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OEM International

Quarterly Report Oct 21, 2014

3090_10-q_2014-10-21_be6e5fdb-7122-4852-9991-0a602a261b05.pdf

Quarterly Report

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Interim report Q3 2014

Third quarter 2014

  • Incoming orders increased by 16 % to MSEK 453 (390)
  • Net turnover increased by 15 % to MSEK 448 (389)
  • Earnings before amortization of intangible assets attributable to acquisitions (EBITA) increased by 9 % to MSEK 54 (49) representing an EBITA-margin of 12 % (13)
  • Profit before tax increased by 9 % to MSEK 48 (44)
  • Profit after tax increased by 14 % to MSEK 38 (33)
  • Profit per share amounted to SEK 1.65 (1.45)
  • Acquisition of Scanding A/S in Denmark

January - September 2014

  • Incoming orders increased by 14 % to MSEK 1 405 (1 229)
  • Net turnover increased by 11 % to MSEK 1 380 (1 241)
  • Earnings before amortization of intangible assets attributable to acquisitions (EBITA) increased by 11 % to MSEK 146 (131) representing an EBITA-margin of 11 % (11)
  • Profit before tax increased by 10 % to MSEK 130 (118)
  • Profit after tax increased by 13 % to MSEK 101 (89)
  • Profit per share amounted to SEK 4.36 (3.86)

Focused work yields results

OEM continued to grow strongly in the third quarter. Net turnover increased by 15 per cent and amounted to MSEK 448 and incoming orders increased by 16 per cent to MSEK 453, compared to the same quarter in the previous year. Currency effects and acquisitions represent 10 per cent of growth. This results in an organic growth of 5 per cent, which there is every reason to be pleased with in a market with a weak underlying growth.

In Sweden, to which the largest part of our turnover is attributable, the good development continues for Elektro Elco. We have also increased sales within our largest Swedish business, OEM Automatic, where we are seeing a growth of 6 per cent. In terms of our regions, we have a good growth across the board. The business in Finland, with a growth of 10 per cent to date this year, is still a positive exclamation mark in the context of the economy, which means that we are acquiring market shares.

The success we are seeing is the result of a focused work aiming to continue the processing of the business. Working with details, introducing new products and identifying areas where we are weak and strong, respectively, and taking relevant action, has resulted in good growth.

Continued strong result

The result remains strong in the third quarter. Earnings (EBITA) increased by 9 per cent to MSEK 54, compared to the same quarter in the previous year. The EBITA-margin amounted to 12 per cent (13). The fact that growth of earnings is not as large in percentage as the increase in turnover has a natural explanation in that we have chosen to continue to invest in developing the organization to create opportunities for continued growth. We should also remember that our comparable quarter last year was a record quarter, which we are now exceeding.

Acquisitions strengthen our position

During the third quarter we have completed the acquisition of Danish Scanding A/S as our fourth acquisition during the year. To date we have completed acquisitions in Finland, Poland, Sweden and, most recently, Denmark. The acquisitions strengthen our business within several different product areas and in all regions, accurately illustrating our acquisition model. I see good opportunities for further acquisitions in the future, while we remain selective when we look at new opportunities. OEM looks for businesses where there is a clear industrial logic and where our position in existing areas can be further strengthened.

The acquisitions we have done to date, due to their size, have not had any major impact on OEM's financial position, which remains strong. Solidity amounted to 45 per cent at the end of the period.

Efficient business model

The times we live in are not easy. Nothing is free, and there are a number of concerns in the global economy. The successes we have experienced are therefore clear proof that we have an efficient business model. It is also an acknowledgement that the focused work that OEM's employees perform throughout the organization bears fruit.

