Nobia

Quarterly Report • Jul 21, 2017

Interim report January-June 2017

(All values in brackets refer to the corresponding period in 2016 and Poggenpohl is recognised as discontinued operations, see page 7.)

April-June 2017

• Net sales for the second quarter amounted to SEK 3,408 million (3,403).
• Organic growth was 1 per cent (4).
• Operating profit amounted to SEK 413 million (420), corresponding to an operating margin of 12.1 per cent (12.3).
• Currency losses had an impact of approximately SEK 35 million on the Group's operating profit, of which SEK 0 million in translation effects and a negative SEK 35 million in transaction effects.
• Profit after tax amounted to SEK 314 million (302), corresponding to earnings per share after dilution of SEK 1.86 (1.80).
• Operating cash flow amounted to SEK 193 million (238).

Nobia Group summary

	Apr-Jun			Jan-Jun		Jan-Dec		Jul-Jun
			Change,			Change,			Change,
	2016	2017	%	2016	2017	%	2016	2016/2017	%
Net sales, SEK m	3,403	3,408	0	6,494	6,723	4	12,648	12,877	2
Gross margin, %	40.1	39.9	–	39.7	39.4	–	39.0	38.9	–
Operating margin before depreciation and impairment, %	14.6	14.2	–	12.6	12.3	–	12.5	12.4	–
Operating profit (EBIT), SEK m	420	413	-2	665	686	3	1,298	1,319	2
Operating margin, %	12.3	12.1	–	10.2	10.2	–	10.3	10.2	–
Profit after financial items, SEK m	406	405	0	640	668	4	1,247	1,275	2
Profit/loss after tax, SEK m	302	314	4	473	519	10	455	501	10
Profit/loss after tax excluding IAC, SEK m	302	314	4	473	519	10	903	949	5
Earnings/loss per share, after dilution, SEK	1.80	1.86	3	2.81	3.07	9	2.70	2.97	10
Earnings/loss per share, after dilution excluding IAC, SEK	1.80	1.86	3	2.81	3.07	9	5.36	5.62	5
Operating cash flow, SEK m	238	193	-19	316	294	-7	1,031	1,009	-2

Comments from the CEO

"Given the conditions with fewer delivery days than last year, I am pleased with the results for the second quarter. Organic growth in the Nordic region was primarily driven by a strong increase in new housing construction in all Nordic countries. Our project sales in the UK also increased, while sales to consumers declined slightly. Although the operating profit was burdened by currency losses, our profit generation in the first half is ahead of last year's. We are now working intensively towards our target of growing organically and via acquisitions. Overall, I remain confident in our ambition to deliver profitable growth," says President and CEO Morten Falkenberg.

Consolidated net sales, earnings and cash flow

Demand for kitchens in the Nordic region and Central Europe in the second quarter is deemed to have improved year-on-year. In the UK, the kitchen market weakened as the result of heightened macroeconomic uncertainty.

Sales increased organically 1 per cent (4), positively impacted by increased sales values and negatively affected by fewer delivery days compared with the preceding year. Currency losses of SEK 12 million (losses: 176) impacted sales.

The gross margin amounted to 39.9 per cent (40.1), adversely affected by currency fluctuations and a changed sales mix, which were partly offset by higher sales values.

Operating profit declined due to lower volumes and currency losses.

The return on operating capital was 32.0 per cent in the past twelvemonth period (Jan-Dec 2016: 32.5). The return on equity was 13.9 per cent in the past twelve-month period (Jan-Dec 2016: 13.0).

Operating cash flow declined due to a negative change in working capital and higher investments compared with the corresponding quarter in 2016.

Net sales and profit by region

Analysis of net sales

	Apr-Jun
	%	SEK m
2016		3,403
Organic growth	1	20
– of which Nordic region	5	77
– of which UK region	-2	-40
– of which CE region	-12	-17
Currency effect	0	-12
Sales to Hygena	0	-3
2017	0	3,408

Currency effect on operating results

	Trans	Trans
	lation	action	Total
	effect	effect	effect
SEK m	Apr-Jun	Apr-Jun	Apr-Jun
Nordic region	10	-5	5
UK region	-10	-30	-40
CE region	0	0	0
Group	0	-35	-35

	Nordic Apr-Jun		UK Apr-Jun		Central Europe Apr-Jun		Group-wide and eliminations Apr-Jun		Group Apr-Jun
SEK m	2016	2017	2016	2017	2016	2017	2016	2017	2016	2017	Change, %
Net sales from external customers	1,626	1,756	1,633	1,520	144	132	–	–	3,403	3,408	0
Net sales from other regions	0	0	–	–	0	1	0	-1	–	–	–
Net sales	1,626	1,756	1,633	1,520	144	133	0	-1	3,403	3,408	0
Gross profit	673	721	636	588	50	42	6	10	1,365	1,361	0
Gross margin, %	41.4	41.1	38.9	38.7	34.7	31.6	–	–	40.1	39.9	–
Operating profit/loss	271	297	175	154	13	5	-39	-43	420	413	-2
Operating margin, %	16.7	16.9	10.7	10.1	9.0	3.8	–	–	12.3	12.1	–

Nordic region

April-June 2017

• The Nordic kitchen market grew year-on-year. The increase in new housing construction remained the primary driver for the positive trend.
• Net sales amounted to SEK 1,756 million (1,626).
• Organic growth was 5 per cent (4). Currency gains of SEK 53 million (losses: 39) impacted net sales for the quarter.
• Gross profit amounted to SEK 721 million (673) and the gross margin to 41.1 per cent (41.4).
• Operating profit amounted to SEK 297 million (271) and the operating margin was 16.9 per cent (16.7).
• Currency gains totalling about SEK 5 million impacted operating profit, of which SEK 10 million in translation effects and a negative SEK 5 million in transaction effects.

Comments on performance

Organic growth was primarily attributable to increased project sales. Fewer delivery days compared with the preceding year had a negative effect on sales. Sales in the project segment grew in all markets, with the highest increase noted in Sweden. Consumer sales increased in Sweden and Denmark, were unchanged in Norway and fell in Finland.

