ANNUAL REPORT & SUSTAINABILITY REPORT 2019

CONTENTS FAST FACTS

GLOSSARY	3
THE PAST YEAR	4
WHY PROFILGRUPPEN?	6
THE CEO ON 2019	8

SUSTAINABILITY REPORT 2019

SUSTAINABLE DRIVE	10
CARING FOR THE BUSINESS	12
CARING FOR THE ENVIRONMENT	13
CARING FOR THE INDIVIDUAL	19
CARING FOR SOCIETY	23
AUDITOR'S OPINION	23

ANNUAL REPORT 2019

DIRECTORS' REPORT	24
FIVE-YEAR SUMMARY	28
FINANCIAL STATEMENTS	29
Consolidated statement of comprehensive income and statement of financial position, Consolidated statement of changes in equity and statement of cash flows	30
Parent company income statement and balance sheet, Parent company statement
of changes in equity and statement of cash flows	32
Notes to the accounts	34
Financial terms	51
Auditor's report	52
CORPORATE GOVERNANCE REPORT	54
BOARD OF DIRECTORS	57
MANAGEMENT	58
SHARE INFORMATION	59

657

PROFILGRUPPEN

EUROPE'S MOST MODERN PRESS

PROFESSIONALISM

SWEDISH

UNCOMPLICATED COOPERATION

LISTED

EXCHANGE STOCK

FOUR PRESSES

FULLY AUTOMATED

LACQUERING AND

INTERIOR FITTINGS

FACILITY FOR PROCESSING,

PACKAGING

ALUMINIUM

PERSONAL INVOLVEMENT

NETWORK OF SUBCONTRACTORS

ESTABL. 1981

ISO 14001 ISO 50001 IATF 16949

ANODISING FACILITY

active customers

466

average number of employees

extrusion presses

PROFILGRUPPEN ALUMINIUM ESTABL. 1981 EUROPE'S MOST MODERN PRESS ANODISING FACILITY FOUR PRESSES ISO 14001 ISO 50001 IATF 16949 NETWORK OF SUBCONTRACTORS FULLY AUTOMATED LISTED EXCHANGE STOCK PERSONAL INVOLVEMENTPROFESSIONALISM UNCOMPLICATED COOPERATION SWEDISH

active customers

FACILITY FOR PROCESSING, LACQUERING AND PACKAGING INTERIOR FITTINGS

GLOSSARY

ANODISING	Electrolytic surface treatment process that produces a very hard insulating and decorative surface
BAUXITE	A soil or rock from which aluminium can be extracted
MACHINING	Various processes that further refine the aluminium extrusion, such as bending, milling or punching
EXTRUSION	Process of manufacturing extrusions by pressing an aluminium ingot through a matrix. A length of metal that has been pressed through a matrix to achieve a specific shape
PROCESSING	Adding new functions or changing the appearance of an extrusion, for example through machining or surface treatment
PRIMARY PRODUCTION	Producing a material for the first time, rather than through recycling
RECYCLING	To recover and reuse a material which formed part of a product that has reached the end consumer

THE PAST YEAR

The past year was unusually eventful for ProfilGruppen, in terms of well planned activities as well as unforeseen events. There were four things in particular that had an impact on us.

1. NEW EXTRUSION PLANT

After a few years of strong growth fuelled by increased orders from both new and existing customers, ProfilGruppen needed to add capacity. To ensure that we are able to grow together with our customers, a decision was taken in 2018 to make a bold investment in a fourth extrusion line. The new production facility, located in a new industrial area close to our existing facilities in Åseda, Småland, was completed by year-end 2019. The investment will increase our capacity by 12,500 tonnes annually under three-shift operation.

ENERGY EFFICIENCY AT ALL STAGES

All aspects of the construction process were inspired by a commitment to sustainability. The new, energy-efficient equipment runs exclusively on renewable electrical energy. Excess heat generated by the facility can be recycled through geothermal storage. The solution has the capacity to heat existing and future properties in the area. This not only saves money but also benefits the environment.

EUROPE'S MOST MODERN PRESS

The process is designed to optimise quality and material use. The machinery consists of equipment with high performance and reliability. A high degree of automation ensures a high level of productivity. Increased productivity is achieved mainly through fewer and shorter stoppages for loading of new feed material. This reduces scrap, as material use for per load can be increased thanks to the long discharge table.

FOCUSING ON HEALTH AND SAFETY

Carefully considered and clear interfaces create the best possible work environment with a focus on safety. The layout has been designed based on a worker's perspective to ensure as unobstructed a view as possible, and with movable desks for controlling the machinery, innovative optical safety solutions and automated material flows.

LOCAL PROFILES

The project has engaged not just ProfilGruppen but also a number of local entrepreneurs in Småland. Almost every aspect of the construction of the new plant was handled by local firms, who worked closely with ProfilGruppen. This close collaboration benefits the whole region.

2. NEW CEO

Following Per Thorsell's decision to step down early in the year, we were able to announce that we had found a new President and CEO. In October, Fredrik Zöögling took over at the helm. He has an M.Sc. in Engineering, is 53 years old and

has many years' experience from senior positions in industry. Before joining ProfilGruppen, he was CEO of Eberspächer Exhaust Technology AB, which manufactures and sells exhaust systems for the HGV industry, has around 900 employees and a turnover of around MSEK 3,600. Fredrik has previously worked at a number of different companies, mainly subcontractors to the automotive industry. Fredrik's own account is presented on pages 8–9.

3. FIRE AT THE ANODISING UNIT

In the summer, a minor fire unfortunately broke out at our anodising unit. Although only a very limited area was damaged, a large amount of smoke was generated. The clean-up work was complex, and we were unable to restart the facility as planned after the holiday. We worked hard to solve our customers' problems in new ways, but unfortunately the problems caused some delays over a period of time. The anodising unit has now been restored and is more efficient than ever.

4. NEW ERP SYSTEM

In spring 2019, we replaced our ERP system, which is an operation that many describe as the corporate equivalent of a complete heart and lung transplant. The project has certainly required a major effort on the part of the organisation, but it has not caused any significant disruptions to our operations. We have since continued to work on optimising the use of the new system.

WHY PROFILGRUPPEN? environment through eco-smart products. A constant striving for efficiency adds value for customers and investors, and this requires a skilled and dedicated workforce.

1. ALUMINIUM – OUR CHOICE, TOMORROW'S MATERIAL

ProfilGruppen creates value for the

We are not alone in seeing the potential of aluminium to help build a sustainable future. That's why demand is constantly increasing, and that's why aluminium is the only thing we work with. The material has many benefits from a lifecycle perspective. This is partly because aluminium's low weight and resistance enable us to create more energy-efficient and sustainable products. Another reason is that it is a highly recyclable material that can be recycled again and again. The metal is also widely available.

2. THE CUSTOMERS – BROAD DEMAND

Products that are strong and light are demanded in a wide variety of industries. In transport, the use of aluminium is increasing, as it reduces the weight of the vehicle and thus increases its carrying capacity, while also reducing fuel consumption and the risk of injury in accidents. In construction, aluminium extrusions are in demand for their corrosion resistance and low weight. The material's high heat conductivity makes it valuable in electronics, such as solar thermal collectors. The potential for application is endless.

3. DESIGN – CUSTOMER VALUE

We are experts on aluminium and extrusion solutions. Those who are looking to use aluminium components or extrusions in their products have everything to gain from contacting one of our designers. Based on the product's application, we can produce a customised solution that optimises the product in terms of technical properties and environmental impact throughout its lifecycle. The manufacturing and logistical processes are also optimised. Together with the customer, we create something unique every time.

4. EXTRUSION – FLEXIBLE MANUFACTURING

Extrusion is our core competence. Extrusions are created by pressing heated aluminium through a matrix that is unique for each product. Extrusion is a cost-effective production method that meets high requirements for quality in the form of accurate measurements and strength. A combination of craftsmanship and technology is required to achieve the right result. The extrusion can be delivered to the customer directly or be further processed.

5. SURFACE TREATMENT – AN EVEN STRONGER EXTRUSION

Through surface treatment, we can change the appearance, colour, function, corrosion resistance and durability of the extrusion to meet the varying needs for different applications. The most common methods are anodising and powder coating, but other methods are also used.

6. PROCESSING – ENDLESS POSSIBILITIES

The extrusions can be processed in many different ways – for example, through simple cutting and punching, or advanced milling or bending in fully automated production cells. In some cases, we also assemble the customer's product and package it for the consumer. Processing is carried out both at our own facilities and in our network of skilled subcontractors.

DESIGN – CUSTOMER VALUE

7. THE PRODUCT– COMPLEXITY MADE SIMPLE

In many cases, the final product is delivered directly to the customer's production line, where it could find its way into anything from a bus to a bathtub or a patient lift. Or why not a bicycle stand or salad bar? Naturally, all these different applications have widely differing focus areas and requirements. Our task is to use our skills and dedication to ensure that the products are delivered to the customer as smoothly as possible, whatever the requirements, and thereby create value for the customer.

NEW POTENTIAL FOR GROWTH

Over the course of the year, our new extrusion plant has been built up. We are ramping up capacity by 12,500 tonnes and thus creating an entirely new foundation for growth. Although 2019 was marked by a concentration on projects for future growth opportunities, we still ended the year with an operating profit in line with last year's record figure – an achievement that involved a great deal of effort.

The past year has added value in many ways. Once again, ProfilGruppen made a large number of interesting deals and increased its market share in Sweden. We also, however, invested considerable energy in building a platform for future growth.

EXTRAORDINARY CHALLENGES STRENGTHEN THE ORGANISATION

In 2019, we faced a number of challenges beyond the ordinary.

We built Europe's most modern extrusion line. At the beginning of the year, there was just a building framework in a new industrial area with limited infrastructure. Together with a number of partners, we created a fully installed facility in just twelve months. Coordination, trialling the facility, ensuring safety and all the other tasks involved required a major effort from the organisation. The project has been successful and proceeded entirely to plan.
The installation and launch of a new ERP system is another major project that engaged the organisation during the year. The official launch took place in May 2019. A change of this magnitude rarely passes unnoticed, and considerable resources were invested in overcoming the complications that arose and to correct consequential errors. For most of our customers, the change passed unnoticed, although some experienced delays in deliveries. Despite extraordinary efforts, we entered the summer period with low stocks and in a difficult delivery situation.
In July, a minor fire broke out at our anodising unit. During maintenance work, parts of the equipment caught fire and a large amount of smoke was generated. The clean-up job was time-consuming and resulted in a production stoppage lasting a few weeks. We made up for this loss of capacity by engaging external companies, which provided exemplary assistance. Since resuming operations, the unit has been operating at capacity and has now caught up.

In the autumn, we put a lot of energy into restoring normal production levels and deliveries. Meanwhile, the construction of our new extrusion plant entered an intensive phase.

Our team had to show its mettle in 2019 and faced up to the challenges in an extraordinary way. I had the privilege of joining this team as President and CEO in mid-October and witnessed a united and resolute organisation during my first few months.

INCREASED MARKET SHARE IN SWEDEN

A slowdown in the economy became apparent in 2019. The European trade association EA estimates that the total European market for aluminium extrusions shrank by two per cent compared with 2018. The Swedish market is estimated to have decreased by the same percentage. Our total delivery volume declined by three per cent year during 2019, but in Sweden our volumes increased and we continued to capture market share domestically. We saw a continued high number of new enquiries while maintaining a stable level of sales of new extrusion tools. We believe both the inflow of enquiries and new tool sales are indicators of continued good opportunities to develop our business together with our customers.

DEDICATED EMPLOYEES

Each day, I am met by dedicated employees who are proud of ProfilGruppen and of what we are achieving together. The workforce responded to and overcame the difficult trials it had to undergo over the past year and adapted rapidly to the new situation. Without the professionalism of our employees, ProfilGruppen would not have been able to achieve the growth and improvements that have been made over the last few years. I would like to say a big thank you to all my skilled and dedicated colleagues for these efforts.

We have laid a good foundation for a stable company that is capable of delivering, even during intensive periods when we are running multiple improvement projects in parallel with our normal day-to-day operations. This will to constantly improve among our workforce gives me great confidence for the future and assures me that ProfilGruppen is in a strong position to achieve continued profitable growth.

FULL SPEED AHEAD

Our investments in a new ERP system and, not least, a new, modern aluminium extrusion plant give us further opportunities to strengthen our position and competitiveness. In 2020, we will be taking one of Europe's most modern extrusion lines into

"We are ramping up capacity by 12,500 tonnes and thus creating an entirely new foundation for growth"

use, and this strengthens our confidence.

We stand up well against the competition in the market and are working continuously to improve our offer in order to become the go-to supplier for our customers. We want to do everything a little better, every day.

I look forward to continuing to develop our business together with my colleagues. Our focus in 2020 will once again be on looking ahead in order to take the next step forward together with our customers. We will continue to streamline our processes on an ongoing basis. Our customer platform will be developed through a focus on new customer groups and an increased degree of processing. We will ensure that we have and continue to develop the right skills. Our customers will become even more convinced that we are the most dedicated, sustainable and reliable partner.

Finally, I would like to thank our customers for their continued trust. We look forward to a continued sustainable and profitable collaboration.

I would also like to say an extra big thank you to all my colleagues for their tremendous efforts during a challenging 2019, where you demonstrated our core values in action.

Åseda, March 2020

Fredrik Zöögling President and CEO

SUSTAINABLE DRIVE

The desire to make progress every day is an important attitude at ProfilGruppen. We want to grow and develop and be as strong as possible – for many years to come. This requires us to be concerned about the long-term future not just of our business but also of the world around us.

Every choice we make affects somebody else. We are aware that we influence the world around us in many different ways and want to make the most positive impact possible.

By spreading the use of a material that is sustainable in many ways, we have a positive impact on the environment. Our own activities are also controlled and governed to show concern for the environment and society.

Our long-term survival depends on successful business deals and profitability. In ProfilGruppen, our customers find a responsive and responsible partner that strives for continuous development. By offering a workplace where individuals can develop and thrive, we create the personal commitment that is essential to our ability to live up to this.

Our core values are: personal commitment, responsiveness, speed, continuous improvement and professionalism. This means that we listen and adapt to the demands that our operational environment places on us. We want to do everything a little better, every day.

STRONG ROOTS IN SMÅLAND

Our operations are based in Åseda in the southern Swedish province of Småland, where we have both our production facilities and head office, as well as the majority of our sales. Our export customers are also largely served from Åseda, and we have only a couple of sales representatives stationed abroad. With about half our customers located in Sweden, we have also opened a sales office in Stockholm to get geographically closer to some of them.

In order to complement our offering, and to ensure a comprehensive delivery to our customers, we work closely with a number of subcontractors of machining services. Most of these are also based in our region. The geographical concentration of our business allows for good transparency, short decision-making pathways and creates a positive sense of community among our employees. It also simplifies the control of sustainability issues such as gender equality, human rights and environmental impact.

We, and the majority of our suppliers, are located in Sweden and follow Swedish laws, collective bargaining agreements and customs – which means that the lowest level in these matters is, from an international perspective, relatively high. We can therefore concentrate on raising our ambitions to the level we ourselves choose.

THE GROUP CONSISTS OF

• ProfilGruppen Extrusions AB, in which the majority of the operations is conducted. This is where extrusions are manufactured and processed. All sales and administration activities are also performed in this company.
• Two sales companies in Germany and Norway, with only a couple of employees.
• PG&WIP AB, which processes and packages products for a specific customer in the interior design industry. The company is 70 per cent owned by ProfilGruppen.
The parent company of the Group, ProfilGruppen AB, is listed on Nasdaq Stockholm Small Cap. This company has no employees and its operations consist of letting properties to other Group companies.

SCOPE OF THE REPORT

This Sustainability Report, which comprises pages 10–23, has been prepared by ProfilGruppen AB (publ), corp. ID no. 556277-8943. The Sustainability Report covers the ProfilGruppen Group. However, not all facts and information in the report are applicable to the part-owned subsidiary PG&WIP AB. Where this is the case, this is indicated by an asterisk (*).

CARING FOR THE BUSINESS

A SOUGHT-AFTER PARTNER

Our vision is to be the preferred supplier of innovative aluminium extrusion solutions in northern Europe. While our high-quality solutions make us a valued supplier, they can be copied. We thus become the most sought-after supplier by providing the highest reliability of delivery and the best treatment to our customers, and by being perceived as a problem-solving partner. We achieve this through personal dedication in everything we do.

The value of our products for the customer is increased because we use our specific expertise in aluminium and the manufacturing process to optimise the customer's product.

LONG-TERM PROFITABILITY

All businesses rely on their ability to generate profits. Profil-Gruppen's Board of Directors has set a target of an operating margin of eight per cent. Achieving this target requires a clear profitability focus throughout the organisation. Our financial performance is presented in the financial section of the annual report.

FREE AND FAIR COMPETITION

As a company, we want to act fairly and honestly in all situations. All employees are expected to act in this way, as evidenced by our Code of Conduct. The Code of Conduct states that we shall comply with all local laws, industry rules and similar in order to maintain free and fair competition.