Jörgen Zahlin President and Chief Executive Officer

Incoming orders SEK million

Net sales SEK million

Share net sales per region

Incoming orders

Incoming orders in the third quarter amounted to MSEK 453 (390), which represents an increase by 16 %. For comparable units, incoming orders increased by 10 %. Year to date for 2014, incoming orders amounted to MSEK 1 405 (1 229), which is an increase by 14 %. For comparable units, incoming orders increased by 10 %. Year to date for 2014, incoming orders were 2 % above net turnover. The order book amounted to MSEK 242 and was 9 % higher than the same time last year.

The increase for comparable units in the most recent quarters reflects a somewhat stronger business climate in most markets.

Sales growth

Net turnover in the third quarter amounted to MSEK 448 (389), which represents an increase by 15 %. For comparable units, net turnover increased by 10 %.

Year to date for 2014, net turnover amounted to MSEK 1 380 (1 241), which is an increase by 11 %. For comparable units, net turnover increased by 8 %.

The currency impact on net turnover has been positive and amounted to 3 %.

Compared to the previous year, the greatest positive net turnover growth was seen in Elektro Elco, OEM Automatic and OEM Motor in Sweden, and the businesses in Denmark, Poland and the Czech Republic.

Compared to the corresponding period last year, the percentage changes between the regions are small. The weaker growth in Sweden in relation to growth in other regions means that the region will decrease by 1 %. Good growth in Denmark, Poland and the Czech Republic means that the region Denmark, Norway, UK and Eastern Central Europe increases its share by 1 %.

Return on equity for the respective quarters is increased by four in order to obtain a better comparison against the rolling 12 months in the diagram.

Earnings trend

Earnings before amortization of intangible assets attributable to acquisitions (EBITA) in the third quarter amounted to MSEK 54 (49), which is an increase by 9 %. The operating margin before amortization of intangible asset (EBITA-margin) amounted to 12 % (13).

Year to date for 2014, earnings before amortization of intangible assets attributable to acquisitions (EBITA) amounted to MSEK 146 (131), which is an increase by 11 %. Exchange rates effects from the translation of foreign entities affect EBITA marginally positive. The operating margin before amortization of intangible asset (EBITA-margin) amounted to 11 % (11).

Earnings are charged with a one-time cost amounting to MSEK 4.9 related to the cost of a dispute. The dispute is described on page 9. If this cost is excluded, EBITA amounted to MSEK 151, which represents an increase by 15 % compared to the period January - September last year.

The increase in earnings is a result of higher net turnover.

Profit after tax increased by 13 % to MSEK 101 (89) Profit per share amounted to SEK 4.36 (3.86)

* As of 2014, OEM reports EBITA (Earnings before amortization of intangible assets attributable to acquisitions) to reflect the companies' current earnings. Historical periods are not adjusted.

Return

Return on equity was 5.8 % compared to 4.6 % in the corresponding quarter of the previous year. On a rolling 12 month period, return on equity was 21 %, which exceeds the target of 20 %.

Equity amounted to MSEK 511 (689) and the equity ratio amounted to 45 % (64) as per 30 September 2014.

Equity has been affected by MSEK 231 through the redemption program carried out during the month of June.

Sales growth by region per quarter.

The percentage changes between the regions over time are small, and all regions have a relatively stable growth.

Sweden.

OEM Automatic AB, OEM Motor AB, Telfa AB, Svenska Batteripoolen AB, Elektro Elco AB, Nexa Trading AB, OEM Electronics AB, Internordic Bearings AB, Svenska Helag AB, Flexitron AB, Agolux AB, Vanlid Transmission AB.

SEK million 2014
Q3
2013
Q3
2014
Q1 – Q3
2013
Q1 – Q3
Trailing
12 mth
2013
Full year
Incoming orders 278 240 881 781 1 148 1 048
Net sales 275 244 866 797 1 141 1 072
EBITA 41 38 115 110 150 145
EBITA-margin 15 % 16 % 13 % 14 % 13 % 14 %

The increasing demand for existing units, together with the acquisition of Nexa Trading, resulted in an increase of net turnover, year to date, of 9 %, to MSEK 866 (797). For comparable units, the increase was 5 %. Changes in exchange rates affected net turnover positively by 3 %. This means that organic growth was 2 %. In Sweden, the percentage net turnover growth was highest in Elektro Elco, OEM Automatic and OEM Motor.