The gross margin declined, primarily as the result of currency losses and a changed sales mix.

The improvement in operating profit was primarily the result of higher sales values that more than compensated for higher costs.

The recall of fittings for top cabinets using the K21 suspension system continued in the second quarter and the costs for this were charged to earnings. This work is expected to be completed during the third quarter.

The HTH GO kitchen concept was launched in Denmark at the end of the first quarter. The design service included in the offering is in high demand among customers and has a high degree of conversion to orders. In connection with the introduction of HTH GO, sales of kitchens under the HTH Gör Det Själv brand were discontinued.

Nobia's first omnichannel store was opened in Norway under the Sigdal brand and was well received in the market.

Net sales and operating margin

Our brands

Share of consolidated net sales, second quarter

Store trend, April-June 2017

Renovated or relocated	–
Newly opened/closed, net	1
Number of own kitchen stores	49

UK region

April-June 2017

• The UK kitchen market is deemed to have weakened year-on-year, driven by heightened macroeconomic uncertainty and lower consumer confidence.
• Net sales amounted to SEK 1,520 million (1,633).
• Organic growth was a negative 2 per cent (pos: 4). Currency losses of SEK 70 million (losses: 136) impacted net sales for the quarter.
• Gross profit amounted to SEK 588 million (636) and the gross margin to 38.7 per cent (38.9).
• Operating profit amounted to SEK 154 million (175) and the operating margin was 10.1 per cent (10.7).
• Currency losses totalling about SEK 40 million impacted operating profit, of which a negative SEK 10 million in translation effects and a negative SEK 30 million in transaction effects.

Comments on performance

The decline in organic sales was primarily due to lower sales via Magnet to both consumers (Retail) and professional builders (Trade), but sales to builders' merchants and DIY chains (B2B) fell as well. Project sales via Commodore, CIE and Rixonway increased during the second quarter.

The gross margin declined slightly, mainly due to currency losses and a changed sales mix, which was partly offset by higher sales values.

The decline in operating profit was mainly attributable to the lower gross margin and lower sales volumes.

Kitchen deliveries under private label to Nobia's smaller B2B customer (Homebase) will be gradually phased out during 2017.

At the end of June, a new online service was launched for Magnet Trade that allows builders and project customers to order kitchens and other products for collection in their local store. In addition, Magnet opened an omnichannel store for consumers in Sutton, outside London, in June.

Net sales and operating margin

Share of consolidated net sales, second quarter

Store trend, April-June 2017

Renovated or relocated	–
Newly opened/closed, net	2
Number of own kitchen stores	214

Our brands

Central Europe region

April-June 2017

• Nobia's market in the Central European region is deemed to have grown slightly year-on-year.
• Net sales amounted to SEK 132 million (144).
• Organic growth was a negative 12 per cent (pos: 11). Currency gains of SEK 5 million (losses: 1) impacted net sales for the quarter.
• Gross profit amounted to SEK 42 million (50) and the gross margin to 31.6 per cent (34.7).
• Operating profit amounted to SEK 5 million (13) and the operating margin was 3.8 per cent (9.0).
• Currency effect totalling about SEK 0 million impacted operating profit, of which SEK 0 million in translation effects and SEK 0 million in transaction effects.

Comments on performance

The organic sales decline was attributable to lower sales to both Austrian customers and to export.

The gross margin weakened as a result of production disruptions and lower volumes, which was partly offset by higher sales values.

Operating profit declined primarily as a result of lower sales volumes and the lower gross margin.

The introduction of a modernised production line at the factory in Wels has resulted in production and delivery disruptions as well as higher costs for the second quarter. Measures to eliminate the disruptions have been taken.

Net sales and operating margin

Share of consolidated net sales, second quarter

Group, first six months of 2017

Januari-June 2017

• Net sales for the first six months amounted to SEK 6,723 million (6,494).
• Organic growth was 5 per cent (4).
• Operating profit amounted to SEK 686 million (665), corresponding to an operating margin of 10.2 per cent (10.2).
• Currency losses of about SEK 65 million impacted operating profit, of which a negative SEK 5 million in translation effects and a negative SEK 60 million in transaction effects.
• Profit after tax amounted to SEK 519 million (473), corresponding to earnings per share of SEK 3.07 (2.81).
• Operating cash flow amounted to SEK 294 million (316).

Sales grew organically by 5 per cent (4), distributed as 10 per cent (4) in the Nordic region, 2 per cent (3) in the UK and a negative 7 per cent (pos: 8) in Central Europe. Currency losses of SEK 97 million (losses: 277) impacted net sales.

Operating profit improved as the result of higher sales values and increased volumes, which offset currency losses and higher costs.

Group-wide items and eliminations reported an operating loss of SEK 82 million (loss: 73). The decline in earnings was attributable to increased costs for investments in strategic initiatives.

Operating cash flow weakened, primarily due to lower cash flow from investing activities compared with the year-earlier period.

Nobia's investments in fixed assets amounted to SEK 117 million (108), of which SEK 31 million (24) pertained to store investments.

