OEM International

Quarterly Report • Jul 14, 2014

Interim report Q2 2014

Second quarter 2014

• Incoming orders rose 12% to SEK 466 million (416)
• Net sales rose 7% to SEK 466 million (434)
• Operating profit before amortisation of acquisition-related intangible fixed assets (EBITA) rose 16% to SEK 46 million (40), corresponding to an EBITA margin of 10% (9)
• Profit before tax rose 12% to SEK 40 million (36)
• Profit after tax rose 13% to SEK 31 million (27)
• Earnings per share were SEK 1.33 (1.17)

January – June 2014

• Incoming orders rose 13% to SEK 952 million (839)
• Net sales rose 9% to SEK 932 million (851)
• Operating profit before amortisation of acquisition-related intangible fixed assets (EBITA) rose 13% to SEK 93 million (82), corresponding to an EBITA margin of 10% (10)
• Profit before tax rose 10% to SEK 82 million (74)
• Profit after tax rose 12% to SEK 63 million (56)
• Earnings per share were SEK 2.71 (2.41)

Events after the end of the reporting period

Acquisition av Scanding A/S in Denmark

Strong trend continues

OEM's second quarter of 2014 points to a continuation of its strong development with sales of SEK 466 million. This is an increase of 7 per cent compared to the same quarter last year. Region Finland and the Baltic States continue to demonstrate a strong performance. Sales rose 14 per cent compared to the same quarter last year, mainly thanks to strong organic growth in combination with the positive effects of acquisitions made in Finland. Region Sweden had a sales growth of 4 per cent compared to the same quarter in 2013. We had satisfactory growth in the companies Elektro Elco and OEM Motor, which compensated for a lower growth rate in some of our other Swedish companies. In the region Denmark, Norway, the UK and Central Eastern Europe, sales rose 13 per cent compared to the same period last year.

I see the trend in the Nordic countries and England as firm evidence of our efforts to create organic growth. The underlying growth in the manufacturing industries is weak in these countries. Our work is about taking marking shares by continually reinforcing our product range and increasing efficiency in our respective companies. OEM has also developed better in Eastern Europe than the market in general, where developments also receive support from an underlying economic growth.

Stable profits

OEM continued to have a stable development of profits in the second quarter. Operating profits (EBITA) rose by 16 per cent to SEK 46 million, compared to the same quarter in 2013. The EBITA margin was 10 per cent, compared to 9 per cent for the same quarter last year. We have somewhat lower operating profits (EBITA) in the second quarter compared to the first quarter of 2014, in spite of the same turnover. This can mainly be explained by the fewer number of working days, allowing the net sale despite the acquisitions end up on the same level as the previous quarter.

Completed acquisitions

The acquisitions implemented in the first quarter have developed in line with our expectations. During the second quarter we have acquired the agency for sales of Conta-Clips products in Poland. After the end of reporting period we have also acquired the Danish company Scanding A/S, which markets products to the process industry. This acquisition reinforces our already well-established operations in relation to the Danish process industry and brings both new products and an expanded customer base. Including the acquisition of Scanding, we acquired sales this year amounting to approximately SEK 95 million. The work with future acquisitions continues according to plan.

Financial position

Our financial position remains strong. During the second quarter OEM implemented an ordinary share dividend of SEK 4 per share and a redemption programme of SEK 10 per share, which represents a total distribution of MSEK 323. As a result of this the equity/assets ratio fell from 61 to 44 per cent. The statement on an equity/assets ratio of over 50 per cent given in the report for the first quarter still applies seen on the basis of the full year of 2014. There is still adequate potential to develop operations and to implement new acquisitions.

Incoming orders

Net sales

SEK million

Incoming orders

Incoming orders in the second quarter amounted to SEK 466 million (416), which is an increase of 12%. Incoming orders for comparable entities rose 9%. For the first half of 2014 incoming orders amounted to SEK 952 million (839), which is an increase of 13%. Incoming orders for comparable entities rose 10%. During the first half of the year incoming orders were 2% higher than net sales. The order stock amounted to SEK 236 million and was 7% higher than the comparable period last year.

The increase for comparable entities in the last quarter reflects a somewhat stronger business position in most of the markets.

Sales growth

Net sales in the second quarter amounted to SEK 466 million (434), which is an increase of 7%. For comparable entities net sales rose 5%. For the first half of 2014 net sales amounted to SEK 932 million (851), which is an increase of 9%. For comparable entities net sales rose 7%. The effects of foreign exchange on net sales has been positive, and has amounted to 2%.

