NOTE — Interim / Quarterly Report 2020

Apr 23, 2020

Interim Report January–March 2020

Interim Report Q1

Financial performance January–March

• Sales increased by 17% to SEK 475 (405) million.
• Operating profit was up by 24% to SEK 33 (27) million.
• Operating margin widened by 0.4 percentage points to 7.0% (6.6%).
• Profit after financial items increased by 13% to SEK 28 (25) million.
• Profit after tax improved by 11% to SEK 22 (20) million, corresponding to SEK 0.80 (0.73) per share.
• Cash flow after investments amounted to SEK 63 (2) million, or SEK 2.26 (0.07) per share.

Events in the period

Actions and consequences of the coronavirus

Actions resulting from the global spread of the coronavirus featured strongly in operations in the first quarter. A number of internal restrictions to travel, meetings and external visits were introduced as early as January. The closure of the plant in China continued for a week longer than planned for the Chinese New Year. Production at this plant had returned to its regular high capacity utilisation by the end of February.

Extensive efforts were made to identify and limit disruptions to inward deliveries of components. Supply delays have occurred, but availability on the market was better than originally feared. Accordingly, production at NOTE's plants in Europe essentially progressed as planned.

In the final days of March, and consistent with the UK government decision to limit all non-essential travel and industrial operations, we temporarily closed our plant at Windsor. The Windsor operations represent around 10% of NOTE's total sales. This closure qualifies for UK government support, which include full compensation for payroll expenses for laid-off staff. The plant is scheduled to resume manufacturing at the end of April, and progressively increase production through May.

The extended closure of our plant in China and other disruptions to supply chains resulted in a loss of sales of some SEK 20 million in the quarter. Including this loss, direct expenses for safety measures to limit the spread of infection and expected support measures in Sweden and other countries totalling some SEK 1 million, the net impact on the first quarter's operating profit was approximately SEK -3 million.

Annual General Meeting, cancellation of shares and share dividend

In December 2018, NOTE executed a repurchase programme totalling 1,000,000 treasury shares. The Board of Directors has proposed that the AGM in April cancels these shares, which would reduce the number of outstanding shares by just over 3%.

Due to current uncertainty relating to the corona situation, on 27 March, the Board of Directors decided to withdraw its previous AGM proposal of a dividend of SEK 1.20 per share. This decision was taken to achieve strength and flexibility for the more turbulent market situation that may lie ahead. NOTE's financial position remains good, and the Board of Directors is simultaneously emphasising its ambition of inviting shareholders to an Extraordinary General Meeting (EGM) later in the year to decide on dividends, if the market justifies this at that time.

Events after the end of the period

Continued growth in medtech

NOTE received a supplementary order worth just over SEK 30 million in an ongoing collaboration with a major medtech customer, for shipments in the second and third quarters this year. This product is used in intensive care, and the need for it has increased sharply during the current pandemic. Manufacture is at NOTE Norrtelje.

To address increasing demand for microelectronics, mainly from medtech customers, the clean room capacity of the Norrtelje plant has been expanded, with capacity more than doubling.

CEO's comments

Clear growth agenda

NOTE has a clear growth agenda with the express goal of achieving minimum sustainable organic growth of 10% per year. NOTE has achieved this goal for several years, which has resulted in increased sales and progressively wider margins. Critical success factors include the company's methodical quality-assurance work and top-class delivery precision—we've achieved sectorleading levels in these respects.

Our customer base is broad, and we currently partner with several of the Nordic leaders across industry, communication, medtech and defence. One of the cornerstones of our growth plan is expanding partnerships within our strong customer base—there's still great potential to expand business on these deals. We're also seeing great interest in NOTE's flexible and industrially broad-based offering. By focusing on the market and technology segments where we're already strong, we have recently secured a large number of new accounts, in traditional industries and new, high-growth application segments.

Brisk progress continues in the first quarter

Despite the very worrying global spread of the coronavirus, NOTE performed strongly and exceeded our expectations in the quarter. Sales grew by 17% to SEK 475 million, our highest ever level for Q1. Growth is fully organic and sales in March were above estimate. Meanwhile, we asses that the one-week extension of the closure of our plant in China, and disruption to inward shipments of electronic components, both direct consequences of the spread of the coronavirus, negatively impacted the group's sales by some SEK 20 million (5%). Accordingly, our underlying growth remained at just over 20%.

