OEM International

Quarterly Report • Jul 13, 2017

Interim report Q2 2017

Second quarter 2017

• Incoming orders rose 17% to SEK 693 million (591)
• Net sales rose 13% to SEK 690 million (612)
• Operating profit rose 7% to SEK 68 million (64)
• EBITA rose 8% to SEK 74 million (68)
• Profit after tax rose 4% to SEK 51 million (49)
• Earnings per share were SEK 2.21 (2.12)
• Two acquisitions, Rauheat OY and Candelux Sp.zo.o.

January - June 2017

• Incoming orders rose 16% to SEK 1,395 million (1,200)
• Net sales rose 15% to SEK 1,360 million (1,185)
• Operating profit rose 17% to SEK 141 million (121)
• EBITA rose 16% to SEK 151 million (130)
• Profit after tax rose 15% to SEK 106 million (93)
• Earnings per share were SEK 4.61 (4.01)

Strong trend continues

OEM reports continued strong growth in the second quarter of 2017 and we're pleased to announce yet another sales record. Net sales increased to SEK 690 million, which is 13% up on the second quarter of 2016. Currency translation effects and acquisitions have contributed a 7% increase, which brought organic growth to 6%. Demand from Swedish and Finnish industrial companies remains strong and the growth rates for incoming orders are higher than for net sales. Operating profit (EBITA) is also showing good growth, albeit slightly lower than sales growth. This is partly due to a somewhat weaker gross margin. The operating margin reached 10.7%.

A look at the first half of 2017, which balances out the impact of single transactions and calendarrelated effects, shows us that the positive trend is even stronger. Incoming orders increased by 16% and net sales increased by 15%. Organic growth was 9% and the operating margin reached 11.1%.

Growth across the regions

Demand in Region Sweden remains strong, with 3% organic growth in the second quarter. This is good, considering that Easter left us with fewer working days than in the year-ago quarter. The halfyear figures, with the calendar-related effects eliminated, show 8% organic growth for the first six months of the year. It is primarily OEM Automatic, Internordic Bearings, Telfa and Svenska Batteripoolen that are posting strong growth figures.

The growth curve in Region Finland, the Baltic states and China is very steep. Sales growth in the second quarter reached 50%, of which 18% was organic growth and 28% can be attributed to our acquisitions. Finland is witnessing considerable growth as the industrial economy there continues to recover, and we're winning lots of new business and expanding our market share. We're also seeing strong growth in China, while growth in the Baltic states continues at a more normal pace.

In Region Denmark, Norway, the UK and East Central Europe, growth remains more or less unchanged from the first quarter of the year. The increase in net sales compared with last year's second quarter was 4%. The companies reporting strongest growth in the region in the second quarter are the operations in Denmark and the Czech Republic.

Two acquisitions in the quarter

In the second quarter, OEM made two acquisitions which together will deliver additional annual sales of SEK 85 million to the Group. The Finnish company, Rauheat Oy, supplies the HVAC sector with insulated district heating pipes and ground-source heating pipes. It brings a new market segment to the Group. The Polish company, Candelux Sp z o.o., supplies commercial construction projects with lighting solutions. The acquisition strengthens OEM's portfolio of products for the commercial lighting market in Sweden and provides new opportunities for OEM to market Hide-a-lite in Poland.

Business model for future success

Most of the operations are showing a good rate of growth and it is pleasing that business is going really well for the largest entities. As part of our company culture we are continuously on the lookout for improvement opportunities. This is the basis of our business model, which creates conditions for continued positive development.

Net sales SEK million

Incoming orders

Incoming orders in the second quarter of 2017 increased by 17% to SEK 693 million (591). For comparable entities, incoming orders rose 12% and the acquired incoming orders were 5%.

Incoming orders in the first six months of 2017 increased by 16% to SEK 1,395 million (1,200). Comparable entities reported a 12% increase in incoming orders.

In the first half of 2017, incoming orders were 3% higher than net sales.

At SEK 334 million (279) on 30 June 2017, the order book was 20% higher than on the corresponding date of the previous year.