Incoming orders increased, year to date, by 13 % to MSEK 881 (781).

Incoming orders were 2 % higher than net turnover in the period January - September 2014, which is a positive signal.

EBITA increased by 4 % to MSEK 115 (110). Excluding the one-time cost connected to a dispute, EBITA increased by 9 % to MSEK 120.

Finland and the Baltic States.

OEM Automatic FI, Akkupojat Oy, OEM Electronics FI, OEM Automatic OU, OEM Automatic UAB, OEM Automatic SIA, OEM Automatic (Shanghai) Co.Ltd.

SEK million 2014
Q3
2013
Q3
2014
Q1 – Q3
2013
Q1 – Q3
Trailing
12 mth
2013
Full year
Incoming orders 69 60 215 185 276 246
Net sales 69 58 212 185 274 248
EBITA 5 4 16 14 20 18
EBITA-margin 7 % 7 % 8 % 7 % 7 % 7 %

Finnish industry generally has a weak demand, however net turnover still increased in the period January - September by 14 % to MSEK 212 (185). Changes in exchange rates affected net turnover positively by 5 % and acquisitions affect net turnover positively by 2 %. This means that organic growth was 7 %. The divisions batteries and cable are the areas that experienced the strongest growth in the period.

Incoming orders have also been good and amounted to MSEK 215 (185), which represents an increase by 16 %.

Incoming orders were 2 % higher than net turnover in the period January - September 2014, which is also a positive signal.

EBITA increased by 18 % to MSEK 16 (14) which is mainly due to a higher net turnover.

Denmark, Norway, UK and Central Eastern Europe.

OEM Automatic Klitsö A/S, OEM Automatic AS, OEM Automatic Ltd, OEM Automatic Sp z o. o., OEM Electronics PL, OEM Automatic spol. s r.o., OEM Automatic s.r.o., OEM Automatic Kft., Scanding A/S

SEK million 2014
Q3
2013
Q3
2014
Q1 – Q3
2013
Q1 – Q3
Trailing
12 mth
2013
Full year
Incoming orders 106 90 308 263 400 355
Net sales 104 88 302 258 393 349
EBITA 10 8 25 20 33 27
EBITA-margin 10 % 10 % 8 % 8 % 8 % 8 %

The increased demand, mainly in Poland, the Czech Republic, Denmark and England, means that net turnover increased in the period January - September 2014 by 17 % to MSEK 302 (258). Changes in exchange rates affected net turnover positively by 3 %. Acquisitions have affected net turnover by 1 %, which means that in the region, net turnover grew organically by as much as 13 %.

Incoming orders have also been good and amounted to MSEK 308 (263), which represents an increase by 17 %.

Incoming orders were 2 % higher than net turnover in the period January - September 2014, which is a positive signal.

EBITA increased by 28 % to MSEK 25 (20) which is mainly due to the increased turnover.

Other financial information.

Cash flows

Cash flows from operating activities in the period January - September amounted to MSEK 87 (75). Total cash flows amounted to MSEK -116 (-36) in the period January - September and was affected by investment activities by MSEK -33 (-32), dividend distribution MSEK -92 (-87) and redemption of shares MSEK -231 (-).

Investments

The group's investments in assets amounted to MSEK 60 (27) and is attributable to properties, machinery and inventory in the amount of MSEK 12 (23), other intangible assets MSEK 1 (4) and corporate acquisitions in the amount of MSEK 47 (-).

Liquidity

Cash and cash equivalents amounted to MSEK 59 (144). Cash and cash equivalents jointly with approved but unused loans amounted to MSEK 268 (346) as per 30 September 2014.

Intangible assets

The result includes amortization of intangible assets in the amount of MSEK 17 (14). The carrying amount in the statement on financial position amounted, as per 30 September 2014, to MSEK 178 (146).