In comparison with last year the largest growth in net sales was in Elektro Elco and OEM Motor in Sweden, and in operations in Poland and Denmark.

There are small percentage changes across the regions compared to the corresponding period last year. The weaker growth in Sweden in relation to growth in other regions means that the region decreased by 1%. Satisfactory growth in Denmark and Poland mean that the region Denmark, Norway, the UK and Central Eastern Europe increase their share by 1%.

Earnings trend

Operating profit before amortisation of acquisition-related intangible fixed assets (EBITA) in the second quarter was SEK 46 million (40), which is an increase of 16%. The operating margin before amortisation of intangible fixed assets (EBITA margin) was 10% (9).

For the first half of 2014 operating profit before amortisation of acquisition-related intangible fixed assets (EBITA) was SEK 93 million (82), which is an increase of 13%. The operating margin before amortisation of intangible fixed assets (EBITA margin) was 10% (10).

Non-recurring expenses of SEK 4.9 million have been charged to operating profit as a result of a lawsuit. The lawsuit is described on page 9. Excluding these expenses EBITA was SEK 98 million, which is an increase of 19% compared to the first half of the year last year.

The increase in operating profit is a result of higher net sales.

Profit after tax rose 12% to SEK 63 million (56). Earnings per share were SEK 2.71 (2.41).

* OEM reports as of 2014 EBITA (operating profit before amortisation of acquisition-related intangible fixed assets) to reflect the ongoing operating profit of the companies. Figures for previous reporting periods are restated.

Return

The return on equity was 6.2% compared to 4.2% for the corresponding quarter last year. The trailing twelve-month return on equity was 19%, which is almost on a par with the target of 20%.

Equity amounted to SEK 472 million (658) and the equity/assets ratio was 44% (61) on 30 June 2014.

Equity has been influenced to an amount of SEK 231 million as a result of the redemption programme implemented in June.

Sales growth by region per quarter

There are small percentage changes across the regions over the period 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 Q2	2013 Q2	2014 Q1 - Q2	2013 Q1 - Q2	Trailing 12	2013 Full year
Incoming orders	294	271	604	541	1 111	1 048
Net sales	293	282	591	553	1 110	1 072
EBITA	36	35	74	72	147	145
EBITA margin	12 %	13 %	12 %	13 %	13 %	14 %

The rising demand for existing entities and the acquisition of Nexa Trading led to an increase in net sales during the first half of the year of 7% to SEK 591 million (553). For comparable entities the increase was 3%. Exchange rate fluctuations had a positive impact of 1% on net sales. In Sweden the percentage growth in net sales was highest in Elektro Elco and OEM Motor. Incoming orders rose 12% during the first half of the year to SEK 604 million (541). Incoming orders were 2% higher than net sales in the first half of 2014, which is a positive sign. EBITA rose 2% to SEK 74 million (72). Excluding the non-recurring expenses related to a lawsuit, EBITA rose 9% to SEK 79 million.

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 Q2	2013 Q2	2014 Q1- Q2	2013 Q1 - Q2	Trailing 12	2013 Full year
Incoming orders	75	60	146	125	266	246
Net sales	74	65	143	128	262	248
EBITA	6	4	11	9	20	18
EBITA margin	8 %	7 %	8 %	7 %	7 %	7 %

In general demand is weak in Finnish industry, but in spite of this there was an increase in net sales in the first half of the year of 12% to SEK 143 million (128). Exchange rate fluctuations had a positive impact of 5% on net sales. In local currency the increase was 5% for comparable entities, with acquisitions accounting for the remaining 2%.

The business area Batteries experienced strong growth during the first half of the year.

Incoming orders were also satisfactory and amounted to SEK 146 million (125), which is an increase of 16%.

Incoming orders were 2% higher than net sales in the first half of 2014, which is a positive sign. EBITA rose 18% to SEK 11 million (9), mainly as a result of higher net sales.

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.

SEK million	2014 Q2	2013 Q2	2014 Q1 - Q2	2013 Q1 - Q2	Trailing 12	2013 Full year
Incoming orders	97	84	202	173	384	355
Net sales	99	88	199	171	377	349
EBITA	7	6	16	11	31	27
EBITA margin	7 %	6 %	8 %	7 %	8 %	8 %

The rise in demand especially in Poland, Denmark, the Czech Republic and England led to an increase in net sales in the first half of the year of 16% to SEK 199 million(171). Exchange rate fluctuations had a positive impact of 5% on net sales, which means that the region experienced an organic increase in nets sales of 11%.