In Western Europe, we achieved growth of 23%, with especially strong sales in Sweden and Finland. We achieved substantial growth from new and current industrial and medtech customers. In our Rest-of-World segment, i.e. from our plants in Estonia in China, growth was 6%. Demand in China was healthy, but as a result of the extended plant closure in February, sales were down somewhat on the previous year. Demand for EMS at our plant in Estonia remained at a high level, and sales increased by 24%. The group's order intake was strong, and our order backlog was 22% above the previous year, a record level.

In earnings terms, our positive trend continued. Operating profit was up by 24% to SEK 33 million, and our operating margin widened by 0.4 percentage points to 7.0%. The earnings improvement was mainly a result of growth, stable margins on current projects and brisk progress in Western Europe, not least Sweden and Finland. Including our lost sales (SEK -20 million), direct expenses for safety measures to limit the spread of infection, and compensation from different support packages, first-quarter operating profit was negatively impacted by some SEK 3 million.

We started the year strongly, with 17% organic growth, operating profit up by 24%, and sustained strong cash flow.

The combination of positive earnings performance with rationalisation of our utilisation of working capital contributed to cash flow after investments increasing to SEK 63 (2) million. Our liquidity situation is currently very positive, and our Balance Sheet is one of the strongest in the sector, with an equity to assets ratio of 41%. We are thus financially well-equipped to take advantage of the growth opportunities that are expected to arise in the current turbulent market situation.

Future

Obviously, the spread of the coronavirus has created uncertainty regarding market progress. We expect the temporary closure of our plant in Windsor, UK, which began in March, to cause a production loss in Q2 of some SEK 20 million. With the current relatively good supply of electronic components, and considering our strong order status, with a lot of new products in ramp-up, we however have good potential to achieve sales in the second quarter of about SEK 500 million, corresponding to growth of well over 10%.

We are monitoring the future progress of the corona situation and its impact on NOTE, our customers and suppliers closely, and with great humility.

Johannes Lind-Widestam

Sales and results of operations

Sales, January–March

NOTE is one of the most expansive and competitive electronics manufacturers in the Nordics, and a stable business partner for Swedish and international customers that need advanced EMS solutions. NOTE's business model is based on long-term customer relationships and partnerships. NOTE sells to a large customer base, essentially active across industry, communication, medtech, defence and high end consumer electronics. Its customer base includes large global corporations active worldwide, and local enterprises whose primary sales are in northern Europe. Usually, the customer outsources all electronics manufacture to one or several EMS partners. Another clear trend is for customers increasingly demanding manufacture and direct shipment of box build products.

The demand for NOTE's services continued to progress positively in the first quarter. Sales rose by 17% to SEK 475 (405) million. The impact of fluctuations in foreign currencies, mainly USD and EUR, was positive at about 2%. The extended plant closure for the Chinese New Year caused by the spread of the coronavirus and other supply chain disruptions, caused sales losses in Q1 of approximately SEK 20 million (5%). In this context, NOTE estimates the underlying organic growth rate at some 20%.

The sales gains consisted of expanded partnerships on existing accounts, and increased volumes to new customers. Most of NOTE's new business customers are SMEs across Europe and Asia. Several of these partnerships, which usually start with industrialisation services (service sales, prototyping and pilot series), have now resulted in batch production and higher volumes.

Sales increased on all domestic markets, with growth in Western Europe of 23%. Sales performance was especially strong in Sweden and Finland, and from industrial and medtech customers. Growth in the UK was at a lower level, partly due to the temporary closure of our plant in Windsor at the end of March. The demand for EMS services from our plant in Estonia, whose customers are mainly in northern Europe, performed robustly, with sales gains of 24%. Growth in Estonia was mainly driven by high volume growth on fairly new collaborations in the communication segment. Sales from our plant in China, which are to local and global customers, were negatively impacted

by the extended closure for the Chinese New Year. Accordingly, sales in the quarter were somewhat lower than the previous year, although demand and capacity utilisation has been back at a high level for some time.

NOTE's growth should also be viewed against the background that the market is evolving rapidly. Previously, the industry was very interested in locating electronics manufacture in Asia. But accentuated by increasing restrictions to global trade, and a sharper focus on sustainability, there is a clear trend for European customers to increasingly demand development and manufacturing services closer to home. With more capacity and efficient plants in Europe, NOTE's organisation is prepared to address this progress.