"Our vision is to be the preferred supplier of innovative aluminium extrusion solutions in northern Europe"

Our employees are never permitted to offer, give, request or receive gifts or equivalent benefits from customers or suppliers if this could affect the commercial relationship or exceed the bounds of normal hospitality. We shall always act responsibly.

Our ongoing reviews of the costs of customer events and business travel indicate that such costs remain within the specified limits.

We communicate to our suppliers, partly through our Code of Conduct for Suppliers*, that we do not accept anything outside these limits. At present, we have no procedure for examining the business ethics of our suppliers, but so far there has not been any situation where irregularities have been detected.

To counteract the risk of relationships between purchasers and suppliers that affect competition, we strive to rotate the respective purchasers' range.

Our Code of Conduct details how an employee who feels that rules or codes are not being complied with by our employees or our suppliers shall report their suspicions. No such suspicions have been reported during the year.

CARING FOR THE ENVIRONMENT

Practically all activities have an impact on the environment, which may be positive or negative. Our ambition is to minimise the negative impact while helping to achieve positive effects. 2,5

Each year, we evaluate all aspects of our business with regard to potential environmental effects and with the intention of determining which of our activities have the biggest impact on the environment so that we can address and define goals linked to these. 1,5 2,0

On the following pages, information is provided about the aspects and activities that are currently deemed to have the most significant environmental impact – and how we manage them. 1,0

The common denominator for most of these items is that they can give rise to carbon dioxide emissions. There is undoubtedly a need to reduce these emissions both globally and nationally, and we are working in various ways to help achieve this reduction. In 2019, our business – the activities in which our companies are engaged, including transports of our products and employees – generated about 3,300 tonnes (3,300) of carbon dioxide emissions. The largest share, over 60 per cent, comes from the use of LPG, which we intend to reduce through energy efficiencies and by gradually shifting away from LPG. The second biggest source of carbon dioxide emissions at ProfilGruppen is transports of extrusions, which accounted for around 20 per cent of total emissions generated in 2019. Our overall carbon dioxide emissions in 2019 were similar to 2018, with emissions from transports, energy use, travel and other sources remaining at the same level. Of these emissions of greenhouse gases, 2,100 tonnes (2,200) fall under Scope 1 of the GHG Protocol and 400 tonnes (400) fall under 0,0 0,5

Scope 2. We will continue our efforts to calculate and define Scope 3 emissions going forward.

Emissions intensity, ratio of carbon dioxide emissions to net sales, tonnes/MSEK From 2019, we have chosen to report emissions intensity, which is the ratio of emissions in Scopes 1 and 2 of the GHG Protocol relative to net sales.

A CLIMATE-SMART MATERIAL

Aluminium is our choice, from the outset and for the future. Aluminium is better from a lifecycle perspective than many of its rivals and can be used to develop sustainable products. It is an excellent choice for products that need to be adapted to a circular economy. This is partly because we can create more energy-efficient and sustainable solutions and partly because it is a genuinely 100 per cent recyclable metal. We welcome all initiatives to impose more stringent demands on, for example, reductions of carbon dioxide emissions. We can contribute to the solution!

Delivered volume, tonnes

Our goal is to spread knowledge about the benefits of aluminium and persuade customers to replace other materials with aluminium to reduce their fuel and energy use. Our volume growth is a way of measuring our success.

MANY PRACTICAL BENEFITS

Aluminium extrusions are used in many different industries. In the construction industry, for example, they are used in windows, doors, doorways and balconies, thanks to their corrosion resistance and low weight. Its high level of durability is also a contributing factor in aluminium being a widely used material in load-bearing structures in aircraft. In addition, aluminium's heat conducting characteristics are exploited in cooling extrusions.

Aluminium is increasingly used in the automotive industry, not least because of its light weight, which means fuel savings can be achieved throughout the life of a vehicle. Reducing the weight of lorries, buses and trains increases their carrying capacity, while lighter vehicles reduce the risk of injuries in

WHY CHOOSE ALUMINIUM?

As a material, aluminium has many benefits, such as:

• Light weight lighter than many other materials
• High strength and durability despite the low weight
• Good corrosion resistance withstands weather and wind without rusting
• Easy to shape efficient to work with
• Long lifespan three quarters of all aluminium that has ever been produced is still being used
• High conductivity can conduct both heat and electricity well
• Design-friendly sets no limits on creativity
• Easy to process major possibilities for built-in functions
• Easy to recycle can be re-used again and again without impairing its properties
• Valuable leads to high re-sale value and profitable recycling
• Widely available abundant bauxite resources in the Earth's crust

case of accidents. The ongoing electrification of the automotive industry is also driving demand for aluminium.

In the aerospace industry, the material's low weight and maintenance requirements are crucial. For the telecom industry, the low weight and the possibilities to incorporate many functions is a natural explanation for why aluminium profiles are important components.

Occasionally, you will hear people say that aluminium is toxic, but our untreated and anodised aluminium extrusions contain no harmful substances and meet the provisions of the EU REACH Regulation and RoHS Directive.

EFFECTIVE RECYCLING

Aluminium can be melted down and reused again and again, without losing any of its valuable and sustainable properties. The prospects for effective recycling are thus ideal.

A very high share – over 90 per cent – of all aluminium extrusion-based products used in the construction, design and transportation industries are returned for recycling. The high value and easy recyclability of the material explain why the share is already so high. Recycling represents a 95 per cent energy saving compared with primary production.

"A very high share of the material is already recycled"

DEMAND EXCEEDS THE SUPPLY OF RECYCLED MATERIAL

The market's demand for recycled material is increasing. The supply of recycled aluminium is limited, however.

Thanks to its durability, more than three quarters of all aluminium ever produced in the world is still in use. The potential to increase the recycling rate for scrapped products is not very great, as a very high share of the material is already recycled. Overall demand for aluminium products, however, is increasing. There is therefore a shortage of aluminium for remelting and the need for primary production is still great.

The recycled metal that is available is currently mainly used in industries with lower quality requirements than in our industry. We and other extrusion manufacturers mainly use primary produced aluminium and remelted process scrap from the aluminium industry.

Our own production process generates a significant amount of scrap in the form of defective products, process scrap and shavings from the machining process. Everything is collected and sent for remelting.

The supply of aluminium in the Earth's crust is practically unlimited, so there is every reason to continue to add more primary material to the aluminium cycle to meet the rising global demand.

Due to the limited supply, those who want to use only recycled material have to join the queue and wait until enough material has entered the cycle.

HYDROPOWER IS SUPERIOR

100

Primary production of aluminium requires a large amount of energy and the environmental impact depends very much on the source of energy that is used for the production. Coal power is still common among European aluminium works, but the most sustainable primary production of aluminium is carried out today in aluminium works using electricity generated entirely from hydropower. These hydro stations also use carbon anodes in the electrolysis process, which gives rise to carbon dioxide emissions.

ProfilGruppen's goal is to ensure that all primary raw material that we buy has been produced using only non-fossil energy sources. Through our purchasing power, we can influence our suppliers and their choices.

Share of primary raw material produced using non-fossil energy sources, per cent

Whereas previously we were in a position to buy raw material produced using hydropower, the situation changed unexpectedly in 2018. The commodity market was hit by turbulence, mainly due to US trade sanctions, and some suppliers struggled to deliver their products. We were forced to act quickly to find other solutions to ensure that our customers would not be affected. Despite that, we have managed to maintain a very high share.

MATERIAL AND ENERGY EFFICIENCY

ALL SCRAP IN THE PROCESS IS RECYCLED

In our manufacturing process, a significant amount of material is discarded at the various stages. The largest amount of scrap is produced in the extrusion production process, partly because the first and last bits of the product are deformed. All discarded material is sent for remelting. Depending on the design and the specific requirements, the amount of scrap generated varies considerably among different extrusions.

Machining of the extrusions produces shavings and waste material from the cutting that is done to create the required component. The share of material that is cut off varies from one product to another and can in some cases be very considerable.

It is clear that the product mix has a big impact on the overall proportion of scrap, and our conscious efforts to improve our performance need to take the form of operational targets broken down by process stage and product. Already at the design stage, we need to work to optimise the extrusion and ensure that the need to cut off material is minimised.

All scrap generated in our manufacturing process is collected, remelted and turned into new material, so scrap is really something of a misnomer. The reason why we still make every effort to minimise the amount of scrap is partly because increasing our material efficiency lowers our costs and partly because of the environmental impact of transports and energy use in the remelting process.

The reasoning is based on the fact that each detail requires a specific amount of material, but a further dimension is that we can use our knowledge to design details that have the same functionality but with thinner walls, for example, and thereby use a smaller amount of material. This is an important aspect that we are working on.

Scrap percentage

Although the overall outcome of our efforts is hard to measure due to the impact of the product mix, we have an ongoing target of reducing total scrap loss by three per cent each year. It is mainly the share of machining scrap that decreased in 2019.

ALL ELECTRICITY FROM HYDROPOWER

It goes without saying that we should use as little energy as possible to limit the greenhouse gas effect. We strive to use only non-fossil energy and are currently using only hydroelectricity that has an environmental product declaration (EPD) from IVL Swedish Environmental Research Institute.

We are certified according to the Energy Management system ISO 50001*, which imposes certain demands on us while also giving us support in our work on energy efficiency. We have, among other things, an activity plan involving a wide range of actions, both large and small, to reduce energy consumption per produced kilo of extrusions. In 2019, we implemented a number of measures, such as continuing to install LED fixtures in several departments, expanding our heat exchanger capacity in the anodising unit and improving efficiency in the use of pneumatic equipment in several processes. In 2019, we built a new extrusion plant. In this project, energy efficiency was a key concern, and our new press will reduce energy use per manufactured unit in the coming years. We achieve the highest energy efficiency by maintaining a high level of capacity utilisation and availability at our plants, which requires dedication from all members of the workforce.

LPG, which is a fossil resource, is still used for the heating of aluminium ingots at one of four presses, for an ageing furnace and for the heating of two sealing baths used in the anodising process. We will gradually be replacing LPG with alternative options and new investments into LPG-powered solutions will not be permitted.

Our process gives rise to excess heat, which we have chosen to take advantage of by delivering parts of it to the municipal district heating network. This recovered energy corresponds to the annual heating of about a hundred standard detached houses.

Energy use in extrusion, kWh per produced tonne

In the last few years, the goal was to reduce energy consumption in extrusion production per produced kilo of extrusions by three per cent compared with the previous year. The outcome in 2019 was unfortunately a slight increase. In the last five years, the reduction has been a total of around 17 per cent. Over the last few years, we have had high capacity utilisation, which has had a positive impact on energy use per produced unit. It is mainly the amount of machining scrap that decreased in 2019.

"All electricity from hydropower"

FACILITATING REUSE

Reusing products and materials is a good way to increase our overall resource efficiency. Together with our customers and suppliers, we try to reuse packaging, baskets, liners and pallets that are used in our production process. We have produced a packaging instruction with the aim of improving the handling of packaging in return systems.

We are working to reduce and sort waste to facilitate reuse. This effort is governed by a waste sorting manual and by activities aimed at reducing the generation of waste.

TRANSPORTS

EFFICIENT MANAGEMENT IS THE KEY

One of the foundations for our growth is that aluminium is increasingly being demanded in the transport industry due to its low weight, which increases fuel efficiency and carrying capacity. Our own business gives rise to transports to, from and between our facilities. In cooperation with suppliers of raw materials, purchased raw materials are to a large extent transported by rail instead of by road.

The volume of transports between our facilities or subcontractors in our value-added chain varies depending on the complexity of the product. We work continuously to reduce the carbon dioxide emissions of these transports. Our logistics team controls, coordinates and increases the loads carried by vehicles in our own processing chain and in transports to our customers. Here, the twin goals of reducing emissions and cutting costs go hand in hand.

Carbon dioxide emissions, kg per transported tonne of aluminium extrusions

In 2019, we did not achieve the expected reduction due to the fire that occurred at our anodising unit in the summer, which resulted in a large number of inefficient transports aimed at maintaining our high standard of service to our customers.

For other transports, we also have the ability to be proactive and reduce the number of transports through the choices we make. For example, we often choose to use our neighbours in Åseda as suppliers for various consumables. By using only tap water for all internal drinking water requirements, we help to reduce transports that cause unnecessary emissions of carbon dioxide.

ENVIRONMENT-RELATED CONDITIONS

NO HARMFUL EMISSIONS TO WATER

We use water from our own source for cooling in the extrusion plants and as rinse water in the anodising process. Sulphuric acid is also used in our anodising process, and after it has been neutralised in a treatment facility sodium sulphates are formed. This gives rise to emissions of sulphates into water. Consumed acid baths are also used to neutralise the caustic soda used in certain cleaning processes.

Under the permit it received in 2019, ProfilGruppen is permitted to emit up to 372 tonnes per calendar year, which is controlled through continuous testing and monthly analyses. Although the environmental impact of sulphate emissions is hard to establish, as sulphates occur naturally in watercourses, we monitor the situation on an ongoing basis and work continuously on improvements to our processes with the aim of minimising emissions.

Sulphate emissions, tonnes

350

During the period 2015–2019, the volume of surface-treated products increased steadily but, thanks to improvements to our processes, this has not resulted in a corresponding increase in emissions, which have been kept below the level specified in our permit throughout the period.

OPERATIONS SUBJECT TO PERMIT AND NOTIFICATION REQUIREMENTS

ProfilGruppen is engaged in operations that are subject to permit and notification requirements under the Swedish Environmental Code. Activities requiring a permit refer to the extrusion of aluminium at our oldest extrusion plant, anodising, mechanical metalworking and recycling of hazardous waste generated in our own operations.

ProfilGruppen's aluminium extrusion and metalworking processes are classified as notifiable activities.

THE BASIS: OUR ENVIRONMENTAL POLICY

ProfilGruppen's overall environmental policy summarises our views on environmental issues and how we should act in such matters.

Our environmental management system ISO 14001 helps us to work systematically*. The certification of the system involves regular external audits, which give us valuable input and help in the evaluation of the work. We are also certified according to the energy management system ISO 50001:2011*, which gives us a further edge in our work on energy issues. Every year, internal audits in energy and environment are performed on the manufacturing processes, according to a rolling schedule. Any discrepancies are noted and followed up.

The company's environmental goals are followed up each month by management, and are given special focus at dedicated meetings.

These meetings also evaluate the relevance of, and compliance with, the environmental policy. The more concrete goals tend to take the prevailing role in our operational work – but this routine helps to keep the important purpose of the environmental policy up-to-date.

We have a network of machining suppliers that we work closely with and with which we have significant sway, enabling us to influence their governance on sustainability issues. We require that they comply with our Code of Conduct for Suppliers and we also carry out supplier evaluations. We set requirements for our suppliers' environmental work, which are a prerequisite for doing business with ProfilGruppen. The aim is to increase the number of suppliers which comply with these guidelines.

ENVIRONMENTAL POLICY

OUR BASIC POSITION IS

that the company's activities should contribute towards the long-term sustainability of society
that products based on our aluminium extrusions should be beneficial from a lifecycle perspective
that our business should be permeated by commitment and concern for our environment

WE SHALL

comply with laws and other binding requirements
implement preventive measures to protect the environment and strive to achieve the lowest possible negative environmental impact
work to ensure the continuous improvement of our processes and management of natural resources, which means:
Material efficiency, reducing the proportion of scrap in our processes
Energy efficiency, reducing energy consumption per unit produced
Transport efficiency, reducing the environmental impact of transport related to our operations
Efficiency of other resources, minimising the use of natural resources and reducing emissions and waste produced
recycle the aluminium scrap that arises in our production processes
when purchasing, strive to select sustainable and energy-efficient goods and services
promote the transition to renewable energy and exploit the possibility of energy exchange with the surrounding society where possible
help and inform customers of energy-related and environmentally sustainable structures that facilitate recycling
provide our employees with the resources and knowledge needed to meet the requirements of this policy

CARING FOR THE INDIVIDUAL

PERSONAL COMMITMENT

The success of ProfilGruppen is based on our customers getting the best treatment, and the fact that we are perceived as a competent, problem-solving and proactive partner. To achieve this, we need personal commitment and employees who thrive at work. To work consistently and consciously to be an attractive workplace, so that we are able to attract, retain and develop individuals with the right skills profiles, is therefore an important strategic objective.

A STABLE BASIS FOR INDIVIDUAL RIGHTS

Respect for the individual is fundamental to ProfilGruppen.

Our Code of Conduct states that we, as a company and as individual employees, are to comply with the UN Universal Declaration of Human Rights and the ILO core conventions. All our employees work in Sweden, Norway or Germany, where the levels of worker protection and the like are high, which facilitates our control in the area. We comply with laws and collective bargaining agreements regarding, for example, salaries and working hours and no unjustified pay differentials may occur. Salary surveys have shown that existing salary differences are objectively justified.

The majority of our subcontractors are located in the Nordic countries, which means that we feel confident that they also follow the guidelines relating to occupational safety and similar. We require that all our machining suppliers follow our Code of Conduct for Suppliers. The plan is to spread

this further to other suppliers. We never cooperate, either indirectly or directly, with suppliers where we have reason to believe that child labour laws are or will be disregarded.

