ab's holdings of shares and participations in operating Group companies, %

					Carrying amount
	Corp. reg. No.	Domicile	Share of equity, %	No. of shares	2014	2015
Nobia Sverige ab	556060-1006	Stockholm	100	100	1,256	1,256
Sigdal Kjøkken AS		Kolbotn	100
Nobia production Sweden ab	556038-0072	tidaholm	100
Marbodal oy1)		Helsinki	100
Nobia Denmark A/S		Ølgod	100
HTH Kök Svenska AB	556187-3190	helsingborg	100
Nobia Denmark Retail A/S		Ølgod	100
Novart oy		Nastola	100
Nobia holding (UK) Limited		Darlington	100
Magnet Ltd		Darlington	100
Larkfame Ltd		Darlington	100
Magnet (isle of Man) Limited		isle of Man	100
Aqua Ware Ltd1)		Darlington	100
Magnet Group trustees Ltd1)		Darlington	100
Magnet Group Ltd1)		Darlington	100
flint properties Ltd1)		Darlington	100
eastham Ltd1)		Darlington	100
hyphen fitted furniture Ltd1)		Darlington	100
Magnet Distribution Ltd1)		Darlington	100
The Penrith Joinery Company Ltd1)		Darlington	100
Magnet & Southerns Ltd1)		Darlington	100
Magnet furniture Ltd1)		Darlington	100
Magnet Joinery Ltd1)		Darlington	100
Magnet Manufacturing Ltd1)		Darlington	100
Magnet retail Ltd1)		Darlington	100
Magnet Supplies Ltd1)		Darlington	100
Magnet industries Ltd1)		Darlington	100
Magnet Kitchens Ltd1)		Darlington	100
firenzi Kitchens Ltd1)		Darlington	100
Gower Group Ltd		halifax	100
Gower furniture Ltd		halifax	100
Charco Ninety-Nine Ltd		halifax	100
WOR Ltd1)		halifax	100
Gower Windows Ltd1)		halifax	100
eurostyle furniture Ltd1)		halifax	100
beverly Doors Ltd1)		halifax	100
Working Systems Ltd1)		halifax	100
perfectshot Ltd1)		halifax	100
addspace products Ltd1)		halifax	100
Gower Garden furniture Ltd1)		halifax	100
rollfold holdings Ltd		Dewsbury	100
rollfold Group Ltd		Dewsbury	100
rollfold trustee Ltd		Dewsbury	100
rollfold Ltd		Dewsbury	100
rixonway Kitchens Ltd		Dewsbury	100
halvanto Kitchens Ltd		Dewsbury	100
Commodore Kitchens Ltd		Grays	100
Cie pLC		Grays	100
Lovene Dörr ab1)	556038-1724	Stockholm	100
Star Möbelwerk GmbH1)		herford	100

					Carrying amount
	Corp. reg. No.	Domicile	Share of equity, %	No. of shares	2014	2015
Swedoor bauelementevertrieb Gmbh1)		herford	100
Nobia Svenska Kök AB	556048-3256	tidaholm	100	30,000	92	92
Poggenpohl Möbelwerke GmbH		herford	98.57		713	713
poggenpohl Group UK Ltd		London	100
Norman Glen Kitchens & interiors Ltd		London	100
Wigmore Street Kitchens Ltd		London	100
Ultimate Kitchens (pimlico) Ltd		London	100
poggenpohl austria Gmbh		Vienna	100
poggenpohl france SarL		paris	100
Poggenpohl Nederland BV		Veldhoven	100
SA Poggenpohl Belgium NV1)		Ghent	100
poggenpohl US inc.		Fairfeld NJ	100
poggenpohl Group Schweiz aG		Littau	100
poggenpohl ab	556323-2551	Stockholm	100
poggenpohl a/S1)		Copenhagen	100
Poggenpohl Japan Co Ltd		Tokyo	100
Möbelwerkstätten Josef Ritter GmbH1)		herford	100
poggenpohl forum Gmbh		herford	100
Goldreif Küchen Gmbh		herford	100
WKF Wehdemer Komponentfer tigung Gmbh1)		herford	100
OP Vermögensförwaltungsgesellschaft mbH1)		herford	100
MB Vermögensförwaltungsgesellschaft mbH1)		herford	100
Norema aSa3)		Jevnaker	100	20,000	154
invita retail a/S		Ølgod	100
Nobia beteiligungs-Gmbh		Wels	100		22)	22)
Nobia Liegenschafts- und anlagenverwaltungs-Gmbh		Wels	100		12)	12)
EWE Küchen GmbH		Wels	100
fM Küchen Gmbh		Linz	100
other					16	20
Total					2,234	2,084

1) the company is dormant.

2) the company is one-per cent-owned by Nobia ab and 99-per cent-owned by the subsidiary, Nobia Sverige ab. the details concern the one-per cent holding.

3) the holding was sold to the subsidiary Nobia Sverige ab in 2015.

18 Note DERIVATIVE INSTRUMENTS
	Group		parent Company
SeK m	Carrying amount 2015	fair value 2015	Carrying amount 2015	fair value 2015
forward agreements, transac tion exposure – assets	18	18	–	–
forward agreements, transac tion exposure – liabilities	-5	-5	–	–
interest swaps	-9	-9	–	–
Total	4	4	–	–

Unrealised gains and losses totalling a net gain of SeK 2 million in shareholders' equity as per 31 December 2015 will be recognised in proft or loss at different times within 24 months of the closing date. for information about forward agreements and interest swaps, see Note 2 financial risks on page 58. The preceding year's unrealised gains and losses totalling a net loss of SEK 1 million were reversed in proft or loss in their entirety in 2015.

Note 19 prepaiD expeNSeS aND aCCrUeD iNCoMe

	Group		parent Company
SeK m	2014	2015	2014	2015
prepaid rent	72	57	–	–
bonus from suppliers	91	84	45	50
Prepaid bank charges	4	3	–	–
insurance policies	8	10	1	1
other	72	104	8	8
Total	247	258	54	59

Operations

Sustainability

Financial statements

Corporate governance and the Nobia share

20 Note	CASH AND CASH EQUIVALENTS

	Group		parent Company
SeK m	2014	2015	2014	2015
Cash and bank balances	470	765	184	472

Unutilised overdraft facilities, which are not included in cash and cash equivalents, totalled SeK 399 million (401) in the Group, and SeK 349 million (351) in the parent Company at year-end. in addition to the overdraft facilities, the company has unutilised credit commitments of SeK 1,000 million (1,000).

Note 21 Share CapitaL

	No. of registered shares	No. of shares outstanding
As per 1 January 2014	175,293,458	167,131,158
as per 31 December 2014	175,293,458	167,526,158
as per 31 December 2015	175,293,458	168,281,305

Share capital amounted to SeK 58,430,237. the share's quotient value is SeK 0.33. all of the registered shares are fully paid. all shares are ordinary shares of the same type. Nobia owned 7,012,153 treasury shares (7,767,300) on 31 December 2015. Bought-back shares are not reserved for issue according to the option agreement or other sale.

Note 22 RESERVES IN SHAREHOLDERS' EQUITy

A specifcation of changes in shareholders' equity is provided on pages 48 and 51.

	translation
SeK m	reserve	hedging	total
Opening balance, 1 January 2014	-361	3	-358
exchange-rate differences attributable to translation of foreign operations	369	–	369
Cash-fow hedges, before tax	–	-5	-5
tax attributable to change in hedging reserve for the year	–	1	1
Closing balance, 31 December 2014	8	-1	7
Opening balance, 1 January 2015	8	-1	7
exchange-rate differences attributable to translation of foreign operations	-89	–	-89
Cash-fow hedges, before tax	–	4	4
tax attributable to change in hedging reserve for the year	–	-1	-1
Closing balance, 31 December 2015	-81	2	-79

Translation reserve

the translation reserve includes all exchange-rate differences arising in conjunction with the translation of fnancial statements from foreign operations that have prepared their fnancial statements in a different currency to the currency in which the consolidated fnancial statements are prepared. The Parent Company and Group present their fnancial statements in SEK.

,edging reserve

the hedging reserve includes the effective portion of the accumulated net change in fair value of a cash-fow hedging and interest-rate hedging instrument attributable to hedging transactions that have not yet occurred.

23 Note	earNiNGS per Share

Earnings per share before dilution

Earnings per share before dilution are calculated by dividing proft attributable to the parent Company shareholders by the weighted average number of outstanding ordinary shares during the period.

	2014	2015
Proft/loss attributable to Parent Company's shareholders, SeK m	-28	829
Proft from continuing operations, SEK m	594	826
Proft/loss from discontinued operations, SeK m	-622	3
Weighted average number of outstanding ordinary shares before dilution	167,334,491	168,059,727
earnings/loss per share before dilution, SeK	-0.17	4.93
earnings per share before dilution, from continuing operations, SeK	3.55	4.91
earnings/loss per share before dilution, for discontinued operations, SeK	-3.72	0.02

Earnings per share after dilution

to calculate earnings per share after dilution, the weighted average number of outstanding ordinary shares is adjusted for the dilution effect of all potential ordinary shares. these potential ordinary shares are attributable to the employee share options that were allotted to senior executives in 2011 and to potential ordinary shares attributable to the performance Share plans that were introduced in 2012, 2013, 2014 and 2015. refer to Notes 4 and 21, on pages 61 and 71.

Various circumstances may mean that the options and share rights do not lead to any dilution. If net proft for the year from continuing operations is negative, neither the share options nor share rights are considered dilutive. also, the share options and performance share rights do not lead to dilution if the achieved earnings per share are insuffcient to entitle shares at the end of the vesting period. in addition, the share options are not dilutive if the exercise price, including a supplement for the value of remaining future services to report during the vesting period, exceed the average share price for the period. Correspondingly, share rights are not dilutive if the value of remaining future services to report during the vesting period correspond to an exercise price that exceeds the average share price for the period.