Solidity

Solidity as per 30 September 2014 amounted to 45 % (64).

Employees

The average number of employees in the group in the period was 650 persons (628). At the end of the period, the number of employees was 656 persons (627). Of this increase, 11 employees were added in connection with acquisitions.

Share repurchases

The company has not repurchased any shares in the period. In total, the number of own shares held is 61 847 shares as per 30 September 2014. This holding represents 0.3 % of the total number of shares. The Annual General Meeting may authorize up to 10 % of the number of shares, which represents 2 316 930 shares.

Share split and redemption of shares

In order to alter to capital structure the Annual General Meeting decided, in addition to the ordinary dividend of SEK 4, to transfer to shareholders SEK 10 per share. This represented a transfer to the shareholders of MSEK 231, which was carried out during the month of June via an automatic redemption. The number of shares remains unchanged after the share split and amounts to 23 169 309 shares, dividing into 4 767 096 class A shares and 18 402 213 class B shares.

The Swedish Tax Agency has provided general advice regarding breakdown of purchase costs between remaining shares and redemption shares. This advice entails that a breakdown of the purchase cost between ordinary shares and redemption shares where 8.8 per cent is attributable to the redemption shares and 91.2 per cent to remaining shares.

Acquisitions 2014

On 15 January 2014 the majority of the business in Finnish Mytrade was acquired, which is focused on marketing vision systems. The business, with a turnover of MSEK 9 in 2013, has been integrated in OEM Automatic Finland and was included in the region Finland and the Baltic States as of 1 January 2014.

On 27 January 2014, all the shares in Nexa Trading AB were acquired. The company markets products primarily in the Nordic region for wireless control of e.g. lighting and security products for the home, and had a turnover of MSEK 52 in 2013. The company is part of region Sweden as of 1 January 2014. On 3 July 2014 all the shares in Danish Scanding A/S were acquired. The company markets flow components, mainly for the process industry in Denmark. The company had a turnover of approx. MDKK 25 in 2013. The company is part of the region Denmark, Norway, UK and Central Eastern Europe as of 1 January 2014.

The total purchase price for acquired businesses amounted to MSEK 32 and contingent consideration based on the growth of the businesses in 2014 - 2016 which is estimated at MSEK 20. The acquisitions have jointly affected the net turnover of the OEM group by MSEK 41 and earnings by MSEK 3.2.

Reported values
in
Fair value Fair value
Acquired net assets at the acquisition date the companies adjustment in group
Intangible assets 0.1 29 29
Other fixed assets 0.3 - 0.3
Inventories 13 - 13
Other current assets 21 21
Cash and cash equivalents - - -
Deferred tax liability -1.3 -6.6 -7.9
Other liabilities -20 - -20
Net identifiable assets / liabilities 13 22 35
Group goodwill - 17 17

Preliminary acquisition analysis

Purchase price, including contingent consideration 52

Through the acquisitions, other intangible assets increased by MSEK 29. The amount relates to customer relationships and supplier relationships that will be amortized over 5 years. Group goodwill is not tax deductible.

OEM normally uses an acquisition structure with a basic purchase price and contingent consideration. Initially, the contingent consideration is valued at the present value of the likely outcome, which for the acquisitions over the year amounts to MSEK 20. Contingent consideration comprises 2-3 years and the maximum outcome is MSEK 25.

Transaction costs for the acquisitions completed in the period amount to MSEK 0.2.

Revaluation contingent consideration

The trend of acquisitions in previous years has not led to any revaluation of liabilities for contingent considerations.

Accounting principles

This Interim Report has been prepared in accordance with IAS 34 Interim Financial Reporting and applicable provisions of the Annual Accounts Act. The interim report for the parent company has been prepared in accordance with the Annual Accounts Act, Chapter 9, Interim Financial Reporting and the Securities Markets Act. For the Group and the parent company, the same accounting policies and methods of computation have been applied as in the most recent annual report. There are no IFRS or IFRIC interpretations with application fr. about 2014 that has a material effect on the Group's results or financial position.

