Nolato B

Quarterly Report • Jul 17, 2020

INTERIM REPORT 2020

January June

Significant sales growth and good earnings performance by the Group

Second quarter of 2020 in brief

• Sales increased to SEK 2,307 million (1,987)
• Operating profit (EBITA) rose to SEK 269 million (233)
• EBITA margin of 11.7% (11.7)
• Profit after tax was SEK 207 million (180)
• Diluted earnings per share increased to SEK 7.79 (6.81)
• Cash flow after investment amounted to SEK 685 million (178)

First six months of 2020 in brief

• Sales increased to SEK 4,372 million (3,643)
• Operating profit (EBITA) rose to SEK 496 million (408)
• Diluted earnings per share were SEK 14.45 (11.77)
• Cash flow after investment amounted to SEK 612 million (203)
• Sustained strong financial position

Nolato AB (publ) sixmonth interim report 2020 Comments from the President and CEO

All three of our business areas performed well in the second quarter, given the current operating climate. The Group achieved strong growth of 12% adjusted for currency and acquisitions, and EBITA increased to SEK 269 million (233), which is the best ever quarter in Nolato's history.

Medical Solutions' overall performance was strong. Production in some segments such as laboratory products and respiratory aids saw increased demand owing to the coronavirus situation. However, products in areas such as surgery were negatively affected as a result of fewer operations taking place. Sales growth, adjusted for currency, was a strong 9% on the back of increased production volumes. The margin was a substantial 14.3% as a result of higher volumes and a favourable sales mix.

The significant growth in Integrated Solutions continued in the quarter, in line with what has previously been communicated, driven in part by a buildup of inventory by customers of vaporiser heating products (VHP). Adjusted for currency and acquisitions, sales rose by 32% with a very strong margin of 14.4%. The buildup of inventory is believed to be a contingency amid the ongoing pandemic as new product variants are rolled out. Inventory buildup is expected to decrease in the third quarter, but with sustained healthy volumes. Performance in the EMC area has returned to normal levels and developed well, having been significantly affected by the coronavirus situation for parts of the first quarter. Mobile phone volumes remained weak in the quarter as a result of the coronavirus situation in Asia.

The quarter began for Industrial Solutions with its customers in the automotive industry, which account for around 40% of its sales, halting operations because of coronavirus. Production has gradually come back on line since the middle of the quarter, but at much lower volumes than last year, with a significant impact on the business area's margin. New customer projects within general industry that started late last year are continuing to make a positive contribution to the business area's sales and profit. Overall, and taking account of the slowdown in the automotive industry in the quarter, Industrial Solutions achieved expected performance with sustained good market positions.

Christer Wahlquist, President and CEO, Nolato AB

"Nolato is a profitable,

sustainable and innovative company at the cutting edge of technology. Supported by a strong financial position that provides us with flexibility, we are well equipped to respond to the opportunities of the future with continued good profitability and growth."

Group highlights

		Q2	Q2	Q1 ­ Q2	Q1 ­ Q2	Rolling	Full year
SEK million unless otherwise specified	Note	2020	2019	2020	2019	12 months	2019
Net sales	1	2,307	1,987	4,372	3,643	8,648	7,919
Operating profit (EBITDA)		360	321	679	580	1,362	1,263
Operating profit (EBITA)		269	233	496	408	983	895
EBITA margin, %		11.7	11.7	11.3	11.2	11.4	11.3
Operating profit (EBIT)	2	267	232	492	405	974	887
Profit after financial income and expense	2	257	223	478	389	946	857
Profit after tax		207	180	384	311	776	703
Basic earnings per share, SEK	3	7.79	6.82	14.46	11.80	29.24	26.60
Diluted earnings per share, SEK	3	7.79	6.81	14.45	11.77	29.24	26.60
Basic adjusted earnings per share, SEK	3	7.83	6.82	14.57	11.88	29.51	26.82
Diluted adjusted earnings per share, SEK	3	7.82	6.81	14.57	11.84	29.50	26.82
Cash flow after investm., excl. acquis. and disposals		685	178	612	203	1,209	800
Net investm affecting cash flow, excl. acq. and disp.		63	87	133	192	301	360
Cash conversion, %		—	—	—	—	120	88
Return on capital employed, %		23.4	23.6	23.4	23.6	23.4	23.1
Return on shareholders' equity, %		25.9	24.5	25.9	24.5	25.9	25.5
Equity/assets ratio, %		51	47	51	47	51	48
Net financial assets, excl. pension­ & lease liabilities		1,245	190	1,245	190	1,245	666

See definitions of IFRS measures and alternative performance measures on page 23.

Including a nonrecurring item of SEK −14 million in operaƟng profit in Q1 2020 and tax effects of SEK +3 million, which impacted profit aŌer tax by SEK −11 million.

Including a nonrecurring item of SEK −22 million in operaƟng profit in Q4 2019 and tax effects of SEK +6 million, which impacted profit aŌer tax by SEK −16 million.

This document is a translation from Swedish. In the event of any difference between this version and the Swedish original, the latter shall prevail.

Second quarter 2020

• Sales totalled SEK 2,307 million (1,987); adjusted for currency and acquisitions, sales increased by a substantial 12%
• Strong performance by Medical Solutions and Integrated Solutions
• Operating profit (EBITA) rose to SEK 269 million (233)
• EBITA margin of 11.7% (11.7) Sales
• Very strong cash flow after investment of SEK 685 million (178)

Sales

Consolidated sales totalled SEK 2,307 million (1,987). Adjusted for currency and acquisitions, this was an increase of a substantial 12%.

Medical Solutions sales amounted to SEK 700 million (634); adjusted for currency, sales increased by a strong 9%. Growth in production volumes was robust, primarily in segments that have benefitted as a result of the coronavirus situation, including diagnostics.

Integrated Solutions sales increased significantly to SEK 1,149 million (821), driven mainly by high demand for vaporiser heating products (VHP). Adjusted for currency and acquisitions, sales increased by a substantial 32%. Inventory buildup by VHP customers continued to make a positive contribution in the quarter. This has taken place in conjunction with the rollout of new product variants. Nolato believes the inventory buildup situation is returning to normal levels from the third quarter, but at sustained healthy volumes. Growth in the EMC area was good, while volumes for mobile phones remained weak in the quarter.

Industrial Solutions sales amounted to SEK 459 million (541); adjusted for currency, sales decreased by 16%. As previously assessed by Nolato, demand from automotive industry customers was significantly impacted by the suspension of operations for periods of the quarter. Production subsequently resumed at low volumes, and gradually increased over the quarter. Nolato believes that, in combination with the summer holiday period, the coronavirus situation will continue to have a negative impact on demand in this business area over the third quarter.

Strong performance by Medical and Integrated

• Operating profit (EBITA)

• EBITA margin

The Group's operating profit (EBITA) increased to SEK 269 million (233). Operating profit (EBITA) increased to SEK 100 million (82) for Medical Solutions and to SEK 166 million (107) for Integrated Solutions. Industrial Solutions operating profit decreased to SEK 11 million (46).

The EBITA margin for Medical Solutions rose to a very strong 14.3% (12.9). The increase was due to high volumes and a favourable sales mix. For Integrated Solutions, the margin was a very strong 14.4% (13.0). Higher volumes have contributed to the increased margin, along with the business area receiving a general contribution equivalent to just over SEK 10 million from Chinese authorities. This compensation boosted the margin by slightly more than 1 percentage point. The EBITA margin for Industrial Solutions was 2.4% (8.5). The lower volumes, in particular for the automotive industry, affected the margin. In addition, redundancy costs of close to SEK 10 million have had a negative impact of just under 2 percentage points. Overall, the Group's EBITA margin was a very strong 11.7% (11.7).