NOTE's customer base is broad, and the 15 largest customers in sales terms represented 52% (49%) of group sales. No single customer (group) represented more than about 8% of total sales.

The group's order backlog, which is a combination of fixed orders and customer forecasts, progressed positively in the quarter, and at the end of the period, was about 22% above the previous year's level, indicating continued positive progress of sales.

Results of operations, January–March

In order to make us more competitive and create the potential for profitable growth, NOTE has been conducting methodical improvement work at all the group's units for several years. This work is conducted locally at each plant and through a number of group-wide projects. Over and above initiatives to expand and develop its customer offering, NOTE's focus is on measures that improve delivery precision and quality performance, and on cost and working capital rationalisation.

Mainly as a consequence of increased sales with stable margins on current customer assignments, gross profit increased by 17% to SEK 58 (49) million. The gross margin was 12.1% (12.1%). Gross margin widened by 0.5 percentage points on the final quarter of the previous year, mainly due to a higher services content on assignments.

Sales and administration overheads in the period increased somewhat to SEK 22 (21) million. As a share of sales, overheads were 4.5% (5.2%).

Other operating expenses/income, mainly consisting of the revaluation of assets and liabilities denominated in foreign currency, was SEK -3 (-1) million.

Operating profit increased by 24% in the first quarter to SEK 33 (27) million, and the operating margin widened by 0.4 percentage points to 7.0% (6.6%).

Net financial income/expense for the period was SEK -5 (-2) million), with the cost increase mainly consisting of revaluations of debt factoring liabilities in foreign currencies, mainly EUR and USD.

Profit after financial items increased by 13% to SEK 28 (25) million, equivalent to a profit margin of 5.8% (6.1%).

Profit after tax was up by 11% to SEK 22 (20) million, or SEK 0.80 (0.73) per share. The estimated tax expense for the period corresponds to 19% (18%) of profit before tax.

Cash flow and financial position

Cash flow

Competing successfully in the high mix market segment sets demanding standards on flexibility in manufacture, the effective supply of materials and the capability to deliver custom logistics solutions. Accordingly, NOTE puts a sharp focus on continuously improving its business methods and internal processes in these segments.

In recent years, the global market for electronic components has been under strain, with implications including extended lead-times and limited supply of certain components. However, the market did stabilise to some extent in the second half of the previous year. Against the background of a high share of electronic component manufacturing being in China, NOTE did extensive work in Q1 to identify and overcome disruptions in its supply chains caused by the global spread of the coronavirus. Supply disruptions did occur in the period, but to a lesser extent than initially feared. Accordingly, inventories were fairly stable in the period. Mainly because of growth, capital tied-up in inventories, including advanced payments for materials, increased by 14% on the previous year-end. Compared to the corresponding period of the previous year, this equates to a 3% decrease, helping a significant rationalisation of the utilisation of working capital.

NOTE is making continuous efforts to monitor credit risks and limit the number of outstanding days of credit. A change in the factoring solution in Estonia meant that the accounts receivable for the period decreased by just over SEK 30 million. Accounts receivable at the end of the first quarter were 11% higher than at the same time last year. Considering the growth, the underlying customer credit days were slightly lower than last year.

Accounts payable—trade mainly consist of purchasing of electronic components and other production materials. NOTE works actively on improving its partner model on the supplier side, which has implications including sourcing being focused

Liquidity and investments

Liquidity and net debt

NOTE puts a sharp focus on measures that further improve the group's liquidity and cash flow. The efficient management of working capital and well-considered logistics setups are high priorities.

The group's available cash and cash equivalents, including un-utilised overdraft facilities, were SEK 243 (126) million at the end of the period. Factored accounts receivable—trade were approximately SEK 292 (180) million. Reported net debt is SEK 132 (227) million, and excluding financial liabilities resulting from the adoption of IFRS 16, net debt was approximately SEK 82 (165) million at the end of the period.

Equity to assets ratio

Cash flow after investments

on fewer, quality-assured suppliers. This also results in more efficient utilisation of working capital. Accounts payable—trade increased by 26% in the quarter, and were 6% above the level of the corresponding period of the previous year.

Positive earnings growth and better utilisation of working capital were contributors to first-quarter cash flow after investments improving to SEK 63 (2) million, or SEK 2.26 (0.07) per share.