So far, we have never identified any shortcomings, either in our own operations or when scrutinising any supplier, concerning human rights or the ILO core conventions. As we grow and expand the number of subcontractors we use for, for example, components, the risk increases that we may engage a company that does not meet the demands we make in this area. We must prevent this by ensuring that new suppliers are carefully screened before being engaged.

RESPECT AND EQUAL TREATMENT

We see diversity as being both self-evident and a strength, which is clarified in our equal treatment policy. This policy also sets out that neither discrimination nor sexual harassment may ever occur. There are specific action plans to ensure this.

The company and the local trade union groups* have carried out a joint evaluation and drawn up a plan for how to prevent and combat discrimination in various forms. The work has resulted in a documented record of where risks of negative discrimination exist, as well as a number of active measures to prevent this. We have also agreed on measures to promote a more balanced gender distribution.

In ProfilGruppen, about 28 per cent of employees are women – but the proportion of women among leaders and managers is lower.

We work to encourage a positive development in this area.

With us, employees with origins from around twenty different countries and with a range of different cultures, languages, knowledge, ages and genders, are all intermingled. By following our core values in a simple organisational structure, all individuals are given the opportunity to develop in a down-to-earth and humble environment. When recruiting, we place a strong emphasis on the candidate's personal qualities and how well they fit in with our core values. 0 1 2 3 4

An understanding of each other is fundamental to equal treatment and wellbeing at work. That's why we have been discussing and working to provide training in various styles of behaviour and ways of interacting with each other. The goal is to help us understand each other better and appreciate our differences.

ProfilGruppen includes local union clubs* for the Swedish trade unions IF Metall, Union and Ledarna. The presence of these clubs provides the opportunity for a clear dialogue between the company and employees, as well as local agreements that benefit both parties.

A SAFE AND SECURE WORKPLACE

A prerequisite for committed and secure employees is a safe working environment. Our health and safety policy clarifies our common starting point on the working environment. The content and relevance of the policy are evaluated each year by the Safety Committee, which is composed of representatives from different parts of the company – including management and safety representatives. Our Head of Safety works on health and safety issues across all areas of the company, supporting and challenging other health and safety officers in the organisation.

The goal of our safety work is to create a physically and mentally healthy and stimulating workplace for all employees, where we prevent work injuries and occupational illness. The Safety Committee and the safety representatives have important roles in this proactive work. We try to eliminate the sources of risk through routines, work equipment, protective equipment, work arrangements and employee training.

In order to enable us to build up an overview and work proactively, we have an internal reporting system* where all our employees can report any hazardous circumstances, incidents and accidents.

All reports and recommended measures are accessible to all members of staff. Employees are encouraged to report all risks so that they can be remedied before any incident occurs. All employees are also trained in safety work through various training courses.

The risks in our physical working environment are primarily related to pinch and cut injuries, and repetitive strain injuries after long service. Unexpected events that employees are exposed to are the root cause of injuries suffered, primarily to the hands and fingers.

These incidents are particularly difficult to eliminate in areas where materials are handled manually. Instead, we use protective equipment such as gloves, which minimise tears and cuts. To prevent strain injuries, we work long-term with preventative health care and lifting aids.

Number of workplace accidents leading to at least one day of absence The number of accidents has decreased over the last few years, despite an increase in the workforce. In 2019, the accidents consisted of a trip accident resulting in a foot injury and an instance where an operator ingeniously circumvented the safety equipment and lost a finger. Measures have been taken to ensure that these accidents cannot be repeated.

Our vision is zero accidents in our operations, which we work systematically to achieve. Our definition of an accident is an incident causing at least one day of absence from work – which means that even minor injuries, such as sprains, can constitute an accident.

In 2019, much of our safety work centred on the construction of our new extrusion plant. The work environment was designed based on a worker's perspective to ensure as unobstructed a view as possible and with movable desks for controlling the machinery, innovative optical safety solutions and automated material flows.

"Sick leave in our company is comparatively low"

WELLBEING AND JOB SATISFACTION

The psychosocial and organisational working environment is often more difficult to measure and control than the physical. We assess this through, among other things, annual conversations with all employees and an analysis of absenteeism.

A transparent organisational structure, unambiguous roles and clear leadership are important parameters when we prevent ill health in this area. Respect for each individual is also key. A good work-life balance improves our employees' wellbeing, as do the health initiatives we have taken. Physical and mental wellbeing are connected.

At ProfilGruppen, we work actively to prevent alcohol and drug abuse in order to further improve safety. It goes without saying that we do not tolerate anybody being under the influence of drugs or alcohol while at work. Substance abuse poses a safety risk, and can also impact on the wellbeing of other members of staff. To curb abuse, we carry out tests prior to employment, and also randomly test employees*. The use of these tests, carried out by occupational health services, has meant that we have averted potential risks – but have also enabled us to offer employees professional help that has helped them to cease destructive behaviour.

HEALTHIER AND STRONGER TOGETHER

At ProfilGruppen, we care about our employees in many ways, including through various health initiatives. We have previously contributed to the construction of a swimming

pool and exercise hall in Åseda, where our business is based. As a sponsor, we are in turn able to offer our employees the chance to go swimming and take part in fitness activities at sharply reduced prices*. In our main factory, there is also an exercise room with equipment that can be used free of charge round the clock.

For employees who do not want to use any of these facilities, or supplement them with anything else, we offer a reimbursement grant for health-promoting activities*.

We also arrange our own exercise sessions to enjoy the pleasure of exercising together. During the past year, we conducted yin yoga and group strength training sessions, and played indoor bandy on a regular basis. Subsidised massage for everyone and complimentary fruit every day are other examples of health promotion measures.

As a complement to our wellness activities, we try to promote wellbeing through, among other things, a staff club that organises activities for employees.

Sick leave in our company is comparatively low, which we are grateful for. But that does not mean that we do not want to be even better. In addition to the above preventive health care initiatives, we work with our occupational health provider in providing coaching to enable employees to return to work.

CONTINUOUS DEVELOPMENT 0 1 2 3 4 5 6 7 8 2.4% 2.5% 2.5% 2.0% Target 2.3% 2.2%

Short-term sick leave, per cent 2015 2016

0,0

0,5

1,0

1,5

2,0

2,5

In 2019, a new record was achieved as short-term sick leave dropped to 2.0 per cent – a good indicator of the wellbeing of our employees.

2017 2018 2019

Continuous competence development is crucial to the company's success. This must take place through the development of existing employees and the recruitment of new talents. The basis of each individual's development is the performance review that takes place at least once a year*. At the review, individual targets and development plans are defined, and our core values are discussed. The development plans may include both external and internal theoretical and practical training. A company-wide training plan* forms the common structure for such training and is complemented by personalised activities.

In ProfilGruppen, internal recruitment has always been common. Internal mobility creates valuable development opportunities for the individual, while the employees gain a greater understanding of the business.

To improve our ability to find new talented individuals, we establish contact with young people at an early stage in order to build contacts and encourage interest in technology in our local county. To market ourselves and the industry, we arrange study visits by pupils of primary school age, both regionally and locally. We also have a good partnership with the mechanical engineering programme at Linnaeus University and continue to market ourselves to various student groups in a variety of ways.

Our low staff turnover indicates that our staff thrive and feel motivated with us.

Continuous improvements are part of our corporate culture, and to allow all employees an involvement in this work, ProfilGruppen has a digital system for suggesting improvements*. All employees are able to make suggestions for improvements and development opportunities in the system, and can follow how the proposal is processed. To encourage proposals, the best proposal each month receives a reward.

OPENNESS AND WHISTLE-BLOWING

Staff turnover, per cent

The level of staff turnover has been normal in the last few years. Prior to that, we had a period with few people retiring and a shortage of young people, who are more prone to move about.

Our geographic concentration facilitates communication between different levels and functions. Our Code of Conduct encourages employees to report any situation in which they perceive non-compliance with the Code of Conduct. They can report to their immediate manager, elected representatives, HR or representatives of management. A report submitted by an employee is of course treated in strict confidence and it is not permitted to disclose the employee's identity when the matter is taken further.

CORE VALUES

CONTINUOUS IMPROVEMENT – SEBASTIAN FRANZÉN

The drive to achieve continuous improvement inspires our whole organisation, not least because we are a technology-driven company. We strive to be at the forefront and use the best possible means to become the market leader. New technology is a big part of this; by using technology we gain new experiences and force ourselves to improve, each day.

PROFESSIONAL – KARIN LENNARTSSON

For me, being professional at work is about following laws, regulations and directives from the authorities, but the most important thing is to treat everyone in the same way whatever their role at ProfilGruppen. Doing the payrolls at ProfilGruppen is a varied job that requires broad knowledge and demands a lot from me.

FAST – IRIS EDLER AXELSSON

Receiving a "Thank you for your quick reply" from a customer shows how important a quick response is for our customers. Time is money. No one has any spare time today, so we try to respond quickly to our customers and to be available in order to maintain good customer relations.

PERSONALLY COMMITTED – STANLEY JONSSON

For me, personal commitment is both essential and something that goes without saying – without it, I wouldn't be able to do my work properly. Our department, which puts the finishing touches to the products, is the last stage in the chain before the delivery to the customer, and when things change several times a day everyone needs to be on board and show their dedication. In my role I have a broad range of contacts with people, both internally and externally. I feel I get a lot back by showing commitment whatever issue I am dealing with, whether large or small.

ATTENTIVE – SEMIR CUCULJ

As a shift leader, I always try to have a positive attitude and do everything I can to ensure that my colleagues succeed in what they are doing. I put myself in the shoes of my colleagues to ensure that I can help in a good way. I always try to be engaged, attentive, clear and motivated in order to strengthen the motivation of my colleagues. I always have time to listen to what they have to say.

CARING FOR SOCIETY

WE WANT TO CONTRIBUTE

Our basic principle is that we, as a company and as individual employees, shall engage in and contribute positively to the development of the communities in which we operate.

In cases where we want to influence legislation or advocacy, activities in these matters is mainly carried out through the professional organisations of which we are members. Svenskt Aluminium is an association of around fifty companies, whose purpose is to develop the use of aluminium and strengthen collaboration among industry, society and academia. The European trade association European Aluminium works to spread knowledge about aluminium and has also formulated a common vision for reduced carbon dioxide emissions.

LOCAL ENGAGEMENT

Our geographical location and concentration means that we are one of the municipality's largest employers, and we are aware that our business affects the town of Åseda in many ways. The fact that we have a mutually beneficial dialogue with the municipality is therefore important for both parties. We try to show respect for both the environment and our neighbours by not disturbing more than is absolutely necessary in terms of noise and emissions, for example.

Water is our most important food and the source of all life in nature's ecosystems. Our water consumption is likely to affect the surrounding waterways and we therefore actively participate in the Alsterån River Water Council, which is a voluntary association of municipalities, companies and organisations that promotes the sustainable management of water resources around the Alsterån river.

It is of the utmost importance for us to ensure that Åseda remains an attractive place to live. We have therefore co-sponsored the building of Hälsans Hus, a swimming pool and sports centre in Åseda, the operations of which we provide significant annual contributions to. The importance of this facility for the area's development should not be underestimated, as it serves as a meeting place where local residents can engage in recreation and training.

Another way for us to contribute positively to society is sponsorship and we have, in our sponsorship policy*, chosen to direct our support to local sports clubs with a focus on children and young adults. In Åseda, ice hockey is a popular pastime and our sponsorship has resulted in the town's ice rink bearing the ProfilGruppen name.

We have also been sponsoring Växjö DFF, a football club exclusively for girls that is working actively to promote integration and equality, which is something we want to support.

Collaboration and knowledge sharing can enable a far-reaching influence and, as a member of Sustainable Småland, a regional network that focuses on the development of innovative environmental solutions, ProfilGruppen has the opportunity to contribute to a greener and more sustainable region.

Training of the desired quality and with the right focus is important for the development of both society and business and, to contribute to this, we are members of Teknikcollege, a collaborative concept that will improve the quality of technological training in the local region.

CARING TOGETHER

The responsibility to make a positive contribution to the local community is an unarguable fact for us, but we do not want to forget that we are part of something bigger and that we all have to work together to take care of our planet. We have chosen to become involved in Vi-skogen, an organisation that plants trees as a means of helping people out of poverty. Tree planting provides fruit, animal feed, firewood and building materials. The trees also make farmers' crops grow better – the trees prevent fertile soil from being washed away in connection with heavy downpours, provide shade from the sun and bind nutrient-rich nitrogen in the ground.

Together with its employees, ProfilGruppen regularly donates funds to Vi-skogen. In this way, we are working together to help people in Africa to achieve better living conditions, while also contributing to a better and more sustainable environment.

AUDITOR'S REPORT ON THE STATUTORY SUSTAINABILITY STATEMENT

To the general meeting of the shareholders of ProfilGruppen AB (publ), corporate identity number 556277-8943

ENGAGEMENT AND RESPONSIBILITY

It is the Board of Directors who is responsible for the statutory sustainability statement for the year 2019 and that it has been prepared in accordance with the Annual Accounts Act.

THE SCOPE OF THE AUDIT

Our examination has been conducted in accordance with FAR's auditing standard RevR 12 The auditor's opinion regarding the statutory sustainability statement. This means that our examination of the corporate governance statement is different and substantially less in scope than an audit conducted in

accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examination has provided us with sufficient basis for our opinions.

OPINIONS

A statutory sustainability statement has been prepared. Kalmar 19 March 2020 Ernst & Young AB

Franz Lindström Authorized Public Accountant

DIRECTORS' REPORT

The Board of Directors and CEO of ProfilGruppen AB (publ), corp. ID no. 556277- 8943, hereby submit the annual report and consolidated accounts for the period 1 January–31 December 2019.

GROUP

The Group is a supplier of customised aluminium components and extrusions. The core business is conducted in the subsidiary company ProfilGruppen Extrusions AB. ProfilGruppen AB (publ) is the parent company of the ProfilGruppen Group.

The head office is located in Åseda, Småland, which is also home to most of the sales organisation. In addition, the company has sales offices in Stockholm, Skellefteå, Norway and Germany. In Finland, sales are handled through agent. Design, product development, extrusion manufacture and processing are carried out mainly in Åseda. Processing is also performed in close co-operation with a number of subcontractors.

Operating from two fully automated production plants, ProfilGruppen's subsidiary PG&WIP AB processes aluminium extrusions into packaged products for a specific customer in the interior design industry. The company is 30 per cent owned by WIP Industries Sweden AB.

REVENUE AND PROFIT

ProfilGruppen generated revenue of MSEK 1,622.1 (1,618.3) in 2019, which is in line with the previous year. Delivery volumes have increased by around three per cent to 31,000 tonnes (31,975) of aluminium extrusions. The reduced volume mainly refers to unprocessed long-length extrusions for two individual export customers.

Exports accounted for 50 per cent (48) of revenue.

The consolidated operating profit was MSEK 113.2 (113.7). This is equivalent to an operating margin of 7.0 per cent (7.0). ProfilGruppen's target is a longterm operating margin of 8 per cent.

Margin improvements and a higher degree of processing had a positive impact on earnings while the reduced delivery volume and inventory losses had a negative impact compared with 2018. The operations of the subsidiary company PG&WIP AB added to earnings, unlike last year when the company experienced quality issues and disruptions in production.

We were able to limit the impact on earnings from the fire that hit our anodising unit in the summer by sourcing external capacity. Production has now returned to normal.

The profit before tax was MSEK 101.9 (107.6). Earnings per share (no dilution) were SEK 9.98 (10.88). The average number of shares in thousands was 7,399 (7,399).

INVESTMENTS, DEPRECIATION AND DISINVESTMENT

Investments in 2019 totalled MSEK 218.6 (137.7). In the previous year, work commenced on a new aluminium extrusion plant. The investment is aimed at increasing our annual capacity by around 12,500 tonnes when running at full capacity. The plant entered trial operation in early January 2020. The project increased investments for the year by MSEK 183.4 (86.6). The total investment is estimated at around MSEK 310, of which over MSEK 40 thus remains to be invested.

During the year, the company's ERP system was replaced and developed, which increased investments in intangible assets by MSEK 9.2 (16.7).

Other investments refer mainly to ongoing improvements.

Total scheduled depreciation/amortisation for the year was MSEK 57.7 (49.2). No impairment losses were recognised during the year (none) and no previous impairment losses were reversed (none).

FINANCIAL POSITION AND CASH FLOW

ProfilGruppen has a target of a net debt to EBITDA ratio of less than 2.0. Net debt to EBITDA stood at 1.8 (0.7) at 31 December 2019, which is within our target range. Excluding the impact of the investment in production capacity, net debt totalled MSEK 39.7 (44.1), resulting in a debt to EBITDA ratio of 0.2 (0.3).

Return on capital employed in 2019 was 18.3 per cent (23.9).

The equity ratio at year-end was 38.2 per cent (40.8). The liquidity reserve at 31 December 2019 stood at MSEK 146.8 (366.4). Total assets at 31 December 2019 were MSEK 1,090.1 (918.3).