Incoming orders were also satisfactory and amounted to SEK 202 million (173), which is an increase of 17%.

Incoming orders were 2% higher than net sales in the first half of 2014, which is a positive sign. EBITA rose 36% to SEK 16 million (11), mainly as a result of the increase in sales.

Other financial information

Cash flow

The cash flow from ongoing operations in the first half of the year amounted to SEK 77 million (45). The total cash flow was SEK -126 million (-43) in the first half of the year and was affected by investment activities to an amount of SEK -34 million (-20), dividends -92 (-87) and the redemption of shares -231 (-).

Investments

Group investments in fixed assets amounted to SEK 42 million (15) and are attributable to property, machinery and equipment to an amount of SEK 7 million (12), other intangible assets of SEK 1 million (3) and corporate acquisitions of SEK 34 million (-).

Liquidity

Liquid assets, consisting of cash and bank balances, amounted to SEK 49 million (138). Liquid assets, together with committed undrawn credit facilities, amounted to SEK 247 million (324) on 30 June 2014.

Intangible assets

An amortisation of intangible assets to an amount of SEK 11 million (9.4) has been charged to profits. The reported value in the Statement of Financial Position on 30 June 2014 was SEK 171 million (150).

Equity/assets ratio

The equity/assets ratio on 30 June 2014 was 44% (61).

Employees

The average number of employees in the Group during the period was 643 (632). At the end of the period there were 655 (631) employees, of which have 5 were employed in conjunction with acquisitions.

Share repurchase

The company has not repurchased any shares during the period. The company's total shareholding was 61,847 shares on 30 June 2014, which corresponds to 0.3% of the overall number of shares. The Annual General Meeting can authorise up to 10% of the number of shares, which corresponds to 2,316,930.

Share split and redemption of shares

To alter the capital structure the Annual General Meeting decided, in addition to an ordinary dividend of SEK 4, to transfer SEK 10 per share to shareholders. This corresponds to a transfer to shareholders of SEK 231 million, which was implemented in June via an automatic redemption process. The number of shares remains unchanged after the share split and is 23,169,309 shares, allocated to 4,767,096 A shares and 18,402,213 B shares.

Acquisitions 2014

On 15 January 2014 the majority of the operations of the Finnish company Mytrade were acquired, the core business of which is the marketing of visions systems. The business, which had a turnover of SEK 9 million in 2013, will be integrated in OEM Automatic Finland and became part of Region Finland and the Baltic States as of 1 January 2014.

All the shares in Nexa Trading AB were acquired on 27 January 2014. The company markets products, primarily in the Nordic countries, for wireless control of lighting and security products for the home, and had a turnover of SEK 52 million in 2013. The company was included in Region Sweden as of 1 January 2014.

The total consideration for the acquired operations amounted to SEK 26.5 million, plus a contingent consideration based on the development of operations in 2014 – 2016 estimated to SEK 13.5 million. The acquisitions have had a joint impact on net sales for the OEM Group to an amount of SEK 22 million and operating profit to an amount of SEK 1.2 million.

Preliminary acquisition analysis (SEK million)

	Reported
	values in		Fair value
The acquired net assets of the companies at the time	the	Adjustments	in the
of acquisition	companies	to fair value	Group
Intangible fixed assets	0,1	21,8	21,9
Other fixed assets	0,1	-	0,1
Inventories	9,3	-	9,3
Other current assets	15,5		15,5
Liquid assets	-	-	-
Deferred tax liabilities	-1,2	-4,9	-6,1
Other liabilities	-12,7	-	-12,7
Net identifiable assets/liabilities	11,1	16,9	28,0
Consolidated
goodwill	-	12,0	12,0
Cash
consideration			40,0

Other intangible fixed assets have increased by SEK 21.8 million as a result of the acquisitions. The amount relates to customer relations that will be written-off over 5 years.

OEM normally uses an acquisition structure with a base consideration and contingent consideration. A contingent consideration is initially valued at the current value of the probable return, which for this year's acquisition is SEK 13.5 million. The contingent consideration covers 2-3 years and the return can be a maximum of SEK 17.8 million.