Equity to assets ratio

NOTE has a good financial position. According to NOTE's externally communicated financial targets, the minimum equity to assets ratio should be 30%. At the end of the first quarter, the equity to assets ratio was 40.9% (36.8%).

Investments

Capital expenditure on fixed assets was SEK 6 (9) million in the year, corresponding to 1.3% (2.1%) of sales. These investments mainly consisted of projects to increase efficiency and quality.

Plan depreciation and amortisation was SEK 11 (11) million, of which SEK 4 (4) million was additional depreciation, mainly on leasehold premises, after the adoption of IFRS 16.

Parent company

The parent company, NOTE AB (publ), is primarily focused on the management, coordination and development of the group. Revenue for the period was SEK 10 (10) million, and mainly related to intra-group services.

Profit after tax amounted to SEK 2 (5) million.

Transactions with related parties

There were no transactions with related parties in the first quarter.

Dividend 2019

Due to the uncertainty currently prevailing as a result of the corona situation, the Board of Directors decided on 27 March to withdraw the previously communicated proposal to the AGM on a dividend of SEK 1.20/share. The decision was made in order to achieve strength and flexibility for the more turbulent market situation that may lie ahead.

Significant operational risks

NOTE is one of the leading northern European EMS partners. It has especially strong market positioning in the high mix market segment, i.e. for products that require high technology competence and flexibility. NOTE produces PCBAs, subassemblies and box build products. The customer offering covers the complete product lifecycle, from design to after-sales.

NOTE's business model, which is designed to increase sales growth combined with limited overheads and investment costs in high-cost countries, is a way to reduce the risks of operations. For a more detailed review of the group's operational and financial risks, refer to NOTE's Annual Report for 2019, more specifically to the Risks section on page 13, the Report of the Directors on page 42, as well as note 24, Financial risks and finance policy, on page 61–62.

NOTE's operations set relatively high standards on working capital financing. Accordingly, it puts a sharp focus on managing its liquidity risk.

Accounting and valuation principles

NOTE observes International Financial Reporting Standards (IFRS) as endorsed by the European Union. Significant accounting and valuation principles are stated on pages 50–52 of the Annual Report for 2019. The group's Interim Report has been prepared in accordance with the Swedish Annual Accounts Act and IAS 34, Interim Financial Reporting. The parent company observes RFR 2.

From 2020, the segment's operating profit will be followed up with a slightly changed approach. This means that the item "Other operating income/expenses" is no longer allocated to the various segments instead it is followed up at the overall level. Comparative figures for the segments have been adjusted in accordance with the new approach.

Earnings per share are reported in accordance with IAS 33 Earnings per share. NOTE has three incentive programmes that were initiated during the period 2017–2019, all of which run for a 3-year period. These warrants have a dilution effect when the stock price exceeds the exercise price. At the end of 2018,

a repurchase of shares was made where 1 million treasury shares were acquired. NOTE has proposed to the AGM that such shares should be canceled. As a result, these shares are not reported as outstanding. Comparative periods have been adjusted accordingly.

All amounts are in millions of Swedish kronor (SEK million) unless otherwise stated.

Discrepancies between reports

Swedish and English-language versions of this Report have been produced. In the event of any discrepancy between the two, the Swedish version shall apply.

Audit review

As in previous years, the Interim Report for the first quarter has not been subject to review by the company's auditor.

Johannes Lind-Widestam CEO and President

Kista, Sweden, 22 April 2020

Consolidated quarterly summary

	2020	2019	2019	2019	2019
SEK million	Q1	Q4	Q3	Q2	Q1
Net sales	475	483	434	437	405
Gross margin	12.1%	11.6%	11.5%	11.7%	12.1%
Operating margin	7.0%	7.4%	7.3%	7.0%	6.6%
Profit margin	5.8%	6.9%	6.8%	6.6%	6.1%
Cash flow after investing activities	63	96	1	-24	2
Cash flow per share, SEK	2.26	3.44	0.04	-0.85	0.07
Equity per share, SEK	18.1	16.7	15.9	14.9	14.9
Equity to assets ratio	40.9%	41.2%	38.7%	36.7%	36.8%
Average number of employees	1,090	1,092	1,070	1,070	1,045
Net sales per employee, SEK 000	436	442	406	409	388