Analysis of net sales

	Jan-Jun
	%	SEK m
2016		6,494
Organic growth	5	335
– of which Nordic region	10	302
– of which UK region	2	52
– of which CE region	-7	-19
Currency effect	-2	-97
Sales to Hygena	0	-9
2017	4	6,723

Currency effect on operating results

Group	-5	-60	-65
CE region	0	0	0
UK region	-20	-55	-75
Nordic region	15	-5	10
SEK m	Jan-Jun	Jan-Jun	Jan-Jun
	Trans lation effect	Trans action effect	Total effect

	Group-wide and
		Nordic		UK		Central Europe		eliminations	Group
		Jan-Jun		Jan-Jun		Jan-Jun		Jan-Jun	Jan-Jun
											Change,
SEK m	2016	2017	2016	2017	2016	2017	2016	2017	2016	2017	%
Net sales from external customers	3,023	3,428	3,211	3,047	260	248	–	–	6,494	6,723	4
Net sales from other regions	1	0	–	–	1	1	-2	-1	–	–	–
Net sales	3,024	3,428	3,211	3,047	261	249	-2	-1	6,494	6,723	4
Gross profit	1,221	1,392	1,257	1,158	86	78	16	24	2,580	2,652	3
Gross margin, %	40.4	40.6	39.1	38.0	33.0	31.3	–	–	39.7	39.4	–
Operating profit/loss	434	509	286	250	18	9	-73	-82	665	686	3
Operating margin, %	14.4	14.8	8.9	8.2	6.9	3.6	–	–	10.2	10.2	–
Net financial items	–	–	–	–	–	–	–	–	-25	-18	28
Profit after financial items	–	–	–	–	–	–	–	–	640	668	4

Net sales and profit by region

Other information

Financing

In April, Nobia paid dividends for the 2016 financial year of approximately SEK 505 million and in May, Nobia repaid a bond loan from AB SEK Securities (Swedish Export Credit Corporation) of SEK 800 million.

Existing loan facilities on 30 June 2017 amounted to SEK 1,000 million, comprising a syndicated bank loan expiring in 2019. The bank loan was unutilised at the end of the period.

Net debt including pension provisions amounted to SEK 711 million (1,080) at the end of the second quarter. The debt/equity ratio was 21 per cent (30) at the end of the quarter.

Net financial items amounted to an expense of SEK 18 million (expense: 25). Net financial items include the net of returns on pension assets and interest expense on pension liabilities corresponding to an expense of SEK 12 million (expense: 13). The net interest expense amounted to SEK 6 million (expense: 12).

Corporate acquisitions and divestments

Nobia announced on 19 December 2016 that it had agreed with German group Adcuram to divest the German luxury kitchen manufacturer Poggenpohl for a cash consideration corresponding to an equity value of EUR 10 million, subject to customary closing day adjustments. In connection with this, Poggenpohl was reclassified as Divested operations in accordance with IFRS 5.

Return on shareholders' equity and operating capital

– 10 20 30 40 Jan-Dec 15 Jan-Dec 16 Jul-Jun 16/17 % Return on shareholders equity, % Return on operating capital, %

On 31 January 2017, Nobia completed the divestment of Poggenpohl, after gaining approval from the competition authorities in Germany and Austria. Nobia thus received a cash consideration of approximately EUR 10 million and payment of an internal loan of about EUR 8 million. Final settlement of the purchase consideration will take place in the third quarter.

Earnings from discontinued operations

From the fourth quarter of 2016, Poggenpohl's operations are reported as discontinued operations in accordance with IFRS 5. The full-year 2015 and the period January-September 2016 have been restated with regard to the income statement, organic growth, specification of items affecting comparability, cash-flow statement and comparative data per region. These restatements are presented as an appendix to the year-end report available on the Nobia website under Investor Relations and Reports and presentations.

Nobia has acquired stores from franchisees with the intention of subsequently selling on. At the end of 2016, Nobia had two stores reported as Discontinued operations and disposal group held for sale, in accordance with IFRS 5. In the first six months of 2017, no change occurred. On 30 June 2017, Nobia had one store in Denmark and one store in Sweden recognised in accordance with IFRS 5.

Loss after tax from discontinued operations during the first half of 2017 amounted to SEK 1 million, of which SEK 0 million pertained to Poggenpohl and a loss of SEK 1 million pertained to stores acquired from franchisees with the intention of subsequently selling on.

Loss after tax for discontinued operations for the first half of 2016 amounted to SEK 16 million, of which a loss of SEK 17 million pertained to Poggenpohl, a profit of SEK 5 million pertaining to the dissolution of a provision related to the divestment of Hygena and a loss of SEK 4 million was related to the stores acquired from franchisees with the intention of subsequently selling on.

Items affecting comparability

Nobia recognises items affecting comparability separately to distinguish the performance of the underlying operations. Items affecting comparability refer to items that affect comparisons insofar as they do not recur with the same regularity as other items. No items affecting comparability (–) were recognised for the first half of 2017.

Personnel

The number of employees at the end of the period was 6,175 (6,565). The decline in the number of employees was mainly attributable to the divestment of Poggenpohl. On 31 December 2016, Poggenpohl had 481 employees.

Changes in the organisation and management

In order to generate efficiency gains, a new organisation will be created with a Chief Product Supply Officer, who will assume overall responsibility for manufacturing and logistics, sourcing, product development and sustainability. The aim of this organisation change is to optimise the supply chain in line with the strategy of capitalising on economies of scale.

Ola Carlsson was appointed Executive Vice President, Chief Product Supply Officer at Nobia. He will take office in the fourth quarter of 2017. Ola Carlsson currently serves as Group Vice President Global Operations at Munters and previously worked as Chief Operations Officer for Electrolux Small Appliances.

New store concept

Nobia is introducing a new store concept that will increase customer involvement, for example, by using digital tools, improving the customer experience and making sales more efficient. The first test store opened under the Sigdal brand in Molde, Norway in April. A store opened in London in June with the same concept for the Magnet brand and a similar store will be opened in Copenhagen in September for the HTH brand.

Transfer of treasury shares

Nobia transferred 110,419 shares in the first half of 2017. The purpose of the transfer was to deliver shares under

the Performance Share Plan resolved by Nobia's 2014 Annual General Meeting.

The 2014 Performance Share Plan encompassed approximately 100 senior executives and was based on participants investing in Nobia shares that were locked into the plan. Each Nobia share invested in under the framework of the plan entitled participants, following a vesting period of approximately three years and provided that certain conditions were fulfilled, to allotment of matching and performance shares in Nobia.

At 30 June 2017, Nobia's holding of treasury shares amounted to 6,709,571 shares.

Significant risks

Nobia is exposed to strategic, operating and financial risks, which are described on pages 37-39 of the 2016 Annual Report.