Operating profit (EBIT) was SEK 267 million (232).

Profit after net financial income/expense rose to SEK 257 million (223). Profit after tax was SEK 207 million (180). Diluted earnings per share stood at SEK 7.79 (6.81). Adjusted earnings per share after dilution but excluding amortisation of intangible assets arising from acquisitions amounted to SEK 7.82 (6.81).

Profit • Adjusted basic earnings per share

	Sales	Sales	Oper. prof.	Oper. prof.	EBITA marg.	EBITA marg.
SEK million	Q2/2020	Q2/2019	Q2/2020	Q2/2019	Q2/2020	Q2/2019
Medical Solutions	700	634	100	82	14.3%	12.9%
Integrated Solutions	1,149	821	166	107	14.4%	13.0%
Industrial Solutions	459	541	11	46	2.4%	8.5%
Intra­Group adj., Parent Co	– 1	– 9	– 8	– 2	—	—
Group total	2,307	1,987	269	233	11.7%	11.7%

Sales, operating profit (EBITA) and EBITA margin by business area

Operating profit (EBITA): Earnings before financial income and expense, taxes and amortisation of intangible assets arising from acquisitions.

First six months 2020

Consolidated sales totalled SEK 4,372 million (3,643) for the first six months of 2020. Adjusted for currency and acquisitions, this was a substantial increase of 14%.

Sales for Medical Solutions rose by 8% to SEK 1,342 million (1,245), while for Integrated Solutions they increased by an exceptional 50% to SEK 2,003 million (1,333) and decreased for Industrial Solutions by 4% to SEK 1,029 million (1,074).

The Group's operating profit (EBITA) increased to SEK 510 million (408), excluding a nonrecurring item of SEK −14 million. Including nonrecurring items, profit amounted to SEK 496 million (408). Overall, the Group's EBITA margin was 11.7% (11.2%) excluding nonrecurring items.

Operating profit (EBIT) rose to SEK 506 million (405), excluding nonrecurring items. Including nonrecurring items, profit amounted to SEK 492 million (405). In January Nolato announced that it plans to consolidate operations in UKbased Nolato Jaycare and that one of its production plants is to be closed by December 2020. The cost of the closure is estimated at approximately SEK 36 million, of which around SEK 30 million affects cash flow. Nonrecurring costs of SEK 22 million were expensed in the fourth quarter of 2019 and the remaining SEK 14 million was expensed in the first quarter of 2020. These nonrecurring items were recognised at Group level and have consequently not affected the profit of the business areas.

Profit after net financial income/expense was SEK 478 million (389). Profit after tax was SEK 384 million (311). Diluted earnings per share were SEK 14.45 (11.77). Excluding nonrecurring items, diluted earnings per share were SEK 14.87 (11.77). Adjusted earnings per share after dilution but excluding amortisation of intangible assets arising from acquisitions amounted to SEK 14.57 (11.84). The effective tax rate was 19.7% (20.1).

Return on capital employed was 23.4% for the last 12month period (23.1% for the 2019 calendar year). Return on equity was 25.9% for the last 12 months (25.5% for the 2019 calendar year).

Medical Solutions •

Sales and profit 6 months (SEK million)	2020	2019
Sales	1,342	1,245
Operating profit (EBITA)	187	160
EBITA margin (%)	13.9	12.9
Operating profit (EBIT)	186	159

Medical Solutions sales amounted to SEK 1,342 million (1,245); adjusted for currency, sales increased by 5%. Growth in production volumes was robust, primarily in segments that have benefitted as a result of the coronavirus situation, including diagnostics. Project revenues have decreased as projects for new products that Nolato is involved in have been delayed owing to the coronavirus situation.

Operating profit (EBITA) rose to SEK 187 million (160).

The EBITA margin grew to a strong 13.9% (12.9). The increase was due to high volumes and a favourable sales mix.

Medical Solutions sales

• Medical Solutions operating profit (EBITA) & EBITA margin %

Integrated Solutions

Sales and profit 6 months (SEK million)
Sales	2,003	1,333
Operating profit (EBITA)	277	164
EBITA margin (%)	13.8	12.3
Operating profit (EBIT)	276	164

Integrated Solutions sales increased sharply to SEK 2,003 million (1,333), driven mainly by high demand in vaporiser heating products (VHP). Adjusted for currency and acquisitions, sales increased by an exceptional 39%. Inventory buildup by VHP customers made a positive contribution in the period. This has taken place in conjunction with the rollout of new product variants. Nolato believes the inventory buildup situation is returning to normal levels from the third quarter, but at sustained healthy volumes. Growth in the EMC area was good, while mobile phone volumes remained weak.

Operating profit (EBITA) rose to SEK 277 million (164).

The EBITA margin grew to a very strong 13.8% (12.3). Higher volumes contributed to the increased margin, along with the business area receiving a general contribution from Chinese authorities. This contribution boosted the margin by more than half a percentage point.

2020 2019 Integrated Solutions sales

• Integrated Solutions operating profit (EBITA) & EBITA margin %

Industrial Solutions •

Sales and profit 6 months (SEK million)	2020	2019
Sales	1,029	1,074
Operating profit (EBITA)	58	90
EBITA margin (%)	5.6	8.4
Operating profit (EBIT)	56	88

Industrial Solutions sales amounted to SEK 1,029 million (1,074); adjusted for currency, sales decreased by 6%. New customer projects within general industry that started late last year continued to make a positive contribution. The hygiene area, which saw low volumes in the first half of last year, has returned to normal levels. As previously assessed by Nolato, demand from automotive industry customers was significantly impacted by the suspension of operations for periods during the second quarter. Production resumed in the second half of May at low volumes, and gradually increased over the quarter. Nolato believes that, in combination with the summer holiday period, the coronavirus situation will continue to have a negative impact on demand in this business area in the third quarter.

Operating profit (EBITA) was SEK 58 million (90).

The EBITA margin was 5.6% (8.4). The lower volumes, in particular for the automotive industry, affected the margin. In addition, redundancy costs had a negative impact of just under 1 percentage point.

Industrial Solutions sales

• Industrial Solutions operating profit (EBITA) & EBITA margin %

Cash flow •

Cash flow after investment in the second quarter amounted to a very strong SEK 685 million (178). The strong cash flow was mainly due to a temporary sharp decrease in tiedup working capital. The inventory levels have normalised following the temporary rise in the first quarter that resulted from the coronavirus situation. Trade receivables were relatively low at the end of the period owing to a mix of fairly high sales with short credit periods in the second quarter, and through accrual effects with quicker settlement of sold trade receivables. Strong earnings and a low level of investment also contributed.

Net investment affecting cash flow decreased to SEK 63 million (87). Cash flow in the first half of the year rose to SEK 612 million (203). The change in cash flow was due to strong earnings, reduced investment, and in particular to the decrease in tiedup working capital. On an accumulated basis, investment affecting cash flow totalled SEK 133 million (192). Cash conversion for the last 12 months increased to 120% (88% for the 2019 calendar year). Nolato's annual general meeting resolved to postpone any decision regarding a dividend. Consequently, no dividend was paid in the second quarter, which has affected cash flow in terms of financing activities compared with the same period last year, when SEK 368 million was paid to shareholders.