The cash flow from operating activities was MSEK 110.7 (129.8) and the corresponding figure after investments was MSEK -121.4 (9.9). At the beginning of the year, stocks of raw materials were high due to uncertainty about potential trade sanctions. Inventories remained high in the first half of the year while the opening inventories were paid for. In the second half of the year, inventories were restored to normal as the risk of trade sanctions was considered to have decreased.

The ongoing investment in new production capacity affected cash flow for the year, with cash flow after investing activities amounting to MSEK 68.8 (82.0).

MARKET

The aluminium extrusion market in northern Europe is estimated by European trade association EA to have decreased by around nine per cent in 2019. EA's latest forecast indicates that the market in Scandinavia and in Europe as a whole will shrink by around two per cent in 2020 compared with 2019.

MANUFACTURING

All manufacturing activities in ProfilGruppen are based on the extrusion of aluminium.

In 2019, the company built its fourth extrusion line close to the three existing presses. A unit for surface treatment of extrusions is located on the same site. Group production of aluminium extrusions totalled 31,100 tonnes (32,550) in 2019.

The extrusions are processed in many different ways. The company's own production facilities offer product-specific robot cells as well as machining, bending, cutting and punching. A wide variety of other processing services are sourced externally from a network of subcontractors. Our subsidiary company PG&WIP AB has two fully automated production lines for machining, surface treatment and packing of interior design details for a specific customer.

DEVELOPMENT WORK

Constant improvement of processes and products is an important aspect of the Group's activities. New products and product models for existing or potential customers are created on a daily basis. A close relationship with the customer enables us to come up with constructive ideas for how to improve the product's properties, efficiency and potential environmental impact throughout its lifecycle.

Process development is carried out in partnership with customers, raw material suppliers, and tool and machinery manufacturers. The expenditure associated with this work does not normally meet the criteria for reporting as assets, but is recognised as cost of goods sold and selling expenses in the consolidated income statement, see Note 6. For each development project, an assessment is made of whether or not the expenditure can be capitalised. During the year no development costs have been capitalised.

QUALITY ASSURANCE

ProfilGruppen Extrusions AB was certified in accordance with the quality assurance system ISO 9002 in 1991. In 1999, ProfilGruppen became the first Nordic company in its sector to be certified in accordance with the automotive industry's quality system at the time. Quality requirements in the automotive industry are continually being tightened, and since 2018 the IATF 16949:2016 standard has applied. ProfilGruppen was certified against the standard in 2018.

ENVIRONMENT

The Group conducts operations that require a permit and are subject to notification requirements under the Swedish Environmental Code. ProfilGruppen's environmental impact and sustainability work are described in greater detail in the company's Sustainability Report, which is integrated in this annual report.

PERSONNEL

The average number of employees in the Group totalled 466 (459). The number of employees in the Group at 31 December 2019 totalled 455 (468). Women make up 28 per cent (28) of the Group's total workforce. Staff turnover during the year was 7.4 per cent (7.2). Payroll expenses totalled MSEK 202.8 (199.5). In October 2019, ProfilGruppen's new President and CEO Fredrik Zöögling took over at the helm. Per Thorsell handed in his notice at the beginning of the year and left the company in August. In the interim, ProfilGruppen's former Director of

FINANCIAL TARGETS

Operating margin, per cent

In 2017, our target for operating margin was changed to 8 per cent.

Marketing Per Owe Isacson served as Acting CEO.

SHARES AND SHAREHOLDERS

Each share in the company corresponds to one vote. The ownership interests that exceed ten per cent are Ringvägen Venture AB's 28.4 per cent, Lars Johansson's 14.5 per cent, and Mats and Kerstin Egeholm's 10.5 per cent.

Largest individual shareholders, 30 December 2019

Shareholder	Number of shares	Holding %, 2019	Holding %, 2018
Ringvägen Venture AB	2,099,983	28.4	28.4
Lars Johansson	1,073,466	14.5	14.5
Mats Egeholm	536,424	7.2	7.2
Hanna Li Kusterer	284,000	3.8	3.5
Kerstin Egeholm	241,494	3.3	3.3
Nordea Livförsäkring Sverige AB	240,494	3.2	3.2
BNP Paribas Sec Services Paris, W81MY (GC)	160,847	2.2	2.6
Försäkringsaktiebolaget Avanza Pension	158,586	2.1	2.3
Lars Bergenhem	144,480	1.9	1.6
Mats Jonson	136,000	1.8	1.8
10 largest individual shareholders	5,075,774	68.4	68.4
Other shareholders	2,323,001	31.6	31.6
Total	7,398,775	100.0	100.0

The number of shareholders was 2,560 at the beginning of the year and 2,508 at the end of the year.

Other share-related information to be provided in the Directors' Report for a listed company in accordance with the Annual Accounts Act can be found in Note 17. Further share information is provided on page 59.

CORPORATE GOVERNANCE

The work of the Board of ProfilGruppen AB is regulated by the formal work plan, which is established annually at the Board meeting following election at the Annual General Meeting. Three of the members of the Board constitute the Remuneration Committee, which deals with remuneration-related matters. The Audit Committee consists of all members of the Board. Prior to the 2020 AGM, the Nominating Committee will be responsible for proposing Board members and auditors, as well as fees for the Board, committees and auditors. More information on the work of the Board and corporate governance at ProfilGruppen is available in the Corporate Governance Report in this annual report and at www.profilgruppen.se.

REMUNERATION OF SENIOR EXECUTIVES

The Board prepares a proposal for guidelines for remuneration of the Group's senior executives. The Board of Directors proposes that the 2020 AGM shall adopt the following guidelines for 2020.

Net debt to EBITDA, times

If net debt related to the ongoing investment in a new extrusion plant is excluded, net debt to EBITDA would be 0.3.

The Board's Remuneration Committee has evaluated the guidelines that have applied since the 2019 AGM and compliance with the guidelines. The Remuneration Committee has had access to information about all remuneration of senior executives as well as average salaries and terms of employment for other employees as a basis for its evaluation and proposal. The proposed guidelines are based on the company's long-term Remuneration Policy, which was last revised in February 2020. Adhering to the company's strategy and maintaining its longterm interests including its sustainability requires a dedicated, competent and competitive Board and management. The guidelines are therefore designed to enable the company to recruit and retain such individuals.

In terms of remuneration, the proposed guidelines contain no significant changes compared with the previous year.

The guidelines cover the Board, CEO and other members of management. Directors' fees for Board members elected by the shareholders' meeting comprise the fixed annual remuneration approved by the shareholders' meeting. No other remuneration may be paid for Board work. No fees are paid to Board members appointed by the employees. In the event that the Board decides to request that a Board member shall perform services for the company, a normal market consultancy fee shall be paid. Such fees may never exceed the Director's fee.

For the CEO and other members of management (currently eight people including the CEO), the guidelines are as follows.

Total remuneration may consist of a fixed basic salary, variable remuneration, pension and other benefits. Variable remuneration, which is capped at 30 per cent of the fixed salary, is linked to the Group's financial performance and only in specific instances to individual targets. Variable remuneration is conditional on a positive net result for the Group and will be retrospectively adjusted if it has been paid on apparently erroneous grounds. Agreements on pension benefits are arranged individually and the retirement benefit costs can amount to a maximum of 30 per cent of the salary. Other remuneration and benefits shall be at market rates and shall help to facilitate the senior executive's opportunities to carry out their work. The employment contracts of members of the management team are permanent contracts and are generally terminable on six months' notice by either party. No remuneration other than unchanged employment terms during the notice period are paid in connection with termination.

The Board may depart from the guidelines if there are special reasons in an individual case.

The guidelines that applied in 2019 are described in Note 4.

OUTLOOK FOR 2020

At the time of the year-end report for 2019, we expected the demand in 2020 to be in line with 2019.

Since then, the external situation has undergone a drastic change due to the Corona infection. The effects of the regulations etc. that are made in different countries will have an impact on business in general and lead to an impact on ProfilGruppen which we cannot yet assess. We consider it positive that the government has given proposals regarding short-term lay-offs and takeover of sick pay costs, which reduces the risks for the companies in the situation that arises.

We intend to take our new extrusion plant into use in the second quarter of 2020, initially by transferring volumes from our other facilities. An increase of around MSEK 20 in depreciation charges in 2020 compared with 2019 as well as start-up costs and an increased interest expense will have an impact on earnings.

RISKS AND RISK MANAGEMENT AT PROFILGRUPPEN

Overall responsibility for the company's risk management rests with the Board of Directors. The CEO is responsible for ongoing risk management in accordance with the guidelines issued by the Board. A number of Group policies have been drawn up to support ProfilGruppen's day-to-day activities, including a financial policy and a raw material policy. The ambition is to achieve ProfilGruppen's general objectives through well-considered risk-taking within certain defined limits.

OPERATIONAL RISKS

Reliance on customers

ProfilGruppen strives to maintain a customer portfolio that is spread across a large number of customers in different industries in order to reduce its dependence on individual customers or industries. Only one customer accounts for more than ten per cent of revenue and this is a consequence of ProfilGruppen's drive to move up the value chain, as part of which the Group has a subsidiary specialising in interior design details for one specific customer. Our agreements with this customer are based on specific investments and run over several years. In 2019, this customer accounted for 13 per cent (13) of total revenues. Among ProfilGruppen's other customers, there is still a large spread.

Inevitably, having a large number of customers creates a risk that some of these will occasionally experience payment problems. We credit insure the majority of our customers, and around 60 per cent (60) of consolidated net sales is covered by our credit insurance policy.

Dependence on suppliers

The loss of a key supplier may result in costs and problems delivering to our customers. In order to reduce this risk, we have signed delivery agreements with strategic suppliers. In order to ensure that all key input goods are available, we have also developed contact with alternative suppliers.

ProfilGruppen continually evaluates its strategic suppliers to ensure that they meet our customers' requirements with regard to factors such as quality, delivery reliability, financial stability, environment and cost-effectiveness. Read more about raw material deliveries on the next page.

Seasonal and cyclical fluctuations

Our customers are spread across several industries and geographic markets. This industry spread is a deliberate strategy aimed at reducing sensitivity to seasonal and cyclical fluctuations. Most of our major customers operate globally, which means that they, and indirectly ProfilGruppen, are affected by the strength of the global economy. A general economic downturn quickly feeds through to our industry and normally has a significant impact.

Liability

Delivering to the automotive industry, for example, entails a liability risk. ProfilGruppen has overall liability to the customer, including for components processed by subcontractors. Future risks are partly covered by separate agreements and insurance policies. There is a low probability of incurring significant damage.

To prevent risks to health and safety, ProfilGruppen has established an internal reporting system for higher-risk situations that is available to all employees and that is used actively.A further description of how we discharge our health and safety responsibilities is presented in our Sustainability Report.

Production stoppages

To minimise disruptions in production, risk assessments are made on an ongoing basis along with preventive work at the Group's production facilities. Should such an event occur, the Group has consequential loss insurance that covers loss of contribution margins for up to 24 months. In case of a major outage, the consequences for the company would be significant.

In summer 2019, our anodising unit was hit by a minor fire that generated a large amount of smoke. This led to delivery disruptions for around a month as well as increased costs. The effects were mitigated through sourcing of external anodising capacity. We continuously review our fire safety arrangements and activities are planned.

Environment

There is always a risk that the Group's operations can cause damage to land, water and air, and to biological processes. Our extrusion production business is ISO 14001-certified, which supports our preventive efforts to minimise such risks. More stringent environmental requirements could give rise to costs as our operations need to be adjusted, and the Group's Environment Director is therefore keeping a close eye on any legislative changes in this field. You can read more about how ProfilGruppen is addressing environmental issues in our Sustainability Report.

Skills

ProfilGruppen is dependent on its ability to continuously attract, retain and develop individuals with the right skills profile. Working consciously to ensure that we are viewed as an attractive workplace, for existing as well as potential employees, is therefore an important part of the company's strategy. The expansive phase that ProfilGruppen has gone through over the last few years has presented a challenge in terms of training our existing employees to meet growing capacity demands. We have an extensive internal training programme as well as a skills development programme aimed at enabling us to realise the company's future strategy.

IT

With IT being a very important part of all our business processes, ensuring a high level of availability is essential. Stoppages can lead to production losses, invoicing losses or reduced efficiency within various parts of the business.

Our IT infrastructure is monitored continuously to ensure operational continuity. Redundancy is desirable in all parts of the IT infrastructure, which, along with constant development of the continuity plan, aims to minimise operational disturbances. Internal expertise focuses on business-critical and operationally critical systems.

In 2019, ProfilGruppen replaced its ERP system, which is always a major operation entailing a risk of disruption. By engaging a group of specialists from all affected areas of our business, we have ensured that everyone is on board and that the risks are minimised. Overall, the project has gone entirely to plan and not caused any serious disruptions.

Capacity

Capacity utilisation in our extrusion production business has increased markedly over the last few years and the scope to increase volumes at our existing plants has been limited. That's why it was decided in 2018 to invest in a new aluminium extrusion line, and construction of the new line was underway throughout 2019. Capacity at the plant, which has been operating on a trial

basis since year-end 2019, will be increased gradually, reaching 12,500 tonnes per year when running at full capacity.

For the processing of aluminium extrusions, we use a network of subcontractors, who account for a significant share of the processed products that ProfilGruppen delivers. This creates flexibility in terms of capacity but also requires a proactive effort in terms of assessing suitable suppliers. At our own facilities, machining is largely performed where there are opportunities for a high degree of automation or optimised production flows.

Raw material

ProfilGruppen's main raw material is alloyed aluminium ingots. This expense item accounted for 48 per cent (48) of operating expenses in 2019.

The raw material is priced in US dollars on the London Metal Exchange (LME) and, historically, the price has been volatile. ProfilGruppen applies raw material clauses in customer contracts, which limits the company's sensitivity to fluctuations in the raw material price. There is always a certain price risk in inventory, however. Raw material purchases are controlled by the Group's raw material policy. Purchases are made in Swedish kronor (SEK) and euros (EUR) in order to match the customers' contract currency and thus reduce the currency risk. Raw material purchases are made in proportion to expected customer orders. Purchases for periods longer than six months are based on contracts with customers. ProfilGruppen's Raw Material Committee meets once a week and checks that the policy is being followed.

As the supply of raw materials for industry is dependent on global players, it is also subject to international trade and environmental policies. This applies also to changes at earlier stages of the supply chain, such as alumina production or bauxite mining.

We have recently experienced how trade sanctions, in this case imposed by the US, have created significant obstacles to obtaining deliveries of raw materials from some of our suppliers. In response, we have broadened our supplier base to secure our ability to deliver. Future disruptions due to unexpected trade conflicts cannot be excluded and could have a material impact on our supply.

Energy

ProfilGruppen's energy consumption comprises approximately 39 GWh of electrical energy per year as well as LPG. In total, energy represents just under 1.5 per cent (1.5) of total operating expenses. At year-end, the Group had hedged the price for around half of its 2020 consumption.

FINANCIAL RISKS

Currency risk

Currency risk means that a fluctuation in the exchange rate has an impact on the Group's results, cash flow or balance sheet. The Group's foreign subsidiaries have very limited activities and limited balance sheets, and the Group therefore only hedges the transaction risk in respect of currency exposure.

The Group normally has net inflows in all currencies. Under ProfilGruppen's currency policy, 50–70 per cent of the expected net inflow in each currency over the next six to eighteen months should be hedged. The CEO has a mandate to hedge up to 100 per cent for periods of up to 24 months. Currency hedging is mainly done through forward contracts.

US dollar fluctuations affect ProfilGruppen's customer prices because raw aluminium is priced in US dollars. Raw material clauses are included in the majority of contracts, which means that exposure can be minimised.

If the exchange rate between the Swedish krona and the most significant currencies moves by ten per cent, and provided that no exchange hedging measures have been taken, the following effects may be seen in profit before tax:

	2019	2018
EUR	MSEK +/-14	MSEK +/-15
DKK	MSEK +/-2	MSEK +/-2
NOK	MSEK +/-2	MSEK +/-2

To finance investments in machinery for our new extrusion line, we have taken out a bank loan of MEUR 12. The euro loan creates a currency exposure that the company does not normally have and that had a negative impact on earnings of MSEK 1.3 (0.0) in 2019. The loan also creates a future currency exposure that could have an impact on earnings.

Interest rate risk

Interest rate risk is the risk of an impact on the Group's earnings as a result of changes in market interest rates. To minimise the risk of such a short-term impact, the Group borrows at fixed rates and enters into interest rate swaps. According to the financial policy, the fixed-rate period is limited to 60 months and at least 30 per cent of the Group's loans must have variable interest rates.

Credit risk

ProfilGruppen's credit risks arise when investing in financial instruments. To minimise this risk, trading is only permitted with a few counterparties approved by the Board of Directors.