Risks and uncertainties

The OEM Group is exposed, through its activities, to both operational risks and financial risks. Business risks include competitive and operational risks and financial risks include liquidity, interest rate and currency risks. The finance activities and financial risk management of the OEM Group are primarily dealt with by the parent company. There is a framework in place limiting how risk management should be conducted and how the risks should be limited. This framework is characterized by a low level of risk. The starting point is a structured and efficient management of the financial risks that arise in the business. For a complete description of the risks affecting the Group, see the Annual Report for 2013 pages 6-7 and pages 47-49. In addition to the risks and uncertainties described in the Annual Report for 2013, no significant risks or uncertainty factors are deemed to have emerged or been removed.

Ongoing dispute

The District Court in Lund in early April rendered its judgment in a dispute in which the subsidiary Inter Bearings AB (IBS) has been involved, in respect of mutual receivables with a client and its insurance company, under an alleged breach of contract.

The judgment means that IBS lost the case against the client, but that the client's insurance company was unsuccessful in its claim against IBS, as this part was dismissed by the Court.

The judgment means that IBS shall pay the client net compensation in the amount of MSEK 4.9 including costs of proceedings, interest and included a deduction for insurance compensation which IBS will receive from its own insurance company. The amount is included in the company's and the Group's results in the first quarter of 2014.

The judgment has been appealed to the Court of Appeal by the defendant and its insurer. IBS has also chosen to appeal the judgment. In the current situation it is not known when a Court of Appeal hearing may take place.

Transactions with related parties

There were no transactions between OEM and related parties that significantly affected the Group's and parent company's financial position and results in the period except intra-group dividends, distributions and redemptions.

The parent company

Net turnover was MSEK 20 (16) and profit after financial items amounted to MSEK 7. (12). Net turnover relates only to intra-group transactions. Other short-term liabilities increased by MSEK 160 in connection with the share redemption of MSEK 231. The abovementioned risks and uncertainty factors specified for the Group also apply indirectly to the parent company.

Events after the reporting period

No significant events have occurred after the end of the reporting period.

The Nomination Committee

The Nomination Committee acting for the Annual General Assembly on 23 April 2015 has the following composition: Lars-Åke Rydh (Chairman) Hans Franzén Jerker Löfgren, Orvaus AB Agne Svenberg Bengt Stillström, AB Traction The Nomination Committee may be contacted via Lars-Åke Rydh, phone 0705-924570 or by e-mail at [email protected]

The next reporting period

The Year End Report for 2014 will be published on 17 February 2015.

Tranås, 21 October 2014

Jörgen Zahlin President and Chief Executive Officer

For additional information, please contact Chief Executive Officer Jörgen Zahlin 075-242 40 22 or Chief Financial Officer Jan Cnattingius 075-242 40 03.

The information in this report is such information that OEM International AB (publ) is required to disclose under the Securities Market Act. The information has been released to media for publication on 21 October 2014 2 pm.

Audit report

To the Board of OEM International AB (publ)

Introduction

We have performed a limited review of the interim financial information in summary (interim report) for OEM International AB (publ), corporate identity number 556184-6691, as per 30 September 2014 and the nine month period ended on that date. The board and the CEO are responsible for the preparation and presentation of this interim financial information in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim financial information based on our review.

Focus and scope of the limited review

We conducted our review in accordance with International Standard on Review Engagements ISRE 2410 Limited review of Interim Financial Information Performed by an Independent Auditor. A limited review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and of performing an analytical review and taking other review measures. A limited review has a different focus and is substantially less in scope than the focus and scope of an audit in accordance with International Standards on Auditing (ISA) and other generally accepted auditing practices.

The review procedures performed in a limited review do not enable us to obtain a level of assurance where we would become aware of all significant matters that might be identified in an audit. The conclusion based on a limited review therefore does not have the certainty of a conclusion based on an audit.