During the first half of 2017, demand in the Nordic region and Central Europe is deemed to have improved, compared year-on-year. The kitchen market in the UK is deemed to have weakened. Nobia is continuing to capitalise on synergies and economies of scale by harmonising the product range, co-ordinating production and enhancing purchasing efficiency.

Nobia's balance sheet as at 30 June 2017 contained goodwill of SEK 2, 338 million (2, 434). The value of this asset item is tested if there are any indications of a decline in value and at least once annually.

The Board of Directors and CEO assure that the six-month report provides a fair view of the Parent Company's and the Group's operations, financial position and profits, and describes the material risks and uncertainties facing the Parent Company and the companies included in the Group.

Stockholm, 21 July 2017

Tomas Billing Chairman

Nora Førisdal Larssen Lilian Fossum Biner Ricard Wennerklint

Stefan Jacobsson Christina Ståhl Jill Little

George Adams Morten Falkenberg President and CEO

Per Bergström Marie Ströberg Employee representative Employee representative

This interim report is unaudited.

Nobia AB, Corporate Registration Number 556528-2752

Condensed consolidated income statement

	Apr-Jun		Jan-Jun		Jan-Dec	Jul-Jun
SEK m	2016	2017	2016	2017	2016	2016/17
Net sales	3,403	3,408	6,494	6,723	12,648	12,877
Cost of goods sold	-2,038	-2,047	-3,914	-4,071	-7,715	-7,872
Gross profit	1,365	1,361	2,580	2,652	4,933	5,005
Selling and administrative expenses	-950	-945	-1,926	-1,964	-3,682	-3,720
Other income/expenses	5	-3	11	-2	47	34
Operating profit	420	413	665	686	1,298	1,319
Net financial items	-14	-8	-25	-18	-51	-44
Profit/loss after financial items	406	405	640	668	1,247	1,275
Tax	-99	-90	-151	-148	-269	-266
Profit/loss after tax from continuing operations	307	315	489	520	978	1,009
Profit/loss from discontinued operations, net after tax	-5	-1	-16	-1	-523	-508
Profit/loss after tax	302	314	473	519	455	501
Total profit attributable to:
Parent Company shareholders	303	314	474	519	456	501
Non-controlling interests	-1	–	-1	0	-1	0
Total profit/loss	302	314	473	519	455	501
Total depreciation¹	76	71	152	142	287	277
Total impairment¹	0	–	0	–	0	0
Gross margin, %	40.1	39.9	39.7	39.4	39.0	38.9
Operating margin, %	12.3	12.1	10.2	10.2	10.3	10.2
Return on operating capital, %	–	–	–	–	32.5	32.0
Return on shareholders equity, %	–	–	–	–	13.0	13.9
Earnings per share before dilution, SEK2	1.80	1.86	2.82	3.08	2.71	2.97
Earnings per share after dilution, SEK2	1.80	1.86	2.81	3.07	2.70	2.97
Number of shares at period end before dilution, 000s3	168,473	168,584	168,473	168,584	168,473	168,584
Average number of shares before dilution, 000s3	168,473	168,547	168,377	168,510	168,425	168,492
Number of shares after dilution at period end, 000s3	168,676	168,729	168,687	168,728	168,676	168,725
Average number of shares after dilution, 000s3	168,661	168,720	168,652	168,710	168,664	168,702

1 Excluding depreciation and impairment recognised on the line "Profit/loss from discontinued operations, net after tax."

2 Earnings per share attributable to Parent Company shareholders.

3 Excluding treasury shares.

Consolidated statement of comprehensive income

		Jan-Jun		Jan-Dec	Jul-Jun
2016	2017	2016	2017	2016	2016/17
302	314	473	519	455	501
-25	-22	-150	-76	-172	-98
3	15	3	20	-8	9
-1	-3	-1	-4	2	-1
-23	-10	-148	-60	-178	-90
-151	4	-218	38	-312	-56
31	-1	44	-7	49	-2
-120	3	-174	31	-263	-58
-143	-7	-322	-29	-441	-148
159	307	151	490	14	353
160	307	152	490	15	353
-1	–	-1	0	-1	0
159	307	151	490	14	353
		Apr-Jun

Condensed consolidated balance sheet

	30 Jun		31 Dec
SEK m	2016	2017	2016
ASSETS
Goodwill	2,434	2,338	2,359
Other intangible fixed assets	107	118	126
Tangible fixed assets	1,657	1,351	1,384
Long-term receivables, interest-bearing (IB)	4	3	3
Long-term receivables	29	29	28
Deferred tax assets	250	165	176
Total fixed assets	4,481	4,004	4,076
Inventories	987	945	857
Accounts receivable	1,596	1,617	1,240
Current receivables, interest-bearing (IB)	2	18	1
Other receivables	406	418	320
Total current receivables	2,004	2,053	1,561
Cash and cash equivalents (IB)	616	138	1,005
Assets held for sale	4	5 1	506
Total current assets	3,611	3,141	3,929
Total assets	8,092	7,145	8,005
SHAREHOLDERS' EQUITY AND LIABILITIES
Share capital	58	58	58
Other capital contributions	1,478	1,484	1,481
Reserves	-227	-317	-257
Profit brought forward	2,240	2,178	2,133
Total shareholders' equity attributable to Parent Company	3,549	3,403	3,415
shareholders
Non-controlling interests	3	–	4
Total shareholders' equity	3,552	3,403	3,419
Provisions for pensions (IB)	885	819	894
Other provisions	101	98	79
Deferred tax liabilities Other long-term liabilities, interest-bearing (IB)	135 810	85 7	84 6
Total long-term liabilities	1,931	1,009	1,063
Current liabilities, interest-bearing (IB)	7	44	801
Current liabilities	2,601	2,688	2,393
Liabilities attributable to assets held for sale	1	1 1	329
Total current liabilities	2,609	2,733	3,523
Total shareholders' equity and liabilities	8,092	7,145	8,005
BALANCE-SHEET RELATED KEY RATIOS
Equity/assets ratio, %	44	48	43
Debt/equity ratio, %	30	21	14
Net debt, closing balance, SEK m	1,080	711	493
Operating capital, closing balance, SEK m	4,632	4,114	3,912
Capital employed, closing balance, SEK m	5,254	4,273	5,182