Sales growth

Net sales in the second quarter increased by 13% to SEK 690 million (612). For comparable entities, net sales rose 6% and acquired sales were 5%. Foreign currency exchange rate movements had a positive 2% effect on net sales in the second quarter. Net sales in the first half of 2017 increased by 15% to SEK 1,360 million (1,185). For comparable entities, net sales rose 9% and acquired sales were 4%. Foreign currency exchange rate movements had a positive 2% effect on net sales in the first six months.

The Swedish operations of Telfa, Agolux, OEM Automatic, ATC Tape Converting, Svenska Batteripoolen, Svenska Helag, Internordic Bearings and OEM Electronics, and the operations in China, Hungary, Finland and the Czech Republic reported the highest percentage growth in net sales compared with last year.

There has been a shift in the share of sales between the regions in the first six months of 2017 compared with the year-ago period. Region Finland, the Baltic states and China has reported positive growth and has increased its share by 4 percentage points over the prior year period. Both Region Sweden and Region Denmark, Norway, the UK and East Central Europe have decreased by 2 percentage points.

Note: The return on equity for each quarter is listed by four to provide a better comparison with the trailing twelve months in the diagram.

Earnings trend

EBITA, operating profit before amortisation of acquisition-related intangible fixed assets, in the second quarter was SEK 74 million (68), which is an increase of 8%.

The EBITA margin was at 10.7% (11.1%). EBITA in the first six months of 2017 increased to SEK 151 million (130), which is an increase of

16%. The EBITA margin in the first six months of 2017 was 11.1% (11.0%).

In the second quarter, operating profit reached SEK 68 million (64) and, for the first six months of the year, the cumulative operating profit reached SEK 141 million (121). The second quarter operating margin was 9.9% (10.4%) and cumulative for the January to June period was 10.4% (10.2%).

Profit after tax in the first six months of 2017 rose 15% to SEK 106 million (93). Earnings per share for the first six months of 2017 were SEK 4.61 (4.01).

Return

The return on equity in the second quarter was 7.7% compared with 8.4% in the year-ago quarter.

The trailing-twelve-month return on equity was 30%, which is well above the 20% target.

Shareholders' equity amounted to SEK 691 million (599) with an equity/assets ratio of 48% (48%) on 30 June 2017.

Sales growth by region for each quarter

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, Ernst Hj Rydahl Bromsbandfabrik, ATC Tape Converting AB and Ranatec Instrument AB.

SEK million	2017 Q2	2016 Q2	2017 Q1 - Q2	2016 Q1 – Q2	2016 Full year	Trailing 12 month
Incoming orders	431	382	862	777	1,564	1,650
Net sales	418	394	843	762	1,543	1,624
EBITA	51	54	113	101	221	233
EBITA margin	12%	14%	13%	13%	14%	14%

Net sales rose 11% in the first six months of the year to SEK 843 million (762). Acquisitions had a beneficial 1% effect on net sales and, with a 2% effect from foreign currency exchange rate movements, this means that organic growth in the region was 8%. More or less all operations are performing well and Telfa, Agolux, OEM Automatic, ATC Tape Converting, Svenska Batteripoolen, Svenska Helag, Internordic Bearings and OEM Electronics account for the largest percentage growth in net sales.

Incoming orders increased by 11% to SEK 862 million (777). Incoming orders in the first six months were 2% higher than net sales.

EBITA rose by 12% to SEK 113 million (101) in the first six months of the year as a result of higher net sales.

Finland, the Baltic states and China

OEM Automatic FI, Akkupojat Oy, OEM Electronics FI, Scannotec Oy, Sitek-Palvelu OY, Rauheat OY, OEM Automatic OU, OEM Automatic UAB, OEM Automatic SIA, OEM Automatic (Shanghai) Co.Ltd.

SEK million	2017 Q2	2016 Q2	2017 Q1 – Q2	2016 Q1 – Q2	2016 Full year	TTM
Incoming orders	143	95	286	193	397	490
Net sales	147	98	276	192	389	473
EBITA	16	9	29	18	35	46
EBITA margin	11%	9%	11%	19%	9%	10%

Net sales for the region in the first six months of the year rose 44% to SEK 276 million (192). Net sales grew 21% due to the positive impact of acquisitions and 3% due to currency movements, resulting in 20% organic growth in the region.

The level of incoming orders has also been good, rising 48% to SEK 286 million (193).

Incoming orders in the first six months were 4% higher than net sales.