Interestbearing assets increased to SEK 1,906 million (828), and interestbearing financial liabilities rose to SEK 661 million (638). Net financial assets consequently totalled SEK 1,245 million (190). The positive cash flow over the past 12month period has increased net financial assets, and no dividend has been paid. There are also interestbearing pension liabilities of SEK 256 million (196) and interestbearing lease liabilities of SEK 245 million (331). Shareholders' equity rose to SEK 3,353 million (2,604). The equity/assets ratio was 51% (47).

Financial position

SEK million	30/06/2020	30/06/2019	31/12/2019
Interest­bearing liabilities, credit institutions	– 661	– 638	– 696
Cash and bank	1,906	828	1,362
Net financial assets	1,245	190	666
Interest­bearing pension liabilities	– 256	– 196	– 246
Net financial assets (+) / liabilities (–), incl. pension liabilities	989	– 6	420
Lease liabilities	– 245	– 331	– 277
Net financial assets (+) / liabilities (–), including pension­ & lease liabilities	744	– 337	143
Working capital	93	361	280
As a percentage of sales (average) (%)	2.6	3.1	3.2
Capital employed	4,514	3,771	4,184
Return on capital employed (average) (%)	23.4	23.6	23.1
Shareholders' equity	3,353	2,604	2,966
Return on shareholders' equity (average) (%)	25.9	24.5	25.5

Cash flow after investments

Excluding acquisitions and disposals

Consolidated performance analysis

		Q2	Q2	Q1 ­ Q2	Q1 ­ Q2	Rolling	Full year
SEK million	Note	2020	2019	2020	2019	12 months	2019
Net sales	1	2,307	1,987	4,372	3,643	8,648	7,919
Gross profit excl. depreciation/amortisation		454	402	860	755	1,717	1,612
As a percentage of net sales		19.7	20.2	19.7	20.7	19.9	20.4
Costs		– 94	– 81	– 181	– 175	– 355	– 349
As a percentage of net sales		4.1	4.1	4.1	4.8	4.1	4.4
Operating profit (EBITDA)		360	321	679	580	1,362	1,263
As a percentage of net sales		15.6	16.2	15.5	15.9	15.7	15.9
Depreciation and amortisation		– 91	– 88	– 183	– 172	– 379	– 368
Operating profit (EBITA)		269	233	496	408	983	895
As a percentage of net sales		11.7	11.7	11.3	11.2	11.4	11.3
Amortisation of intangible assets arising fr. acquis.		– 2	– 1	– 4	– 3	– 9	– 8
Operating profit (EBIT)	2	267	232	492	405	974	887
Financial income and expense	2	– 10	– 9	– 14	– 16	– 28	– 30
Profit after financial income and expense	2	257	223	478	389	946	857
Tax		– 50	– 43	– 94	– 78	– 170	– 154
As a perc. of profit after financial inc. and exp.		19.5	19.3	19.7	20.1	18.0	18.0
Profit after tax		207	180	384	311	776	703

Personnel • Contact:

The average number of employees during the period was 6,118 people (5,521). The increase in the number of employees is especially attributable to Integrated Solutions in China.

Significant risks and uncertainty factors

The business risks and risk management of the Group and the Parent Company, along with the management of financial risks, are described in the 2019 Annual Report on pages 53 – 55, and in Note 30 on pages 79 – 82.

No significant events have occurred during the period that would significantly affect or change these descriptions of the Group's and the Parent Company's risks or the management thereof.

Seasonal effects

Nolato does not experience any significant seasonal variations. However, in the third quarter sales within Industrial Solutions, and to a certain degree Medical Solutions, can be negatively affected by the fact that the holiday period falls in this quarter both for Nolato and its customers.

Events after the balance sheet date

No significant events have occurred since the end of the period, but Nolato is operating in an environment that at the time of this report's publication is affecting the Group in various ways by Covid19, particularly the Industrial Solutions business area.

• Christer Wahlquist, President and CEO, tel. +46705 804848.
• PerOla Holmström, CFO, tel. +46705 763340.

• Webcast conference call on 17 July:

In connection with the interim report, Nolato will hold a webcast conference call in English at 3.15 p.m. CET. Nolato will be represented by President and CEO Christer Wahlquist and CFO PerOla Holmström, who will present the interim report and answer questions. Information regarding telephone numbers and website is available at

https://financialhearings.com/

event/12326. The presentation will be available at www.nolato.com/ir after publication of the interim report. The webcast will be available at the same address after the live broadcast.

Ownership and legal structure

Nolato AB (publ), Swedish corporate identity number 5560804592, is the Parent Company of the Nolato Group.

Its Class B shares are listed on the Nasdaq Stockholm exchange in the Large Cap segment, where they are included in the Industrials sector.

There were 11,486 shareholders at 30 June. The largest shareholders are the Jorlén family with 10%, the Boström family with 9%, the Hamrin family and Capital Group with 8% each and Lannebo Funds with 7%, of the capital.

The Parent Company

For the parent company, which has no operating activities, sales amounted to SEK 33 million (35). Profit after financial income and expense amounted to SEK 159 million (143).

Contingent liabilities amounted to SEK 252 million (107).

Accounting and valuation principles

Nolato's consolidated accounts have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the EU.

The interim report for the Group has been prepared in accordance with IAS 34 Interim Financial Reporting and applicable provisions of the Swedish Annual Accounts Act. Publication of this interim report is subject to the Swedish Securities Market Act.

The consolidated accounts have been prepared according to the same principles as in the most recent annual accounts, as set out in the Annual Report 2019.

IASB and the IFRS Interpretations Committee have issued new standards and statements that apply to financial years starting 1 January 2020 or later. There are no plans for the early application of new or amended standards for future application. None of the standards or interpretations published by IASB are expected to have a material impact on the Group or Parent Company's financial statements.

The interim report for the Parent Company has been prepared in accordance with Chapter 9 of the Swedish Annual Accounts Act.

Financial information schedule

• Ninemonth interim report 2020: 23 October 2020
• 2020 yearend report: 10 February 2021
• Threemonth interim report 2021: 4 May 2021
• 2021 Annual General Meeting: 4 May 2021
• Sixmonth interim report 2021: 20 July 2021
• Ninemonth interim report 2021: 28 October 2021
• 2021 yearend report: 7 February 2022

Prior to publication this information constituted inside information that Nolato AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out above, at 2:30 p.m. CET on 17 July 2020.

Nolato's business

Nolato is a global, advanced hightech cooperation partner and manufacturer of polymer products and systems for leading customers in welldefined market areas such as medical technology, pharmaceuticals, consumer electronics, telecom, automotive, hygiene and other selected industrial sectors.

With its many years of experience, indepth materials and processes expertise, early involvement in customer projects, advanced project management and detailed knowledge of each customer's specific requirements, Nolato is an effective and innovative partner.

Nolato's business model

Our business model is based on three decentralised business areas, which with their own decisionmaking and shared ambitions endeavour to fulfil our vision and financial targets.

The sharing of experience between our business areas, leadingedge technology, wideranging development and design knowhow, advanced project management and efficient production allow us to establish longterm, innovative cooperation with our customers and partners and generate added value for both them and our shareholders.

Our shared values of being professional, well organised and responsible are reflected in everything we do.

Nolato's strategies

• Early involvement in customers' development processes
• Close and longterm collaboration/partnerships with our customers
• Innovative, integrated and hightech solutions
• High productivity/Lean manufacturing
• Advancing up the value chain/Greater added value
• Global presence
• Responsible business practice

Nolato is a Swedish group with operations in Europe, Asia and North America.

We develop and manufacture products in polymer materials such as plastic, silicone and TPE for leading customers within medical technology, pharmaceuticals, consumer electronics, telecom, automotive, hygiene and other selected industrial sectors.