	2014	2015
Weighted average number of outstanding ordinary shares	167,334,491	168,059,727
employee share option scheme 20111)	56,519	64,546
performance Share plan 20121)	135,166	33,787
performance Share plan 2013	174,846	206,201
performance Share plan 2014	32,807	119,324
performance Share plan 2015	–	33,235
Weighted average number of outstanding ordinary shares after dilution	167,733,829	168,516,820
earnings/loss per share, after dilution, SeK	-0.17	4.92
earnings per share after dilution from continuing operations, SeK	3.54	4.90
earnings/loss per share after dilution from discontinued operations, SeK	-3.71	0.02

1) pertains to dilution until redemption.

Note 24 DiviDeND

A dividend of SEK 2.50 per share for the 2015 fscal year will be proposed at the Annual General Meeting on 11 April 2016. Based on the number of shares outstanding at the end of 2015, the proposed dividend totals SEK 421 million. This amount has not been recognised as a liability, but will be recognised as an appropriation of profts under shareholders' equity for the 2016 fscal year.

In 2015, dividends totalling SEK 294 million were paid for the 2014 fscal year. Dividends to non-controlling interests in subsidiaries amounted to SEK 0.1 million.

In 2014, dividends totalling SEK 167 million were paid for the 2013 fscal year. Dividends to non-controlling interests in subsidiaries amounted to SEK 0.5 million.

Note 25 ProvisioNs for PeNsioNs

Defned-beneft pension plans, Group

	Group
Provisions for pensions, seK m	2014	2015
Defned-beneft pension plans	869	732

There are several defned-beneft pension plans within the Group, whereby the employee's right to remuneration after termination of employment is based upon fnal salary and period of service. These plans are primarily found in the UK, Sweden and Germany. The plans in the UK and Germany have already been concluded and no new benefts can be earned. These pension plans have been replaced by defned-contribution plans.

Commitments for old-age pensions and family pensions for salaried employees in Sweden are secured on the basis of the FPG/PRI system and insurance, primarily with Alecta. According to statement UFR 3 from the Swedish Financial Repor ting Board, the insurance with Alecta is a multiemployer defned-beneft plan. Since the Group did not have access to information in the 2015 fscal year that would make it possible to recognise this plan as a defned-beneft plan, ITP pension plans secured on the basis of insurance with Alecta have been recognised as defned-contribution plans. Fees for pension insurance with Alecta for the year amounted to SEK 2.7 million (2.7). On 31 December 2015, Alecta's surplus, which can be distributed between the policy holder and/or the persons insured in the form of the collective consolidation rate, amounted to 153 per cent (143 per cent on 31 December 2014). The collective consolidation rate comprises the market value of Alecta's assets as a percentage of the insurance commitments produced in accordance with Alecta's actuarial calculation assumptions, which are not in agreement with IAS 19.

The amounts recognised in the consolidated balance sheet have been calculated as follows:

	Group
SEK m	2014	2015
Present value of funded obligations	2,965	2,806
Fair value of plan assets	-2,275	-2,295
	0	511
Present value of unfunded obligations	179	221
Net debt in balance sheet		32

The net debt for defned-beneft plans amounting to SEK 732 million (869) is recognised in its entirety in the "Provisions for pensions" item in the consolidated balance sheet. Net debt at year-end in the UK amounted to 70 per cent of total debt.

Changes in the defned-beneft pension commitments during the year were as follows:

	Defned-beneft obligation		Plan assets		Net debt
	2014	2015	2014	2015	2014	2015
At beginning of the year	2,45	3,144	-1,21	-2,25	54
Recognised in the income statement
Costs for service during current year	-6	8	–	–	-6	8
Interest expense()/income (-)	113	120	-72	-77	41	43
	10	12	-2	-	35	51
Recognised in other comprehensive income
Remeasurements
Actuarial gains/loss due to:
– demographic assumptions	-50	-19	–	–	-50	-19
– fnancial assumptions	417	-162	–	–	417	-162
– experience-based adjustments	2	-51	–	–	2	-51
Return on plan assets excluding interest income	–	–	-167	62	-167	62
Exchange-rate differences	333	61	-252	-46	81	15
	02	-11	-41	1	23	-155
Other
Employer contributions	–	–	-95	-74	-95	-74
Benefts paid	-140	-125	132	115	-8	-10
Reclassifcation from other long-term remuneration	–	51	–	–	–	51
	-140	-4	3	41	-103	-33
At year-end	3,144	3,02	-2,25	-2,25		32

Operations Sustainability Financial statements

Corporate governance and the Nobia share

Costs in the consolidated income statement are divided between the following items:

		Group
SEK m	2014	2015
Cost of goods sold	0	1
Selling expenses	1	1
Administrative expenses	-7	6
Net fnancial items	41	43
Total pension costs	35	51

The actual return on the plan assets of the pension plans amounted to:

Total actual return on plan assets	23	15
Return on pension assets excluding interest income	167	-62
Interest income	72	77
SEK m	2014	2015

Principal actuarial assumptions:

		Group
%	2014	2015
Discount rate	1.95–3.7	2.0–3.9
Future annual salary increases	2.0–2.5	2.0–2.3
Future annual pension increases		1.0–3.1 1.0–3.15

Life expectancy

The expected average number of years of life remaining after retirement at 65 years of age is as follows:

	Group
	2014	2015
On closing date
Men	22.0–23.0	20.9–23.0
Women	25.0–25.3	24.5–25.0
20 years after closing date
Men	23.0–25.1	23.0–25.0
Women	25.0–28.5	25.0–28.1

Plan assets comprise the following:

	2014			2015
Group, SEK m	Listed price on an active market	Unlisted prices	Listed price on an active market	Unlisted prices
Cash and cash equivalents	39	–	15	–
High-quality corporate bonds	120	–	125	–
Mutual funds, Western Europe	131	–	142	–
Mutual funds, growth markets	27	–	24	–
Mutual funds, global	412	–	428	–
Hedge funds	200	–	218	–
Fixed-income funds, term 7–20 years	1,342	–	730	–
Proper ty funds	4	–	613	–
Total	2,25	–	2,25

Contributions to post-employment remuneration plans are expected to amount to SEK 82 million (71) for the 2016 fscal year.

Sensitivity analysis:

The table below presents the possible changes in actuarial assumptions at year-end, all other assumptions being unchanged, and how they would affect the defned-beneft commitments.

	Group
SEK m	Increase	Decrease
Discount rate (1% change)	-504	609
Expected mor tality (1-year change)	68	-67
Future salary increase (1% change)	14	-11
Future increase in pension (1% change)	338	-264

Total pension costs recognised in the consolidated income statement were as follows:

	Group
Pension costs, seK m	2014	2015
Total costs for defned-beneft plans	35	51
Total costs for defned-contribution plans	161	179
Costs for special employer's contributions and tax on
returns from pension	9	7
Total pension costs	205	23

Defned-beneft pension plans, Parent Company:

	Parent Company
Provisions for pensions, seK m	2014	2015
Provisions in accordance with Pension Obligations
Vesting Act, FPG/PRI pensions	24	24

The costs are recognised in the Parent Company's income statement as follows:

	Parent Company
Defned-beneft plans, seK m	2014	2015
Administrative expenses	2	3

The total pension cost recognised in the Parent Company's income statement is as follows:

	Parent Company
Pension costs, seK m	2014	2015
Total costs for defned-beneft plans	2	3
Total costs for defned-contribution plans	11	11
Costs for special employer's contributions and tax on
returns from pension	2	2
Total pension costs	15	1

Parent Company pension liabilities are calculated at a discount rate of 3.3 per cent (3.0).

The assumptions are calculated on the basis of the salary levels applicable on the closing date. SEK 335,000, per taining to defned-beneft pension plans in the Parent Company, is expected to be paid in 2016.

Note 26 DeferreD tax

The change in deferred tax assets/tax liabilities for the year, Group

		2014			2015
	Deferred tax	Deferred tax		Deferred tax	Deferred tax
SEK m	assets	liabilities	Net	assets	liabilities	Net
Opening balance	410	162	248	303	143	160
Recognised in net proft/loss for the year	-30	-12	-18	-30	-7	-23
Recognised in discontinued operations, cost before
reclassifcation to discontinued operations	-140	-1	-139	–	–	–
Remeasurements of defned-beneft pension plans	41	–	41	-34	–	-34
Changes in forward agreements	3	2	1	-1	0	-1
Other changes	2	–	2	0	–	0
Offset/Reclassifcation	0	0	0	–	–	–
Acquisitions	0	1	-1	–	0	0
Reclassifcation of assets held for sale	-11	-19	8	–	–	–
Translation differences	28	10	18	3	-3	6
Closing balance	303	143	10	241	133	10

The change in deferred tax assets/tax liabilities for the year

	Defned-beneft	Other temporary	Loss carry
Deferred tax assets	pension plans	differences	forwards, etc.	Total
As per 1 January 2014	115	5	23	410
Recognised in net proft/loss for the year	-15	-4	-11	-30
Recognised in discontinued operations, cost before reclassifcation to discontinued operations	–	2	-142	-140
Recognised in other comprehensive income	41	3	–	44
Recognised directly against shareholders' equity	–	2	–	2
Offset/Reclassifcation	–	0	–	0
Acquisitions	–	0	–	0
Reclassifcation of assets held for sale	–	-11	–	-11
Translation differences	16	3	9	28
As per 31 December 2014	15	52	4	303
As per 1 January 2015	15	52	4	303
Recognised in net proft/loss for the year	-8	-1	-21	-30
Recognised in other comprehensive income	-34	-1	–	-35
Recognised directly against shareholders' equity	–	0	–	0
Acquisitions	–	–	–	–
Translation differences	3	-1	1	3
As per 31 December 2015	11	4	4	241

	Temporary differences
Deferred tax liabilities	in fxed assets	other	Total
As per 1 January 2014	133	2	12
Recognised in net proft/loss for the year	-15	3	-12
Recognised in discontinued operations, cost before reclassifcation to discontinued operations	-1	–	-1
Recognised in other comprehensive income	–	2	2
Offset/Reclassifcation	-2	2	0
Acquisitions	1	–	1
Reclassifcation of liabilities attributable to assets held for sale	-10	-9	-19
Translation differences	8	2	10
As per 31 December 2014	114	2	143
As per 1 January 2015	114	2	143
Recognised in net proft/loss for the year	-12	5	-7
Recognised in other comprehensive income	–	0	0
Acquisitions	0	0	0
Translation differences	-2	-1	-3
As per 31 December 2015	100	33	133

Operations
Sustainability
Financial statements
Corporate governance and the Nobia share

On 1 January 2016, corporation tax in Denmark was lowered from 23.5 per cent to 22.0 per cent, in Norway from 27.0 per cent to 25.0 per cent. Nobia's deferred tax liabilities and receivables from these countries are recognised at this new tax rate from 31 December 2015, with a marginal effect on proft or loss and the balance sheet. The change in loss carryforwards for the year per tained primarily the utilisation of capitalised losses in Sweden and Germany and the capitalisation of losses in the US. Deferred tax assets at year-end were attributable to Germany, Sweden and the US. The loss carryforwards attributable to the US will expire in 2029 or later. The value of the loss carryforward for which a deferred tax asset has not been recognised amounted to SEK 64 million (292) and was primarily attributable to Germany and the US. Of the loss carryforwards that have not been recognised, approximately SEK 26 million will expire in 2018 or later, and SEK 38 million of the unrecognised loss carryforwards have no date of expiry.