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, for the Group in accordance with IAS 34 and the Annual Accounts Act, and for the Parent Company in accordance with the Annual Accounts Act.

Tranås, 21 October 2014 KPMG AB

Kjell Bidenäs Chartered Accountant

The regions' sales and earnings.

SALES & EARNINGS BY REGION *

Net sales (SEK million) *

Jan- Jan
sept sept Q3 Q2 Q1 Q4 Q3 Trailing Full year
2014 2013 2014 2014 2014 2013 2013 12 mth 2013
Sweden, external income 866 797 275 293 298 275 244 1 141 1 072
Sweden, income from other segments 64 60 20 21 22 22 21 86 82
Finland and the Baltic States, external income 212 185 69 74 68 62 58 274 248
Finland and the Baltic States, income from other segments 2 3 1 1 1 1 1 3
3
Denmark, Norway, the United Kingdom and
Central Eastern Europe, external income 302 258 104 99 99 91 88 393 349
Denmark, Norway, the United Kingdom and
Central Eastern Europe, income from other segments 1 1 0 0 0 0 0 1
1
Other operating segments/elimination -66 -63 -21 -22 -23 -23 -22 -90 -86
1 380 1 241 448 466 466 428 389 1 808 1 668

Operating profit (SEK million) *

Jan- Jan
sept sept Q3 Q2 Q1 Q4 Q3 Trailing Full year
2014 2013 2014 2014 2014 2013 2013 12 mth 2013
Sweden 106 104 38 33 35 33 36 139 137
Finland and the Baltic States 15 11 5 6 4 4 4
19
15
Denmark, Norway, the United Kingdom and
Central Eastern Europe 22 17 9 6 7 6 7
28
23
143 132 52 45 46 43 47 186 175

Consolidated profit/loss (SEK million) *

Jan-
sept
Jan
sept
Q3 Q2 Q1 Q4 Q3 Trailing Full year
2014 2013 2014 2014 2014 2013 2013 12 mth 2013
Operating profit segment above 143 132 52 45 46 43 47 186 175
Group functions -10 -12 -3 -4 -4 -4 -2 -14 -16
Net financial items -2 -2 -1 -1 -1 0 -1 -3 -2
Pre-tax profit/(loss) 130 118 48 40 42 39 44 169 157

The Group's performance and financial position.

CONDENSED CONSOLIDATED STATEMENT OF INCOME AND OTHER COMPREHENSIVE INCOME (SEK MILLION)

Jan- Jan
sept sept Q3 Q2 Q1 Q4 Q3 Trailing Full year
2014 2013 2014 2014 2014 2013 2013 12 mth 2013
Net sales 1 380 1 241 448 466 466 428 389 1 808 1 668
Other operating income
Operating costs ***
1 1
-1 092
1
-389
-
-414
-
-413
2
-381
1
-334
-1598 3
3
-1 474
Depreciation of fixed assets -1 216
-33
-29 -11 -11 -11 -10 -11 -42 -39
Operating profit 133 120 49 41 42 39 45 172 159
Net financial income/expense -2 -2 -1 -1 -1 0 -1 -3 -2
Pre-tax profit/(loss) 130 118 48 40 42 39 44 169 157
Tax -29 -29 -10 -9 -10 -7 -11 -36 -36
Profit/loss for the period 101 89 38 31 32 32 33 133 121
Other comprehensive income
Periodens resultat 101 89 38 31 32 32 33 133 121
Items that have been transferred or may
recycled to net income
Exchange differences for the period on
translation of overseas operations 8 -1 1 6 1 4 -1 12 4
Items that can not be recycled to
net profit
Revaluation of defined
benefit pension plans 1 -2 0 2 0 0 -2 1
-2
Other comprehensive income for the period 9 -2 1 8 1 4 -2 13 2
Comprehensive income for the period 110 87 39 39 33 36 31 146 123
Earnings per outstanding share, SEK* 4,36 3,86 1,65 1,33 1,38 1,38 1,45 5,74 5,24
Earnings per total shares, SEK* 4,35 3,85 1,65 1,32 1,38 1,38 1,44 5,73 5,23
EBITA** 146 131 54 46 47 43 49 189 174

* Attributable to shareholders of the parent company. There are no dilution effects.