Nolato's shares are listed on Nasdaq Stockholm in the Large Cap segment, where they are included in the Industrials sector.

www.nolato.com

The Board of Directors and the President give their assurance that this interim report provides a true and fair view of the operations, financial position and earnings of the company and the Group, and describe the significant risks and uncertainty factors faced by the company and the companies included in the Group.

Torekov 17 July 2020

Fredrik Arp Chairman of the Board

Sven BoströmSvensson Lovisa Hamrin Åsa Hedin Board member Board member Board member

Erik LyngeJorlén LarsÅke Rydh Jenny Sjödahl Board member Board member Board member

Björn Jacobsson Håkan Svensson Christer Wahlquist Board member Board member President and CEO Employee representative Employee representative

Review report

Nolato AB, corporate identity number 5560804592

Introduction

We have reviewed the condensed interim report for Nolato AB as at June 30, 2020 and for the six months period then ended. The Board of Directors and the Managing Director are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.

Scope of review

We conducted our review in accordance with the International Standard on Review Engagements, ISRE 2410 Review of Interim Financial Statements Performed by the Independent Auditor of the Entity . A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and other generally accepted auditing standards in Sweden.

The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act regarding the Group, and in accordance with the Swedish Annual Accounts Act regarding the Parent Company.

Torekov 17 July 2020

Ernst & Young AB Joakim Falck Authorised public accountant

		Q2	Q2	Q1 ­ Q2	Q1 ­ Q2	Rolling	Full year
SEK million	Note	2020	2019	2020	2019	12 months	2019
Net sales	1	2,307	1,987	4,372	3,643	8,648	7,919
Cost of goods sold		– 1,945	– 1,670	– 3,694	– 3,057	– 7,308	– 6,671
Gross profit		362	317	678	586	1,340	1,248
Other operating income		6	1	22	1	23	2
Selling expenses		– 30	– 32	– 65	– 63	– 128	– 126
Administrative expenses		– 71	– 59	– 143	– 119	– 255	– 231
Other operating expenses		—	5	—	—	– 6	– 6
		– 95	– 85	– 186	– 181	– 366	– 361
Operating profit	2	267	232	492	405	974	887
Financial income and expense	2	– 10	– 9	– 14	– 16	– 28	– 30
Profit after financial income and expense	2	257	223	478	389	946	857
Tax		– 50	– 43	– 94	– 78	– 170	– 154
Profit after tax		207	180	384	311	776	703
All earnings are attrib. to the Parent Co.'s shareh.
Depreciation/amortisation reg. non­current assets		93	89	187	175	388	376
Basic earnings per share, SEK	3	7.79	6.82	14.46	11.80	29.24	26.60
Diluted earnings per share, SEK	3	7.79	6.81	14.45	11.77	29.24	26.60
Number of shares at the end of the period, bef. dil.		26,581,308	26,456,658	26,581,308	26,456,658	26,581,308	26,548,008
Number of shares at the end of the period, after dil.		26,614,401	26,485,524	26,614,401	26,485,524	26,614,401	26,548,982
Average number of shares, before dilution		26,564,658	26,382,033	26,559,108	26,357,158	26,534,706	26,431,806
Average number of shares, after dilution		26,585,973	26,429,995	26,570,464	26,427,448	26,541,520	26,432,001

Consolidated income statement (summary)

At the end of the period, the Group had two incentive programmes: Incentive Programme 2016/2021 and Incentive Programme 2019/2024. For more information please see Note 3 Earnings per share on page 17.

Consolidated comprehensive income

	Q2	Q2	Q1 ­ Q2	Q1 ­ Q2	Rolling	Full year
SEK million	2020	2019	2020	2019	12 months	2019
Profit after tax	207	180	384	311	776	703
Other comprehensive income
Items that cannot be transferred to profit for the period
Revaluations of defined benefit pension plans	– 3	– 10	– 3	– 10	– 59	– 66
Tax attrib. to items that cannot be transf. to profit for the per.	1	2	1	2	10	11
	– 2	– 8	– 2	– 8	– 49	– 55
Items that have been conv. or can be conv. into prof. for the per.
Transl. diff. for the period on transl. of foreign operations	– 90	– 28	– 12	33	– 24	21
Changes in the fair value of cash flow hedges for the period	3	1	2	—	4	2
Tax attrib. to changes in the fair value of cash flow hedges	– 1	—	– 1	—	– 1	—
	– 88	– 27	– 11	33	– 21	23
Other comprehensive income, net of tax	– 90	– 35	– 13	25	– 70	– 32
Total comp. inc. for the per. attrib. to the Parent Co.'s shareh.	117	145	371	336	706	671

Financial instruments are measured at fair value in the statement of financial position, pursuant to measurement hierarchy Level 2.

Consolidated balance sheet (summary)

SEK million	30/06/2020	30/06/2019	31/12/2019
Assets
Non­current assets
Intangible non­current assets	848	798	852
Property, plant and equipment	1,800	1,892	1,839
Non­current financial assets	2	2	2
Other non­current receivables	2	1	1
Deferred tax assets	57	76	58
Total fixed assets	2,709	2,769	2,752
Current assets
Inventories	743	553	667
Accounts receivable	974	1,105	1,051
2) Other current assets	306	338	302
Cash and bank	1,906	828	1,362
Total current assets	3,929	2,824	3,382
Total assets	6,638	5,593	6,134
Shareholders' equity and liabilities
Shareholders' equity	3,353	2,604	2,966
1) Long­term liabilities and provisions	1,171	1,098	1,179
1) Deferred tax liabilities	94	95	110
1) 3) Current liabilities and provisions	2,020	1,796	1,879
Total liabilities and provisions	3,285	2,989	3,168
Total shareholders' equity and liabilities	6,638	5,593	6,134
1) Interest­bearing/non­interest­bearing liabilities and provisions:
Interest­bearing liabilities and provisions	1,162	1,165	1,219
Non­interest­bearing liabilities and provisions	2,123	1,824	1,949
Total liabilities and provisions	3,285	2,989	3,168
Financial instruments are measured at fair value in the statement of financial position, pursuant to measurement hierarchy Level 2.

2) Derivative assets are included in other current assets at	10	1	5
3) Derivative liabilities are included in current liabilities and provisions at	5	12	1

Changes in consolidated shareholders' equity (summary)

	Q1 ­ Q2	Q1 ­ Q2	Full year
SEK million	2020	2019	2019
Shareholders' equity at the beginning of the period	2,966	2,592	2,592
Total comprehensive income for the period	371	336	671
Dividends	—	– 368	– 368
Exercise of warrants included in incentive programmes	16	44	71
Shareholders' equity at the end of period attrib. to Parent Co's shareh.	3,353	2,604	2,966

At the end of the period, the Group had two incentive programmes: Incentive Programme 2016/2021 and Incentive Programme 2019/2024. In Incentive Programme 2016/2021, Series 2017/2020 has redemptions from 01/05/2020 to 15/12/2020 and Series 2018/2021 from 01/05/2021 to 15/12/2021. The subscription price is SEK 485.10 for Series 2017/2020 and SEK 502.00 for Series 2018/2021. The programmes have been taken into account in calculating the number of shares after dilution. Upon full subscription, the programmes provide a maximum of 888,400 new class B shares.