1 Change compared with 31 December 2016 primarily due to divestment of Poggenpohl.

Statement of changes in consolidated shareholders' equity

Attributable to Parent Company shareholders

Closing balance, 30 June 2017	58	1,484	-329	12	2,178	3,403	–	3,403
Allocation of share saving schemes	–	3	–	–	–	3	–	3
Change in non-controlling interests	–	–	–	–	–	–	-4	-4
Dividend	–	–	–	–	-505	-505	–	-505
Total comprenhensive income/loss for the period	–	–	-76	16	550	490	0	490
Other comprehensive income/loss for the period	–	–	-76	16	31	-29	0	-29
Profit/loss for the period	–	–	–	–	519	519	0	519
Opening balance, 1 January 2017	58	1,481	-253	-4	2,133	3,415	4	3,419
Closing balance, 30 June 2016	58	1,478	-231	4	2,240	3,549	3	3,552
Allocation of share saving schemes	–	0	–	–	–	0	–	0
Dividend	–	–	–	–	-421	-421	0	-421
Total comprehensive income for the period	–	–	-150	2	300	152	-1	151
Other comprehensive income/loss for the period	–	–	-150	2	-174	-322	0	-322
Profit/loss for the period	–	–	–	–	474	474	-1	473
Opening balance, 1 January 2016	58	1,478	-81	2	2,361	3,818	4	3,822
SEK m	Share capital	Other capital contributions	Exchange-rate differences attributable to translation of foreign operations	Cash flow hedges after tax	Profit brought forward	Total	Non controlling interests	Total shareholders equity

Condensed consolidated cash-flow statement

	Apr-Jun		Jan-Jun		Jan-Dec	Jul-Jun
SEK m	2016	2017	2016	2017	2016	2016/17
Operating activities
Operating profit	420	413	665	686	1,298	1,319
Operating profit/loss for discontinued operations	-8	-1	-15	-2	-466	-453
Depreciation/Impairment	86	71	172 1	142 2	657 3	627
Adjustments for non-cash items	6	0	-1	-24	95	72
Tax paid	-48	-52	-114	-101	-230	-217
Change in working capital	-174	-183	-301	-300	-73	-72
Cash flow from operating activities	282	248	406	401	1,281	1,276
Investing activities
Investments in fixed assets	-52	-61	-108	-117	-290	-299
Other items in investing activities	8	6	18	10	40	32
Interest received	1	0	1	1	1	1
Change in interest-bearing assets	2	-16	3	-17	4	-16
Acquisistion of operations	–	–	0	–	0	–
Divestment of operations	–	-6	–	-85	–	-85
Cash flow from investing activities	-41	-77	-86	-208	-245	-367
Operating cash flow before acquisition/divestment
of operations interest, increase/decrease of interest-bearing assets	238	193	316	294	1,031	1,009
Total cashflow from operating and investing
activities	241	171	320	193	1,036	909
Financing activities
Interest paid	-4	-2	-11	-7	-21	-17
Change in interest-bearing liabilities 5	-17	-781	-30	-807 4	-71	-848
Dividend	-421	-505	-421	-505	-421	-505
Cash flow from financing activities	-442	-1,288	-462	-1,319	-513	-1,370
Cash flow for the period excluding exchange-rate
differences in cash and cash equivalents	-201	-1,117	-142	-1,126	523	-461
Cash and cash equivalents at beginning of the period	804	1,243	765	1,266	765	616
Cash flow for the period	-201	-1,117	-142	-1,126	523	-461
Exchange-rate differences in cash and cash equivalents 5	13	12	-7	-2	-22	-17
Cash and cash equivalents at period-end	616	138	616	138	1,266 6	138

1 Impairment amounted to SEK 2 million and pertained to kitchen displays SEK 1 million and equipment, tools, fixtures and fittings SEK 1 million. 2 No impairment was recognised during the period.

3 Impairment amounted to SEK 332 million and pertained to land and buildings SEK 151 million, plant and machinery SEK 28 million, equipment, tools, fixtures and fittings SEK 47 million, kitchen displays SEK 46 million, goodwill SEK 58 million and other tangible assets SEK 2 million.

4 Repayment of loan totalling SEK 800 million. No repayment or raising of loans during the corresponding period 2016 or the full year 2016. 5 Refer to Note 1 on page 16.

6 Of which SEK 261 million is recognised on the line Assets held for sale.

Analysis of net debt

	Apr-Jun		Jan-Jun		Jan-Dec	Jul-Jun
SEK m	2016	2017	2016	2017	2016	2016/17
Opening balance	768	396	774	493	774	1,080
Acquisition of operations	–	–	0	–	0	–
Divestment of operations	–	6	–	23	–	23
Translation differences	-31	-9	-40	1	-31	10
Operating cash flow	-238	-193	-316	-294	-1,031	-1,009
Interest paid, net	3	2	10	6	20	16
Remeasurements of defined benefit pension plans	151	-4	218	-38	312	56
Other change in pension liabilities	6	8	13	15	28	30
Dividend	421	505	421	505	421	505
Closing balance	1,080	711	1,080	711	493	711

Note 1 – Accounting policies

This interim report has been prepared in accordance with IFRS, with the application of IAS 34 Interim Financial Reporting. For the Parent Company, accounting policies are applied in accordance with Chapter 9, Interim Reports, of the Swedish Annual Accounts Act. Nobia has applied the same accounting policies in this interim report as were applied in the 2016 Annual Report.

Consolidated cash-flow statement – correction of error

Earlier periods have been restated to reflect the discovery of error in the classification of translation effects of cash and cash equivalents in the cash-flow statement. These translation effects were historically recognised in financing activities on the line "Change in interest-bearing liabilities" but have been corrected and are now recognised as "Exchange-rate differences in cash and cash equivalents." Corrections for historical periods are as follows:

Apr-Jun 2016 SEK -15 million Jan-Jun 2016 SEK -29 million Jan-Dec 2016 SEK -59 million

Note 2 – References

Segment information, pages 2 and 6. Loan and shareholders' equity transactions, page 7. Divestment of operations, pages 7 and 8. Items affecting comparability, page 8.