** Definition of EBITA; Operating profit before amortisation of acquisition-related intangible fixed assets.

*** Costs of SEK 4.9 million relating to a lawsuit judgement have been charged to operating expenses in the January to March 2014 period.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (SEK MILLION)

2014-09-30 2013-09-30 2013-12-31
Fixed assets
Goodwill 85 66 67
Other intangible assets 93 80 78
Total intangible assets 178 146 145
Property, plant and equipment 201 209 211
Total property, plant and equipment 201 209 211
Financial assets 1 0 0
Total financial assets 1 0 0
Total fixed assets 379 355 356
Deferred tax assets 2 2 2
Current assets
Inventories 318 288 302
Current receivables 376 285 267
Cash and cash equivalents 59 144 173
Total current assets 753 716 742
Total assets 1 134 1 074 1 100
Equity 511 689 725
Non-current interest-bearing liabilities 25 24 24
Provisions for pensions 3 3 4
Non-current non-interest-bearing liabilities 10 - -
Deferred tax liabilities 69 61 64
Total non-current liabilities 106 87 92
Current interest-bearing liabilities 252 105 88
Current non-interest-bearing liabilities 265 193 194
Total current liabilities 517 298 283
Total equity and liabilities 1 134 1 074 1 100

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (SEK MILLION)

2014-09-30 2013-09-30 2013-12-31
At beginning of year 725 689 689
Comprehensive income for the period
Profit/loss for the period 101 89 121
Other comprehensive income for the period 9 -2 2
Comprehensive income for the period 110 87 123
Dividends paid -92 -87 -87
Redemption of shares -231 - -
At the end of the period 511 689 725

CONDENSED CONSOLIDATED CASH FLOW STATEMENT (SEK MILLION)

Jan- Jan
sept sept Q3 Q2 Q1 Q4 Q3 Trailing Full year
2014 2013 2014 2014 2014 2013 2013 12 mth 2013
Operating cash flows
before movements in working capital 123 111 45 33 44 47 43 170 158
Movements in working capital -36 -36 -35 1 -2 12 -14 -24 -24
Operating cash
flows 87 75 10 35 43 59 30 146 134
Investing cash flows -33 -32 1 -9 -25 -12 -12 -45 -44
Cash flows after
investing activities 55 43 11 26 17 47 18 101 90
Financing cash
flows
- Change in financial liabilities 153 8 -1 147 7 -18 -11 135 -10
- Dividends paid -92 -87 - -92 - - - -92 -87
- Redemption of shares -231 - - -231 - - - -231 -
Financing cash flow -171 -79 -1 -176 7 -18 -11 -189 -97
Cash flow for the period -116 -36 10 -150 25 29 7
-87
-7
Cash and cash equivalents at the beginning of the period 173 181 49 198 173 144 138 144 181
Exchange rate difference 2 -1 1 1 0 0 0 2
-1
Cash and cash equivalents at the end of the period 59 144 59 49 198 173 144 59 173