Transaction expenses for the acquisitions implemented during the period amounted to SEK 0.0 million.

Accounting principles

This summarised consolidated interim report has been prepared in accordance with IAS 34, Interim Financial Reporting, and the applicable provisions in the Swedish Annual Accounts Act. The interim report for the Parent Company has been prepared in accordance with Swedish Annual Accounts Act, chapter 9, Interim Report and the Securities Market Act. The Group and the Parent Company have applied the same accounting principles and preparation basis as in the last annual report.

Risks and uncertainties

The OEM Group is exposed to both business-related and financial risks through its operations. Business-related risks include competition and operational risks, and financial risks include liquidity, interest rate and currency risks. The financial operations of the OEM Group and management of financial risks are mainly handled by the Parent Company. There are frameworks for how risk management should be conducted and how risks should be limited. These frameworks are characterised by a low risk level. The basis for this is a structured and efficient management of the financial risks that occur in the business. For a complete report of the risks affecting the Group, please refer to the Annual Report for 2013, pages 6-7 and pages 47-49. There is still no clear picture of market developments for the Group's three regions.

Litigation

Lund District Court delivered judgement in the beginning of April concerning the lawsuit in which the subsidiary Internordic Bearings AB (IBS) has been involved, regarding mutual creditor claims with a client and the client's insurance company for a breach of contract claim.

The judgement means that IBS has lost the case against the client, but that the client's insurance company has not been successful in its claim against IBS, and that this suit has been dismissed by the court.

The judgement means that IBS must pay a net amount of SEK 4.9 million to the client, including litigation costs, interest and with deductions for the insurance benefits that IBS receives via its own insurance company. The amount is included in the company's and the Group's income statement for the first quarter of 2014.

The judgement has been appealed to the Court of Appeal by the client and their insurance company. IBS has also decided to appeal the judgement.

Related party transactions

No transactions between OEM and related parties have been entered into that materially affect the financial position and performance of the Group or the Parent Company during the period, with the exception of inter-company dividends, dividend and redemption of shares.

Parent company

Net sales were SEK 13 million (11) and profit after financial items was SEK -8.3 million (16). Net sales only refer to inter-company transactions. The risks and uncertainties specified above for the Group also apply indirectly to the Parent company.

Events after the end of the reporting period

OEM International has acquired on 3 July 2014 all the shares in Scanding A/S in Denmark. Access will take place on 1 September 2014. The company markets flow components, primarily for the process industry in Denmark. The company had a turnover of approx. DKK 25 million in 2013.

Next reporting period

The interim report for the period January – September 2014 will be published on 21 October 2014.

Attestation

The Board of Directors and the CEO declare that the interim report gives a true and fair summary of the Group's and Parent Company's business operations, financial position and results, and describes significant risks and uncertainties faced by the Parent Company and the companies included in the Group.

Tranås, 14 July 2014

Lars-Åke Rydh	Ulf Barkman	Hans Franzén
Chairman of the Board	Member of the Board	Member of the Board

Jerker Löfgren Petter Stillström Agne Svenberg Member of the Board Member of the Board Member of the Board

Jörgen Zahlin President and CEO

The report has not been the object of a special review by the company's auditors.

Please contact CEO Jörgen Zahlin +46(0)75-242 40 22 for any additional information, or Finance Director Jan Cnattingius +46(0)75-242 40 03.

The information in this report is such that OEM International AB (publ) is obligated to make it public in accordance with the Securities Market Act. The information has been submitted to the media for publication on 14 July 2014, 12.00.

The regions' sales and earnings.

SALES & EARNINGS BY REGION *

Net sales (SEK million) *

	Jan-	Jan
	June	June	Q2	Q1	Q4	Q3		Q2 Trailing Full year
	2014	2013	2014	2014	2013	2013	2013	12 mth	2013
Sweden, external income	591	553	293	298	275	244	282		1 110 1 072
Sweden, income from other segments	44	39	21	22	22	21	19	87	82
Finland and the Baltic States, external income	143	128	74	68	62	58	65	262	248
Finland and the Baltic States, income from other segments	1	2	1	1	1	1	1	3	3
Denmark, Norway, the United Kingdom and
Central Eastern Europe, external income	199	171	99	99	91	88	88	377	349
Denmark, Norway, the United Kingdom and
Central Eastern Europe, income from other segments	0	0	0	0	0	0	0	1	1
Other operating segments/elimination	-45	-41	-22	-23	-23	-22	-20	-91	-86
	932	851	466	466	428	389	434		1 749 1 668