Refinancing risk

Operational capital requirements are financed through bank loans. ProfilGruppen's financing policy states that the company must have loan commitments or agreements covering a period of at least twelve months. The agreements specify the financial targets that need to be met. During 2018–2020, which is a period of investments in increased production capacity, ProfilGruppen has an option to increase the credit limit, but it has not yet been necessary to do so. The euro financing refers to the aforesaid investment and matures in 2025, when half the loan will have been repaid.

PARENT COMPANY

ProfilGruppen AB (publ) is the parent company of the ProfilGruppen Group. ProfilGruppen runs operations in the form of a limited company (publ) and has its registered office in Uppvidinge Municipality, Kronoberg County, Sweden. The company address is: Box 36, SE-364 21 Åseda, Sweden.

Rental income and payments for services from companies in the Group account for 100 per cent of revenues in the parent company, ProfilGruppen AB. The parent company has no employees (0).

DIVIDEND

The Board and the CEO propose that standing profits available as per the balance sheet, of SEK 134,173,042, be appropriated in the following manner:

Dividend to shareholders	SEK	0
To be carried forward	SEK 134,173,042
Total profits according to balance sheet	SEK 134,173,042

113.2 MSEK 218.6MSEK

9.98 SEK

Under its dividend policy, the company aims to distribute 40-50 per cent of earnings after tax over a business cycle to the shareholders, having regard to capital requirements and the capital structure.

ANNUAL REPORT AND SUSTAINABILITY REPORT

Details of the company's and the Group's profits and overall financial position may be found in the following income statement and balance sheet with the Notes to these accounts. The consolidated income statement and balance sheet and the parent company's income statement and balance sheet for 2019 are to be submitted for approval at the Annual General Meeting on 21 April 2020.

In accordance with Ch. 6 § 11 of the Swedish Annual Accounts Act, ProfilGruppen has chosen to present its statutory sustainability report separately from its annual report, although it is integrated in the same document as the annual report. The Sustainability Report was handed to the auditor together with the annual report.

Consolidated operating profit		Earnings per share, Group			Investments for the year, Group

FIVE-YEAR SUMMARY, GROUP		2019	2018	2017	2016	2015
Net sales/Revenue Profit before depreciation, amortisation and impairment Operating profit Operating margin Profit before tax Profit margin	MSEK MSEK MSEK % MSEK %	1,622.1 170.9 113.2 7.0 101.9 6.3	1,618.3 162.9 113.7 7.0 107.6 6.6	1,382.8 141.0 103.9 7.5 99.7 7.2	1,132.0 104.1 69.1 6.1 65.0 5.7	980.2 44.8 22.9 2.3 17.8 1.8
Return on equity Return on capital employed Cash flow from operating activities Investments Liquidity reserves	% % MSEK MSEK MSEK	20.3 18.0 110.7 218.6 146.8	23.9 23.9 129.8 137.7 366.4	26.0 25.6 85.5 65.3 140.1	20.8 19.0 84.8 50.8 165.1	6.2 7.4 13.2 68.4 108.2
Net interest-bearing debt Net debt to EBITDA Interest-bearing liabilities and interest-bearing provisions Net debt/equity ratio	MSEK times MSEK times	300.2 1.8 330.2 0.7	116.2 0.7 142.3 0.3	89.8 0.6 117.7 0.3	88.6 0.9 99.9 0.3	133.8 3.0 143.1 0.6
Total assets Equity ratio Capital turnover rate Proportion of risk-bearing capital Interest coverage ratio	MSEK % times % times	1,090.1 38.2 2.6 43.3 9.7	918.3 40.8 3.4 44.9 16.9	742.1 43.7 3.4 48.1 23.3	606.9 44.6 3.1 49.2 14.5	539.7 40.8 3.0 45.7 3.8
Employees Average number of employees Number of positions at year-end Staff turnover Average age costs including social security contributions Revenue per employee (average) Profit before tax per employee (average)	% years MSEK kSEK kSEK	466 455 7.4 44 292.6 3,481 219	459 468 7.2 44 285.3 3,526 235	442 453 6.2 44 268.1 3,129 226	379 393 3.6 45 229.3 2,987 171	339 353 6.2 46 Salary 195.8 2,892 52
Per share Average number of shares 1) Earnings per share Cash flow from operating activities per share Equity per share Dividend per share 2)	thousands SEK SEK SEK SEK	7,399 9.98 14.97 53.90 0.00	7,399 10.88 17.54 48.86 5.00	7,399 9.86 11.56 42.24 4.50	7,399 6.56 11.47 35.53 3.00	7,399 1.88 1.79 29.26 0.00

1) There is no dilution. 2) For 2019, this refers to the dividend distribution proposed by the Board. For definitions, see page 51 of the annual report, or the website www.profilgruppen.se.

CONTENTS FINANCIAL STATEMENTS

	Consolidated statement of comprehensive income	30
	Consolidated statement of financial position
	Consolidated statement of changes in equity	31
	Consolidated statement of cash flows
	Parent company income statement	32
	Parent company statement of comprehensive income
	Parent company balance sheet
	Parent company statement of changes in equity	33
	Parent company statement of cash flows
General information		34
	Notes to the accounts
Note 1	Accounting principles	34
Note 2	Revenue	40
Note 3	Other operating income and expenses	40
Note 4	Employees and personnel costs	40
Note 5	Auditors' fees and expenses	42
Note 6	Operating expenses by type of cost	42
Note 7	Leases	42
Note 8	Financial items	43
Note 9	Appropriations and untaxed reserves	43
Note 10	Taxes	44
Note 11	Intangible assets	44
Note 12	Property, plant and equipment	45
Note 13	Right-of-use assets	45
Note 14	Financial fixed assets	46
	Note 15 Inventories	46
Note 16	Trade receivables	46
Note 17	Equity	46
Note 18	Earnings per share	46
Note 19	Interest-bearing liabilities	46
Note 20	Prepaid and accrued income and expenses	47
Note 21	Financial instruments	47
Note 22	Pledged assets and contingent liabilities	49
Note 23	Investments in Group companies	49
Note 24	Statement of cash flows	50
Note 25	Related parties and transactions	50
Note 26	Events after the end of the financial year	50
Financial terms		51

Auditor's report 52

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(MSEK)		Note	2019	2018
Revenue Cost of goods sold		2	1,622.1 -1,411.9	1,618.3 -1,410.1
Gross profit			210.2	208.2
Other operating income Selling expenses Administrative expenses Other operating expenses		3 3	5.6 -59.4 -43.2 0.0	0.1 -53.1 -41.2 -0.3
Operating profit		4, 5, 6, 7	113.2	113.7
Financial income		8	0.4	0.7
Financial expenses		8	-11.7	-6.8
Net financial items			-11.3	-6.1
Profit before tax Tax		10	101.9 -21.4	107.6 -24.1
Profit/loss for the year			80.5	83.5
Of which attributable to:	Parent company shareholders Non-controlling interests		73.9 6.6	80.5 3.0
Earnings per share, SEK (no dilution)		18	9.98	10.88
Other comprehensive income Profit/loss for the year Changes in hedging reserve		17	80.5 2.2	83.5 1.6
Changes in translation reserve Deferred tax on the above items			-0.2 -0.4	0.1 -0.4
Total items that will be reclassified to net earnings Deferred tax on the above items	Restatement of defined benefit pension obligations		1.6 -1.6 0.4	1.3 0.5 -0.1
Total items that will not be reclassified to net earnings			-1.2	0.4
Comprehensive income for the year Comprehensive income attributable to:	Parent company shareholders Non-controlling interests		80.9 74.3 6.6	85.2 82.2 3.0

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(MSEK)		Note	31 Dec 2019	31 Dec 2018
Assets	Intangible assets Property, plant and equipment Right-of-use assets Financial fixed assets	11 12 13 14	39.0 523.2 13.8 0.2	31.5 362.9 0.0 0.2
	Total non-current assets		576.2	394.6
	Inventories Trade receivables	15 16	232.0 202.7	247.5 224.7
	Prepaid expenses and accrued income Other receivables Cash and cash equivalents	20 21 24	9.3 40.0 29.9	7.4 18.0 26.1
	Total current assets		513.9	523.7
Total assets		2	1,090.1	918.3
Equity	Share capital Other paid-up capital Reserves Profit brought forward. incl. profit/loss for the year		37.0 29.5 0.1 332.2	37.0 29.5 -1.9 296.8
	Total equity, controlling interests Non-controlling interests		398.8 18.1	361.4 13.0
	Total equity	17	416.9	374.4
Liabilities	Non-current interest-bearing liabilities Provisions for pensions Deferred tax liabilities	19, 21, 24 4 10	155.5 18.2 55.1	78.6 16.3 35.7
	Total non-current liabilities		228.8	130.6
	Current interest-bearing liabilities Trade payables Current tax liabilities Other liabilities Accrued expenses and deferred income	19, 21, 24 19 20	156.5 190.2 0.1 7.1 90.5	47.4 228.5 16.9 17.4 103.1
	Total current liabilities		444.4	413.3
	Total liabilities		673.2	543.9
Total equity and liabilities			1,090.1	918.3

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(MSEK) Consolidated Note equity	Share capital 17	Other paid-up capital	Translation reserve	Hedging reserve	Retained earnings incl. profit for the year	Non-controlling interests	Total equity	Number of shares
Opening balance 1 Jan 2018	37.0	29.5	0.2	-3.4	249.2	12.1	324.6	7,398,775
Comprehensive income
Profit/loss for the year					80.5	3.0	83.5
Other comprehensive income			0.1	1.2	0.4	0.0	1.7
Transactions with shareholders
Dividend					-33.3	-2.1	-35.4
Closing balance 31 Dec 2018	37.0	29.5	0.3	-2.2	296.8	13.0	374.4	7,398,775
Opening balance 1 Jan 2019	37.0	29.5	0.3	-2.2	296.8	13.0	374.4	7,398,775
Comprehensive income
Profit/loss for the year					73.9	6.6	80.5
Other comprehensive income			-0.2	2.2	-1.6	0.0	0.4
Transactions with shareholders
Dividend					-36.9	-1.5	-38.4
Closing balance 31 Dec 2019	37.0	29.5	0.1	0.0	332.2	18.1	416.9	7,398,775

CONSOLIDATED STATEMENT OF CASH FLOWS

(MSEK)	Note	2019	2018
Operating activities	24
Operating profit		113.2	113.7
Adjustment for non-cash items		59.2	50.5
Interest received		0.4	0.7
Interest paid		-12.1	-7.4
Income tax paid		-28.7	-22.5
Cash flow from operating activities prior to change in working capital		132.0	135.0
Cash flow from changes in working capital
Inventories		15.4	-66.3
Operating receivables		7.3	-22.9
Operating liabilities		-44.0	84.0
Cash flow from operating activities		110.7	129.8
Investing activities
Acquisition of intangible assets		-9.2	-16.7
Acquisition of property, plant and equipment in 2019 affected by construction of extrusion plant in the amount of MSEK 190.2 (72.1)		-222.9	-103.3
Sale of property, plant and equipment		0.0	0.1
Cash flow from investing activities		-232.1	-119.9
Financing activities
Dividend		-38.4	-35.4
Change in drawn overdraft facility		94.0	8.4
Borrowings		94.4	34.8
Repayment of loans		-17.5	-16.5
Repayment of lease liabilities		-7.6	-3.1
Cash flow from financing activities		124.9	-11.8
Cash flow for the year		3.5	-1.9
Cash and cash equivalents at beginning of year		26.1	27.9
Exchange rate differences in cash and cash equivalents		0.3	0.1
Cash and cash equivalents, closing balance		29.9	26.1

PARENT COMPANY INCOME STATEMENT

(MSEK)	Note	2019	2018
Revenue Cost of goods sold	2	21.8 -3.4	21.8 -3.9
Gross profit		18.4	17.9
Administrative expenses		-4.5	-3.9
Operating profit	4, 5	13.9	14.0
Income from investments in subsidiaries Interest income and similar income Interest expense and similar charges	8 8 8	3.5 1.3 -2.9	4.9 0.8 -0.3
Profit after financial items		15.8	19.4
Appropriations	9	-8.1	38.0
Profit before tax		7.7	57.4
Tax	10	-0.6	-11.6
Profit/loss for the year		7.1	45.8

PARENT COMPANY STATEMENT OF COMPREHENSIVE INCOME

(MSEK)	2019	2018
Profit/loss for the year	7.1	45.8
Other comprehensive income Items that will be reclassified to net earnings Items that will not be reclassified to net earnings	0.0 0.0	0.0 0.0
Comprehensive income for the year	7.1	45.8

PARENT COMPANY BALANCE SHEET

(MSEK)	Note	31 Dec 2019	31 Dec 2018
Assets
Property, plant and equipment	12	176.9	113.4
Financial fixed assets	23	87.9	87.9
Total non-current assets		264.8	201.3
Receivables from Group companies		122.9	112.4
Other receivables		12.2	9.7
Total current receivables		135.1	122.1
Cash and bank balances	24	0.0	0.4
Total current assets		135.1	122.5
Total assets		399.9	323.8
Equity and liabilities
Restricted equity
Share capital		37.0	37.0
Non-restricted equity
Share premium reserve		29.5	29.5
Retained earnings		97.6	88.8
Profit/loss for the year		7.1	45.8
Total equity	17	171.2	201.1
Untaxed reserves	9	54.7	46.6
Deferred tax liabilities	10	3.4	3.9
Non-current interest-bearing liabilities to credit institutions	19, 21, 24	0.0	0.0
Interest-bearing liabilities to credit institutions	19, 21, 24	163.6	48.3
Non-interest bearing liabilities
Trade payables		5.1	11.6
Other liabilities		0.8	11.1
Accrued expenses and deferred income	20	1.1	1.2
Total current liabilities		170.6	72.2
Total equity and liabilities		399.9	323.8

PARENT COMPANY STATEMENT OF CHANGES IN EQUITY

(MSEK)	Restricted equity	Non-restricted equity
	Share capital	Share premium account	Retained earnings	Total equity
Opening equity 1 Jan 2018 Profit/loss for the year Transactions with shareholders	37.0	29.5	122.1 45.8	188.6 45.8
Dividend			-33.3	-33.3
Closing equity 31 Dec 2018	37.0	29.5	134.6	201.1
Opening equity 1 Jan 2019 Profit/loss for the year Transactions with shareholders	37.0	29.5	134.6 7.1	201.1 7.1
Dividend			-37.0	-37.0
Closing equity 31 Dec 2019	37.0	29.5	104.7	171.2
Proposed dividend for the financial year 2019			0.0	0.0

PARENT COMPANY STATEMENT OF CASH FLOWS

(MSEK)	Note	2019	2018
Operating activities	24
Operating profit		13.9	14.0
Adjustment for non-cash items		3.3	3.3
Interest received		4.8	5.8
Interest paid		-2.9	-0.3
Income tax paid		-12.1	-11.7
Cash flow from current operations prior to changes in working capital		7.0	11.1
Cash flow from changes in working capital
Operating receivables		-13.0	-24.7
Operating liabilities		4.1	0.8
Cash flow from operating activities		-1.9	-12.8
Investing activities
Acquisition of property, plant and equipment		-76.9	-33.2
Sale of property, plant and equipment		0.0	0.0
Shareholders' contributions, subsidiaries		0.0	0.1
Cash flow from investing activities		-76.9	-33.1
Financing activities
Dividend		-37.0	-33.3
Group contributions		0.0	50.0
Change in drawn overdraft facility		115.4	29.2
Repayment of loans		0.0	0.0
Cash flow from financing activities		78.4	45.9
Cash flow for the year		-0.4	0.0
Cash and cash equivalents, opening balance		0.4	0.4
Cash and cash equivalents, closing balance		0.0	0.4

GENERAL INFORMATION

These consolidated financial statements refer to the Group, which consists of ProfilGruppen AB (publ), corp. ID no. 556277-8943, and its subsidiaries. A list of significant subsidiaries is included in Note 23.

The consolidated financial statements have been prepared in Swedish kronor (SEK) and all amounts are expressed in millions of Swedish kronor (MSEK) unless otherwise indicated.

ProfilGruppen AB is a limited company with its registered office in Uppvidinge Municipality, Kronoberg County, Sweden. The company is listed on the NASDAQ OMX Stockholm Stock Exchange. The address of the head office as well as the site of the company's main operations is Box 36, SE-364 21 Åseda.

These consolidated financial statements were approved for publication by the Board of Directors on 19 March 2020.

NOTES

1 ACCOUNTING PRINCIPLES

COMPLIANCE WITH SET STANDARDS AND LEGISLATION

The consolidated financial statements have been drawn up in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) as approved by the EC Commission for application within the EU. In addition, RFR 1 Supplementary Accounting Regulations for Groups has also been applied.

Unless otherwise stated under the heading Parent company's accounting principles, the same principles are applied to the parent company as to the Group. Any deviations that occur are due to restrictions in the ability to apply IFRS to the parent company as a result of the Swedish Annual Accounts Act (ÅRL) and the Act on Safeguarding of Pension Obligations (Tryggandelagen) and, in some instances, are for tax purposes.