Note 3 – Financial instruments – fair value

The carrying amounts of the Group's financial assets and liabilities are recognised at amortised cost, corresponding to a reasonable approximation of their fair values. Financial instruments measured at fair value in the balance sheet are forward agreements comprising assets at a value of SEK 44 million (31 Dec 2016: 9) and liabilities at a value of SEK 26 million (31 Dec 2016: 12). The measurement of these items is attributable to level 2 of the fair value hierarchy, meaning based on indirectly observable market data. The supplementary purchase consideration of SEK 53 million pertaining to the acquisition of Commodore and CIE is conditional upon the business performance and is valued at level 3 of the fair value hierarchy. During the fourth quarter of 2016, SEK 22 million was paid out. The remaining provision amounts to SEK 22 million restated at the applicable balance-sheet date.

Note 4 – Related-party transactions

The Parent Company invoiced Group-wide services to subsidiaries in an amount of SEK 109 million (115) during the first half of 2017. The Parent Company reported a loss of SEK 4 million (0) from participations in Group companies.

Parent Company

Condensed Parent Company income statement

	Apr-Jun		Jan - Jun		Jan-Dec	Jul-Jun
SEK m	2016	2017	2016	2017	2016	2016/17
Net sales	56	57	115	115	219	219
Administrative expenses	-72	-81	-142	-154	-301	-313
Operating loss	-16	-24	-27	-39	-82	-94
Profit from shares in Group companies	–	-3	–	-4	-76	-80
Other financial income and expenses	2	-9	4	-15	-1	-20
Profit/loss after financial items	-14	-36	-23	-58	-159	-194
Tax on profit/loss for the period	-1	0	-1	0	-20	-19
Profit/loss for the period	-15	-36	-24	-58	-179	-213

Parent Company balance sheet

	30 Jun	31 Dec
SEK m	2016	2017	2016
ASSETS
Fixed assets
Shares and participations in Group companies	2,086	1,378	1,469
Deferred tax assets	0	5	0
Total fixed assets	2,086	1,383	1,469
Current assets
Current receivables
Accounts receivable	2	7	1
Receivables from Group companies Other receivables	2,645 9	2,332 45	2,868 3
Prepaid expenses and accrued income	45	49	47
Cash and cash equivalents	364	56	949
Total current assets	3,065	2,489	3,868
Total assets	5,151	3,872	5,337
SHAREHOLDERS' EQUITY, PROVISIONS AND LIABILITIES
Shareholders' equity
Restricted shareholders' equity
Share capital	58	58	58
Statutory reserve	1,671	1,671	1,671
	1,729	1,729	1,729
Non-restricted shareholders' equity
Share premium reserve	52	52	52
Buy-back of shares	-391	-391	-391
Profit brought forward	1,945	1,267	1,948
Profit/loss for the period	-24	-58	-179
	1,582	870	1,430
Total shareholders' equity	3,311	2,599	3,159
Long term liabilities
Provisions for pensions	15	16	16
Deferred tax liabilities	0	5	0
Liabilities to credit institutes	800	–	–
Total long-term liabilities	815	21	16
Current liabilities
Liabilities to credit institutes	–	43	800
Accounts payable	15	29	15
Liabilities to Group companies	987	1,102	1,276
Other liabilities	3	55	27
Accrued expenses and deferred income	20	23	44
Total current liabilities	1,025	1,252	2,162
Total shareholders' equity, provisions and liabilities	5,151	3,872	5,337

Comparative data per region

	Apr-Jun		Jan-Jun		Jan-Dec	Jul-Jun
Net sales, SEK m	2016	2017	2016	2017	2016	2016/17
Nordic	1,626	1,756	3,024	3,428	5,988	6,392
UK	1,633	1,520	3,211	3,047	6,122	5,958
Central Europe	144	133	261	249	541	529
Group-wide and eliminations	0	-1	-2	-1	-3	-2
Group	3,403	3,408	6,494	6,723	12,648	12,877
	Apr-Jun		Jan-Jun		Jan-Dec	Jul-Jun
Gross profit, SEK m	2016	2017	2016	2017	2016	2016/17
Nordic	673	721	1,221	1,392	2,402	2,573
UK	636	588	1,257	1,158	2,323	2,224
Central Europe	50	42	86	78	172	164
Group-wide and eliminations	6	10	16	24	36	44
Group	1,365	1,361	2,580	2,652	4,933	5,005
	Apr-Jun		Jan-Jun		Jan-Dec	Jul-Jun
Gross margin, %	2016	2017	2016	2017	2016	2016/17
Nordic	41.4	41.1	40.4	40.6	40.1	40.3
UK	38.9	38.7	39.1	38.0	37.9	37.3
Central Europe	34.7	31.6	33.0	31.3	31.8	31.0
Group	40.1	39.9	39.7	39.4	39.0	38.9
	Apr-Jun		Jan-Jun		Jan-Dec	Jul-Jun
Operating profit, SEK m	2016	2017	2016	2017	2016	2016/17
Nordic	271	297	434	509	856	931
UK	175	154	286	250	545	509
Central Europe	13	5	18	9	37	28
Group-wide and eliminations	-39	-43	-73	-82	-140	-149
Group	420	413	665	686	1,298	1,319
	Apr-Jun		Jan-Jun		Jan-Dec	Jul-Jun
Operating margin, %	2016	2017	2016	2017	2016	2016/17
Nordic	16.7	16.9	14.4	14.8	14.3	14.6
UK	10.7	10.1	8.9	8.2	8.9	8.5
Central Europe	9.0	3.8	6.9	3.6	6.8	5.3
Group	12.3	12.1	10.2	10.2	10.3	10.2