Consolidated cash flow statement (summary)

	Q2	Q2	Q1 ­ Q2	Q1 ­ Q2	Rolling	Full year
SEK million	2020	2019	2020	2019	12 months	2019
Cash fl. from oper. activities bef. changes in work. cap.	277	201	576	395	1,186	1,005
Changes in working capital	471	64	169	—	324	155
Cash flow from operating activities	748	265	745	395	1,510	1,160
Cash flow from investment activities	– 63	– 87	– 133	– 192	– 394	– 453
Cash flow before financing activities	685	178	612	203	1,116	707
Cash flow from financing activities	– 32	– 372	– 68	– 362	– 21	– 315
Cash flow for the period	653	– 194	544	– 159	1,095	392
Cash and cash equiv. at the beginning of the period	1,333	1,034	1,362	953	—	953
Exchange rate difference in liquid assets	– 80	– 12	—	34	—	17
Cash and cash equivalents at the end of the period	1,906	828	1,906	828	—	1,362

Note 1 Revenue

		Q1 ­ Q2 ­ 2020					Q1 ­ Q2 ­ 2019				Full year ­ 2019
		Med.	Integr.	Indust.		Med.	Integr.	Indust.		Med.	Integr.	Indust.
SEK million	Sum	Sol.	Sol.	Sol.	Sum	Sol.	Sol.	Sol.	Sum	Sol.	Sol.	Sol.
Sweden	496	87	6	403	595	77	14	504	1,173	157	35	981
Other Europe	2,056	888	652	516	1,588	826	277	485	3,148	1,620	548	980
North America	413	246	86	81	278	221	6	51	608	464	14	130
Asia	1,324	47	1,251	26	1,108	47	1,030	31	2,852	105	2,683	64
Rest of world	85	74	8	3	83	74	6	3	154	138	12	4
Elimination internal sales	– 2				– 9				– 16
Tot. revenues fr. customer contracts	4,372	1,342	2,003	1,029	3,643	1,245	1,333	1,074	7,919	2,484	3,292	2,159

The above table essentially covers products transferred at a specific date.

For the first six months of the year, the Group recognised increased provision of previously impaired trade receivables of SEK 1 million. Impairment losses are recognised in the cost of goods sold.

Note 2 Reconciliation of consolidated income before tax

	Q1 ­ Q2	Q1 ­ Q2	Rolling	Full year
SEK million	2020	2019	12 months	2019
Operating profit (EBIT)
Medical Solutions	186	159	344	317
Integrated Solutions	276	164	539	427
Industrial Solutions	56	88	144	176
Group adjustments, Parent Company	– 26	– 6	– 53	– 33
Consolidated operating profit (EBIT)	492	405	974	887
Financial income and expense (not distributed by business areas)	– 14	– 16	– 28	– 30
Consolidated profit before tax	478	389	946	857

Including a nonrecurring item of SEK −14 million in operaƟng profit in Q1 2020. The nonrecurring item has been recognised at Group level and has therefore not affected the earnings of the business areas.

Including a nonrecurring item of SEK −22 million in operaƟng profit in Q4 2019. The nonrecurring item has been recognised at Group level and has therefore not affected the earnings of the business areas.

SEK million Profit after tax Average number of shares, before dilution Basic earnings per share (SEK) Nonrecurring items Profit after tax excl. nonrecurring items Basic earnings per share excl. nonrecurring items (SEK) Dilutive shares from Series 2016/2019 incentive progr. with exercise price SEK 296.30 per share; total 240,600 warrants Dilutive shares from Series 2017/2020 incentive progr. with exercise price SEK 485.10 per share; total 196,200 warrants Dilutive shares from Series 2018/2021 incentive progr. with exercise price SEK 502.00 per share; total 193,500 warrants Average number of shares, after dilution Diluted earnings per share (SEK) Diluted earnings per share excl. nonrec. items (SEK) Numb. of shares at the end of the per., before dilution Numb. of shares at the end of the period, after dilution 10,241 — 26,585,973 26,429,995 7.79 6.81 7.79 6.81 26,581,308 26,456,658 207 180 7.79 6.82 7.79 6.82 — — — 47,962 11,074 — 384 311 776 703 26,559,108 26,357,158 26,534,706 26,431,806 2020 2019 12 months 2019 Q2 Q2 Q1 Q2 Q1 Q2 Rolling Full year 2020 2019 207 180 26,564,658 26,382,033 395 311 803 719 14.87 11.80 30.26 27.20 14.46 11.80 29.24 26.60 11 — 27 16 6,281 — 3,769 195 — 70,290 — — 14.45 11.77 29.24 26.60 14.87 11.77 30.25 27.20 5,075 — 3,045 — 26,570,464 26,427,448 26,541,520 26,432,001 26,614,401 26,485,524 26,614,401 26,548,982 26,581,308 26,456,658 26,581,308 26,548,008 26,614,401 26,485,524

Note 3 Earnings per share (IFRS measures)

At the end of the period, the Group had two incentive programmes: Incentive Programme 2016/2021 and Incentive Programme 2019/2024. In Incentive Programme 2016/2021, Series 2017/2020 has redemptions from 01/05/2020 to 15/12/2020 and Series 2018/2021 from 01/05/2021 to 15/12/2021. The subscription price is SEK 485.10 for Series 2017/2020 and SEK 502.00 for Series 2018/2021. The programmes have been taken into account in calculating the number of shares after dilution. Upon full subscription, the programmes provide a maximum of 888,400 new class B shares.

Adjusted earnings per share (alternative performance measures)

	Q2	Q2	Q1 ­ Q2	Q1 ­ Q2	Rolling	Full year
SEK million	2020	2019	2020	2019	12 months	2019
Profit after tax	207	180	384	311	776	703
Adjusted earnings:
Amort. of intangible assets arising from acquisitions	2	1	4	3	9	8
Tax on amortisation	– 1	– 1	– 1	– 1	– 2	– 2
Adjusted earnings	208	180	387	313	783	709
Average number of shares, before dilution	26,564,658	26,382,033	26,559,108	26,357,158	26,534,706	26,431,806
Adjusted basic earnings per share (SEK)	7.83	6.82	14.57	11.88	29.51	26.82
Non­recurring items	—	—	11	—	27	16
Adjusted earnings after tax, excl. non­recurring items	208	180	398	313	810	725
Adj. basic earnings per share excl. non­rec. items (SEK)	7.83	6.82	14.99	11.88	30.53	27.43
Average number of shares, after dilution	26,585,973	26,429,995	26,570,464	26,427,448	26,541,520	26,432,001
Adjusted diluted earnings per share (SEK)	7.82	6.81	14.57	11.84	29.50	26.82
Adj. diluted earn. per share excl. non­rec. items (SEK)	7.82	6.81	14.98	11.84	30.52	27.43

Fiveyear overview

IFRS measures	2019	2018	2017	2016	2015
Operating profit (EBIT) (SEK million)	887	941	749	443	556
Basic earnings per share (SEK)	26.60	27.44	21.74	12.77	15.97
Diluted earnings per share (SEK)	26.60	27.37	21.74	12.77	15.97

Alternative performance measures
Net sales (SEK million)	7,919	8,102	6,720	4,447	4,726
Operating profit (EBITA) (SEK million)	895	949	763	457	570
EBITA margin (%)	11.3	11.7	11.4	10.3	12.1
Profit after financial income and expense (SEK million)	857	921	731	438	555
Profit after tax (SEK million)	703	722	572	336	420
Cash flow after investments, excl. acq. and disposals (SEK million)	800	593	496	245	288
Cash conversion (%)	88	60	66	55	52
Return on capital employed (%)	23.1	29.7	26.6	20.6	29.6
Return on shareholders' equity (%)	25.5	30.4	29.4	19.0	25.3
Net financial assets (+) liabilities (–), excl. pension­ & lease	666	341	31	– 206	249
liabilities (SEK million)
Equity/assets ratio (%)	48	50	45	47	54
Adjusted basic earnings per share (SEK)	26.82	27.67	22.16	13.19	16.35
Adjusted diluted earnings per share (SEK)	26.82	27.59	22.15	13.19	16.35
Dividend per share (SEK)	—	14.00	12.50	10.50	10.00
Average number of employees	5,941	6,449	7,249	6,418	7,759

Including any nonrecurring items.