ASSUMPTIONS DURING PREPARATION OF THE PARENT COMPANY'S AND THE GROUP'S FINANCIAL STATEMENTS

The parent company's functional currency is Swedish krona, which is the reporting currency for both the parent company and the Group. The financial statements are therefore presented in Swedish krona (SEK). All amounts, unless stated otherwise, are rounded off to the nearest million kronor. Assets and liabilities are recognised at historical cost, with the exception of certain financial assets and liabilities that are measured at fair value. Financial assets and liabilities measured at fair value comprise derivative instruments

The accounting principles set out below for the Group have been applied consistently to those periods included in the consolidated financial statements, unless otherwise stated below. The Group's accounting principles have been applied consistently to any reporting and consolidation of subsidiaries.

NEW AND AMENDED STANDARDS APPLIED BY THE GROUP

IFRS 16 Leases was applied by the Group for the first time for the financial year beginning on 1 January 2019.

The Group applied IFRS 16 for the first time for the financial year 2019 with the transition date 1 January 2019. Under IFRS 16 transition rules, the Group has applied the simplified approach, which means that comparative figures have not been restated. The reclassifications and adjustments resulting from the new lease rules are therefore included in the opening balance as at 1 January 2019.

On transition to IFRS 16, the Group recognises lease liabilities related to leases that were previously classified as operating leases in accordance with the provisions of IAS 17 Leases. These liabilities have been measured at the present value of future minimum lease payments. In the calculation, the lessee's incremental borrowing rate at 1 January 2019 has been used. The average incremental borrowing rate at the transition date was 3 per cent.

At the transition date, 1 January 2019, all right-of-use assets were measured

at an amount equal to the lease liability adjusted for prepaid lease payments relating to the lease at 31 December 2018. The following relief provisions were applied on the transition:

• The right-of-use assets were classified and the discount rate was then determined for each category of assets.

• The period of use was determined using subsequent knowledge about factors such as options to extend and termination clauses.

• Leases terminated within twelve months of the date of initial application have been accounted for as short-term leases.

• Leases for which the underlying asset is of low value have not been recognised in the balance sheet.

A further description and calculations of the transition to IFRS 16 are presented in Note 7.

NEW AND AMENDED STANDARDS NOT YET APPLIED BY THE GROUP

No standards have been applied early. No IFRS or IFRIC interpretations that have not yet become effective are expected to have a significant impact on the Group.

CRITICAL ESTIMATES

Drawing up the financial reports in accordance with IFRS requires the company's management to make estimates and assumptions that affect the application of the accounting principles as well as the reported amounts. Any estimates and assumptions are based on historical experience and a number of other factors that under current circumstances appear reasonable. The result of these estimates and assumptions is then used to determine the carrying amounts of assets and liabilities that cannot be clarified by other means or sources. The actual outcome may differ from these estimates and assessments.

The following important estimates have been made when applying the Group's accounting principles.

Inventories

Inventories are measured at the lower of cost and net realisable value, which usually means measurement at cost. See also the heading Inventories.

The net realisable value is to some extent an estimate based on forecasts from customers but also on historical data.

Expected credit losses

Impairment testing of goodwill

When calculating the recoverable amount of cash-generating units for the assessment of any impairment requirement for goodwill, several assumptions about future relationships and other parameter estimates have been carried out. Please refer to Note 11.

Assumptions concerning pensions

To calculate pension assumptions, management has made estimates of the discount rate and other parameters. The assessment of these parameters is based on expectations. If the actual values of the parameters were to differ from the expected values an actuarial gain or loss will be recognised in other comprehensive income in the consolidated financial statements. For a sensitivity analysis of the most significant of these assumptions, see Note 4.

CLASSIFICATION ETC.

Non-current assets and non-current liabilities consist largely of amounts that are expected to be recovered or for which there is a right to payment more than twelve months after the closing date.

Current assets and current liabilities essentially consist of amounts that are expected to be recovered or for which there is a right to payment within twelve months of the closing date.

For each balance-sheet item that includes amounts expected to be recovered or paid both within and after twelve months from the closing date, this information is provided in a note to the relevant balance-sheet item.

CONSOLIDATION PRINCIPLES

All companies in which the Group has a controlling interest are classified as subsidiaries. Subsidiaries are included in the consolidated financial statements as of the date on which the controlling interest is transferred to the Group. They are excluded from the consolidated financial statements as of the date on which the controlling interest ceases to exist.

Non-controlling interests are presented separately in the consolidated statement of comprehensive income, the consolidated statement of financial position and in Note 23 Investments in Group companies.

The purchase method is applied in accounting for the Group's business combinations (see Note 23).

Intra-Group receivables and liabilities, revenue or expenses and unrealised gains or losses that arise through intra-Group transactions between Group companies are eliminated in their entirety during preparation of the consolidated financial statements.

FOREIGN CURRENCY

Transactions in foreign currency

Transactions in foreign currency are converted to the functional currency at the exchange rate on the transaction day. Functional currencies are the currencies in the primary economic environments where companies in the Group operate. Monetary assets and liabilities in foreign currencies are converted to the functional currency at the closing date rate. Exchange-rate differences arising from the conversions are reported in the statement of comprehensive income. Non-monetary assets and liabilities that are recognised at historical cost are converted at the exchange rate on the transaction date. Non-monetary assets and liabilities that are recognised at fair value are converted to the functional currency at the exchange rate in effect at the time the fair value is measured, at which point exchange rate changes are recognised together with other changes in the value of the asset or liability.

Financial reports concerning foreign operations

Assets and liabilities in foreign operations are translated to Swedish kronor at the closing rate. Revenue and expenses from a foreign operation are converted to Swedish krona at an average exchange rate that is an approximation of the rates on each transaction day. Translation differences that arise through currency conversion for foreign operations are recognised in other comprehensive income.

REVENUE

The Group's revenue essentially comprises the sale of customised aluminium extrusions. The Group supplies the products with no additional commitments in respect of assembly or installation. The sale of products is recognised as revenue when control of the goods is transferred to the customer, which takes place when the goods have been transported to the location specified in the agreement, the risk for obsolete or lost goods has been transferred to the customer and the customer has either accepted the goods in accordance with the agreement, the deadline for objections to the agreement has expired, or

the Group has objective evidence to indicate that all the criteria for acceptance have been met. No financing component is deemed to exist at the time of the sale. The revenue is recognised at the fair value of what has been or will be received.

The transaction price is basically fixed, although variable remuneration may occur in the form of discounts based on total sales. Revenue from sales is recognised on the basis of the price in the agreement, less calculated discounts. Historical data is used to estimate the expected value of the discounts, and the revenue is reported only to the extent it is highly probable that a substantial reversal will not occur. No financing component is deemed to exist at the time of the sale, as the credit period normally amounts to 30-60 days. As a result, the Group does not adjust the transaction price for the effects of a significant financing component. The Group's policy is to sell the products to the end customer with no right of return. No reversal of the recognised income will therefore be made.

The Group's commitment to repair or replace defective products in accordance with normal warranty regulations is recognised as a provision. Historical data is used to assess the size of the returns.

A receivable is recognised when the goods have been delivered, as it is at this time that the remuneration becomes unconditional (i.e. only the passing of time is required for payment to take place).

FINANCIAL INCOME AND EXPENSES

Financial income and expenses comprise interest income from bank balances and receivables and interest expenses on loans, lease liability, dividend income, exchange rate differences, unrealised and realised gains and losses on interest rate swaps used within financial activities.

Dividend income is recognised once the right to receive payment has been determined. Borrowing costs directly attributable to the purchase, construction or production of a qualified asset which necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised and included in the cost of the asset. Other borrowing costs are recognised in accordance with the effective interest method.

Interest income is recognised as income with the application of the effective interest method.

FINANCIAL INSTRUMENTS

The Group's financial assets and liabilities comprise the following items: financial fixed assets, trade receivables, other receivables, cash and cash equivalents, interest-bearing liabilities, trade payables, accrued expenses and other liabilities.

a) Initial recognition

Financial assets and financial liabilities are recognised when the Group becomes party to the instrument's contractual terms. Purchases and sales of financial assets and liabilities are recognised on the trade date, i.e. the date on which the Group commits itself to buy or sell the asset.

At initial recognition, financial instruments are recognised at fair value plus, for an asset or financial liability that is not recognised at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability, such as fees and commissions. Transaction costs for financial assets and financial liabilities that are recognised at fair value through profit or loss are expensed in the statement of comprehensive income.

The Group classifies and values its financial assets in the following categories: • financial assets at amortised cost

• financial assets at fair value through other comprehensive income • financial assets at fair value through profit or loss (derivatives not included in hedge accounting)

The classification of investments in debt instruments depends on the Group's business model for managing financial assets and the contractual conditions for the assets' cash flows. For investments in an equity instrument that is not held for trading, recognition depends on whether the Group, at the instrument's acquisition date, has made an irrevocable decision to recognise the equity instrument at fair value via other comprehensive income. The Group only reclassifies debt instruments in those cases where the Group's business model for the instruments is changed.

Subsequent valuation of investments in debt instruments depends both on the Group's business model for managing the asset as well as the type of cash flow the asset generates. The Group classifies its investments in debt instruments in three valuation categories:

Financial assets at amortised cost

Assets held for the purpose of collecting contractual cash flows, and where these cash flows consist exclusively of principal and interest, are reported at amortised cost. Interest income from such financial assets is recognised as financial income through the application of the effective interest method. Gains and losses arising from a reversal from the statement of financial position are recognised directly in profit or loss within other gains and losses together with the exchange rate result. Impairment losses are reported solely on a separate line in the statement of comprehensive income in cases where this refers to a significant amount. The Group's financial assets valued at amortised cost consist of trade receivables, accrued income, other receivables as well as cash and cash equivalents.

Financial assets at fair value through other comprehensive income

Assets held for the purpose of collecting contractual cash flows and for sale, where the assets' cash flows consist exclusively of principal and interest, are valued at fair value via other comprehensive income. Changes in carrying amount are recognised via other comprehensive income, with the exception of the recognition of interest income, exchange rate differences and impairment losses, which are recognised in the income statement. When the financial asset is removed from the balance sheet, the accumulated gain or loss, which has previously been recognised in other comprehensive income, is transferred from equity to the income statement. Interest income from these financial assets is recognised as financial income through the application of the effective interest method. Foreign exchange gains and losses are included in other gains and losses. Impairment losses are reported solely on a separate line in the statement of comprehensive income in cases where this refers to a significant amount.

Financial assets at fair value through profit or loss

Assets that do not meet the requirements for being recognised at amortised cost or fair value via other comprehensive income are valued at fair value through profit or loss. A profit or loss for a debt instrument that is recognised at fair value through profit or loss, and which is not included in a hedging relationship, is reported net in the statement of comprehensive income in the period in which the profit or loss is incurred. Any holdings in derivatives in the form of currency futures and interest swaps that do not meet the criteria for hedge accounting, fall into this category.

d) Reversal of financial assets

Financial assets, or a part thereof, are removed from the statement of financial position when the contractual rights to receive cash flows from the assets have expired or have been transferred and either (i) the Group transfers essentially all risks and benefits associated with ownership or (ii) the Group does not transfer or retains essentially all risks and benefits associated with ownership and the Group has not retained control of the asset.

e) Financial liabilities - Classification and valuation

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss are financial liabilities held for trading. Derivatives are classified as being held for trading if they are not identified as hedges. The Group has financial liabilities in the form of interest rate swaps and forward contracts. Financial liabilities at fair value through profit or loss are also recognised at fair value in subsequent periods, and the change in value is recognised under financial items in the statement of comprehensive income. Any holdings in derivatives in the form of currency futures and interest swaps that do not meet the criteria for hedge accounting fall into this category.

Financial liabilities at fair value through other comprehensive income are classified as current liabilities if they fall due within 12 months from the closing date; if they fall due later than 12 months from the closing date, they are classified as non-current liabilities.

Financial liabilities at amortised cost

The Group's other financial liabilities are classified as subsequently being valued at amortised cost using the effective interest method. Other financial liabilities consist of liabilities to credit institutions (non-current and current), liabilities to Group companies, trade payables, current liabilities.

f) Reversal of financial liabilities

Financial liabilities are removed from the statement of financial position when

the obligations have been settled, cancelled or otherwise terminated. The difference between the carrying amount of a financial liability (or part of a financial liability) that has been extinguished or transferred to another party and the remuneration that has been paid, including any transferred assets that are not cash or liabilities that have been assumed, is reported in the statement of comprehensive income.

When the conditions for a financial liability are renegotiated, and are not removed from the statement of financial position, a profit or loss is reported in the statement of comprehensive income. The profit or loss is calculated as the difference between the original contractual cash flows and the modified cash flows, discounted to the original effective interest rate.

g) Offsetting of financial instruments

Financial assets and liabilities are netted and recognised with a net amount in the statement of financial position only when there is a legal right to net the carrying amounts and an intention to settle them with a net amount or simultaneously to realise the asset and settle the liability. The legal right must not depend on future events and must be legally binding for the company and the counterparty, both in case of normal business activities and in the event of default, insolvency or bankruptcy.

h) Impairment of financial assets

Assets recognised at amortised cost

The Group values the future anticipated credit losses related to investments in debt instruments reported at amortised cost or fair value with changes via other comprehensive income based on prospective information. The Group chooses a provision method based on whether there has been a significant increase in credit risk or not.

For trade receivables, the Group applies the simplified approach for credit reserve, i.e. the reserve will correspond to the expected loss over the lifetime of the trade receivable. To measure the anticipated credit losses, trade receivables have been grouped based on allocated credit risk properties and overdue days. The Group uses forward-looking variables for anticipated credit losses. Anticipated credit losses are only reported in the consolidated statement of comprehensive income in the item "Other external expenses" if the amount is not significant.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits with banks.

Borrowing

Borrowing is initially reported at fair value, net of transaction costs. Borrowing is then recognised at amortised cost, and any difference between the amount received (net of transaction costs) and the amount of the repayment is recognised in the statement of comprehensive income spread over the loan period, applying the effective interest method.

The liability is classified as current in the balance sheet, unless the company has an unconditional right to postpone the settlement of the liability for at least 12 months after the reporting period.

Borrowing costs

General and specific borrowing costs directly attributable to the purchase, construction or production of qualifying assets are included in the cost of these assets. Qualifying assets are assets which necessarily take a substantial period of time to get ready for their intended use or sale. Capitalisation ceases when substantially all of the activities necessary to prepare the asset for its intended use or sale are complete. Deviations from this principle have been made in respect of the ongoing acquisition of a new production plant, as no borrowing costs have been included in the cost of the asset. During the period of construction, borrowing costs directly related to the acquisition have been accounted for as a financial expense.

Financial income arising from the temporary investment of borrowed capital pending its use for financing the asset reduces the borrowing costs eligible for capitalisation. All other borrowing costs are expensed as incurred.

Trade payables

Trade payables belong to the "Other financial liabilities" category. Trade payables are taken up once an invoice has been received. Trade payables have a short expected maturity and are measured without discounting.

Derivatives and hedge accounting

The Group's derivative instruments have been procured in order to hedge the

risks associated with interest and currency exposure to which the Group is subjected. Derivatives are recognised in the statement of financial position on the trade date and are valued at fair value, both initially and in subsequent revaluations at the end of each reporting period. The method for recognising the profit or loss arising from revaluation depends on whether the derivative has been identified as a hedging instrument and, if so, the nature of the item that has been hedged.

When the transaction is entered into, the Group documents the relationship between the hedging instrument and the hedged item, as well as the Group's risk management objective and risk management strategy in respect of the hedge. The Group also documents its assessment, both when the hedge is entered into and on a continual basis, of whether the derivative instruments used in hedging transactions have been and will continue to be effective when it comes to countering changes in fair value or the cash flows attributable to the hedged items.

Information about the fair value of various derivative instruments used for hedging purposes can be found in Note 21. Changes in the hedging reserve in equity are shown in Note 17. The entire fair value of a derivative that constitutes a hedging instrument is classified as a non-current asset or a non-current liability when the hedged item's remaining term is longer than 12 months, and as a current asset or current liability when the hedged item's remaining term is less than 12 months. Derivative instruments held for trading are always classified as current assets or current liabilities.

Transaction exposure – cash flow hedges

Currency exposure regarding future contracted and forecast flows is hedged through currency futures. The currency future that protects the forecast flow is recognised in the statement of financial position at fair value. The effective part of changes in the fair value of the forward contract is recognised in other comprehensive income and accumulated in equity as long as the hedge is effective. The ineffective part of the change in value is recognised as income immediately in the income statement. If the hedge is ineffective or if the hedged forecast transaction is no longer expected to occur, accumulated gains or losses are recognised immediately in profit or loss for the year. The amount recognised in equity through other comprehensive income is reclassified to profit or loss for the year in the same period in which the hedged item affects profit or loss for the year, and is recognised in the item "Income". When a hedging instrument falls due, is sold, liquidated or redeemed, or the company modifies the identification of the hedge relationship before the hedged transaction has occurred and the forecast transaction is still expected to occur, the reported cumulative gain or loss in the hedging reserve remains as equity and is recognised in a similar way to that above when the transaction occurs.