Consolidated six-year summary

SEK million	Rolling 12 mth.	2019	2018	2017	2016	2015
Net sales	1,830	1,760	1,379	1,176	1,098	1,122
Gross margin	11.7%	11.7%	12.5%	11.9%	12.0%	10.9%
Operating margin	7.1%	7.1%	6.1%	7.9%	5.5%	4.0%
Profit margin	6.5%	6.6%	5.7%	7.6%	5.0%	3.5%
Cash flow after investing activities	136	75	-76	70	41	5
Cash flow per share, SEK	4.88	2.69	-2.63	2.41	1.42	0.18
Equity per share, SEK	18.1	16.7	13.3	12.8	11.0	9.9
Return on operating capital	20.4%	20.7%	17.8%	24.2%	16.1%	12.9%
Return on equity	20.5%	21.7%	17.1%	21.0%	14.9%	12.4%
Equity to assets ratio	40.9%	41.2%	39.8%	48.8%	45.8%	43.3%
Average number of employees	1,080	1,070	980	912	987	940
Net sales per employee, SEK 000	1,694	1,645	1,407	1,289	1,113	1,193

Financial definitions

Gross profit margin	Gross profit as a percentage of net sales.
Equity per share	Equity divided by the number of outstanding shares at end of the period (before dilution).
Average number of employees	Average number of employees calculated on the basis of hours worked.
Cash flow per share	Cash flow after investments divided by the number of outstanding shares at end of the period (before dilution).
Net sales per employee	Net sales divided by the average number of full-time employees.
Net debt	Interest-bearing liabilities and provisions less cash and cash equivalents.
Operating capital	Total assets less cash and cash equivalents, non-interest bearing liabilities and provisions.
Order backlog	A combination of fixed orders and customer forecasts.
Return on equity	Net profit as a percentage of the average equity for the most recent twelve-month period.
Return on operating capital	Operating profit as a percentage of the average operating capital for the most recent twelve-month period.
Operating margin	Operating profit as a percentage of net sales.
Equity to assets ratio	Equity as a percentage of total assets.
Profit margin	Profit after financial items as a percentage of net sales.

Consolidated Income Statement

SEK million	2020 Q1	2019 Q1	Rolling 12 mth.	2019 Full year
Net sales	475	405	1,830	1,760
Cost of goods and services sold	-417	-356	-1,615	-1,554
Gross profit	58	49	215	206
Selling expenses	-14	-12	-51	-49
Administrative expenses	-8	-9	-32	-33
Other operating income/expenses	-3	-1	-2	0
Operating profit	33	27	130	124
Net financial income/expenses	-5	-2	-11	-8
Profit after financial items	28	25	119	116
Income tax	-6	-5	-25	-24
Profit after tax	22	20	94	92

Consolidated Statement of Other Comprehensive Income

SEK million	2020 Q1	2019 Q1	Rolling 12 mth.	2019 Full year
Profit after tax	22	20	94	92
Other comprehensive income
Items that can be subsequently reversed in the income statement:
Exchange rate differences	16	10	17	11
Cash flow hedges	0	0	0	0
Tax on hedges and exchange rate difference	0	0	-2	-2
Total other comprehensive income after tax	16	10	15	9
Comprehensive income after tax	38	30	109	101

Earnings per share

	2020 Q1	2019 Q1	Rolling 12 mth.	2019 Full year
Number of shares at end of period (000)	27,873	27,873	27,873	27,873
Weighted average number of shares (000)*	27,873	27,873	27,873	27,873
Weighted average number of shares (000)**	28,217	27,873	28,073	27,973
Earnings per share, SEK*	0.80	0.73	3.39	3.31
Earnings per share, SEK**	0.79	0.73	3.36	3.30

* Before dilution

Consolidated Balance Sheet

SEK million	2020 31 Mar	2019 31 Mar	2019 31 Dec
Assets
Goodwill	110	110	110
Intangible assets—customer relationships	13	16	13
Other intangible assets	13	13	14
Right of use assets	50	62	54
Property, plant and equipment	98	84	96
Deferred tax assets	1	2	1
Other financial assets	1	1	0
Total non-current assets	286	288	288
Inventories	420	435	370
Accounts receivable—trade	377	339	380
Other current receivables	22	19	18
Cash and bank balances	126	44	73
Total current asset	945	836	841
TOTAL ASSETS	1,231	1,124	1,129
Equity and liabilities
Equity	503	414	465
Liabilities
Long-term interest-bearing liabilities	21	15	21
Long-term liabilities, right of use asset	34	47	38
Deferred tax liabilities	11	8	12
Other long term provisions	0	9	-
Total non-current liabilities	66	79	71
Current interest-bearing liabilities	187	194	191
Short-term liabilities, right of use asset	16	15	16
Accounts payable—trade	339	321	270
Other current liabilities	113	101	109
Other short term provisions	7	-	7
Total current liabilities	662	631	593
TOTAL EQUITY AND LIABILITIES	1,231	1,124	1,129