IFRS measures	Note		Q1	Q2	Q3	Q4	Full year
Operating profit (EBIT) (SEK million)	2	2020	225	267	—	—	—
	2	2019	173	232	236	246	887
	2018 261 264 203 2020 6.67 7.79 — 3 2019 4.98 6.82 7.02 3 2018 7.83 7.75 5.85 2020 6.67 7.79 — 3 2019 4.97 6.81 7.01 3 2018 7.80 7.70 5.81 Q1 Q2 Q3 Note 2020 2,065 2,307 — 1 2019 1,656 1,987 1,980 1 2018 2,039 2,302 1,980 2020 319 360 — 2019 259 321 326 2018 322 325 267 2020 227 269 — 2019 175 233 238 2018 264 266 205 2020 11.0 11.7 — 2019 10.6 11.7 12.0 2018 12.9 11.6 10.4 2020 221 257 — 2 2019 166 223 232 2 2018 256 257 198 2020 177 207 — 2019 131 180 186 2018 206 204 154 2020 – 3 748 — 2019 130 265 83 2018 296 472 39 2020 – 0.11 28.16 — 2019 4.94 10.04 3.13 2018 11.25 17.94 1.48 2020 – 73 685 — 2019 25 178 – 4 2018 187 352 – 68	213	941
Basic earnings per share (SEK)						—	—
						7.76	26.60
						6.01	27.44
Diluted earnings per share (SEK)						—	—
						7.75	26.60
						5.98	27.37
Alternative performance measures						Q4	Full year
Net sales (SEK million)						—	—
						2,296	7,919
						1,781	8,102
Operating profit (EBITDA) (SEK million)						—	—
						357	1,263
						275	1,189
Operating profit (EBITA) (SEK million)						—	—
						249	895
						214	949
EBITA margin (%)						—	—
						10.8	11.3
						12.0	11.7
Profit after financial income and exp. (SEK million)						—	—
						236	857
						210	921
Profit after tax (SEK million)						—	—
						206	703
						158	722
Cash flow from operating activities (SEK million)						—	—
						682	1,160
						238	1,045
Cash fl. from operations per share bef. dilution (SEK)						—	—
						25.69	43.81
						9.05	39.72
Cash flow after investments, excluding acquisitions						—	—
and disposals (SEK million)						601	800
						122	593
Cash flow after investments, excl. acquisitions and		2020	– 2.75	25.79	—	—	—
disposals per share before dilution (SEK)		2019	0.95	6.75	– 0.15	22.64	30.19
		2018	7.11	13.38	– 2.58	4.64	22.54
Adjusted basic earnings per share (SEK)	3	2020	6.74	7.83	—	—	—

3

Shareholders' equity per share, before dilution (SEK)

Return on total capital (%)

Quarterly data (summary)

2018 7.91 7.83 5.93 6.01 27.67 2019 5.06 6.82 7.09 7.84 26.82

2020 121 126 — — —

2018 92 87 92 99 99 2019 106 98 107 112 112

2020 15.7 15.8 — — —

2018 18.8 19.6 19.1 18.4 18.4 2019 16.1 15.2 15.5 15.6 15.6

Alternative performance measures		Q1	Q2	Q3	Q4	Full year
Return on capital employed (%)	2020	23.2	23.4	—	—	—
	2019	25.3	23.6	23.4	23.1	23.1
	2018	29.8	32.0	31.2	29.7	29.7
Return on operating capital (%)	2020	31.2	33.1	—	—	—
	2019	34.4	31.6	30.7	31.0	31.0
	2018	36.8	41.1	41.1	40.0	40.0
Return on shareholders' equity (%)	2020	26.0	25.9	—	—	—
	2019	25.9	24.5	24.7	25.5	25.5
	2018	32.6	34.9	33.1	30.4	30.4
Closing share price Nolato B (Nasdaq Stockholm)	2020	449.40	628.00	—	—	—
	2019	386.50	566.50	525.50	550.00	550.00
	2018	609.00	723.00	548.00	366.50	366.50

Including a nonrecurring item of SEK −14 million in operaƟng profit in Q1 2020 and tax effects of SEK +3 million, which impacted profit aŌer tax by SEK −11 million.

Including a nonrecurring item of SEK −22 million in operaƟng profit in Q4 2019 and tax effects of SEK +6 million, which impacted profit aŌer tax by SEK −16 million.

Including nonrecurring items of SEK +20 million in Q1 2018 and SEK –17 million in Q3 2018, which affected operating profit by a net amount of SEK +3 million.

Quarterly data business areas

Alternative performance measures
Net sales (SEK million)	Note		Q1	Q2	Q3	Q4	Full year
Medical Solutions	1	2020	642	700	—	—	—
	1	2019	611	634	612	627	2,484
		2018	532	562	596	580	2,270
Integrated Solutions	1	2020	854	1,149	—	—	—
	1	2019	512	821	862	1,097	3,292
		2018	939	1,186	892	703	3,720
Industrial Solutions	1	2020	570	459	—	—	—
	1	2019	533	541	512	573	2,159
		2018	568	554	492	505	2,119
Group adjustments, Parent Company	1	2020	– 1	– 1	—	—	—
	1	2019	—	– 9	– 6	– 1	– 16
		2018	—	—	—	– 7	– 7
Group total	1	2020	2,065	2,307	—	—	—
	1	2019	1,656	1,987	1,980	2,296	7,919
		2018	2,039	2,302	1,980	1,781	8,102

Alternative performance measures
Operating profit (EBITA) (SEK million)			Q1	Q2	Q3	Q4	Full year
Medical Solutions		2020	87	100	—	—	—
	EBITA margin (%)		13.6	14.3	—	—	—
		2019	78	82	80	80	320
	EBITA margin (%)		12.8	12.9	13.1	12.8	12.9
		2018	69	73	76	77	295
	EBITA margin (%)		13.0	13.0	12.8	13.3	13.0
Integrated Solutions		2020	111	166	—	—	—
	EBITA margin (%)		13.0	14.4	—	—	—
		2019	57	107	116	147	427
	EBITA margin (%)		11.1	13.0	13.5	13.4	13.0
		2018	120	140	114	99	473
	EBITA margin (%)		12.8	11.8	12.8	14.1	12.7
Industrial Solutions		2020	47	11	—	—	—
	EBITA margin (%)		8.2	2.4	—	—	—
		2019	44	46	44	47	181
	EBITA margin (%)		8.3	8.5	8.6	8.2	8.4
		2018	57	55	35	39	186
	EBITA margin (%)		10.0	9.9	7.1	7.7	8.8
Group adjustments, Parent Company		2020	– 18	– 8	—	—	—
		2019	– 4	– 2	– 2	– 25	– 33
		2018	18	– 2	– 20	– 1	– 5
Group total		2020	227	269	—	—	—
	EBITA margin (%)		11.0	11.7	—	—	—
		2019	175	233	238	249	895
	EBITA margin (%)		10.6	11.7	12.0	10.8	11.3
		2018	264	266	205	214	949
	EBITA margin (%)		12.9	11.6	10.4	12.0	11.7

Including a nonrecurring item of SEK −14 million in operaƟng profit in Q1 2020. The nonrecurring item has been recognised at Group level and has therefore not affected the earnings of the business areas.