Operating profit (SEK million) *

	Jan-	Jan
	June	June	Q2	Q1	Q4	Q3		Q2 Trailing Full year
	2014	2013	2014	2014	2013	2013	2013	12 mth	2013
Sweden	68	68	33	35	33	36	33	137	137
Finland and the Baltic States	10	8	6	4	4	4	4	18	15
Denmark, Norway, the United Kingdom and
Central Eastern Europe	13	9	6	7	6	7	5	27	23
	91	85	45	46	43	47	41	181	175

Consolidated profit/loss (SEK million) *

	Jan- June	Jan June	Q2	Q1	Q4	Q3		Q2 Trailing Full year
	2014	2013	2014	2014	2013	2013	2013	12 mth	2013
Operating profit segment above	91	85	45	46	43	47	41	181	175
Group functions	-8	-11	-4	-4	-4	-2	-5	-13	-16
Net financial items	-2	-1	-1	-1	0	-1	0	-3	-2
Pre-tax profit/(loss)	82	74	40	42	39	44	36	165	157

The Group's performance and financial position.

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

	Jan-	Jan
	June	June	Q2	Q1	Q4	Q3		Q2 Trailing Full year
	2014	2013	2014	2014	2013	2013	2013	12 mth	2013
Net sales	932	851	466	466	428	389	434		1 749 1 668
Other operating income	-	0	-	-	2	1	0		3 3
Operating costs ***	-827	-759	-414	-413	-381	-334	-389		-1 542 -1 474
Depreciation of fixed assets	-21	-19	-11	-11	-10	-11	-10	-42	-39
Operating profit	84	75	41	42	39	45	36	168	159
Net financial income/expense	-2	-1	-1	-1	0	-1	0		-3 -2
Pre-tax profit/(loss)	82	74	40	42	39	44	36	165	157
Tax	-19	-18	-9	-10	-7	-11	-9	-37	-36
Profit/loss for the period from	63	56	31	32	32	33	27	128	121
Profit/loss for the period	63	56	31	32	32	33	27	128	121
Other comprehensive income
Items that have been transferred or may
recycled to net income
Exchange differences for the period on
translation of overseas operations	7	0	6	1	4	-1	7	11	4
Items that can not be recycled to
net profit
Revaluation of defined
benefit pension plans	2	0	2	0	0	-2	0		-1 -2
Other comprehensive income for the period	8	0	8	1	4	-2	7	10	2
Comprehensive income for the period	71	56	39	33	36	31	34	138	123
Earnings per outstanding share, SEK*	2,71	2,41	1,33	1,38	1,38	1,45	1,17	5,54	5,24
Earnings per total shares, SEK*	2,71	2,41	1,33	1,38	1,38	1,44	1,17	5,53	5,23
EBITA**	93	82	46	47	43	49	40	184	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)

	2014-06-30	2013-06-30	2013-12-31
Fixed assets
Goodwill	80	67	67
Other intangible assets	91	84	78
Total intangible assets	171	150	145
Property, plant and equipment	210	204	211
Total property, plant and equipment	210	204	211
Financial assets	1	1	0
Total financial assets	1	1	0
Total fixed assets	381	356	356
Deferred tax assets	2	1	2
Current assets
Inventories	299	284	302
Current receivables	339	304	267
Cash and cash equivalents	49	138	173
Total current assets	686	726	742
Total assets	1 069	1 083	1 100
Equity	472	658	725
Non-current interest-bearing liabilities	24	18	24
Provisions for pensions	2	1	4
Non-current non-interest-bearing liabilities	8	-	-
Deferred tax liabilities	69	61	64
Total non-current liabilities	103	81	92
Current interest-bearing liabilities	253	122	88
Current non-interest-bearing liabilities	241	223	194
Total current liabilities	494	345	283
Total equity and liabilities	1 069	1 083	1 100

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (SEK MILLION)

	2014-06-30	2013-06-30	2013-12-31
At beginning of year	725	689	689
Comprehensive income for the period
Profit/loss for the period	63	56	121
Other comprehensive income for the period	8	0	2
Comprehensive income for the period	71	56	123
Dividends paid	-92	-87	-87
Redemption of shares	-231	-	-
At the end of the period	472	658	725

CONDENSED CONSOLIDATED CASH FLOW STATEMENT (SEK MILLION)