Nobia does not recognise any deferred tax attributable to temporary differences relating to investments in subsidiaries or associated companies. Any future effects (withholding tax and other deferred tax for proft taking within the Group) are recognised when Nobia is no longer able to govern the reversal of such differences or when, for other reasons, it is no longer improbable that reversals will be made in the foreseeable future. These possible future effects are not deemed to have any relation to the overall amount of the temporary differences.

Note 27 other ProvisioNs

SEK m	Unutilised tenancy rights	Dilapidations	Other long-term employee benefts	Items affecting comparability1)	other	Total
As per 1 January 2015	15	32	54		3	14
Reclassifcation to pension liabilities	–	–	-51	–	–	-51
Expensed in consolidated income statement
– Additional provisions	2	15	1	–	57	75
– Reversed unutilised amounts	-3	-2	–	-1	-34	-40
Utilised during the year	-3	-15	0	-4	-2	-24
Translation differences	1	1	0	0	1	3
As per 31 December 2015	12	31	4	4	5	110

1) Closing provisions for items affecting comparability comprise expenses for lease of premises.

Note 28 LIABILITIES TO CREDIT INSTITUTIONS

	Group		Parent Company
Maturity structure, seK m	2014	2015	2014	2015
Within 1 year	1	3	–	–
Between 1 and 5 years	804	800	800	800
Longer than 5 years	–	–	–	–
Total	05	03	00	00

	Group		Parent Company
SEK m	2014	2015	2014	2015
Bonus to customers	112	98	–	–
Accrued salary-related costs	223	238	32	26
Accrued interest	2	2	2	2
rents	26	18	–	–
other	244	245	3	1
Total	0	01	3	2

Note 30 FINANCIAL ASSETS AND LIABILITIES

		Financial instruments initially			Total
	Derivatives used in	identifed	Accounts and	other	carrying
Group 2015, seK m	hedge accounting	at fair value	loans receivable	liabilities	amount1)
Long-term interest-bearing receivables	–	–	3	–	3
Other long-term receivables	–	–	34	–	34
Accounts receivable	–	–	1,269	–	1,269
Current interest-bearing receivables	–	–	5	–	5
Other receivables	18	–	87	–	105
Total	1	–	1,3	–	1,41
Additional purchase consideration (other provisions)	–	50	–	–	50
Long-term interest-bearing liabilities	–	–	–	811	811
Current interest-bearing liabilities	–	–	–	4	4
Accounts payable	–	–	–	1,089	1,089
Other liabilities	14	–	–	365	379
Total	14	50	–	2,2	2,333

1) The carrying amount is considered to essentially correspond to the fair value.

		Financial
		instruments initially			Total
	Derivatives used in	identifed	Accounts and	other	carrying
Group 2014, seK m	hedge accounting	at fair value	loans receivable	liabilities	amount1)
Long-term interest-bearing receivables	–	–	7	–	7
Other long-term receivables	–	–	28	–	28
Accounts receivable	–	–	1,091	–	1,091
Current interest-bearing receivables	–	–	1	–	1
Other receivables	20	–	118	–	138
Total	20	–	1,245	–	1,25
Additional purchase consideration (other provisions)	–	36	–	–	36
Long-term interest-bearing liabilities	–	–	–	811	811
Current interest-bearing liabilities	–	–	–	4	4
Accounts payable	–	–	–	1,053	1,053
Other liabilities	24	–	–	365	389
Total	24	36	–	2,233	2,23

1) The carrying amount is considered to essentially correspond to the fair value.

Exchange-rate gains and losses per taining to the operations were recognised in other operating income and operating expenses in the net amount of SEK 11 million (loss: 7).

Financial exchange-rate gains and losses were recognised in net fnancial items in the amount of SEK 4 million (0).

Parent Company 2015, seK m	Accounts and loans receivable	other liabilities	Total carrying amount1)
Accounts receivable	1	–	1
Other receivables	2,876	–	2,876
Total	2,	–	2,
Long-term interest-bearing liabilities	–	800	800
Current liabilities to Group companies	–	864	864
Accounts payable	–	18	18
Other liabilities	–	11	11
Total	–	1,3	1,3

Parent Company 2014, seK m	Accounts and loans receivable	other liabilities	Total carrying amount1)
Accounts receivable	8	–	8
Other receivables	3,207	–	3,207
Total	3,215	–	3,215
Long-term interest-bearing liabilities	–	800	800
Current liabilities to Group companies	–	1,110	1,110
Accounts payable	–	22	22
Other liabilities	–	2	2
Total	–	1,34	1,34

1) The carrying amount is considered to essentially correspond to the fair value.

Operations

Sustainability

Financial statements

Corporate governance and the Nobia share

Determination of fair value of fnancial instruments

• Level 1 According to prices listed in an active market for the same instrument.
• Level 2 Based directly or indirectly on observable market information not included in Level 1.
• Level 3 Based on input that is not observable in the market.

The measurement of derivative instruments is included in Level 2 and based on market listings or the counterpar ty's measurement. Derivative instruments amounted to SEK 18 million (20) in assets and SEK 14 million (24) in liabilities. For disclosures regarding liabilities for additional purchase considerations for business combinations, which are measured under Level 3, refer to Note 34 on page 78. In an estimate of fair value, the company's long-term loans are not deemed to signifcantly deviate from their carrying amounts.

Note 31 PLEDGED ASSETS, CONTINGENT LIABILITIES AND COMMITMENTS

The Group has contingent liabilities per taining to sub-contractor guarantees, pension liabilities, bank guarantees for loans and other guarantees and other considerations that arise in normal commercial operations. No signifcant liabilities are expected to arise through these contingent liabilities. Based on the company's assessment, no provision has been posted for ongoing tax cases. The amounts involved are not considered to have any material effect on the company's results or fnancial position.

	Group			Parent Company
SEK m	2014	2015	2014	2015
Floating charges	–	–	–	–
Endowment insurance	–	–	–	–
Proper ty mor tgage	–	–	–	–
other assets	12	12	–	–
Total pledged assets	12	12	–	–

In their normal business activities, the Group and the Parent Company pledged the following guarantees and contingent liabilities.

	Group			Parent Company
SEK m	2014	2015	2014	2015
Securities for pension commit ments	1	1	17	19
Other contingent liabilities	144	143	162	158
Total	145	144	1	1

Note 32 DiscoNtiNueD oPeratioNs

Hygena's operations are recognised as discontinued operations from 1 January 2015 and fgures for 2014 have been restated accordingly. On 23 February 2015, the French competition authority approved the divestment of Hygena to Fournier Group. The transaction took place on 2 March 2015 and, in connection with this, Nobia received the purchase consideration.

Nobia holds a number of stores that were acquired from franchisees, with the intention of subsequently selling on. At year-end 2014, Nobia had four stores in Denmark and three stores in Sweden, a total of seven stores. During the third quar ter of 2015, two stores in Sweden were divested. At year-end 2015, Nobia had four stores in Denmark and one in Sweden, which are recognised in the Nordic region as Discontinued operations and a disposal group held for sale in accordance with IFRS 5.

Proft/loss from discontinued operations

		Group
SEK m	2014	2015
Proft/loss from business activities of discontinued operations
Income	1,264	240
expenses	-1,746	-295
Loss before tax	-482	-55
tax	-138	-1
Loss after tax	-620	-56

Proft/loss from remeasurement to fair value after deductions for selling expenses

Proft/loss from remeasurement to fair value after
deductions for selling expenses attributable to
discontinued operations before tax	-1	–
Tax attributable to aforementioned remeasurement	0	–
Loss from remeasurement after tax	-1	–

Proft/loss in conjunction with divestment of discontinued operations

Capital gains/losses in conjunction with divestment
of discontinued operations	-1	59
Tax attributable to aforementioned capital gains/losses	0	0
Proft/loss from divestment after tax	-1	59
Total gain/loss from discontinued operations after tax	-22	3
Earnings/loss per share from discontinued operations
before dilution (SEK)	-3.72	0.02
after dilution (SEK)	-3.71	0.02

The gain from discontinued operations of SEK 3 million (loss: 622) was attributable to the Parent Company's owners.

Of the proft of SEK 825 million (595) from continuing operations, SEK 826 million (594) was attributable to the Parent Company's owners.

Net cash fow from discontinued operations	2014	2015
Cash fow from operating activities	-95	-22
Cash fow from investing activities	-12	236
Cash fow from fnancing activities1)	182	-52
Net cash fow from discontinued operations	75	162

1) Cash fow from fnancing activities primarily per tains to intra-Group transactions.

Note 33 assets heLD for saLe

On 30 October 2014, Nobia signed an agreement for the sale of Hygena Cuisine SAS to French kitchen company Fournier Group. For this reason, the net assets of Hygena Cuisine SAS and Nobia Holding France have been reclassifed to Assets held for sale in accordance with IFRS 5. The sale took place during the frst quar ter of 2015.

Assets and liabilities for the fve stores acquired by Nobia with the intention of selling on are recognised as Assets held for sale refer also to Note 32 on page 77.