Growth has been robust across most of the operations in Finland. The operations in China and the Baltic states have reported a 41% and an 8% increase in sales respectively.

EBITA rose 63% to SEK 29 million (18), due primarily to increased net sales.

Denmark, Norway, UK and East Central 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	2017 Q2	2016 Q2	2017 Q1 – Q2	2016 Q1 – Q2	2016 Full year	TTM
Incoming orders	119	114	247	230	452	468
Net sales	124	119	242	231	450	460
EBITA	9	10	17	18	30	29
EBITA margin	7%	8%	7 %	8%	7%	6%

Net sales in the first six months of the year increased by 4% to SEK 242 million (231). Exchange rate fluctuations have had a 1% positive impact on net sales, resulting in 3% organic growth in the region. The operations reporting organic growth are Hungary, the Czech Republic, the UK and Denmark. Incoming orders increased by 7% to SEK 247 million (230).

Incoming orders in the first six months were 2% higher than net sales.

EBITA fell by 7% to SEK 17 million (18), due to a lower coverage ratio and an increased cost base.

Other financial information

Cash flow

Operating cash flow was SEK 79 million (89) in the first six months of 2017. Total cash flow was SEK -7 million (-18) in the first six months of 2017 and was affected by investing activities of SEK - 55 million (-37) and by dividends of SEK -127 million (-116).

Investments

The Group's investments in property, plant and equipment in the first six months of 2017 totalled SEK 52 million (31). Property, machinery and equipment accounted for SEK 20 million (31), and intangible assets for SEK 32 million (-), SEK 29 million (-) of which is related to business combinations. Of the intangible asset investment related to business combinations, the adjustment of the acquisition analysis for Sitek-Palvelu OY had a SEK 3 million impact on goodwill.

Cash and cash equivalents

Cash and cash equivalents, comprising cash and bank balances, amounted to SEK 76 million (67). Cash and cash equivalents, together with committed undrawn credit facilities, amounted to SEK 279 million (293) on 30 June 2017.

Intangible assets

Amortisation of intangible assets totalling SEK 13 million (12) has been charged to the income statement. On 30 June 2017, intangible assets amounted to SEK 217 million (165).

Equity/assets ratio

On 30 June 2017, the equity/assets ratio was 48% (48%).

Employees

The Group's average number of employees in the first six months of 2017 was 785 (737). At the end of the period, the number of employees was 806 (747). 27 of these employees joined the Group through acquisitions.

Share repurchase

The company did not repurchase any shares during the period. The company's total shareholding was 61,847 shares on 30 June 2017, which is equivalent to 0.3% of the total number of shares. The Annual General Meeting is authorised to repurchase up to 10% of the shares, which is the equivalent of 2,316,930 shares.

Acquisitions

On 28 April 2017, the entire shareholding of Rauheat OY in Finland was acquired. The company markets HVAC & plumbing products for the construction industry. Its head office is located in Rauma in Finland. The company generates annual sales of approximately EUR 5 million. It has 11 employees and became part of Region Finland, the Baltic states and China on 1 May 2017.

On 22 June 2017, the entire shareholding of Candelux Sp. z o.o. in Poland was acquired. The company is a distributor of professional lighting for public settings, comprising products of its own and thirdparty premium brands. Its head office is located in Warsaw in Poland. The company generates annual sales of approximately EUR 4 million. It has 35 employees and became part of Region Denmark, Norway, the UK and East Central Europe on 1 July 2017.

The total consideration for the businesses acquired was SEK 42.1 million, plus contingent considerations estimated at SEK 14.0 million, based on how the businesses develop in the 2017 - 2019 period.

Following the acquisitions, OEM's consolidated net sales have increased by SEK 12.7 million and operating profit by SEK 1.0 million in 2017.