Hedging of the Group's fixed interest – cash flow hedges

Interest rate swaps are used to hedge interest risks. The interest rate swaps are valued at fair value in the statement of financial position. In profit or loss for the year, the interest coupon part is continuously recognised as interest income or interest expense; any other change in the value of the interest rate swap is recognised in other comprehensive income, provided the criteria for hedge accounting and effectiveness are met.

Inefficiencies in hedge accounting

The effectiveness of a hedge is evaluated when the hedging relationship is entered into. The hedged item and the hedging instrument are evaluated continually to ensure that the relationship satisfies the requirements. When the Group hedges sales of foreign currency, hedging relationships are entered into where critical conditions in the hedging instrument exactly match the conditions for the hedged item. In this way, a qualitative evaluation of the effectiveness of the relationship has been carried out. If altered circumstances affect the conditions for the hedged item to such an extent that the critical conditions no longer exactly match the hedging instrument's critical conditions, the Group uses the hypothetical derivative method to evaluate efficiency. When hedging foreign currency sales, inefficiencies can occur if the timing of the forecast transaction is altered compared to the initial estimate.

The Group enters into interest rate swaps that have the same critical conditions as the hedged item. Critical conditions can include reference rate, contractual repricing dates, payment dates, due dates and nominal amount. The Group does not hedge 100% of the loans and therefore only identifies the share of outstanding loans that correspond to the nominal amounts of the swaps. As the critical conditions have been matched throughout the year and the comparison year, the financial relationship has been 100% effective.

Ineffectiveness of hedge relationships with interest rate swaps is assessed according to the same principles as for hedging of future currency purchases. Inefficiencies can occur due to:

CVA/DVA adjustment of the interest rate swap not included in the loan, Differences between critical conditions between the interest rate swap and the loan

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are recognised as assets in the statement of financial position if it is likely that future financial advantages will be available to the company and the acquisition value of the asset can be calculated in a reliable way. Property, plant and equipment are recognised for the Group at cost after deductions for accumulated depreciation and any impairment losses. The cost includes the purchase price and expenses directly attributable to the asset in order to acquire it in a condition where it can be utilised in accordance with the aim of the acquisition. Principles for impairment losses are dealt with below.

The cost of non-current assets produced in-house includes material costs, expenditure on employee remuneration, if applicable, other manufacturing costs that are thought to be directly attributable to non-current assets, as well as estimated expenditure on disassembly and removal of assets and restoration of the site or area where required.

Property, plant and equipment that comprise elements with different useful lives are treated as separate components of property, plant and equipment. The carrying amount of an item of property, plant and equipment is removed from the statement of financial position when this is scrapped or sold off, or when no future financial advantages are expected from the use of or scrapping/selling the asset. Any gain or loss arising from the sale or scrapping of an asset comprises the difference between the sale price and the asset's carrying amount less direct selling expenses. Gains and losses are reported as other operating revenue/expense.

Depreciation methods

Depreciation is performed linearly over the asset's estimated useful life. The Group applies component depreciation, which means that the components' assessed useful life forms the basis for depreciation, see Note 11. Real estate is divided chiefly into land and buildings. No depreciation is performed for land, the useful life of which is judged to be indeterminable.

An asset's residual value and useful life are assessed annually.

LEASES

Accounting principle for leases before 1 January 2019

Leases under which the Group has assumed or transferred all essential risks and benefits associated with a non-current asset have been classified as finance leases. When the Group has been a lessee the asset has been capitalised and a corresponding interest-bearing current or non-current liability has been recognised in the statement of financial position. The capitalised value has been depreciated in the same way as for purchased assets.

Asset leases under which all substantial risks and rewards have not been transferred to the Group are classified as operating leases and have therefore not been capitalised. Instead, the lease payments have been expensed as incurred.

Accounting principle for leases from 1 January 2019

The Group's leases refer mainly to commercial premises, vehicles and IT equipment. The terms are negotiated separately for each contract and contain a large number of different contract terms. The leases contain no specific terms or restrictions under which they would be terminated if terms were not met, but the leased assets may not be used as collateral for loans.

The leases are recognised as right-of-use assets with corresponding liabilities on the day when the leased asset is available for use by the Group. Each lease payment is apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated over the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Right-of-use assets are depreciated on a straight-line basis over the shorter of the asset's useful life and the lease term. Leases are normally depreciated over fixed periods of three to five years for commercial premises, three to six years for vehicles and three years for IT equipment but in some cases with an option to extend or terminate the lease, as described below. Assets and liabilities arising from leases are initially recognised at present value.

Lease liabilities include the present value of the following lease payments: • fixed payments and

• variable lease payments that depend on an index.

Lease payments are discounted at the incremental borrowing rate.

The average interest rate used for discounting is three per cent.

Right-of-use assets are measured at cost, which includes the following:

• the initial measurement of the lease liability and

• payments made at or before the date when the leased asset is made available for use to the lessee.

Payments for short-term leases and low-value leases are expensed in the income statement on a straight-line basis. Short-term leases are leases with a term of twelve months or less.

Options to extend or terminate a lease

Options to extend or terminate leases are included in the majority of the Group's leases for commercial premises. The terms are used to maximise flexibility in terms of how the contracts are managed. Options to extend or terminate a lease are included in the asset and liability when it is reasonably certain that they will be exercised.

INTANGIBLE ASSETS

Goodwill

Goodwill represents the difference between the cost for a business combination and the fair value of acquired assets, assumed liabilities and contingent liabilities.

Goodwill is measured at cost minus any cumulative impairment losses. Goodwill is divided among cash-generating units and is tested annually for impairment. Goodwill is not amortised.

Other intangible assets

IT systems adapted to the Group's operations are accounted for as intangible assets and capitalised in the balance sheet when they are taken into use. The useful life is assessed individually.

INVENTORIES

Inventories are measured at the lower of cost and net realisable value. Inventories comprise a raw material portion (aluminium) and a processing portion.

The cost of raw materials and direct materials is determined based on the first-in, first-out principle. The cost of the processing portion consists of direct manufacturing costs and a reasonable proportion of indirect manufacturing costs. During measurement, consideration is paid to normal capacity utilisation. Net realisable value is the estimated sale price less selling expenses.

IMPAIRMENT OF NON-FINANCIAL ASSETS

The carrying amounts of the Group's non-financial assets, with the exception of inventories, are reviewed on each closing date to assess whether there is any indication of a need for impairment. If an impairment indicator exists, the asset's recoverable amount is calculated. The valuation of assets that are exempt as per the above is tested as per the relevant standard. For goodwill the recoverable amount is calculated at least once a year.

If it is not possible to establish essentially independent cash flows for an individual asset, the assets are grouped at the lowest level at which it is possible to identify essentially independent cash flows (a cash-generating unit). An impairment loss is recognised when an asset or cash-generating unit's carrying amount exceeds the recoverable amount. An impairment loss burdens the profit/loss for the year.

The recoverable amount is the higher of the fair value less selling expenses and value in use. When calculating the value in use, future cash flows are discounted using a discount factor that takes into consideration risk-free interest and the risk that is associated with the specific asset.

Reversal of impairment

An impairment loss is reversed if there is an indication that the impairment loss may no longer exist and there has been a change in the assumptions on which the calculation of the recoverable amount was based. However, goodwill impairment losses are never reversed. A reversal is only performed to the extent that the asset's carrying amount after reversal does not exceed the carrying amount that would have been recognised, less depreciation/amortisation where appropriate, if no impairment had been made.

EMPLOYEE BENEFITS

Salaries and social security contributions are recognised as personnel costs in the income statement. The costs are recognised in the period when the services are provided in accordance with the employment contracts.

Defined contribution pension plans

Obligations regarding contributions to defined-contribution pensions are

reported as an expense in the statement of comprehensive income as they occur.

Defined benefit pension plans

Commitments for old-age pensions and family pensions for salaried employees in Sweden are met through insurance with Alecta. In accordance with UFR 10, this is a multi-employer defined benefit pension plan. The company has not had access to such information that makes it possible to report this pension as a defined benefit scheme. The pension plan as per ITP that is met through insurance with Alecta is therefore reported as a defined contribution pension.

In Norway, all employees are covered by defined benefit pension schemes. In Sweden, some employees are covered by defined benefit pension plans in addition to those which are insured through Alecta. However, there are no new earned pension entitlements in these plans.

The Group's net obligation regarding defined benefit pensions is calculated separately for each pension plan by estimating future benefits earned by employees through their employment during both current and earlier periods; this benefit is discounted to a present value and the fair value of any plan assets is deducted. The discount rate is the interest rate on a risk-free investment in an active market with a maturity corresponding to the plan's pension obligations. The calculation is performed by qualified actuaries using the projected unit credit method.

When the benefits associated with a pension improve, the proportion of the increased benefit that is attributed to employees' employment during earlier periods is recognised as an expense in profit or loss on a straight-line basis over the average period until the benefits are earned completely. If the benefit is earned completely, an expense is recognised directly in profit or loss.

When there is a difference in how the retirement benefit cost is established in a legal entity and group, a provision or claim is reported in relation to special payroll tax based on this difference. The provision or claim is not calculated as a present value.

PROVISIONS

Provisions are recognised in the balance sheet when there is a legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefits will be required to settle the obligation.

STATEMENT OF CASH FLOWS

The statement of cash flows is prepared using the indirect method, which means that earnings are adjusted for transactions not resulting in cash inflows or outflows and for income and expenses attributable to cash flow from investing activities.

TAXES

Income tax consists of both deferred and paid tax. Income tax is recognised in profit or loss unless the underlying transaction is recognised in other comprehensive income, in which case the related tax effect is recognised in the same way.

Current tax is tax that must be paid or received in relation to the current year, with application of the tax rates that have been adopted or adopted in practice as of the closing date; this also includes adjustment of current tax attributable to earlier periods.

Deferred tax is calculated in accordance with the balance sheet method based on temporary differences in the carrying amount of assets and liabilities and the value for tax purposes. A temporary difference that occurred during initial recognition of goodwill is not taken into consideration, and neither are temporary differences attributable to investments in subsidiaries that are not expected to be reversed within the foreseeable future. The valuation of deferred tax is based on how carrying amounts of assets or liabilities are expected to be realised or regulated.

Deferred tax is calculated with application of the tax rates and tax rules that have been adopted or adopted in practice as of the closing date. Deferred tax assets regarding deductible temporary differences and tax loss carry-forwards are recognised only to the extent it is likely these can be utilised. The value of deferred tax assets is reduced when it is assessed to be no longer likely that these can be utilised.

Any additional income tax that arises through dividends is recognised at the same time as the dividend is recognised as a liability.

CONTINGENT LIABILITIES

A contingent liability is recognised when there is a possible obligation arising from events and whose occurrence is confirmed only by one or more uncertain future events, or there is a commitment that is not recognised as a liability or provision because it is unlikely that an outflow of resources will be required.

PARENT COMPANY'S ACCOUNTING PRINCIPLES

The most important accounting principles applied in the preparation of this annual report are set out below. These principles have been applied consistently for all the years presented, unless otherwise stated. The parent company has drawn up its annual accounts in accordance with the Swedish Annual Accounts Act and the Swedish Financial Reporting Board's recommendation RFR 2 Accounting for Legal Entities. RFR 2 means that the parent company in the annual accounts for the legal entity must apply all standards, interpretations and amendments approved by the EU, provided this is possible within the framework of the Annual Accounts Act and with regard to the connection between accounting and taxation. The recommendation states which exemptions from and additions to IFRS are to be made.

The accounting principles specified below for the parent company have been applied consistently in all the periods presented in the parent company's financial reports.

In those cases where the parent company applies accounting principles other than the Group's accounting principles, these are specified below.

Presentation methods

The income statement and balance sheet follow the presentation method set out in the Annual Accounts Act. The statement of changes in equity also follows the Group's presentation method, but must contain the columns specified in the Annual Accounts Act. It also entails a difference in terms compared with the consolidated accounts, mainly in respect of financial income and expenses and equity.

Property, plant and equipment

Property, plant and equipment in the parent company are reported at cost after deductions for accumulated depreciation and any impairment losses in the same way as for the Group.

Accounting principle for leased assets before 1 January 2019 In the parent company, all leases are accounted for under the rules for operating leases.

Accounting principle for leased assets from 1 January 2019

The parent company has chosen not to apply IFRS 16 Leases, but has instead chosen to apply RFR 2 IFRS 16 Leases paras. 2-12.

Investments in subsidiaries

Investments in subsidiaries are reported at cost less deductions for any impairments. The cost value includes acquisition-related costs and any additional purchase sums.

When there is an indication that investments in subsidiaries have decreased in value, the recoverable amount is calculated. If this is lower than the carrying amount, an impairment is conducted. Impairments are reported in the item "Income from investments in Group companies".

Financial instruments

IFRS 9 is not applied in the parent company. Instead, the parent company applies the items specified in RFR 2 (IFRS 9 Financial instruments, pp. 3-10).

Financial instruments are valued at the acquisition value In subsequent periods, financial assets acquired with the intention of being held in the short term will be recognised in accordance with the lowest value principle at the acquisition value or the market value, whichever is lower.

When calculating the net realisable value of receivables recognised as current assets, the principles of impairment testing and loss-risk reservation in IFRS 9 will apply. For a receivable that is reported at amortised cost at Group level, this means that the loss-risk reserve that is reported in the Group in accordance with IFRS 9 should also be included in the parent company.

Dividends

Anticipated dividends from subsidiaries are reported in those instances where the parent company alone has the right to determine the size of the dividend, and where the parent company has made a decision on the size of the dividend before it has published its financial reports.

Taxes

The parent company reports untaxed reserves including deferred tax liability.

Group contributions and shareholders' contributions for legal entities

The parent company reports Group contributions and shareholders' contributions in accordance with the statement from the Swedish Financial Reporting Board and applies its alternative rule, under which Group contributions are recognised as appropriations.

2 REVENUE

Information on operating segments

The Group's chief operating decision-maker follows the outcome of activities on a consolidated basis with no breakdown by segment or branches. The chief operating decision-maker uses the company's aggregate operating profit or loss as the basis for decisions about resource allocation and assessing performance. ProfilGruppen thus consists of only one segment. For financial information on the segment, please refer to the statement of comprehensive income and the statement of financial position, Note 11 (for investments and depreciation/amortisation) and Note 22 (for cash flow effects).

Revenue by industry	2019	2018
Transport	446.7	522.8
Construction	343.2	284.4
Furnishing	336.6	180.9
General industry	272.1	350.3
Electronics	199.2	257.8
Wholesalers and other	24.3	22.1
	1,622.1	1,618.3

Revenue by degree of product processing	2019	2018
Processed products	1,305.8	1,256.4
Untreated extrusions	316.3	361.9
	1,622.1	1,618.3

Information on geographical markets

Sales are mainly to customers in Europe, where the market conditions are similar. Goods are sold for export partly through sales staff who are integrated in the Swedish organisation and based in Sweden and partly through a small number of sales representatives who report directly to the Swedish organisation but are employed in sales companies in each export market. In the first instance, the Group's opportunities and risks are not affected by the location of our customers, but conditions do differ somewhat on the home and export markets. Information on external sales refers to geographical areas grouped according to customer location.

Revenue by market	2019	2018
Sweden	816.9	837.0
Germany	430.1	278.6
Other exports	375.1	502.7
	1,622.1	1,618.3

All of the Group's non-current assets are located in Sweden.

One customer accounted for 13 per cent (13) of total revenues in 2019. Revenue for the Group refers to the revenue source sale of goods. Rents for commercial premises from Swedish companies in the Group account for 100 per cent of the parent company's revenue.

Revenue is distributed slightly differently, as shown below.

3 OTHER OPERATING INCOME AND EXPENSES

	Group		Parent company
Other operating income	2019	2018	2019	2018
Profit on sale of non-current assets	0.0	0.1	0.0	0.0
Retroactive correction energy tax	5.6	0.0	0.0	0.0
	5.6	0.1	0.0	0.0
Other operating expenses
Loss on sale and scrapping of non-current asset	0.0	0.3	0.0	0.0

4 EMPLOYEES AND PERSONNEL COSTS

	2019		2018
Average number of employees	Total	Men	Total	Men
The parent company	0	0	0	0
Group companies in Sweden	464	333	457	328
Group companies outside Sweden
Norway, sales company	1	1	1	1
Germany, sales company	1	1	1	1
	2	2	2	2
Group, total	466	335	459	330

Gender distribution of the Board and management

During the year, the Board of ProfilGruppen AB (the parent company) consisted of 88 per cent (71) men. The Group's management team (including CEO) consisted of 75 per cent (71) men. The Group's other boards and management teams consisted of 60 per cent (71) men.

Salaries, other remuneration and payroll overheads

	2019			2018
	Salaries and other	Payroll overheads (of which remuneration retirement benefit costs) remuneration pension expenses)	Salaries and	Payroll other overheads (of which
Parent company	1.2	0.3 (0.0)	1.0	0.2 (0.0)
Group companies	201.6	89.5 (24.9)	198.5	85.7 (22.3)
Total, Group	202.8	89.8 (24.9)1)	199.5	85.9 (22.3)1)

1) Of which MSEK 1.1 (1.2) relates to the Board and CEO in the Group's different companies.