	Jan-	Jan
	June	June	Q2	Q1	Q4	Q3		Q2 Trailing Full year
	2014	2013	2014	2014	2013	2013	2013	12 mth	2013
Operating cash flows
before movements in working capital	78	68	33	44	47	43	34	168	158
Movements in working capital	0	-23	1	-2	12	-14	-4		-2 -24
Operating cash
flows	77	45	35	43	59	30	30	166	134
Investing cash flows	-34	-20	-9	-25	-12	-12	-6	-58	-44
Cash flows after
investing activities	44	25	26	17	47	18	25	108	90
Financing cash
flows
- Change in financial liabilities	154	19	147	7	-18	-11	11	125	-10
- Dividends paid	-92	-87	-92	-	-	-	-87	-92	-87
- Redemption of shares	-231	-	-231	-	-	-	-	-231	-
Financing cash flow	-169	-67	-176	7	-18	-11	-76	-199	-97
Cash flow for the period	-126	-43	-150	25	29	7	-51	-90	-7
Cash and cash equivalents at the beginning of the period 173		181	198	173	144	138	188	138	181
Exchange rate difference	1	-1	1	0	0	0	1		1 -1
Cash and cash equivalents at the end of the period	49	138	49	198	173	144	138	49	173

KEY PERFORMANCE INDICATORS

	Jan-	Jan
	June	June	Q2	Q1	Q4	Q3		Q2 Trailing Full year
	2014	2013	2014	2014	2013	2013	2013	12 mth	2013
Return on equity, %	10,5	8,3	6,2	4,3	4,2	4,6	4,2	19,3	17,1
Return on capital employed, % **	11,7	9,8	6,2	5,5	5,0	6,0	5,1	22,7	21,3
Return on total capital % ***	8,6	7,2	4,5	4,1	3,7	4,6	0,4	16,9	15,9
Equity/assets ratio, %	44,2	60,7							65,9
Earnings per outstanding share, SEK	2,71	2,41	1,33	1,38	1,38	1,45	1,17	5,54	5,24
Earnings per total shares, SEK	2,71	2,41	1,33	1,38	1,38	1,44	1,17	5,53	5,23
Equity per total shares, SEK	20,39	28,39							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, %	9,0	8,8	8,9	9,1	9,4	11,4	8,3	9,7	9,5
EBITA-margin, % *	9,9	9,7	9,9	10,0	10,0	12,6	9,1	10,6	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
	June	June	Q2	Q1	Q4	Q3		Q2 Trailing Full year
	2014	2013	2014	2014	2013	2013	2013	12 mth	2013
Net sales	13	11	7	7	21	6	6	40	38
Operating costs	-22	-23	-11	-11	-11	-9	-12	-42	-43
Depreciation	-3	-3	-2	-2	-2	-1	-1	-6	-6
Operating profit	-12	-15	-6	-6	9	-5	-8	-8	-11
Income from investments
in Group companies	4	30	4	-	-4	-	30	-1	26
Net financial income/expense	0	1	0	0	0	0	0		0 1
Profit/loss after
financial items	-8	16	-3	-5	5	-4	23	-8	16
Year-end appropriations	-	0	-	-	107	0	-	107	107
Pre-tax profit/(loss)	-8	16	-3	-5	112	-4	23	99	124
Tax	2	3	1	1	-26	1	2	-23	-22
Profit/loss for the period	-6	19	-2	-4	86	-4	24	76	102

CONDENSED BALANCE SHEET OF THE PARENT COMPANY (SEK MILLION)

Assets	2014-06-30	2013-06-30	2013-12-31
Intangible fixed assets	22	22	23
Property, plant and equipment	20	20	20
Financial assets	362	330	324
Total fixed assets	404	372	367
Current receivables	147	143	237
Cash on hand and demand deposits	0	107	139
Total current assets	147	250	376
Total assets	551	622	743
Equity and liabilities
Equity	70	317	400
Untaxed reserves	177	153	177
Deferred tax liabilities	2	2	2
Non-current non-interest-bearing liabilities	8	-	-
Total non-current liabilities	8	-	-
Current interest-bearing liabilities	280	-	-
Current non-interest-bearing liabilities	15	150	164
Total current liabilities	294	150	164
Total equity and liabilities	551	622	743
Pledged assets	7,5	7,5	7,5
Contingent liabilities	213	187	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