Quarterly data per region

		2016			2017
Net sales, SEK m	I	II	III	IV	I	II
Nordic	1,398	1,626	1,355	1,609	1,672	1,756
UK	1,578	1,633	1,495	1,416	1,527	1,520
Central Europe	117	144	150	130	116	133
Group-wide and eliminations	-2	0	-1	0	0	-1
Group	3,091	3,403	2,999	3,155	3,315	3,408
		2016			2017
Gross profit, SEK m	I	II	III	IV	I	II
Nordic	548	673	537	644	671	721
UK	621	636	573	493	570	588
Central Europe	36	50	50	36	36	42
Group-wide and eliminations	10	6	10	10	14	10
Group	1,215	1,365	1,170	1,183	1,291	1,361
		2016			2017
Gross margin, %	I	II	III	IV	I	II
Nordic	39.2	41.4	39.6	40.0	40.1	41.1
UK	39.4	38.9	38.3	34.8	37.3	38.7
Central Europe	30.8	34.7	33.3	27.7	31.0	31.6
Group	39.3	40.1	39.0	37.5	38.9	39.9
		2016			2017
Operating profit, SEK m	I	II	III	IV	I	II
Nordic	163	271	185	237	212	297
UK	111	175	166	93	96	154
Central Europe	5	13	14	5	4	5
Group-wide and eliminations	-34	-39	-29	-38	-39	-43
Group	245	420	336	297	273	413
		2016			2017
Operating margin, %	I	II	III	IV	I	II
Nordic	11.7	16.7	13.7	14.7	12.7	16.9
UK	7.0	10.7	11.1	6.6	6.3	10.1
Central Europe	4.3	9.0	9.3	3.8	3.4	3.8
Group	7.9	12.3	11.2	9.4	8.2	12.1

Reconciliation of alternative performance measures

Nobia presents certain financial performance measures in the interim report that are not defined according to IFRS, known as alternative performance measures. Nobia believes that these measures provide valuable complementary information to investors and the company's management since they facilitate assessments of trends and the company's performance. Because not all companies calculate performance measures in the same way, these are not always comparable with those measures used by other companies. Consequently, the performance measures are not to be seen as replacements for measures defined according to IFRS. For definitions of the performance measures that Nobia uses, see pages 22-24.

	Apr-Jun		Jan-Jun
Analysis of net sales Nordic Region	%	SEK m	%	SEK m
2016		1,626		3,023
Organic growth	5	77	10	302
Currency effect	3	53	3	103
2017	8	1,756	13	3,428

	Apr-Jun			Jan-Jun
Analysis of net sales UK Region	%	SEK m	%	SEK m
2016		1,633		3,211
Organic growth	-2	-40	2	52
Currency effect	-4	-70	-6	-207
Sales to Hygena	0	-3	0	-9
2017	-7	1,520	-5	3,047

	Apr-Jun			Jan-Jun
Analysis of net sales Central Europe Region	%	SEK m	%	SEK m
2016		144		260
Organic growth	-12	-17	-7	-19
Currency effect	4	5	3	7
2017	-8	132	-5	248

	Apr-Jun		Jan-Jun		Jan-Dec	Jul-Jun
Operating profit before depreciation and impairment, SEK m	2016	2017	2016	2017	2016	2016/17
Operating profit	420	413	665	686	1,298	1,319
Depreciation and impairment	76	71	152	142	287	277
Operating profit before depreciation and impairment	496	484	817	828	1,585	1,596
Net sales	3,403	3,408	6,494	6,723	12,648	12,877
% of Net sales	14.6%	14.2%	12.6%	12.3%	12.5%	12.4%

	Apr-Jun		Jan-Jun		Jan-Dec	Jul-Jun
Profit/loss after tax excluding IAC, SEK m	2016	2017	2016	2017	2016	2016/17
Profit/loss after tax	302	314	473	519	455	501
Items affecting comparability net after tax	–	–	–	–	448	448
Profit/loss after tax excluding IAC	302	314	473	519	903	949

Reconciliation of alternative performance measures, cont.

	30 Jun		31 Dec
Net debt SEKm	2016	2017	2016
Provisions for pensions (IB)	885	819	894
Other long-term liabilities, interest-bearing (IB)	810	7	6
Current liabilities, interest-bearing (IB)	7	44	801
Interest-bearing liabilities booked as liabilities attributable	–	–	62
to assets held for sale (IB)
Interest-bearing liabilities	1,702	870	1,763
Long-term receivables, interest -bearing (IB)	-4	-3	-3
Current receivables, interest-bearing (IB)	-2	-18	-1
Interest-bearing assets booked as assets held for sale (IB)	–	–	-261
Cash and cash equivalents (IB)	-616	-138	-1,005
Interest-bearing assets	-622	-159	-1,270
Net debt	1,080	711	493
	30 Jun		31 Dec
Operating capital SEK m	2016	2017	2016
Total assets	8,092	7,145	8,005
Other provisions	-101	-98	-79
Deferred tax liabilities	-135	-85	-84
Current liabilities, non interest-bearing	-2,601	-2,688	-2,393
Liabilities attributable to assets held for sale, non interest
bearing	-1	-1	-267
Non-interest-bearing liabilities	-2,838	-2,872	-2,823
Capital employed	5,254	4,273	5,182
Interest-bearing assets	-622	-159	-1,009
Interest-bearing assets booked as assets held for sale (IB)	–	–	-261
Operating capital	4,632	4,114	3,912
		Jan-Dec	Jul-Jun
Average operating capital SEK m		2016	2016/17
OB Operating capital		4,596	4,632
OB Net operating assets discontinued operations		-535	-502
CB Operating capital		3,912	4,114
CB Net operating assets discontinued operations		22	-4
Average operating capital before adjustments of acquistion and
divestments		3,998	4,120
Adjustment for acquisitions and divestments not occurred in the middle
of the period		0	–
Average operating capital		3,998	4,120
		Jan-Dec	Jul-Jun
Average equity SEK m		2016	2016/17
OB Equity attributable to Parent Company shareholders		3,818	3,549
CB Equity attributable to Parent Company shareholders		3,415	3,403
Average equity before adjustment of increases and decreases in capital		3,617	3,476
Adjustment for increases and decreases in capital not occured in the
middle of the period		-106	126
Average equity		3,511	3,602