Preliminary acquisition analysis (SEK million)

		Fair
	Companies	value
	' carrying	adjustme	Group
The acquired companies' net assets at the time of acquisition	amounts	nt	fair value
Intangible fixed assets	0.4	14.9	15.3
Other fixed assets	8.0	3.8	11.8
Other non-current receivables	0.1	-	0.1
Inventories	13.8	-	13.8
Other current assets	15.5	-	15.5
Cash and cash equivalents	1.1	-	1.1
Deferred tax liability		-3.7	-3.7
Other liabilities	-23.3	-	-23.3
Net identifiable assets/liabilities	15.6	15.0	30.6
Consolidated goodwill	-	11.5	11.5
Consideration, including contingent consideration			42.1

As a result of the acquisitions, other intangible fixed assets have increased by SEK 15.3 million and other fixed assets by SEK 11.8 million. Other intangible fixed assets relate to customer relationships that will be amortised over a five-year period. Consolidated goodwill is not tax deductible.

OEM normally uses an acquisition structure with a base consideration and contingent consideration. Contingent consideration is initially measured at the present value of the probable earn-out amount, which is SEK 14.0 million for the acquisitions this year. The period for contingent consideration is three (3) years at most and the earn-out is capped at SEK 15.6 million. Both the base consideration and the contingent consideration are settled in cash.

Transaction expenses linked to acquisitions that have been made amount to SEK 0.3 million in the period.

Remeasurement of contingent consideration

Contingent consideration recognised as a liability was remeasured based on the development of previously acquired businesses and was subsequently increased by SEK 0.1 million (-0.9). This has been recognised in operating expenses and had a negative SEK -0.1 million (0.9) effect on the operating profit in 2017. Acquisition-related consideration liability on 30 June 2017 totalled SEK 23.9 million (14.8).

Accounting policies

This condensed consolidated interim report has been prepared in accordance with IAS 34, Interim Financial Reporting, and in compliance with relevant provisions from the Swedish Annual Accounts Act. The interim report for the Parent Company has been prepared in compliance with Chapter 9, Interim Reports, of the Swedish Annual Accounts Act. The Group and the Parent Company have applied the same accounting policies and basis of preparation as in the latest annual report. No

International Financial Reporting Standards (IFRS) or International Financial Reporting Interpretations Committee (IFRIC) interpretations adopted in 2017 have had a significant effect on the reported results or financial position of the Group.

There are no separate disclosures of the fair values of financial assets and liabilities stated at cost because the carrying amounts of financial assets and financial liabilities are considered to be reasonable approximations of their fair values. This is because the company management believes there have been no material fluctuations in market interest rates or credit spreads that would have a material impact on the fair value of the Group's interest-bearing liabilities. Furthermore, the fair value of trade and other current receivables and payables is assumed to approximate their carrying amount given their short-term nature.

Risks and uncertainties

The OEM Group is exposed to both business-related risks and financial risks through its activities. Business-related risks include competition and operational risks, and financial risks include liquidity risk, interest rate risk and currency risk. The financial operations of the OEM Group and the management of financial risks are mainly handled by the Parent Company. For a complete report on the risks affecting the Group, please refer to pages 32 and 33 and pages 74 to 76 of the 2016 Annual Report.

Other than the risks and uncertainties described in the Annual Report for 2016, no significant risks or uncertainties have been identified or removed.

Related party transactions

No related party transactions have been entered into that materially affected the financial position or the performance of the Group and Parent Company during the period, except for inter-company dividend payments and dividends to shareholders of the Parent Company.

Parent Company

Net sales for the Parent Company in the first six months of 2017 totalled SEK 16 million (15) and profit after financial items was SEK 27 million (14). Net sales relate entirely to inter-company transactions. The foregoing risks and uncertainties specified for the Group also apply indirectly to the Parent Company.

Events after the close of the reporting period

There are no significant events to report after the close of the reporting period.

Definitions

Definitions can be found on page 16.

Assurance

The Board of Directors and the Managing Director declare that the interim report gives a true and fair view of the Group's and the Parent Company's operations, position and income and describes the principal risks and uncertainties faced by the Parent Company and the Group's Companies.

Tranås, Sweden, 13 July 2017

Petter Stillström Ulf Barkman Hans Franzén Chairman of the Board Board member Board member

Ingrid Nordlund Jörgen Rosengren Anna Stålenbring Board member Board member Board member

Åsa Söderström Jerring Jörgen Zahlin Board member Managing Director and Chief Executive Officer

This report has not been separately audited by the company's auditors.

For further information, please contact the Managing Director, Jörgen Zahlin, on +46 (0)75-242 40 22 or the Finance Director, Jan Cnattingius, on +46 (0)75-242 40 03.