		Group
SEK m	2014	2015
Assets held for sale
Disposal group for sale:
Tangible fxed assets	380	4
inventories	48	0
Accounts receivable and other receivables	164	4
Total	52
Liabilities attributable to assets held for sale
Disposal group for sale:
Accounts payable and other liabilities	341	3
Deferred tax liabilities	19	–
Total	30	3

Note 34 COMPANy ACQUISITIONS

On 12 November 2015, Nobia acquired 100 per cent of the share capital of the UK kitchen companies Commodore and CIE via Nobia Holding UK. The acquisition of Commodore and CIE strengthens Nobia's position in the UK private developer market and enables synergy effects, primarily in sourcing and production. Transaction costs for the year for the acquisition amounted to SEK 9 million and are recognised under the Group's other operating expenses The additional purchase consideration of a maximum of SEK 53 million is conditional on the performance of the operations over the next two years and is measured according to Level 3 of the fair value hierarchy. The closing liability measured at the closing day rate on 31 December 2015 amounted to SEK 50 million. Commodore and CIE were consolidated from 1 November 2015 and generated sales of SEK 68 million during the last two months of 2015. Sales for the full-year 2015 amounted to about SEK 516 million.

The acquisition analysis below is preliminary since the acquisition amounts of fair value have not been fnally determined.

The acquisition amounts for Rixonway, which was acquired on 9

December 2014, have been fnally determined. Additional purchase consideration of SEK 3 million was paid to the owners in 2015. The remaining por tion of the recognised liability of SEK 35 million (a total of SEK 38 million including exchange-rate differences) was dissolved in proft or loss and recognised among the Group's administrative expenses.

Acquired net assets and goodwill, SEK m	2014	2015
Purchase consideration	252	369
Additional purchase consideration	35	53
Fair value of acquired net assets	-27	-125
Goodwill	20	2

Goodwill is attributable to synergies that are expected to be achieved through additional co-ordination of sourcing, production, distribution and administration.

		2014	2015
		Acquired		Acquired
Assets and liabilities included in the acquisition, SEK m	Fair value	carrying amount	Fair value	carrying amount
Cash and cash equivalents	2	2	21	21
Tangible fxed assets	112	112	9	9
Intangible fxed assets	2	2	–	–
inventories	23	23	46	46
Accounts receivable and other receivables	90	90	102	102
Accounts payable and other operating liabilities	-86	-86	-46	-46
Interest-bearing liabilities	-112	-112	-5	-5
Taxes, net	-3	-3	-2	-2
Deferred taxes, net	-1	-1	0	0
Acquired net assets	2	2	125	125

Reduction in the Group's cash and cash equivalents in conjunction with acquisition	250	34
Cash and cash equivalents in acquired subsidiaries	2	21
Purchase consideration paid in cash	252	369
SEK m	2014	2015

Operations

Sustainability

Financial statements

Corporate governance and the Nobia share

Note 35 RELATED-PARTy TRANSACTIONS

No sales of goods were made to and no purchases of goods were made from the Parent Company to other Group companies during the year. Group-wide services are invoiced to subsidiaries.

A specifcation of subsidiaries is presented in Note 17 on page 69. Remuneration was paid to senior executives during the year, refer to Note 4 on page 61.

Summary of related-party transactions

			Purchase of
		Sale of goods/	goods/services		other	Receivables from	Liabilities to
		services from	from related	Invoicing Group	(such as interest,	related par ties	related par ties
Parent Company, SEK m	year	related par ties	parties	wide services	dividends)	per 31 Dec	per 31 Dec
Related parties
Subsidiaries	2015	–	75	199	416	2,863	864

Note 36 EVENTS AFTER THE CLOSING DATE

Lars Bay-Smidt, Executive Vice President, EVP Nordic Region and Head of Commercial Denmark, left Nobia on 18 January 2016.

Rune Stephansen took offce as Executive Vice President and Head of Commercial Denmark on 1 February 2016. Rune Stephansen previously served as Executive Vice President, Head of Commercial Sweden. Annica Hagen took offce as Executive Vice President and Head of Commercial Sweden on 1 March 2016. Annica Hagen was previously the Executive Vice President, Brand Por tfolio and Innovation. Kim Lindqvist took offce as Executive Vice President, Chief Marketing Offcer on 1 March 2016. Kim Lindqvist previously served as the Executive Vice President, Digital and Media Strategy.

BOARD OF DIRECTORS' ASSURANCE

The Board of Directors and the President declare that the Annual Repor t was prepared in accordance with generally accepted accounting principles in Sweden and that the consolidated fnancial statements have been prepared in accordance with accounting standards referred to in Regulation (EC) No 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the application of international accounting standards. The Annual Repor t and the consolidated fnancial statements give a true and fair view of the position and earnings of the Parent Company and the Group. The Board of Directors' Repor t for the Parent Company and the Group gives a true and fair view of the developments of operations, position and earnings and describes signifcant risks and uncer tainties facing the Parent Company and companies included in the Group. The consolidated accounts and balance sheet and the Parent Company income statement and balance sheet will be presented to the Annual General Meeting for adoption on 11 April 2016.

Authorised Public Accountant

Operations Sustainability

Financial statements

Corporate governance and the Nobia share

AUDITOR'S REPORT

To the Annual Meeting of the shareholders of Nobia AB (publ), corporate registration number 5552–252.

Report on the annual accounts and consolidated accounts

We have audited the annual accounts and consolidated accounts of Nobia AB (publ) for the year 2015. The annual accounts and consolidated accounts of the company are included in the printed version of this document on pages 32–80.

Responsibilities of the Board of Directors and the Managing Director for the annual accounts and consolidated accounts

The Board of Directors and the Managing Director are responsible for the preparation and fair presentation of these annual accounts in accordance with the Annual Accounts Act and of the consolidated accounts in accordance with International Financial Reporting Standards, as adopted by the EU, and the Annual Accounts Act, and for such internal control as the Board of Directors and the Managing Director determine is necessary to enable the preparation of annual accounts and consolidated accounts that are free from material misstatement, whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express an opinion on these annual accounts and consolidated accounts based on our audit. We conducted our audit in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the annual accounts and consolidated accounts are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the annual accounts and consolidated accounts. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the annual accounts and consolidated accounts, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company's preparation and fair presentation of the annual accounts and consolidated accounts in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors and the Managing Director, as well as evaluating the overall presentation of the annual accounts and consolidated accounts.

We believe that the audit evidence we have obtained is suffcient and appropriate to provide a basis for our audit opinions.

Opinions

In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act, and present fairly, in all material respects, the fnancial position of the parent company as of 31 December 2015 and of their fnancial performance and cash fows for the year then ended in accordance with the Annual Accounts Act. The consolidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the fnancial position of the group as of 31 December 2015 and of their fnancial performance and cash fows for the year then ended in accordance with International Financial Reporting Standards, as adopted by the EU, and in accordance with the Annual Accounts Act. The statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts.

We therefore recommend that the annual meeting of shareholders adopt the income statement and balance sheet for the parent company and the group.

Report on other legal and regulatory requirements

In addition to our audit of the annual accounts and consolidated accounts, we have also audited the proposed appropriations of the companys proft or loss and the administration of the Board of Directors and the Managing Director of Nobia AB (publ) for the year 2015.

Responsibilities of the Board of Directors and the Managing Director

The Board of Directors is responsible for the proposal for appropriations of the companys proft or loss, and the Board of Directors and the Managing Director are responsible for administration under the Companies Act.

Auditor's responsibility

Our responsibility is to express an opinion with reasonable assurance on the proposed appropriations of the companys proft or loss and on the administration based on our audit. We conducted the audit in accordance with generally accepted auditing standards in Sweden.

As basis for our opinion on the Board of Directors proposed appropriations of the companys proft or loss we examined the Board of Directors reasoned statement and a selection of suppor ting evidence in order to be able to assess whether the proposal is in accordance with the Companies Act.

As basis for our opinion concerning discharge from liability, in addition to our audit of the annual accounts and consolidated accounts, we examined signifcant decisions, actions taken and circumstances of the company in order to determine whether any member of the Board of Directors or the Managing Director is liable to the company. We also examined whether any member of the Board of Directors or the Managing Director has, in any other way, acted in contravention of the Companies Act, the Annual Accounts Act or the Ar ticles of Association.

We believe that the audit evidence we have obtained is suffcient and appropriate to provide a basis for our opinions.

Opinions

We recommend to the annual meeting of shareholders that the proft be appropriated in accordance with the proposal in the statutory administration repor t and that the members of the Board of Directors and the Managing Director be discharged from liability for the fnancial year.

Stockholm 21 March 2016 KPMG AB

George Pettersson Authorized Public Accountant

Corporate Governance

Nobia AB is a Swedish public limited liability company domiciled in Stockholm, Sweden. The company is the Parent Company of the Nobia Group. The basis for the control of the Group includes the Swedish Corporate Governance Code, the Articles of Association, the Swedish Companies Act and the regulations issued by Nasdaq Stockholm.

Nobia has applied the Swedish Corporate Governance Code (the Code) since 1 July 2005 and in 2015, the company had no deviations to report. Nobia also applies the Swedish Annual Accounts Act concerning the company's corporate governance reporting. Nobia monitors developments in the area of corporate governance and continuously adapts its corporate-governance principles to create value for its owners and other stakeholders. No violations of applicable stock exchange regulations were reported.

2015 Annual General Meeting

The right of shareholders to make decisions concerning the affairs of Nobia is exercised at the Annual General Meeting. A notice convening the Annual General Meeting is issued pursuant to the Swedish Companies Act and the company's Articles of Association. The 2015 Annual General Meeting was held on 14 April at Lundqvist & Lindqvist Klara Strand Konferens, Klarabergsviadukten 90 in Stockholm. 169 shareholders participated in the 2015 Annual General Meeting, representing 70 per cent of the capital and votes in Nobia. The Board of Directors, members of Group management and auditors were present at the Meeting. Board Chairman, Johan Molin, was elected Chairman of the Meeting. In accordance with the Board's proposal , the Annual General Meeting resolved on a dividend of SEK 1.75 per share to shareholders. The Meeting also resolved that the number of Board members should be nine without any deputy members until the conclusion of the next Annual General Meeting, and resolved on fees to the Board and Board Chairman and elected Board members and auditors. Johan Molin, who has served as a Board member since 2010 and Chairman since 2011, declined re-election. Tomas Billing was elected the new Board Chairman. Christina Ståhl was elected as a new Board member. All other members of the Board were re-elected. The Annual General Meeting re-elected KPMG as the company's auditor, with George Pettersson as Auditor-in-Charge. In accordance with the Board's proposal, the Annual General

Meeting also resolved on guidelines and other employment conditions for the senior executives, the adoption of a Performance Share Plan and authorisation for the Board of Directors to make decisions regarding acquisitions and transfers of treasury shares for the period until the 2016 Annual General Meeting.