Consolidated Change in Equity

SEK million	2020 Q1	2019 Q1	Rolling 12 mth.	2019 Full year
Opening equity	465	384	414	384
Comprehensive income after tax	38	30	109	101
Payment warrants	-	-	-	0
Dividend	-	-	-20	-20
Closing equity	503	414	503	465

Consolidated Cash Flow Statement

SEK million	2020 Q1	2019 Q1	Rolling 12 mth.	2019 Full year
Operating activities
Profit after financial items	28	25	119	116
Reversed depreciation and amortisation	11	10	45	44
Other non-cash items	5	-5	11	1
Tax paid	-6	-7	-19	-20
Change in working capital	30	-18	3	-45
Cash flow from operating activities	68	5	159	96
Cash flow from investing activities	-5	-3	-23	-21
Cash flow from financing activities	-13	10	-56	-33
Change in cash and cash equivalents	50	12	80	42
Cash and cash equivalents
At beginning of period	73	31	44	31
Cash flow after investing activities	63	2	136	75
Cash flow from financing activities	-13	10	-56	-33
Exchange rate difference in cash and cash equivalents	3	1	2	0
Cash and cash equivalents at end of period	126	44	126	73
Un-utilised credits	117	82	117	116
Available cash and cash equivalents	243	126	243	189

Operating segments

NOTE's operating segment Western Europe consist of units located in geographical regions with high industrial activity and innovation standards in Sweden, Finland and the UK. These units provide advanced production technology services in close collaboration with customers, such as component selection, developing test equipment, prototyping and batch production.

Operating segment Rest of World, located in Estonia and

China, are close to large end markets and in regions with strong traditions of production and high competence levels. In addition to development-oriented services, these units also offer costefficient volume production of PCBAs and box build products.

Intra-Group are group-wide business support functions in the parent company and for the sourcing operations in NOTE Components. The segment also includes group eliminations.

SEK million	2020 Q1	2019 Q1	Rolling 12 mth.	2019 Full year
WESTERN EUROPE
External net sales	323	262	1 167	1 106
Internal net sales	1	2	3	4
Operating profit	31	25	108	102
Operating margin	9.6%	9.3%	9.2%	9.2%
Inventories	256	253	256	237
External accounts receivable—trade	268	223	268	238
Average number of employees	511	434	486	468
REST OF WORLD
External net sales	152	143	663	654
Internal net sales	8	19	54	65
Operating profit	6	6	27	27
Operating margin	3.8%	3.4%	3.8%	3.8%
Inventories	164	182	164	133
External accounts receivable—trade	108	115	108	142
Average number of employees	561	594	577	585
INTRA-GROUP
Internal net sales	-9	-21	-57	-69
Operating profit	-4	-4	-5	-5
External accounts receivable—trade	1	0	1	0
Average number of employees	18	17	17	17

Sales per customer segment

SEK million	2020 Q1	2019 Q1	Rolling 12 mth.	2019 Full year
WESTERN EUROPE
Industrial	203	166	707	671
Communication	24	27	111	114
Medtech	64	35	212	181
Defence	30	32	128	133
High end consumer	2	1	9	7
Total external sales	323	262	1,167	1,106
REST OF WORLD
Industrial	100	92	427	419
Communication	40	47	189	196
Medtech	0	0	1	0
Defence	0	0	0	0
High end consumer	12	4	46	39
Total external sales	152	143	663	654
TOTAL
Industrial	303	258	1,134	1,090
Communication	64	74	300	310
Medtech	64	35	213	181
Defence	30	32	128	133
High end consumer	14	5	55	46
Total external sales	475	405	1,830	1,760