Including a nonrecurring item of SEK −22 million in operaƟng profit in Q4 2019. The nonrecurring item has been recognised at Group level and has therefore not affected the earnings of the business areas.

Including nonrecurring items of SEK +20 million in Q1 2018 and SEK –17 million in Q3 2018, which affected operating profit by a net amount of SEK +3 million. The nonrecurring items has been recognised at Group level and has therefore not affected the earnings of the business areas.

Depreciation/write­downs/amortisation (SEK million)		Q1	Q2	Q3	Q4	Full year
Medical Solutions	2020	41	41	—	—	—
	2019	39	40	40	41	160
	2018	28	28	28	28	112
Integrated Solutions	2020	17	16	—	—	—
	2019	17	17	16	16	66
	2018	8	8	8	7	31
Industrial Solutions	2020	36	36	—	—	—
	2019	30	32	34	35	131
	2018	25	25	28	26	104
Parent Company	2020	—	—	—	—	—
	2019	—	—	—	19	19
	2018	—	—	—	1	1
Group total	2020	94	93	—	—	—
	2019	86	89	90	111	376
	2018	61	61	64	62	248

Group financial highlights

		Q2	Q2	Q1 ­ Q2	Q1 ­ Q2	Rolling	Full year
IFRS measures Note		2020	2019	2020	2019	12 months	2019
Basic earnings per share (SEK)	3	7.79	6.82	14.46	11.80	29.24	26.60
Diluted earnings per share (SEK)	3	7.79	6.81	14.45	11.77	29.24	26.60
Alternative performance measures
Net sales (SEK million)	1	2,307	1,987	4,372	3,643	8,648	7,919
Sales growth (%)		16	– 14	20	– 16	17	– 2
Percentage of sales outside Sweden (%)		91	86	89	84	88	85
Operating profit (EBITDA) (SEK million)		360	321	679	580	1,362	1,263
1) Operating profit (EBITA) (SEK million)		269	233	496	408	983	895
1) EBITA margin (%)		11.7	11.7	11.3	11.2	11.4	11.3
Profit after financial income and exp. (SEK million)	2	257	223	478	389	946	857
1) Profit margin (%)		11.1	11.2	10.9	10.7	10.9	10.8
Profit after tax (SEK million)		207	180	384	311	776	703
1) Return on total capital (%)		15.8	15.2	15.8	15.2	15.8	15.6
1) Return on capital employed (%)		23.4	23.6	23.4	23.6	23.4	23.1
1) Return on operating capital (%)		33.1	31.6	33.1	31.6	33.1	31.0
1) Return on shareholders' equity (%)		25.9	24.5	25.9	24.5	25.9	25.5
Equity/assets ratio (%)		51	47	51	47	51	48
Debt/equity (%)		35	45	35	45	35	41
Interest coverage ratio (times)		30	24	30	23	28	25
Net investments affecting cash flow, excl. acquisitions and disposals (SEK million)		63	87	133	192	301	360
Cash flow after investments, excl. acquisitions and
disposals (SEK million)		685	178	612	203	1,209	800
1) Cash conversion (%)		—	—	—	—	120	88
Net financial assets, excl. pension­ & lease liabilities (SEK million)		1,245	190	1,245	190	1,245	666
Adjusted basic earnings per share (SEK)	3	7.83	6.82	14.57	11.88	29.51	26.82
Adjusted diluted earnings per share (SEK)	3	7.82	6.81	14.57	11.84	29.50	26.82
Cash flow from operations per share, before dilution (SEK)		28.16	10.04	28.04	14.99	56.87	43.81
Cash flow from operations per share, after dilution (SEK)		28.14	10.03	28.02	14.96	56.89	43.75
Cash flow after investments excluding acquisitions and
disposals, per share, before dilution (SEK)		25.79	6.75	23.04	7.70	42.06	30.19
Cash flow after investments excluding acquisitions and
disposals, per share, after dilution (SEK)		25.77	6.73	23.02	7.68	42.05	30.15
Shareholders' equity per share, before dilution (SEK)		—	—	126	98	—	112
Shareholders' equity per share, after dilution (SEK)		—	—	126	98	—	112
Average number of employees		—	—	6,118	5,521	—	5,941

1) KPIs calculated as specified on pages 24 and 25.

Including a nonrecurring item of SEK −14 million in operaƟng profit in Q1 2020 and tax effects of SEK +3 million, which impacted profit aŌer tax by SEK −11 million.

Including a nonrecurring item of SEK −22 million in operaƟng profit in Q4 2019 and tax effects of SEK +6 million, which impacted profit aŌer tax by SEK −16 million.

Definitions IFRS measures

Earnings for the period that are attributable to the parent company's owners divided by the average number of outstanding shares.

Earnings per share Operating profit (EBIT)

Earnings before financial income and expense and taxes.

Definitions Alternative performance measures

Nolato presents certain financial measures in this report that are not defined according to IFRS. Nolato considers that these measures provide valuable supplementary information for investors and company management, as they enable an assessment of trends and the company's performance. Since not all companies calculate financial measures in the same way, these are not always comparable to measures used by other companies. These financial measures should not therefore be regarded as substitutes for measures defined according to IFRS.

Adjusted earnings per share Interest coverage ratio

Profit after tax, excluding amortisation of intangible assets arising from acquisitions, divided by the average number of shares.

Average number of shares

The average basic number of shares comprises the parent company's weighted average number of outstanding shares during the period. After dilution, a weighted average of the shares that may be issued under the ongoing share warrant programme is added, if they are inthemoney, but only insofar as the average listed share price for the period exceeds the subscription price of the warrants.

Cash conversion Profit margin

Cash flow after investments, excl. acquisitions and disposals, divided by operating profit (EBIT). Cash flow and operating profit have been adjusted by nonrecurring items, if any.

Cash flow after investments, excl. acquisitions and disposals per share

Cash flow after investing activities excl. acquisitions and disposals, divided by the average number of shares.

Cash flow from operating activities per share Return on operating capital

Cash flow from operating activities, divided by the average number of shares.

Debt/equity ratio

Interestbearing liabilities and provisions divided by

Equity/assets ratio

Shareholders' equity as a percentage of total capital in the balance sheet.

Profit after financial income and expense, plus financial expenses, divided by financial expenses.

Net financial assets (+) / liabilities (–)

Interestbearing liabilities from credit institutions less interestbearing assets.

Operating profit (EBITA)

Earnings before financial income and expense, taxes and amortisation of intangible assets arising from acquisitions.

Operating profit (EBITDA)

Earnings before financial income and expense, taxes and depreciation/amortisation.

Profit after financial income and expense as a percentage of net sales.

Return on capital employed

Profit after financial income and expense, plus financial expenses as a percentage of average capital employed. Capital employed consists of total capital less noninterestbearing liabilities and provisions.

Operating profit as a percentage of average operating capital. Operating capital consists of total capital less noninterestbearing liabilities and provisions, less interestbearing assets.

Return on shareholders' equity

EBITA margin Return on total capital shareholders' equity. Profit after tax as a percentage of average shareholders' equity.

Operating profit (EBITA) as a percentage of net sales. Profit after financial income and expense, plus financial expenses as a percentage of average total capital in the balance sheet.