The complete minutes from the Annual General Meeting are available on Nobia's website.

Individual shareholders wishing to have a specifc matter addressed by the Annual General Meeting can do so by submitting a request to the Board in good time prior to the Meeting, to the address published on the Group's website.

Articles of Association

Nobia's Articles of Association regulate such matters as the focus of the operations, information about share capital and how notifcation of the Annual General Meeting is to take place. The full text of the Articles of Association is available on Nobia's website.

On 31 December 2015, the share capital in Nobia AB amounted to SEK 58,430,237 divided between 175,293,458 shares (of which, Nobia held 7,012,153 treasury shares). All of the shares are of the same class. The share's quotient value is SEK 0.33. All shares, except for bought-back treasury shares, entitle owners to a share of the company's assets and proft. The Nobia share and ownership structure are described in more detail on pages 90–91.

Nomination Committee

According to the instruction for Nobia's Nomination Committee adopted at the 2015 Annual General Meeting, the members and Chairman of the Committee are to be elected at the Annual General Meeting for the period until the conclusion of the following Annual General Meeting. The Nomination Committee shall comprise at least three members representing the largest shareholders of the Company. The Chairman of the Nomination Committee shall convene the frst meeting of the Nomination Committee. The Nomination Committee is entitled to appoint an additional two co-opted members. Co-opted members shall assist the Nomination Committee in performing its duties but have no voting rights. The Chairman of the Board may be a member of the Nomination Committee only as a co-opted member. In accordance with the Code, the Nomination Committee should be chaired by an owner representative. The instruction for the Nomination Committee adopted by the Annual General Meeting also states that the Nomination Committee's tasks are to submit proposals on the election of the Board Chairman and other members of the Board of Directors, Directors' fees and any remuneration for committee work, election and remuneration of the auditor, election of the Chairman of the Annual General Meeting and election of members of the Nomination Committee. The Codes states that in its proposals on Board members, the Nomination Committee is to pay particular attention to the requirement of diversity and breadth on the Board and the requirement of an even gender distribution. In performing its other duties, the Nomination Committee shall fulfl the requirements encumbent on the Committee in accordance with the Code.

In accordance with the resolution adopted at the 2015 Annual General Meeting, the Nomination Committee comprised the following members prior to the 2016 Annual General Meeting: Viveca Ax:son Johnson (Chairman) representing Nordstjernan, Fredrik Palmstierna representing Latour, Torbjörn Magnusson representing If Skadeförsäkring, Evert Carlsson representing Swedbank Robur funds and Lars Bergkvist representing Lannebo funds. The members of the Nomination Committee represent approximately 44 per cent of the shares and votes in the company. No remuneration is paid to the Committee members.

The Nomination Committee held three minuted meetings prior to the 2016 Annual General Meeting. Based on the company's strategy and priorities, the Nomination Committee's work included an evaluation

of the results of the Board of Directors' own evaluation, its size and composition and the election of an auditor.

The Nomination Committee's proposals prior to the 2016 Annual General Meeting are incorporated in the notice of the Annual General Meeting, which was published on Nobia's website on 10 March.

Shareholders are welcome to contact the Nomination Committee and submit proposals by post to AB, Valberedningen, Box 70376, SE-107 24 Stockholm, Sweden.

Work of the Board of Directors

In accordance with Nobia's Articles of Association, the Board is, to the extent appointed by the General Meeting, to comprise not fewer than three and not more than nine members, with not more than three deputy members. The 2015 Annual General Meeting resolved that the Board was to comprise nine members with no deputy members. The Board also includes two members, with two deputy members, who are appointed by employees' organisation in accordance with the Swedish Board Representation (Private Sector Employees) Act. The Code also contains certain requirements regarding the composition of the Board of Directors. The Board is to have an appropriate composition with respect to the company's operations, stage of development, strategy and other circumstances, and be characterised by diversity and breadth in terms of the competencies, experience and background of the Board members elected by the Annual General Meeting. Efforts are made to achieve an even gender distribution. The number of women on the Board amounts to three of the nine members elected at the Annual General Meeting, including the President, corresponding to 33 per cent.

The gender-distribution requirements of the Swedish Corporate Governance Code are thus deemed to be satisfed.

No deputies of Board members elected by the Annual General Meeting are appointed. A maximum of one Board member elected by the Annual General Meeting may work in company management or in the management of the company's subsidiaries. Furthermore, a majority of the Board members elected by the Annual General Meeting are to be independent in relation to the company and company management. At least two of these Board members must also to be independent in relation to the company's largest shareholders. Nobia's Board of Directors fulfls these requirements. The President is proposed as a member of the Board that is proposed to the 2016 Annual General Meeting. This has been the case in earlier years, except for 2010 when the then President decided to retire. Other executives in the company participate at Board meetings to make presentations and to serve as secretary. The Board held eight meetings during the 2015 fscal year.

The work of the Board of Directors follows a fxed agenda for each Board meeting, including such matters as business status, investments, budget, interim reports and annual accounts. The Chairman leads and delegates the work of the Board and ensures that matters not included in the fxed agenda are addressed. The Board's work is regulated by the rules of procedure adopted annually by the Board and by the instruction regarding the distribution of duties between the Board and the President. In 2015, the strategy of achieving the Group's operating margin target of 10 per cent continued to receive a great deal of attention in the Board of Directors'

Nobia's organisation

work. Issues relating to brands, innovation, range and supply chain were key components of these efforts. The focus remained targeted to effciency and growth. In parallel with offensive investments, potential acquisitions for generating proftable growth were evaluated during the year. In the summer of 2015, the Board visited Nobia Svenska Kök and Nobia Production Sweden AB in Tidaholm, Sweden. The Board members are presented on pages 86–87. Attendance at Board meetings is shown in the table on page 84.

A new method for evaluating the work and composition of the Board was applied in 2015. After having used an evaluation questionnaire for many years, the Board Chairman this year sent out a number of questions as a basis for a round table discussion. In addition, the Chairman held private discussions with the Board members. The Board also evaluates the President on an ongoing basis throughout the year.

The Board does not have a separate Audit Committee. Instead, control issues to be discussed by such a Committee are managed by the Board in its entirety, except for the President who does not participate in these issues. Accordingly, the Board can monitor signifcant issues regarding the company's fnancial reporting and its internal control, and risk management of fnancial issues. The same applies to signifcant issues related to the audit of the annual report and consolidated fnancial statements and the impartiality and independence of the auditors. To ensure that the Board's information requirements are met in this respect, the company's auditors report to the Board at least three times a year. Part of the auditors' presentation of information to the Board takes place in the absence of the company's executives. The form in which these reports are to be prepared is documented in the Board's rules of procedure. Furthermore, the Board assists in the preparation of the Nomination Committee's proposals for the Annual General Meeting's decision regarding the election of auditors.

One occasion is primarily devoted to the planning of the year's audit. In the hard-close audit at the end of September, the company's processes for internal control are also addressed. Finally, reporting is received in conjunction with the adoption of the annual accounts. In addition, the auditors also present an annual account of the consulting assignments that have been performed by the audit frm.

In April 2015, the auditors presented and discussed the focus and scope of the audit, which also took particular consideration of the risk perspective regarding internal control. At the meeting in October, the auditors reported on the results of the audit of internal control, which analysed the results of the self-

Support functions Business units

assessment of the internal control that the Group's business units perform every year, and reported on the IT audit performed. Also at this meeting, the auditors presented their observations from the hard-close audit. The examination of the annual accounts for 2015 was presented at the Board meeting in February 2016. In 2015, the Group's CFO served as the Board of Directors' secretary.

Remuneration Committee

The Board appoints a Remuneration Committee from within its ranks, which for the period from the 2015 Annual General Meeting until the 2016 Annual General Meeting comprised Tomas Billing (Chairman), Fredrik Palmstierna and Ricard Wennerklint. The Committee's task is to prepare proposals to the Board relating to the remuneration and employment terms for the President. The Committee also has the task of making decisions on the President's proposals regarding remuneration and other employment terms for the managers who report to the President. Furthermore, the Committee submits proposals to the Annual General Meeting regarding principles for remuneration and other employment terms for senior executives and monitors and evaluates the ongoing schemes for variable remuneration to senior executives, and the schemes concluded during the year, and the implementation of the Annual General Meeting's decision on guidelines for remuneration to senior executives. The Committee held six meetings during the year.

Remuneration to senior executives

The members of Group management receive both fxed and variable remuneration. The fundamental principle is that the variable salary portion may amount to a maximum

of 30 per cent of fxed annual salary. The exception to this principle is the President whose variable salary portion may amount to a maximum of 50 per cent of fxed annual salary. Exceptions may also be made for senior executives following decisions by the Board. The variable salary portion is normally divided between several targets, for example, the Group's earnings, earnings in the business unit for which the manager is responsible and individual/quantitative targets. The variable salary portion is based on an earnings period of one year. The targets for the President are determined by the Board. The targets for the other senior executives are established by the President following recommendations by the Board's Remuneration Committee.

Nobia has implemented annual remuneration schemes based on matching and performance shares since 2012, following decisions by each year's Annual General Meeting. These Performance Share Plans, which include the requirement that the participant acquire shares in Nobia, are described in more detail in the Financial overview of the Board of Directors' Report on pages 32–36. The remuneration and benefts of senior executives are described in Note 4 on pages 61–64.

Group management

The President and Group management, see pages 88–89, hold regular Group management meetings. In addition, the President and the CFO meet the management team of each commercial business unit three times per year at local management meetings.