This information is of such a nature that its disclosure by OEM International AB (publ.) is required under the EU Market Abuse Regulation and the Swedish Securities Market Act. The information was provided for publication on 13 July 2017 at 11.00 CET by Jan Cnattingius.

The regions' sales and earnings

SALES & EARNINGS BY REGION

Net sales (SEK million)

	Jan-	Jan
	jun	jun	Q2	Q1	Q4	Q3		Q2 Trailing	Full year
	2017	2016	2017	2017	2016	2016	2016	12 mth	2016
Sweden, external income	843	762	418	425	440	341	394	1 624	1 543
Sweden, income from other segments	47	41	24	23	19	18	20	84	78
Finland, the Baltic States and China, external income	276	192	147	128	103	94	98	473	389
Finland, the Baltic States and China, income from other segments 4		3	2	2	2	1	2		7 7
Denmark, Norway, the United Kingdom and
East Central Europe, external income	242	231	124	117	110	109	119	460	450
Denmark, Norway, the United Kingdom and
East Central Europe, income from other segments	1	0	0	0	0	0	0		1 1
Elimination	-52	-45	-27	-25	-21	-19	-22	-92	-85
	1 360	1 185	690	671	654	544	612	2 558	2 382

EBITA (MSEK)

	Jan-	Jan
	jun	jun	Q2	Q1	Q4	Q3		Q2 Trailing	Full year
	2017	2016	2017	2017	2016	2016	2016	12 mth	2016
Sweden	113	101	51	62	71	49	54	233	221
Finland, the Baltic States and China, external income	29	18	16	13	7	10	9	46	35
Denmark, Norway, the United Kingdom and
East Central Europe	17	18	9	8	4	8	10	29	30
Group functions	-7	-7	-1	-6	-2	-1	-4	-9	-9
	151	130	74	78	81	67	68	298	277

Operating profit (SEK million)

	Jan-	Jan
	jun	jun	Q2	Q1	Q4	Q3		Q2 Trailing	Full year
	2017	2016	2017	2017	2016	2016	2016	12 mth	2016
EBITA	151	130	74	78	81	67	68	298	277
Amortisation of acquisition-related intangible fixed assets.
Sweden	-6	-6	-3	-3	-3	-3	-3	-11	-12
Finland, the Baltic States and China, external income	-3	-1	-2	-1	-1	0	0	-4	-2
Denmark, Norway, the United Kingdom and
East Central Europe	-2	-2	-1	-1	-1	-1	-1	-4	-5
Operating profit	141	121	68	73	76	62	64	279	259

Consolidated profit/loss (SEK million)

	Jan-	Jan
	jun	jun	Q2	Q1	Q4	Q3		Q2 Trailing	Full year
	2017	2016	2017	2017	2016	2016	2016	12 mth	2016
Operating profit	141	121	68	73	76	62	64	279	259
Net financial items	-5	-2	-3	-1	-2	0	0	-7	-4
Pre-tax profit/(loss)	136	119	65	71	74	62	63	272	255

The Group's performance and financial position

CONDENSED CONSOLIDATED STATEMENT OF INCOME (SEK MILLION)

	Jan-	Jan
	jun	jun	Q2	Q1	Q4	Q3		Q2 Trailing	Full year
	2017	2016	2017	2017	2016	2016	2016	12 mth	2016
Net sales	1 360	1 185	690	671	654	544	612	2 558	2 382
Other operating income	-	1	-	-	4	2	1		7 7
Operating costs ***	-1 195	-1 043	-609	-586	-571	-472	-538	-2 238	-2 086
Depreciation of fixed assets	-24	-23	-13	-12	-11	-11	-11	-47	-46
Operating profit	141	121	68	73	76	62	64	279	259
Net financial income/expense	-5	-2	-3	-1	-2	0	0	-7	-4
Pre-tax profit/(loss)	136	119	65	71	74	62	63	272	255
Tax	-30	-26	-14	-16	-15	-13	-14	-58	-54
Profit/loss for the period	106	93	51	56	60	49	49	215	201
Earnings per outstanding share, SEK*	4,61	4,01	2,21	2,40	2,59	2,10	2,12	9,30	8,70
Other comprehensive income
Profit/loss for the period	106	93	51	56	60	49	49	215	201
Items that have been transferred or may
recycled to net income
Exchange differences for the period on
translation of overseas operations	3	0	3	0	-3	4	2		4 2
Items that can not be recycled to
net profit
Revaluation of defined
benefit pension plans	0	0	0	0	1	0	0		0 0
Other comprehensive income for the period	2	0	3	0	-2	4	2		4 2
Comprehensive income for the period	109	93	54	55	58	52	51	219
									203