Definitions

Performance measure	Calculation	Purpose
Return on shareholders' equity	Net profit for the period as a percentage of average shareholders' equity attributable to Parent Company shareholders based on opening and closing balances for the period. The calculation of average shareholders' equity has been adjusted for increases and	Return on equity shows the total return on shareholders' capital in accounting terms and reflects the effects of both the operational profitability and financial gearing. The measure is primarily used to analyse shareholder profitability over time.
Return on operating capital	decreases in capital. Operating profit as a percentage of average operating capital based on opening and closing balances for the period excluding net assets attributable to discontinued operations. The calculation of average operating capital has been adjusted for acquisitions and divestments.	Return on operating capital shows how well the operations use net capital that is tied up in the company. It reflects how both cost and capital-efficient net sales are generated, meaning the combined effect of the operating margin and the turnover rate of operating capital. The measure is used in profitability comparisons between operations in the Group and to assess the Group's profitability over time.
Gross margin	Gross profit as a percentage of sales.	This measure reflects the efficiency of the part of the operations that is primarily linked to production and logistics. It is used to measure cost efficiency in this part of the operations.
EBITDA	Earnings before depreciation/amortisation and impairment.	To simplify, the measure shows the earnings generating cash flow in the operations. It provides a view of the ability of the operations, in absolute terms, to generate resources for investment and payment to financers and is used for comparisons over time.
Items affecting comparability	Items that affect comparability in so far as they do not reoccur with the same regularity as other items.	Reporting items affecting comparability separately clearly shows the performance of the underlying operations.
Net debt	Interest-bearing liabilities less interest bearing assets. Interest-bearing liabilities include pension liabilities.	Net debt is used to monitor the debt trend and see the level of the refinancing requirement. The measure is used as a component in the debt/equity ratio.
Operating capital	Capital employed excluding interest bearing assets.	Operating capital shows the amount of capital required by the operations to conduct its core operations. It is mainly used to calculate the return on operating capital.

Performance measure	Calculation	Purpose
Operating cash flow	Cash flow from operating activities including cash flow from investing activities, excluding cash flow from acquisitions/divestments of operations, interest received, increase/decrease in interest-bearing assets.	This measure comprises the cash flow generated by the underlying operations. The measure is used to show the amount of funds at the company's disposal for paying financers of loans and equity or for use in growth through acquisitions.
Organic growth	Change in net sales, excluding acquisitions, divestments and changes in exchange rates.	Organic growth facilitates a comparison of sales over time by comparing the same operations and excluding currency effects.
Region	Region corresponds to an operating segment under IFRS 8.
Earnings per share	Net profit for the period divided by a weighted average number of outstanding shares during the period.
Operating margin	Operating profit as a percentage of net sales.	The measure reflects the operating profitability of the operations. It is used to monitor the flexibility and efficiency of the operations before taking into account capital tied up. The performance measure is used both internally in governance and monitoring of the operation, and for benchmarking with other companies in the industry.
Debt/equity ratio	Net debt as a percentage of shareholders' equity including non-controlling interests.	A measure of the ratio between the Group's two forms of financing. The measure shows the percentage of the loan capital in relation to capital invested by the owners, and is thus a measure of financial strength but also the gearing effect of lending. A higher debt/equity ratio means a higher financial risk and higher financial gearing.
Equity/assets ratio	Shareholders' equity including non controlling interests as a percentage of balance-sheet total.	This measure reflects the company's financial position and thus its long-term solvency. A healthy equity ratio/strong financial position provides preparedness for managing periods of economic downturns and financial preparedness for growth. It also provides a minor advantage in the form of financial gearing.
Capital employed	Balance-sheet total less non-interest bearing provisions and liabilities.	The capital that shareholders and lenders have placed at the company's disposal. It shows the net capital invested in the operations, such as operating capital, with additions for financial assets.

Performance measure	Calculation	Purpose
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).

Information to shareholders

For further information

Contact any of the following on +46 (0)8 440 16 00 or +46 (0)705 95 51 00:

• Morten Falkenberg, President and CEO
• Kristoffer Ljungfelt, CFO
• Lena Schattauer, Head of Communication and Investor Relations

Presentation

The interim report will be presented on Friday, 21 July at 2:00 p.m. CET in a webcast teleconference that can be followed on Nobia's website. To participate in the teleconference, call one of the following numbers:

• From Sweden: +46 (0)8 505 564 74
• From the UK: +44 (0)203 364 5374
• From the US: +1 855 753 22 30

Financial calendar

27 October 2017	Interim report January-September 2017
6 February 2018	Interim report January-December 2017
10 April 2018	Annual General Meeting 2018
27 April 2017	Interim report January-March 2017

This information is such that Nobia is obliged to made public pursuant to the EU's Market Abuse Regulation and the Swedish Securities Market Act. The information was submitted for publication, through the agency of the contact person set out above, on 21 July 2017 at 1:00 p.m. CET.

Nobia develops and sells kitchens through some twenty strong brands in Europe, including Magnet in the UK; HTH, Norema, Sigdal, Invita, Marbodal in Scandinavia; Petra and A la Carte in Finland and Ewe, FM and Intuo in Austria. Nobia generates profitability by combining economies of scale with attractive kitchen offerings. The Group has approximately 6,000 employees and net sales of about SEK 13 billion. The Nobia share is listed on the Nasdaq Stockholm under the ticker NOBI. Website: www.nobia.com

Box 70376 • 107 24 Stockholm, Sweden • Office address: Klarabergsviadukten 70 A5 • Tel +46 8 440 16 00 • Fax +46 8 503 826 49 • www.nobia.com. Corporate Registration Number: 556528–2752 • Board domicile: Stockholm, Sweden