Auditors

KPMG AB was elected as the company's auditor at the 2015 Annual General Meeting for a mandate period of one year until

the conclusion of the 2016 Annual General Meeting. Nobia's Auditor-in-Charge, George Pettersson, was re-elected. The Nomination Committee's proposals for auditing frm and Auditor-in-Charge prior to the 2016 Annual General Meeting were presented in the notice of the Annual General Meeting, which was published on Nobia's website on 10 March. The interaction of the auditors with the Board is described above. Nobia's purchases of services from KMPG, in addition to audit assignments, are described in Note 6 on page 65.

The Board's description of internal control and risk management systems regarding the fnancial reporting for the 0 fscal year

The Board of Directors is responsible maintaining a high level of internal control at the company in accordance with the Swedish Companies Act and the Code. This description has been prepared in accordance with Chapter 6, Section 6, second paragraph, second point of the Swedish Annual Accounts Act, and is thereby limited to the internal control and risk management of the fnancial reporting. The description of the Group's internal control and risk management systems also includes the description of the company's systems.

Control environments and governing documents

The structure of Nobia is organised so that the frst stage of the value chain, sourcing/ purchasing, production and logistics have Group-wide management functions. The main task of these operating units is to capitalise on opportunities for economies of scale within each area. The commercial

Board of Directors in 2015

		Board meetings, 8 meetings in total	Remuneration Committee, 6 meetings in total	Born	Board member since	Nationality	Independent
Johan Molin1)	Chairman	1		1959	2010	Swedish	Not independent2)
Tomas Billing3)	Chairman	7	6	1963	2015	Swedish	Not independent2)
Morten Falkenberg	President and CEO	8		1958	2011	Danish	Not independent4)
Lilian Fossum Biner	Board member	7		1962	2012	Swedish	Independent
Nora Førisdal Larssen	Board member	8		1965	2011	Norwegian	Not independent2)
Stefan Jacobsson	Board member	8		1952	2014	Swedish	Independent
Thore Olsson	Board member	8		1943	2007	Swedish	Independent
Fredrik Palmstierna	Board member	7	6	1946	2006	Swedish	Not independent2)
Ricard Wennerklint	Board member	8	6	1969	2014	Swedish	Not independent2)
Christina Ståhl5)	Board member	5		1970	2015	Swedish	Independent
Per Bergström	Employee representative	8		1960	2000	Swedish
Marie Ströberg	Employee representative	8		1973	2007	Swedish
Patrik Falck6)	Employee representative	6		1965	2011	Swedish
Terese Asthede6)	Employee representative	8		1971	2013	Swedish

1) Chairman until 14 April 2015

2) In relation to major shareholders 3) Chairman from 14 April 2015

4) President 5) New Board member from 14 April 2015

6) Deputy

Nobia 2015
Operations
Sustainability
Financial statements
Corporate governance and the Nobia share

units are responsible for developing Nobia's sales channels and brands in line with Nobia's strategy.

The basis for the internal control of fnancial reporting is the control environment that comprises the company's organisation, decision-making procedures, authority and responsibility, as documented and communicated in governing documents such as internal policies, guidelines, manuals and codes. Examples include the division of responsibility between the Board on one hand and the President and other bodies established by the Board on the other, instructions for authorisation, and instructions for accounting and reporting.

Documentation concerning the principles and forms for reporting, internal governance, control and monitoring is compiled in Nobia's Financial & Accounting Manual, which is available to all relevant employees on Nobia's intranet.

This Manual is available to all relevant employees on Nobia's intranet. Each unit manager is responsible for ensuring effective internal control, and the fnancial manager of each unit is responsible for monitoring and ensuring compliance with Nobia's accounting procedures and principles. These are documented in the aforementioned manual. All fnancial managers from the various units meet once a year to discuss various topics relevant to fnancial reporting.

Risk management

The Group has methods for risk assessment and risk management to ensure that the risks to which the Group is exposed are managed within the established frameworks. The risks identifed concerning fnancial reporting are managed in the Group's control structure

and are continuously monitored and assessed. One of the tools for this purpose is self-assessments, which are conducted annually by local management teams and evaluated according to established procedures. Risk assessments are described in more detail on pages 37–39.

Financial information

The Group has established information and communication channels in order to support the completeness and accuracy of the fnancial reporting, for example, through governing documents in the form of internal policies, guidelines, manuals and codes regarding the fnancial reporting applied by relevant personnel.

The Group monitors compliance with these governing documents and measures the effciency of control structures.

In addition, the Group's information and communication channels are monitored to ensure that these channels are appropriate for the fnancial reporting. Furthermore, the Group has developed checklists to ensure compliance with the disclosure requirements in the fnancial statements.

Monitoring by the Board

The outcome of the Group's risk assessment and risk management processes is addressed each year by the Board, which ensures that these processes include all material areas and provide balanced guidelines for the various executives.

The Board receives periodic fnancial reports and each Board meeting addresses the company's and Group's fnancial position. The Group's internal control function, which is an integrated part of the central fnance function, monitored viewpoints that

emerged during the year from the internal control self-assessment at some of the larger units.

Nobia does not currently have an internal audit function. The Board has discussed this matter and found the existing monitoring and assessment structure of the Group to be satisfactory. External services may also be engaged in the context of certain special examinations. This decision is reviewed annually.

Auditors' report of the Corporate Governance Statement

To the annual meeting of the shareholders in Nobia AB (publ), Corp. Reg. No. 556528-2752

It is the Board of Directors who is responsible for the Corporate Governance Statement for the year 2015 and that it has been prepared in accordance with the Annual Accounts Act.

As a basis for our opinion that the Corporate Governance Statement has been prepared and is consistent with the annual accounts and the consolidated accounts, we have read the Corporate Governance Statement and assessed its statutory content based on our knowledge of the company. This means that our statutory examination of the Corporate Governance Statement is different and substantially less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted audit standards in Sweden.

In our opinion, the Corporate Governance Statement has been prepared and its statutory content is con-sistent with the annual accounts and the consolidated accounts.

Stockholm, 21 March 2016 KPMG AB George Pettersson, Authorised Public Accountant

Key external regulatory frameworks:

• Swedish Companies Act
• IFRS and Swedish Annual Accounts Act
• Nasdaq Stockholm's Rule book for Issuers
• Swedish Corporate Governance Code, www.corporategovernanceboard.se

Key internal regulatory frameworks:

• Ar ticles of Association
• The Board's rules of procedure and instructions on the distribution of duties between the Board and President, internal policies, guidelines, manuals, codes and checklists
• Nobia's Financial & Accounting Manual
• Risk Management Process

Overview of governance at Nobia

BOARD OF DIRECTORS

Tomas Billing

Born 1963. B.Sc. Business Administration. CEO of Nordstjernan. Chairman of the Board since 2015. Dependent in relation to major shareholders. Board assignments: Chairman of NCC. Board member of BiJaKa and Parkinson Research Foundation. Previous employment: President of Hufvudstaden and Monark Bodyguard. Holding in Nobia: 185,779 shares.

Nora Førisdal Larssen 4

Born 1965. B.Sc. Business Economics, MBA. Senior Investment Manager at Nordstjernan. Board member since 2011. Dependent in relation to major shareholders.

Board assignments: Chairman of Etac and Emma S, Board member of Ekornes and Filippa K.

Previous employment: Product Line manager at Electrolux and partner at McKinsey & Co. Holding in Nobia: 5,000 shares.

Morten Falkenberg 2

Born 1958. B.Sc. Business Administration. President and CEO of Nobia. Board member since 2011. Board assignments: Board member of Velux Group. Previous employment: Executive Vice President at Electrolux and Head of Floor Care and Small Appliances, senior positions at TDC Mobile and the Coca-Cola Company. Holding in Nobia: 523,303 shares

(private and occupational pension) Holding in related companies: –

Stefan Jacobsson 5

Born 1952. Board member since 2014. Independent.

Board assignments: Chairman of Thule Group, Woody Bygghandel and HBG. Board member of Etac. Previous employment: CEO of Puma AG, NFI Corp., ABU/Garcia and Tretorn. Holding in Nobia: 10,000 shares in endowment insurance.

Lilian Fossum Biner 3

Born 1962. Board member since 2012. B.Sc. Business Administration. Independent.

Board assignments: Board member of Orifame, Thule, Givaudan, LE Lundbergföretagen and a-connect AG.

Previous employment: Vice President and CFO of Axel Johnsson, Senior Vice President and HR Director of at Electrolux. Holding in Nobia: 6,000 shares.

Thore Ohlsson 6

Born 1943. President of Elimexo. Board member since 2007. Independent.

Board assignments: Chairman of Friskvårdscenter, Thomas Frick, and VLPN Holding. Board member of Puma SE, Cobra Puma, Elite Hotels, Bastec and Josefsson Invest.

Previous employment: President and CEO of Aritmos with wholly owned companies ABU-Garcia, Etonic, Monark-Crescent, Stiga, Tretorn and Puma AG (84%). President of Trianon, Etonic and Tretorn. CEO of Tretorn. Holding in Nobia: 70,000 shares.

Operations

Sustainability

Financial statements

Corporate governance and the Nobia share

Christina Ståhl Born 1970. B.Sc. Business Administration and M.Sc. Business and Economics. CEO of MQ. Board member since 2015. Independent. Previous employment: President of furniture chain Mio. Holding in Nobia: – 7 9

Marie Ströberg 11

Born 1973. Employee representative since 2007. Employed at Nobia Svenska Kök since 2007. Holding in Nobia: –

Fredrik Palmstierna Born 1946. B.Sc. Business 8

Economics, MBA. Board member since 2006. Dependent in relation to major shareholders.

Board assignments: Chairman of Latour. Board member of Securitas, Hultafors, Fagerhult and the Viktor Rydberg Schools Foundation. Holding in Nobia: 371,000 shares,

through related parties and companies.

Patrik Falck 12

Born 1965. Deputy Board member Employee representative since 2011. Employed at Nobia Production Sweden since 1986. Holding in Nobia: –

Ricard Wennerklint

Born 1969. Deputy CEO of If Skadeförsäkring and member of Sampo Group Executive Committee. Board member since 2014. Dependent in relation to major shareholders. Previous employment: CFO of If Skadeförsäkring. Holding in Nobia: 10,000 shares.