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

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (SEK MILLION)

	2017-06-30	2016-06-30	2016-12-31
Fixed assets
Goodwill	132	98	117
Other intangible assets	85	66	79
Total intangible assets	217	165	196
Property, plant and equipment	246	220	227
Total property, plant and equipment	246	220	227
Deferred tax assets	2	3	1
Financial assets	0	0	0
Total financial assets	2	3	2
Total fixed assets	466	387	425
Current assets
Inventories	430	386	428
Current receivables	471	405	404
Cash and cash equivalents	76	67	83
Total current assets	978	858	915
Total assets	1 444	1 245	1 340
Equity	691	599	709
Non-current interest-bearing liabilities	41	35	36
Provisions for pensions	1	2	1
Non-current non-interest-bearing liabilities	16	2	12
Deferred tax liabilities	85	74	83
Total non-current liabilities	143	112	132
Current interest-bearing liabilities	268	239	167
Current non-interest-bearing liabilities	341	295	331
Total current liabilities	609	534	498
Total equity and liabilities	1 444	1 245	1 340

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (SEK MILLION)

	2017-06-30	2016-06-30	2016-12-31
At beginning of year	709	622	622
Comprehensive income for the period
Profit/loss for the period	106	93	201
Other comprehensive income for the period	2	0	2
Comprehensive income for the period	109	93	203
Dividends paid	-127	-116	-116
At the end of the period	691	599	709

CONDENSED CONSOLIDATED CASH FLOW STATEMENT (SEK MILLION)

	Jan-	Jan
	jun	jun	Q2	Q1	Q4	Q3		Q2 Trailing	Full year
	2017	2016	2017	2017	2016	2016	2016	12 mth	2016
Operating cash flows
before movements in working capital	126	114	62	64	83	60	61	270	257
Movements in working capital	-47	-25	-10	-38	-4	-10	-6	-61	-38
Operating cash flows	79	89	53	26	79	50	56	209	219
Acquisition of subsidiaries
net effet on cash and cash equivalents	-34	-8	-22	-11	-21	-1	0	-56	-31
Acquisition of intangible fixed assets	-3	0	-1	-2	-2	-1	0	-6	-3
Acquisition of property, plant and equipment	-20	-30	-13	-6	-14	-5	-4	-39	-50
Sales of property, plant and equipment	2	2	0	1	1	1	1		4 5
Investing cash flows	-55	-37	-37	-18	-36	-6	-3	-97	-79
Financing cash flows
- Loan raised	7	1	7	0	1	1	0		9 3
- Loan amortisation	-1	-1	-1	0	0	0	-1	-2	-2
- Change in bank overdrafts	90	46	104	-14	-36	-37	30	17	-28
- Dividends paid	-127	-116	-127	-	-	-	-116	-127	-116
Financing cash flow	-31	-70	-17	-13	-35	-37	-86	-110	-142
Cash flow for the period	-7	-18	-2	-5	8	7	-33		8 -3
Cash and cash equivalents at the beginning of the period	83	85	77	83	75	67	99	67	85
Exchange rate difference	0	1	0	0	0	1	1		0 2
Cash and cash equivalents at the end of the period	76	67	76	77	83	75	67	76	83