Parent Company Income Statement

SEK million	2020 Q1	2019 Q1	Rolling 12 mth.	2019 Full year
Net sales	10	10	38	38
Cost of services sold	-3	-4	-15	-16
Gross profit	7	6	23	22
Selling expenses	-4	-5	-17	-18
Administrative expenses	-3	-3	-11	-11
Other operating income/expenses	2	6	2	6
Operating profit	2	4	-3	-1
Net financial income/expenses	1	1	76	76
Profit after financial items	3	5	73	75
Appropriations	-	-	-19	-19
Profit before tax	3	5	54	56
Income tax	-1	0	-13	-12
Profit after tax	2	5	41	44

Parent Company Statement of Other Comprehensive Income

SEK million	2020 Q1	2019 Q1	Rolling 12 mth.	2019 Full year
Profit after tax	2	5	41	44
Other comprehensive income
Items that can be subsequently reversed in the income statement:	-	-	-	-
Total other comprehensive income	-	-	-	-
Comprehensive income after tax	2	5	41	44

Parent Company Balance Sheet

SEK million	2020 31 Mar	2019 31 Mar	2019 31 Dec
Assets
Intangible assets	3	4	4
Property, plant and equipment	1	0	1
Long-term receivables from group companies	152	90	149
Financial non-current assets	221	222	221
Total non-current assets	377	316	375
Receivables from group companies	14	65	19
Other current receivables	5	10	3
Cash and bank balances	56	-6	25
Total current assets	75	69	47
TOTAL ASSETS	452	385	422
Equity and liabilities
Equity	242	221	240
Untaxed reserves	26	7	26
Liabilities
Liabilities to financial institutions	1	-	1
Liabilities to group companies	170	139	138
Other current liabilities and provisions	13	18	17
Total current liabilities	184	157	156
TOTAL EQUITY AND LIABILITIES	452	385	422

Parent Company Change in Equity

SEK million	2020 Q1	2019 Q1	Rolling 12 mth.	2019 Full year
Opening equity	240	216	221	216
Comprehensive income after tax	2	5	41	44
Dividend	-	-	-20	-20
Closing equity	242	221	242	240

This is NOTE

NOTE produces PCBAs, subassemblies, and increasingly box build products. The products are embedded in complex systems used in applications including electronic control, surveillance and security.

The customers are active in medtech, defence, industrial, communication and high end consumer electronics. Primarily, the customer base consists of large corporations operating on the global market, but also businesses whose main sales are in northern Europe.

The business model is based on delivering advanced manufacturing services, tailored

logistics solutions as well as value-added consulting services for the best total cost. The customer offering covers complete product lifecycles from design to after-sales.

In Western Europe, NOTE has plants located in geographical regions with high industrial activity and innovation capabilities. At these plants, NOTE provides sophisticated production technology services in close partnership with customers, such as component selection, developing test equipment, prototyping and batch production.

NOTE's plants in Estonia and China are

close to major final markets, and in regions with strong traditions of production and high skills levels. Over and above development-oriented services, cost-efficient batch production of PCBAs and box build products are provided.

NOTE AB (publ) Corporate ID no. 556408-8770

Calendar

Interim Report Q2 16 Jul 2020 Interim Report Q3 22 Oct 2020

Ordering financial information

Financial and other relevant information can be ordered from NOTE. Out of consideration for the environment, a subscription service is readily available from NOTE's website. Website: www.note.eu E-mail: info@note.eu Tel: +46 (0)8-568 990 00

Investor Relations contact

Henrik Nygren Chief Financial Officer Tel: +46 (0)70 977 0686 E-mail: henrik.nygren@note.eu

NOTE AB (publ) Borgarfjordsgatan 7 164 40 Kista Sweden

NOTE Components AB Borgarfjordsgatan 7 164 40 Kista Sweden

NOTE Hyvinkää Oy Avainkierto 3 05840 Hyvinkää Finland

NOTE Lund AB Maskinvägen 3 227 30 Lund Sweden

NOTE Norrtelje AB Vilhelm Mobergs gata 18 761 46 Norrtälje Sweden

NOTE Pärnu OÜ Laki 2

80010 Pärnu Estonia

NOTE Torsby AB Inova Park 685 29 Torsby Sweden

NOTE UK Ltd Stroudwater Business Park

Brunel Way Stonehouse GL10 3SX Gloucestershire UK

NOTE Electronics

(Dongguan) Co Ltd No. 6 Lin Dong 3 Road Lincun Industrial Center Tangxia 523710 Dongguan Guangdong Province China

Speedboard Assembly Services Ltd 1a Alma Road Windsor SL4 3HU UK

www.note.eu info@note.eu