Terese Asthede 13

Born 1971. Deputy Board member Employee representative since 2013. Employed at Nobia Svenska Kök since 2006.

Board assignments: Board member of Nobia Svenska Kök. Holding in Nobia:–

Per Bergström Born 1960. Employee 10

representative since 2000. Employed at Nobia Production Sweden since 1976.

Board assignments: Board member of of Tidaholms Energi, Elnät and Bredband Östra Skaraborg. Holding in Nobia: –

Auditors

KPMG AB

Auditor-in-Charge, Authorised Public Accountant

George Pettersson

Other audit assignments: Addtech, Sandvik, Skanska and Lagercrantz Group.

GROUP MANAGEMENT

Morten Falkenberg 1 2

Born 1958. B.Sc. Business Administration. President and CEO. Employed at Nobia since 2010. Board assignments: Board member of Velux Group. Previous employment: Executive Vice President at Electrolux and Head of Floor Care and Small Appliances, senior positions at TDC Mobile and the Coca-Cola Company.

Holding in Nobia: 523,303 shares (private and occupational pension). Holding in related companies: –

Christian Rösler 4

Born 1967. Executive Vice President, Central Europe region and Head of Ewe/FM. Employed at Nobia sedan 2007.

Previous employment: Leading positions at IKEA Austria. Holding in Nobia: 864 shares.

Mikael Norman Born 1958. CFO. Employed at Nobia since 2010. Board assignments: Board member of Cloetta AB. Previous employment: Group controller at Electrolux. Holding in Nobia: 46,205 shares.

Rune Stephansen 5

Born 1965. Executive Vice President and Head of Commercial Denmark. Employed at Nobia since 2009.

Previous employment: Leading positions at Marbodal, Kvik, Sportex, Rusta, IKEA and Jysk. Holding in Nobia: 10,697 shares.

Peter Kane 3

Born 1965. Executive Vice President, UK Region and Head of Magnet. Employed at Magnet since 1984.

Previous employment:

Management positions at Magnet. Holding in Nobia: 39,402 shares.

Born 1966. Executive Vice President and Head of Commercial Norway. Employed at Nobia since 2004.

Previous employment: Leading positions at Nobia Norway, Norema and Sigdal Kjøkken. Holding in Nobia: 10,297 shares.

Operations

Sustainability

Financial statements

Corporate governance and the Nobia share

Erkka Lumme 7

Born 1974. Executive Vice President and Head of Commercial Finland. Employed at Nobia since 2012.

Previous employment: Senior positions in sales and marketing at IDO Badrum and Pukkila. Holding in Nobia: –

Patrick Heinen 10 Kim Lindqvist

Born 1968. Executive Vice President and Head of Poggenpohl. Employed at Nobia since 2015. Previous employment: Senior position at König+Neurath AG. Holding in Nobia: –

Nick Corlett 8

Born 1965. Executive Vice President, Sourcing and Product Management. Employed at Nobia since 2012.

Previous employment: Leading positions at Howdens Joinery and MFI Group. Holding in Nobia: 7,692 shares.

11

Born 1974. Executive Vice President, Chief Marketing Offcer. Employed at Nobia since 2012. Previous employment: Senior positions in marketing and innovation at Electrolux. Holding in Nobia: 6,272 shares.

Annica Hagen 9

Born 1977. Executive Vice President and Head of Commercial Sweden. Employed at Nobia since 2014. Previous employment: Senior positions in innovation and marketing at Electrolux and Pernod Ricard. Holding in Nobia: 1,522 shares.

Thomas Myringer Born 1960. Executive Vice 12

President, HR Director. Employed at Nobia since 2003. Previous employment: Senior HR positions at the Skanska Group. Holding in Nobia: 15,924 shares.

The Nobia share and shareholders

In 2015, the closing price of the Nobia share on the Nasdaq Stockholm was SEK 106.00 (69.75), corresponding to a market capitalisation of approximately SEK 18.6 billion (12.2).

Facts in brief

• The Nobia share is listed on the Nasdaq Stockholm under the short name NOBI.
• The share is traded on the Large Cap list, Consumer Goods sector.
• Nobia is the only kitchen company on the Nasdaq Stockholm.
• About 70 per cent of the shareholdings are Swedish.

Analysts that follow Nobia

COMPANy	ANALyST
ABG Sundal Collier	Mattias Montgomery
Carnegie Investment Bank	Agnieszka Vilela
Danske Markets Equities	Anders Hansson
Den norske Bank	Simon Sigvardsson
Handelsbanken	Rasmus Engberg
Nordea Bank	Predrag Savinovic
Skandinaviska Enskilda Banken	Stefan Cederberg

Share trading and share-price trend

The Nobia share has been listed on the Nasdaq Stockholm since 2002. The share has been traded on the Large Cap list, which is the stock exchange's segment for companies with a market capitalisation of more than EUR 1 billion, since January 2015. The Nobia share is in the Consumer Goods sector.

In 2015, the Nobia share price rose 52 per cent, while the entire stock exchange increased 7 per cent during the same period. During the same period, the OMX Stockholm Consumer Goods PI index increased 24 per cent.

During the year, a total of 77.8 million (64.9) Nobia shares were traded at a value of SEK 7.3 billion (3.7). The average turnover per day was approximately 310,000 shares (260,000), corresponding to a value of SEK 29.0 million (14.9). In 2015, the turnover rate, or the share's liquidity, amounted to 45 per cent (37), which can be compared with the average on the Nasdaq Stockholm of 73 per cent (67).

The highest closing price for the Nobia share during 2015 was SEK 110.40 on 3 December. The lowest closing price during the year was SEK 67.50 on 16 January.

Ownership structure

On 31 December 2015, the number of shareholders was 6,234 (4,412). At yearend, the fve largest shareholders held 47.4 per cent (57.1) of all shares and the ten largest shareholders held 59.8 per cent (68.8). The proportion of registered shares held by foreign owners during the year amounted to 30.6 per cent (22.1) of the total number of shares.

On the date of publication of this Annual Report, Nobia's Board of Directors, excluding the President, owned directly

and indirectly a total of 657,779 shares in the company (740,051). On the same date, members of Nobia's Group management, directly and indirectly, had combined holdings of 662,178 shares (571,486).

Share capital and treasury shares

On 31 December 2015, Nobia's share capital amounted to SEK 58,430,237, divided between 175,293,458 shares with a quotient value of SEK 0.33. Each share, with the exception of bought-back treasury shares, entitles the holder to one vote, and carries the same entitlement to the company's capital and profts.

At the start of the year, Nobia held 7,767,300 treasury shares. The aim of the holding is that the treasury shares can be used as a means of payment for future acquisitions and enable adjustment of the company's capital structure, thereby contributing to greater shareholder value.

In 2015, the Board decided to sell 755,147 treasury shares, utilising the authorisation from the 2015 Annual General Meeting. The purpose of the sale was to deliver shares under an employee share option scheme resolved by the 2011 Annual General Meeting, and to deliver shares under a Performance Share Plan resolved by the 2012 Annual General Meeting. The employee share option scheme and Performance Share Plan are described in more detail on page 63.

On 31 December 2015, Nobia had 7,012,153 treasury shares, corresponding to 4.0 per cent of the total number of shares issued.

Dividend policy and proposed dividend

Nobia's objective is that the average dividend should comprise 40–60 per cent of net proft after tax. Investment require-

Sustainability

Financial statements

Corporate governance and the Nobia share

Nobia Share price diagram 2011-2015

ments, acquisition opportunities, liquidity and the fnancial position of the company are taken into consideration when preparing dividend proposals.

The Board of Directors proposes to the Annual General Meeting a dividend of SEK 2.50 per share for 2015, corresponding to 51 per cent of net proft after tax for the year. The proposal entails a total dividend of approximately SEK 421 million.

Information and contact person

Nobia's objective is to facilitate the valuation of the company by the stock market through clear information. The provision of information is based mainly on quarterly fnancial repor ting, press releases, information on the website, company presentations and meetings with shareholders, analysts and investors.

The contact person for information is Lena Schattauer, Head of Communication and Investor Relations, telephone: +46 8 440 16 07 or e-mail: lena.schattauer@nobia.com.

Financial calendar 2016

11 April	Annual General Meeting
27 April	Interim report Jan–Mar 2016
20 July	Interim report Jan–Jun 2016
	28 October Interim report Jan–Sep 2016

Ownership structure, 31 December 2015

	Number of	Percentage of		Percentage of
	shareholders	shareholders, %	No. of shares	capital, %
1–500	3,106	49.8	591,367	0.3
501–1 000	1,278	20.5	1,033,263	0.6
1 001–5 000	1,334	21.4	2,867,366	1.6
5 001–10 000	167	2.7	1,207,781	0.7
10 001–15 000	60	1.0	753,309	0.4
15 001–20 000	33	0.5	582,274	0.3
20 001–	256	4.1	168,258,098	96.0
Total	6,234	100	175,293,458	100

Nobia's largest owners, 31 December 2015

		Share of
Shareholder	No. of shares	capital, %
Nordstjernan	35,147,843	20.0
If Skadeförsäkring	17,700,000	10.1
Lannebo funds	14,477,666	8.3
Fourth Swedish National Pension fund	9,151,457	5.2
Handelsbanken funds	6,695,133	3.8
AMF Insurance and funds	5,335,912	3.0
Swedbank Robur funds	5,280,731	3.0
Investmentaktiebolaget Latour	5,136,325	2.9
Norges Bank	3,113,639	1.8
Catella Fund management	2,884,000	1.7

Source: Euroclear Sweden. At year-end, Nobia held 7,012,153 treasury shares corresponding to 4.0 per cent of the total number of shares issued.

Data per share

	2013	2014	2015
Earnings/loss per share, SEK	2.10	-0.17	4.92
Dividend per share, SEK	1.00	1.75	2.501)
Shareholders' equity per share, SEK	19	19	23
Number of shares at end of the period	175,293,458	175,293,458	175,293,458
Shareholders at year-end	4,221	4,421	6,234
Share price at year-end	54.50	69.75	106.00

1) The Board's proposal.