KEY PERFORMANCE INDICATORS

	Jan-	Jan
	jun	jun	Q2	Q1	Q4	Q3		Q2 Trailing	Full year
	2017	2016	2017	2017	2016	2016	2016	12 mth	2016
Return on equity, %	15,2	15,2	7,7	7,5	8,0	7,0	8,4	30,2	30,2
Return on capital employed, %	16,7	15,1	8,4	8,3	8,9	7,6	8,0	33,2	31,6
Return on total capital %	11,5	10,6	5,8	5,7	5,8	5,4	5,6	22,7	21,8
Equity/assets ratio, %	47,9	48,1		55,7					53,0
Earnings per outstanding share, SEK	4,61	4,01	2,21	2,40	2,59	2,10	2,12	9,30	8,70
Earnings per total shares, SEK	4,59	4,00	2,19	2,40	2,57	2,10	2,12	9,26	8,67
Equity per total shares, SEK	29,83	25,87							30,62
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, %	10,4	10,2	9,9	10,8	11,6	11,4	10,4	10,9	10,9
EBITA-margin, %	11,1	11,0	10,7	11,7	12,3	12,2	11,1	11,7	11,6

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

The Parent Company's performance and financial position

CONDENSED INCOME STATEMENT OF THE PARENT COMPANY (SEK MILLION)

	Jan-	Jan
	jun	jun	Q2	Q1	Q4	Q3		Q2 Trailing	Full year
	2017	2016	2017	2017	2016	2016	2016	12 mth	2016
Net sales	16	15	8	8	26	8	8	50	49
Operating costs	-24	-23	-12	-11	-13	-11	-12	-48	-47
Depreciation	-3	-3	-2	-2	-2	-2	-2	-6	-6
Operating profit	-11	-11	-6	-5	11	-5	-6	-4	-5
Income from investments
in Group companies	39	26	39	-	0	-2	26	37	24
Other financial income/expense, Net	-1	-1	-1	0	0	0	0	-2	-1
Profit/loss after
financial items	27	14	32	-6	12	-7	20	31	18
Year-end appropriations	-	-	-	-	171	-		- 171	171
Pre-tax profit/(loss)	27	14	32	-6	183	-7	20	202	189
Tax	3	3	1	1	-41	1	1	-37	-37
Profit/loss for the period	29	17	34	-4	142	-6	21	165	153

Comprehensive income for the period corresponds with the profit/loss for the period.

CONDENSED BALANCE SHEET OF THE PARENT COMPANY (SEK MILLION)

Assets	2017-06-30	2016-06-30	2016-12-31
Intangible fixed assets	19	18	18
Property, plant and equipment	17	17	18
Financial assets	375	380	346
Total fixed assets	411	415	382
Current receivables	244	221	359
Cash on hand and demand deposits	-	-	-
Total current assets	244	221	359
Total assets	655	636	741
Equity and liabilities
Equity	158	119	255
Untaxed reserves	252	220	252
Deferred tax liabilities	2	2	2
Non-current non-interest-bearing liabilities	15	1	12
Total non-current liabilities	15	1	12
Current interest-bearing liabilities	138	139	83
Current non-interest-bearing liabilities	90	154	136
Total current liabilities	228	293	219
Total equity and liabilities	655	636	741

Notes

Segment reporting is presented on page 5, 6 and page 11, disclosures about fair value of financial instruments are presented on page 9 and accounting policies are presented on page 8.

Definitions

In addition to the conventional financial performance measures established by IFRS, OEM uses the term EBITA which is defined below. The reason for this is that the company wishes to reflect the underlying business activities and improve the comparability of financial information across different periods of time.

EBITA Operating profit before amortisation of acquisition-related intangible fixed assets A reconciliation of the calculation of EBITA is presented on page 11.

EBITA margin EBITA divided by net sales

Return on capital employed EBITA plus finance income as a percentage of average capital employed

Return on total capital EBITA plus finance income as a percentage of average total capital

Capital employed Total assets less non-interest-bearing liabilities and provisions

One of Europe's leading technology trading companies with 36 operating entities in 14 countries

For 40 years, OEM's idea has been to serve as a link that creates value between customers and manufacturers of industrial components and systems. Over the years, the company has grown from a small, family-owned business in Tranås in southern Sweden into an international technology trading group operating in 14 countries in northern Europe, Central Eastern Europe, the UK and China. OEM has partnerships with more than 300 leading and specialist manufacturers and is responsible for their sales in selected markets. Its range comprises more than 50,000 products in the areas of electrical components, flow technology, motors, transmissions and brakes, ball bearings and seals, appliance components and installation components. The Group has a customer base of more than 25,000 businesses, primarily in the manufacturing sector. The company's high level of expertise enables it to help customers increase purchasing efficiency and choose the right components.

www.oem.se