Forwardlooking information

Some of the items reported relate to future events and actual outcomes may differ materially. In addition to those factors explicitly commented on, other factors may also materially affect the actual outcome, such as economic conditions, exchange rates and interest rate levels, political risks, competition and pricing, product development, commercialisation and technical difficulties, supply problems and customer credit losses.

Alternative performance measures

		Q2	Q2	Q1 ­ Q2	Q1 ­ Q2	Rolling	Full year
SEK million unless otherwise specified	Note	2020	2019	2020	2019	12 months	2019
Operating profit (EBITDA)		360	321	679	580	1,362	1,263
Non­recurring items		—	—	14	—	18	4
Adjusted operating profit (EBITDA)		360	321	693	580	1,380	1,267
Operating profit (EBIT)	2	267	232	492	405	974	887
Reversal of amort. of intangible assets arising
in connection with acquisitions		2	1	4	3	9	8
Operating profit (EBITA)		269	233	496	408	983	895
Non­recurring items		—	—	14	—	36	22
Adjusted operating profit (EBITA)		269	233	510	408	1,019	917
EBITA margin (%)		11.7	11.7	11.3	11.2	11.4	11.3
Adjusted EBITA margin (%)		11.7	11.7	11.7	11.2	11.8	11.6
Profit after financial income and expense	2	257	223	478	389	946	857
Non­recurring items		—	—	14	—	36	22
Adjusted profit after financial income and expense		257	223	492	389	982	879
Profit margin (%)		11.1	11.2	10.9	10.7	10.9	10.8
Adjusted profit margin (%)		11.1	11.2	11.3	10.7	11.4	11.1
Profit after tax		207	180	384	311	776	703
Non­recurring items		—	—	14	—	36	22
Tax on non­recurring items		—	—	– 3	—	– 9	– 6
Adjusted profit after tax		207	180	395	311	803	719
Cash fl. after investm., excl. acquisitions and dispos.		—	—	—	—	1,209	800
Non­recurring items (affecting cash flow)		—	—	—	—	—	—
Adj. cash fl. after investments, excl. acq. and disp.		—	—	—	—	1,209	800
Operating profit (EBIT)	2	—	—	—	—	974	887
Non­recurring items		—	—	—	—	36	22
Adjusted operating profit (EBIT)		—	—	—	—	1,010	909
Cash conversion (%)		—	—	—	—	120	88

Including a nonrecurring item of SEK −14 million in operaƟng profit in Q1 2020 and tax effects of SEK +3 million, which impacted profit aŌer tax by SEK −11 million. The nonrecurring item has been recognised at Group level and has therefore not affected the earnings of the business areas.

Including a nonrecurring item of SEK −22 million in operaƟng profit in Q4 2019 and tax effects of SEK +6 million, which impacted profit aŌer tax by SEK −16 million. The nonrecurring item has been recognised at Group level and has therefore not affected the earnings of the business areas.

Alternative performance measures	Q2	Q1	Q4	Q3	Q2	Q1	Q4	Q3	Q2
SEK million unless otherwise specified	2020	2020	2019	2019	2019	2019	2018	2018	2018
Profit after financial income and exp., rolling 12 months	945	912	856	831	797
Financial expense, rolling 12 months	35	36	36	30	29
Adj. profit after financial inc. and exp., rolling 12 months	980	948	892	861	826
Total capital, at the end of period	6,638	6,630	6,134	6,051	5,593	5,733	5,156	5,229	5,381
Average total capital, last 5 quarters	6,209	6,028	5,733	5,552	5,418
Return on total capital (%)	15.8	15.7	15.6	15.5	15.2
Adj. profit after financial inc. and exp., rolling 12 months	980	948	892	861	826
Capital employed, at the end of period	4,514	4,480	4,184	4,022	3,771	3,982	3,387	3,225	3,131
Average capital employed, last 5 quarters	4,194	4,088	3,869	3,677	3,499
Return on capital employed (%)	23.4	23.2	23.1	23.4	23.6
Operating profit (EBIT), rolling 12 months	974	939	887	855	821
Capital employed, at the end of period	4,514	4,480	4,184	4,022	3,771	3,982	3,387	3,225	3,131
Cash and bank, at the end of period	– 1,906	– 1,333	– 1,362	– 851	– 828	– 1,034	– 953	– 818	– 891
Operating capital, at the end of period	2,608	3,147	2,822	3,171	2,943	2,948	2,434	2,407	2,240
Average operating capital, latest 5 quarters	2,938	3,006	2,864	2,781	2,594
Return on operating capital (%)	33.1	31.2	31.0	30.7	31.6
Profit after tax, rolling 12 months	776	749	703	655	623
Shareholders' equity, at the end of period	3,353	3,220	2,966	2,833	2,604	2,783	2,592	2,422	2,301
Average shareholders' equity, latest 5 quarters	2,995	2,881	2,756	2,647	2,540
Return on shareholders' equity (%)	25.9	26.0	25.5	24.7	24.5

Parent Company income statement (summary)

	Q2	Q2	Q1 ­ Q2	Q1 ­ Q2	Rolling	Full year
SEK million	2020	2019	2020	2019	12 months	2019
Net sales	15	16	33	35	58	60
Selling expenses	– 2	– 2	– 3	– 4	– 6	– 7
Administrative expenses	– 16	– 13	– 31	– 25	– 54	– 48
Other operating income	1	—	3	2	4	3
Other operating expenses	– 10	– 11	– 22	– 25	– 45	– 48
Operating profit	– 12	– 10	– 20	– 17	– 43	– 40
Profit from participations in Group companies	200	182	200	182	486	468
Financial income	3	4	6	8	8	10
Financial expenses	23	– 15	– 27	– 30	– 39	– 42
Profit after financial income and expense	214	161	159	143	412	396
Appropriations	—	—	—	—	210	210
Tax	– 7	– 5	1	2	– 44	– 43
Profit after tax	207	156	160	145	578	563
Depreciation/amortisation	—	—	—	—	—	—

Parent Company balance sheet (summary)

SEK million	30/06/2020	30/06/2019	31/12/2019
Assets
Intangible fixed assets	1	1	1
Property, plant and equipment	1	1	1
Financial assets	1,818	1,734	1,854
Deferred tax assets	10	14	—
Total fixed assets	1,830	1,750	1,856
Other receivables	518	468	954
Cash and bank	932	101	218
Total current assets	1,450	569	1,172
Total assets	3,280	2,319	3,028
Shareholders' equity and liabilities
Shareholders' equity	2,018	1,398	1,842
Untaxed reserves	229	199	229
Deferred tax liabilities	—	—	5
Other provisions	11	14	11
Long­term liabilities	684	578	670
Current liabilities	338	130	271
Total shareholders' equity and liabilities	3,280	2,319	3,028

Transactions with related parties	Period	Services sold	Services bought	Interest income	expenses	Interest Result from	Rec. fr. rel. shares in part. on bal.	Liab. to rel. part. on bal.
SEK million						Group com.	sheet date	sheet date
Subsidiary	Q1 ­ Q2 2020	33	– 4	6	—	200	855	354
Subsidiary	Q1 ­ Q2 2019	35	– 3	8	—	182	901	145

None of the company's Board members or senior executives currently have, or have previously had, any direct or indirect involvement in any business transaction with the company which is, or was, of an unusual character in terms of its conditions. Nor has the Group issued any loans, pledged any guarantees or entered into any surety arrangements for any of the company's Board members or senior executives.

Nolato AB, Nolatovägen 32, SE269 78 Torekov, Sweden • Tel. +46 431 442290 • Fax +46 431 442291 • Corp. id. number 5560804592 • Email info@nolato.com • Website www.nolato.com