FIVE-yEAR OVERVIEW

SEK m	2011	2012	2013	20141)	2015
Income statement
Net sales	13,114	12,343	11,773	11,411	13,332
Change in per cent	-7	-6	-5	7	17
Gross proft	5,048	4,791	4,824	4,617	5,358
Operating proft/loss	184	-274	654	878	1,145
Financial income	9	11	13	12	34
Financial expenses	-92	-107	-107	-90	-92
Proft/loss after fnancial items	101	-370	560	800	1,087
Tax on net proft for the year	-16	-155	-195	-205	-262
Proft/loss for continuing operations	85	-525	365	595	825
Proft/loss from discontinued operations, net after tax	-16	-20	-15	-622	3
Net proft/loss for the year	69	-545	350	-27	828
Net proft/loss for the year attributable to:
Parent Company shareholders	70	-546	351	-28	829
Non-controlling interests	-1	1	-1	1	-1
Net proft/loss for the year	-69	-545	350	-27	828
Balance sheet
Fixed assets	5,556	4,782	4,670	4,446	4,697
Inventories	1,005	929	849	853	934
Current receivables	1,632	1,325	1,373	1,494	1,665
Cash and cash equivalents	152	171	278	470	765
Assets held for sale	71	71	15	592	8
Total assets	8,416	7,278	7,185	7,855	8,069
Shareholders' equity	3,521	2,657	3,154	3,191	3,818
Non-controlling interests	4	5	4	5	4
Non-interest-bearing liabilities	3,145	2,624	2,563	2,615	2,697
Interest-bearing liabilities	1,744	1,883	1,462	1,684	1,547
Liabilities attributable to assets held for sale	2	109	2	360	3
Total shareholders' equity and liabilities	8,416	7,278	7,185	7,855	8,069
Net debt including pensions	1,586	1,707	1,176	1,206	774
Capital employed	5,269	4,546	4,620	4,880	5,369
Operating capital	–	–	4,334	4,402	4,596
Key fgures
Gross margin, %	38.5	38.8	41.0	40.5	40.2
Operating margin, %	1.4	-2.2	5.6	7.7	8.6
Operating proft before depreciation/amor tisation and
impairment (EBITDA)	632	739	950	1,204	1,491
Operating margin before depreciation/amortisation and
impairment, %	4.8	6.0	8.1	10.6	11.2
Proft/loss after fnancial items as a percentage of net sales	0.8	-3.0	4.8	7.0	8.2
Turnover rate of capital employed, multiple	2.5	2.7	2.5	2.5	2.5
Return on capital employed, %	3.6	-5.3	14.6	–	–
Return on operating capital, %	–	–	15.1	23.2	26.9
Return on shareholders' equity, %	2.0	-17.7	12.0	-0.9	24.1
Debt/equity ratio, %	45	64	37	38	20
Equity/assets ratio, %	42	37	44	41	47
Cash fow from operating activities	413	560	831	1,033	1,145
Investments	471	393	251	316	410
		-3.27	2.10	-0.17	4.92
Earnings per share after dilution effects	0.42
Dividend per share, SEK	0	0.50	1.00	1.75	2.502)
Personnel
Average number of employees	7,475	7,355	6,690	6,636	6,473
Net sales per employees, SEK 000s Personnel expenses	1,765 3,103	1,780 2,955	1,799 2,822	1,829 3,001	2,039 3,246

1) After reclassifcation of Hygena to discontinued operations.

2) The Board's proposal.

Sustainability

Financial statements

Corporate governance and the Nobia share

2016 ANNUAL GENERAL MEETING

The shareholders of Nobia AB (publ) are invited to the Annual General Meeting on Monday, 11 April at 3:00 p.m. at Lundqvist & Lindqvist Klara Strand Konferens, Klarabergsviadukten 90, Stockholm, Sweden.

Right to participate at the Annual General Meeting

Shareholders who wish to participate in the Annual General Meeting must:

• frstly be included in the shareholders' register maintained by Euroclear Sweden AB as of Tuesday, 5 April 2016, and,
• secondly notify Nobia of their par ticipation in the Annual General Meeting not later than Tuesday, 5 April 2016.

Notifcation of attendance

Notifcation of attendance at the Annual General Meeting may be made:

• by e-mail: bolagsstamma\$nobia.com
• by telephone: 46 8 440 16 00
• by fax: 46 8 503 826 49
• by post: Nobia AB, Box 70376, SE-107 24 Stockholm, Sweden

This notifcation shall state:

• the shareholders' name
• personal identity number/Corporate Registration Number
• address and daytime telephone number
• shareholding
• information about any advisors (not more than two assistants) and information on any proxies who may accompany the shareholder to the Meeting

When applicable, complete authorisation documents, such as registration cer tifcates or the equivalent, shall be appended.

Proxy

Shareholders represented by proxy shall issue a written power of attorney for the proxy.

If the power of attorney is issued on behalf of a legal entity, a cer tifed copy of a registration cer tifcate or corresponding document ("cer tifcate") for the legal entity shall be appended to the notifcation of attendance. The power of attorney and cer tifcate may not be more than one year old. However, the validity of the power of attorney may be a maximum of fve years from the date of issue, if specifcally stated. The power of attorney in original and, where applicable, the cer tifcate, should be sent by post to the company at the address stated above in good time prior to the Annual General Meeting. Proxy forms are available from Nobia's website and will also be sent to shareholders who so request and inform the company of their postal address.

Nominee shares

Shareholders whose shares have been registered with a nominee, through the bank or securities broker administering the shares, must temporarily re-register their shares in their own names in order to be entitled to participate in the Annual General Meeting. Such re-registration must be completed with Euroclear Sweden AB not later than Tuesday, 5 April 2016. A request for re-registration must be made well in advance of this date.

Dividend

The Board of Directors proposes that a dividend of SEK 2.50 per share be paid for the 2015 fscal year. The record date to be entitled to receive dividend is proposed as Wednesday, 13 April 2016.

Annual Report

The Nobia Annual Report is published in Swedish and English, and both versions are available for download from the Group's website. Printed versions of the Annual Report are sent to shareholders and other individuals who have requested such a version.

DEFINITIONS

RETuRN ON SHAREHOLDERS' EquITy

Net proft for the year after tax as a percentage of average shareholders' equity. The calculation of average shareholders' equity has been adjusted for capital increases and reductions.

RETuRN ON OPERATING CAPITAL

Operating proft as a percentage of average operating capital excluding net assets attributable to discontinued operations. The calculation of average operating capital has been adjusted for acquisitions and divestments.

GROSS MARGIN

Gross proft as a percentage of net sales.

EBITDA

Earnings before depreciation/amortisation and impairment.

NET DEBT

Interest-bearing liabilities less interest-bearing assets. Interest-bearing liabilities include pension liabilities.

OPERATING CAPITAL

Capital employed excluding interest-bearing assets.

OPERATING CASH FLOW

Cash fow from operating activities including cash fow from investing activities, excluding cash fow from acquisitions/divestments of operations, interest received, increase/decrease in interestbearing assets.

REGION

A region comprises an operating segment in accordance with IFRS 8.

EARNINGS PER SHARE

Net proft for the year divided by a weighted average number of outstanding shares during the year.

OPERATING MARGIN

Operating proft as a percentage of net sales.

DEBT/EquITy RATIO

Net debt as a percentage of shareholders' equity including non-controlling interests.

EquITy/ASSETS RATIO

Shareholders' equity including non-controlling interests as a percentage of balance-sheet total.

CAPITAL EMPLOyED

Balance-sheet total less non-interest-bearing provisions and liabilities.

CuRRENCy EFFECTS

"Translation effects" refers to the currency effects arising when foreign results and balance sheets are translated to SEK.

"Transaction effects" refers to the currency effects arising when purchases or sales are made in currency other than the currency of the producing country (functional currency).

Nobia AB

Street address: Klarabergsviadukten 70 A5 Postal address: Box 70376, SE-107 24 Stockholm, Sweden Tel: +46 8 440 16 00, info@nobia.com www.nobia.com

Commodore Kitchens

Acorn House Gumley Road Grays Essex RM20 4XP UK Tel: +44 1375 382323 www.commodorekitchens.co.uk

EWE Küchen GmbH

Dieselstraße 14 A-4600 Wels Austria Tel +43 7242 237 0 www.ewe.at www.intuo-kitchen.com

FM Küchen GmbH

Galgenau 30 A-4240 Freistadt Austria Tel +43 7942 701 0 www.fm-kuechen.at

Gower Furniture Ltd

Holmfeld Industrial Estate Halifax West Yorkshire HX2 9TN UK Tel. +44 1422 232 200 www.gower-furniture.co.uk

Magnet Ltd

3 Allington Way Yarm Road Business Park Darlington, Co Durham DL1 4XT UK Tel +44 1325 469 441 www.magnet.co.uk www.magnettrade.co.uk

Nobia Denmark A/S

Industrivej 6 DK-6870 Ølgod Denmark Tel +45 75 24 47 77 www.hth.dk www.invita.dk

Nobia Svenska Kök AB

Mossebogatan 6 Box 603 SE-522 81 Tidaholm Sweden Tel +46 502 170 00 www.marbodal.se

Novart Oy

Kouvolantie 225 Box 10 FI-155 61 Nastola Finland Tel +358 207 730 730 www.novar t.f www.petrakeittiot.f www.alacar tekeittiot.f www.keittiomaailma.f

Poggenpohl Möbelwerke GmbH

Poggenpohlstraße 1 DE-32051 Herford Germany Tel +49 5221 38 10 www.poggenpohl.com www.goldreif.com

Sigdal Kjøkken AS and Norema AS

Trollosveien 6 Postboks 633 NO-1411 Kolbotn Norway Tel +47 66 82 23 00 www.sigdal.com www.norema.no

Rixonway Kitchens Ltd

Churwell Vale Shaw Cross Business Park Dewsbury, West Yorkshire WF12 7RD UK Tel +44 1924 431 300 www.rixonway.co.uk

uno form

Fabriksvej 7 DK-9640 Farsø Denmark Tel +45 98 63 29 44 www.unoform.dk