KEY PERFORMANCE INDICATORS

Jan- Jan
sept sept Q3 Q2 Q1 Q4 Q3 Trailing Full year
2014 2013 2014 2014 2014 2013 2013 12 mth 2013
Return on equity, % 16,3 12,9 5,8 6,2 4,3 4,2 4,6 20,5 17,1
Return on capital employed, % ** 18,1 9,8 6,4 6,2 5,5 5,0 6,0 23,1 21,3
Return on total capital % *** 13,1 7,2 4,5 4,5 4,1 3,7 4,6 16,8 15,9
Equity/assets ratio, % 45,1 64,2 65,9
Earnings per outstanding share, SEK 4,36 3,86 1,65 1,33 1,38 1,38 1,45 5,74 5,24
Earnings per total shares, SEK 4,35 3,85 1,65 1,32 1,38 1,38 1,44 5,73 5,23
Equity per total shares, SEK 22,05 29,73 31,28
Average number of outstanding shares (thousands) 23 107 23 107 23 107 23 107 23 107 23 107 23 107 23 107 23 107
Average total shares (thousands) 23 169 23 169 23 169 23 169 23 169 23 169 23 169 23 169 23 169
Operating margin, % 9,6 9,6 10,9 8,9 9,1 9,4 11,4 9,6 9,5
EBITA-margin, % * 10,6 10,6 11,9 9,9 10,0 10,0 12,6 10,4 10,5

* Definition of EBITA margin; EBITA divided by net sales.

EBITA = Operating profit before amortisation of acquisition-related intangible fixed assets.

**EBITA plus finance income as a percentage of average capital employed.

***EBITA plus finance income as a percentage of average total capital.

The Parent Company's performance and financial position.

CONDENSED INCOME STATEMENT OF THE PARENT COMPANY (SEK MILLION)

Jan- Jan
sept sept Q3 Q2 Q1 Q4 Q3 Trailing Full year
2014 2013 2014 2014 2014 2013 2013 12 mth 2013
Net sales 20 16 7 7 7 21 6 41 38
Operating costs -32 -32 -10 -11 -11 -11 -9 -43 -43
Depreciation -5 -4 -2 -2 -2 -2 -1 -7 -6
Operating profit -17 -20 -5 -6 -6 9 -5 -8 -11
Income from investments
in Group companies 24 30 - 4 - -4 -
-1
26
Net financial income/expense 0 1 0 0 0 0 0 0
1
Profit/loss after
financial items 7 12 -5 -3 -5 5 -4 -9 16
Year-end appropriations - - - - - 107 - 107 107
Pre-tax profit/(loss) 7 12 15 -3 -5 112 -4 99 124
Tax 3 4 1 1 1 -26 1 -23 -22
Profit/loss for the period 10 16 16 -2 -4 86 -4 76 102

CONDENSED BALANCE SHEET OF THE PARENT COMPANY (SEK MILLION)

Assets 2014-09-30 2013-09-30 2013-12-31
Intangible fixed assets 21 22 23
Property, plant and equipment 19 20 20
Financial assets 374 329 324
Total fixed assets 415 371 367
Current receivables 163 133 237
Cash on hand and demand deposits 0 108 139
Total current assets 163 242 376
Total assets 578 613 743
Equity and liabilities
Equity 86 314 400
Untaxed reserves 177 153 177
Deferred tax liabilities 2 2 2
Non-current non-interest-bearing liabilities 10 - -
Total non-current liabilities 10 - -
Current interest-bearing liabilities 136 - -
Current non-interest-bearing liabilities 168 144 164
Total current liabilities 304 144 164
Total equity and liabilities 578 613 743
Pledged assets 7,5 7,5 7,5
Contingent liabilities 216 189 192

One of Europe's leading technology trading companies with 29 operating entities in 14 countries.

For 40 years OEM has aspired to become a creative link between customers and manufacturers of industrial components and systems. On the way the company has grown from a small family-owned business from Tranås in southern Sweden into an international technology trading company operating in 14 countries is northern Europe, Central Eastern Europe, the UK and China. OEM cooperates with over 300 leading and specialist manufacturers, and is responsible for their sales in selected markets. The product range consists of more than 25,000 items in the field of electrical components, flow components, motors and transmissions, ball bearings and seals, appliance components and lighting. The Group has over 20,000 customers, primarily within the manufacturing industry. The company possesses the requisite cuttingedge competence to help customers improve their purchasing efficiency and to select the right components.

www.oem.se

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