Salaries and other remuneration,		2019	2018
divided between Board, CEO and other employees	Board	Other and CEO employees	Board	Other and CEO employees
Parent company	1.2	0.0	1.0	0.0
Group companies in Sweden	3.2	196.4	3.0	193.5
Group companies outside Sweden
Norway, sales company	0.0	0.9	0.0	0.9
Germany, sales company	0.0	1.1	0.0	1.1
	0.0	2.0	0.0	2.0
Group, total	4.4	198.4	4.0	195.5

Profit sharing

In 2019, all permanent ProfilGruppen employees benefited from a profit-sharing scheme. Consolidated earnings after financial items constituted the basic criterion for profit sharing, and the cost for 2019 was kSEK 2,933 (4,032) including social security contributions.

Pensions		Group Parent company
Cost of defined contribution plans recognised in income statement	2019	2018	2019	2018
as cost of goods sold	14.5	11.6	0.0	0.0
as selling expenses	5.1	4.8	0.0	0.0
as administrative expenses	4.8	5.5	0.0	0.0
	24.4	21.9	0.0	0.0

Defined benefit pension plans

For salaried employees in Sweden, the ITP2 defined benefit pension obligations for retirement and family pensions are secured through an insurance policy with Alecta. As per a statement from the Swedish Financial Reporting Board, UFR 10, this is a multi-employer defined benefit pension plan. For the financial year 2019, the company has not had access to information that would enable it to account for its proportionate share of the plan's obligations, assets and expenses. It has therefore not been possible to report the plan as a defined benefit plan. The ITP2 pension plan that is secured through an insurance policy with Alecta is therefore accounted for as a defined contribution pension. The premium for defined benefit retirement and family pensions is calculated individually and depends on factors such as salary, previously earned pension and expected remaining period of service. Expected fees in the next reporting period for ITP2 insurance policies with Alecta are MSEK 3.7 (3.8) excluding payroll tax. The Group's share of the total contributions to the plan and of the total number of active members is 0 and 0 per cent, respectively.

The collective funding ratio comprises the market value of Alecta's assets as a percentage of insurance commitments calculated in accordance with Alecta's actuarial methods and assumptions, which do not correspond to IAS 19. The collective funding ratio is normally permitted to vary within a range of 125 and 155 per cent. If Alecta's collective consolidation level were to fall below 125 per cent or exceed 155 per cent it would be necessary to take measures to create conditions under which the level can return to the normal range. In case of a low consolidation level one measure that can be taken is to raise the agreed price for new subscriptions and an increase in the existing benefits. A high consolidation level can be addressed by introducing premium reductions. At the end of 2019, Alecta's surplus in the form of the collective funding ratio was 148 per cent (142).

There are other defined benefit pension plans that provide benefits for retiring employees, both for employees in Sweden and for employees in Norway. There are no new earned pension entitlements for the Swedish plan. The parent company does not have any defined benefit plans.

	Group
Fully or partially funded obligations				2019 2018 2017 2016 2015
Obligation balance 1 January Correction, payroll tax	18.2 0.3	18.8 -0.1	19.7 -2.3	19.1 0.0	23.4 0.0
Cost for pensions earned during the year Interest expense Payments	0.1 0.4 -0.6	0.1 0.4 -0.5	0.1 0.4 -0.6	0.1 0.6 -0.7	0.1 0.4 -3.8
Actuarial gains/losses Actuarial gains/losses recognised through other comprehensive income	0.0 1.7	0.0 -0.5	0.0 1.6	0.0 0.4	0.0 -0.9
Translation differences	0.1	0.0	-0.1	0.2	-0.1
Obligation balance 31 December of which unrecognised actuarial losses	20.2 -	18.2 -	18.8 -	19.7 -	19.1 -
Plan assets balance 1 January Expected return on plan assets Costs Incoming payments Actuarial gains/losses Actuarial gains/losses recognised through	1.9 0.0 0.0 0.1 0.0	1.8 0.0 0.0 0.1 0.0	1.9 0.0 0.0 0.0 0.0	1.7 0.1 0.0 0.1 0.0	2.1 0.1 0.0 -0.3 0.0
other comprehensive income Translation differences	0.0 0.0	0.0 0.0	0.0 -0.1	-0.1 0.1	0.0 -0.2
Plan assets balance 31 December	2.0	1.9	1.8	1.9	1.7
Net debt recognised in the balance sheet relating to defined benefit pension plans	18.2	16.3	17.0	17.8	17.4
Cost recognised in profit or loss of which selling expenses of which administrative expenses of which financial expenses	0.5 0.2 0.0 0.3	0.4 0.1 0.0 0.3	0.5 0.1 0.0 0.4	0.7 0.1 0.0 0.6	0.5 0.2 0.0 0.3
Cost recognised in other comprehensive income of which caused by experience-based adjustments -0.4 of which caused by changed assumptions	1.7 2.1	-0.4 -0.5 0.1	1.6 -0.4 2.0	0.4 -1.1 1.5	-0.8 0.3 -1.1

Sensitivity analysis for estimated net debt at balance sheet date
Change in obligation for discount rate -0.5 percentage points	1.7
Change in obligation for discount rate +0.5 percentage points	-1.5
Change in obligation for inflation assumption -0.5 percentage points	-1.4
Change in obligation for inflation assumption +0.5 percentage points	1.6
Change in obligation for duration assumption -1 year	-1.0
Change in obligation for duration assumption +1 year	1.0

The most important actuarial assumptions as of the closing day

		Sweden	Norway
	2019	2018	2019	2018
Discount rate	1.2%	2.2%	1.8%	2.6%
Long-term inflation assumption	1.7%	2.0%	-	-
Expected return on
plan assets	-	-	1.8%	2.6%
Future salary increases	-	-	2.3%	2.8%
Future increases in pensions	1.7%	2.0%	2.5%	2.5%
Staff turnover	-	-	0.0	0.0
Expected remaining employment period	0 years	0 years	4.0 years 5.0 years
Average remaining
term of the obligation	15 years 15 years			25 years 25 years
Average life expectancy, women	89 years 89 years			89 years 89 years
Average life expectancy, men	87 years 87 years		86 years 86 years

The discount rate for the Norwegian plan is based on the market yield on mortgage bonds with a maturity corresponding to the remaining term of the obligation, 25 years. For the Swedish plan, the discount rate has been based on the market yield on mortgage bonds with a maturity corresponding to the average remaining term of the obligation, in this case 15 years.

Plan assets only exist in the Norwegian plan and consist chiefly of interestbearing securities, which account for 76 per cent (77). Other assets are shares 13 per cent (13), real estate 11 per cent (9) and other 0 per cent (1).

The actual return on plan assets in the Norwegian plan in 2019 is not known (2018: not known).

Our best estimate of payments to defined benefit pension plans in 2020 is MSEK 0.9.

Guidelines for remuneration for senior executives

The members of the Board receive remuneration in accordance with the decisions of the Annual General Meeting.

The Board prepares a proposal for guidelines for remuneration of the Group's CEO and other senior executives. The guidelines are based on the company's long-term Remuneration Policy, which was revised in February 2019.

The 2019 Annual General Meeting adopted a set of guidelines for the CEO and other members of management, a group comprising seven persons at the time of the AGM. The decision encompasses guidelines as follows. Total remuneration may consist of a fixed basic salary, variable remuneration, pension and other benefits. Variable remuneration, which is capped at 30 per cent of the fixed salary, is linked to the Group's results and only in specific instances to individual targets. Variable remuneration is conditional on a positive net result for the Group and will be retrospectively adjusted if it has been paid on apparently erroneous grounds. Agreements on pension benefits are arranged individually and the pension costs can amount to a maximum of 30 per cent of the salary. Other remuneration and benefits shall be at market rates and shall help to facilitate the senior executive's opportunities to carry out their work. The employment contracts of members of the management team are generally terminable on six months' notice by either party. The Board may depart from the guidelines if there are special reasons in an individual case.

The guidelines which the Board intends to propose to the 2020 AGM are presented in the Directors' Report.

Directors' fees and other remuneration to senior executives, kSEK

		2019	2018
Kåre Wetterberg	Chairman of the Board	400	365
Jörgen Abrahamsson	Board member	155	-
Monica Bellgran	Board member	155	150
Mats Egeholm	Board member	155	150
Bengt Stillström	Board member	155	150
Thomas Widstrand	Board member	155	150
Employee representatives	two members and two deputies	-	-
Total fees		1,175	965

In 2019, ProfilGruppen's CEO at the beginning of the year, who left the company in August, received kSEK 1,681 (2,896) in fixed and variable remuneration, including benefits. The CEO who took up his post in October received the same forms of remuneration in the amount of kSEK 504 (0). In the interim, the company had an Acting CEO, who during his roughly two-month term as Acting CEO received remuneration of kSEK 286 (0).

Other senior executives, totalling seven people (six), have received kSEK 8,510 (7,349) in fixed and variable remuneration, including benefits.

Excluding social security contributions, the total cost of variable remuneration for the executive management team, which consisted of eight people, was kSEK 562 in 2019 (seven people, kSEK 462), of which kSEK 72 (0) refers to the new CEO and kSEK 22 (0) to the person who was Acting CEO during part of the year. The previous year's remuneration was paid during the year.

The CEO's employment contract is terminable on six months' notice by the CEO and on twelve months' notice by the company. The contracts of other members of senior management are terminable on six months' notice by either party.

Pension benefits and pension agreements for senior executives

For the CEO, a defined benefit pension provision of 30 per cent of his total salary has been made. The retirement benefit cost for the CEO who departed during the year was kSEK 449 (783), excluding special payroll tax of kSEK 109 (190). The corresponding cost for the CEO who took up his post during the year was kSEK 156 (0), excluding special payroll tax of kSEK 38 (0). The Group also incurred a retirement benefit cost for the Acting CEO of kSEK 83 (0), excluding special payroll tax of kSEK 20 (0). There are no agreements for early retirement.

Other senior executives during the year, seven people (six), are covered by the pension plan for salaried employees in Sweden (ITP). The annual pension costs for these people was kSEK 1,991 (1,601), excluding special payroll tax of kSEK 483 (388). The pensions are transferable and so are not conditional on future employment.

There are no other agreements on severance pay.

5 AUDITORS' FEES AND EXPENSES

	Group Parent company
	2019	2018	2019	2018
Ernst & Young AB Audit engagement Other engagements	0.7 0.2	0.7 0.0	0.0 0.0	0.0 0.0
Other auditors Audit engagement	0.1	0.1	-	-

Audit services under the audit engagement refer to the statutory audit of the annual accounts and accounting records and of the Board of Directors' and Chief Executive Officer's management of the company, other tasks incumbent on the company's auditors as well as advice and other assistance occasioned by observations made in the course of such audit activities. Audit services in addition to the audit engagement refer to other quality assurance services prescribed in statutes, the company's Articles of Association, regulations or contracts.

Tax advisory services refer to services in the area of tax. Other advisory services refer to all other advisory services not included in the above.

6 OPERATING EXPENSES BY TYPE OF COST

	Group
	2019	2018
Raw materials	726.1	722.8
Personnel costs	292.6	285.4
External machining services	176.5	154.1
Depreciation/amortisation	57.7	49.2
Impairment of trade receivables	2.0	0.0
Other operating expenses	259.6	296.2
	1,514.5	1,507.7

The cost of developing products and the business amounts to MSEK 8.4 (8.1) and is included in the operating expenses divided into personnel costs and other operating expenses. During the year, none of these costs have been capitalised in accordance with IAS 38.

7 LEASES

Disclosures on operating leases applicable for the comparative period, as IFRS 16 has been applied from 1 January 2019

Note 1 Accounting principles describes the principles for how the new standard IFRS 16 Leases has been applied. In the consolidated statement of financial position, the following adjustments related to IFRS 16 Leases have been made as at the transition date (1 January 2019).

		Effect of transition to
	CB 31 Dec 2018	IFRS 16	OB 1 Jan 2019
Machinery and equipment	7.7	0.0	7.7
Right-of-use assets	0.0	12.8	12.8
Short-term lease liabilities	1.2	5.2	6.4
Long-term lease liabilities	0.0	7.6	7.6

An explanation of the difference between the operating lease commitments accounted for in accordance with IAS 17 immediately before the initial application date (31 December 2018) and lease liabilities accounted for in accordance with IFRS 16 at the initial application date is presented below.

Operating lease commitments at 31 December 2018 Short-term leases expensed on a straight-line basis Leases for which the underlying asset is of low value Discounting at the Group's incremental borrowing rate 2–7% Finance lease liabilities at 31 December 2018		14.1 -0.5 -0.2
		-0.6 1.2
	Lease liability recognised at 1 January 2019	14.0
	Of which Short-term lease liabilities Long-term lease liabilities	6.4 7.6

The recognition of depreciation of right-of-use assets instead of lease payments has had a positive impact on the operating profit of MSEK 0.2. Interest on lease payments had a negative impact on net financial items of MSEK 0.6. Earnings before tax have decreased by MSEK 0.4 as a result of IFRS 16. As the main payment is accounted for as financing activities, cash flow from financing activities is reduced by the corresponding increase in cash flow from operating activities. The interest portion of the lease payment remains as cash flow from operating activities and is included in net financial items. The Group recognises a right-of-use asset in the balance sheet and a lease liability at the present value of future lease payments. The leased asset is depreciated on a straight-line basis over the term of the lease or the useful life of the asset if it is considered reasonably certain that the Group will obtain the ownership by the end of the lease term. The lease expense is recognised as depreciation in operating profit and interest expense in net financial items. If the lease is considered to include a low-value asset or has a term of 12 months or less, or if it includes service components, these lease payments are recognised as operating expenses in the income statement over the term of the lease.

Disclosures for the financial year 2019

	Group
Amounts recognised in the balance sheet Right-of-use assets	2019	1 Jan 2019
Commercial premises	4.6	7.2
Vehicles	8.9	5.1
IT equipment	0.3	0.5
	13.8	12.8
Lease liabilities
Non-current interest-bearing liabilities	7.8	7.6
Current interest-bearing liabilities	6.4	6.4
Amounts recognised in the income statement	2019	2018
Commercial premises	3.4	-
Vehicles	3.2	-
IT equipment	0.2	-
	6.8	-
Right-of-use assets not recognised
in the balance sheet	2019	2018
Short-term leases included in cost of goods sold	0.5	-
Underlying low-value asset included in cost of goods sold	4.1	-
	4.6	-

No significant variable lease payments not included in the lease liability have been identified.

Total lease-related cash flow in 2019 was MSEK 12.3. For information on undiscounted cash flows for the lease liability, see Note 21.

The Group's finance lease payments (before IFRS 16) in 2019 were MSEK 0.4 (3.0). At 31 December 2019, there were no finance leases in the Group.

"IFRS 16 Leases has been applied from 1 January 2019, which has required adjustments to the Group's non-current assets"

8 FINANCIAL ITEMS

	Group
	2019	2018
Interest income	0.4	0.7
Financial income	0.4	0.7
Interest portion of retirement benefit costs for the year Interest expenses, other Other expenses	0.3 7.0 4.4	0.3 4.1 2.4
Financial expenses	11.7	6.8
	Parent company
	2019	2018
Dividend PG&WIP AB Interest income ProfilGruppen Extrusions AB	3.5 1.3	4.9 0.8
Financial income	4.8	5.7
Interest expenses ProfilGruppen Extrusions AB Interest expenses, other	2.7 0.2	0.3 0.0
Financial expenses	2.9	0.3

APPROPRIATIONS 9 AND UNTAXED RESERVES

	Appropriations		Untaxed reserves
Parent company	2019	2018	2019	2018
Accumulated
accelerated depreciation
Allocated (+)/dissolved (-)
buildings	0.0	0.0	0.0	0.0
equipment	6.4	0.1	8.0	1.6
	6.4	0.1	8.0	1.6
Tax allocation reserves Allocated (+) / dissolved (-)
per tax year
2012	0.0	-5.8	0.0	0.0
2015	0.0	0.0	3.2	3.2
2016	0.0	0.0	10.3	10.3
2017	0.0	0.0	13.8	13.8
2018	0.0	17.7	17.7	17.7
2019	1.7	-	1.7	-
	1.7	11.9	46.7	45.0
Group contribution received	0.0	-50.0	-	-
	8.1	-38.0	54.7	46.6

10 TAXES

Reported tax expense	Group		Parent company
	2019	2018	2019	2018
Current tax	6.5	21.0	1.1	11.7
Deferred tax related to temporary differences	14.9	3.1	-0.5	-0.1
Total reported tax expense	21.4	24.1	0.6	11.6

	Group		Parent company
Reconciliation effective tax, per cent	2019	2018	2019	2018
Tax at applicable tax rate for the parent company	21	22	21	22
Dividends, subsidiaries	-	-	-10	-2
Other	-	-	-3	0
Reported effective tax	21	22	8	20

Change in recognised		through	Recognised Recognised through
deferred tax liability	1 Jan 2019	P/L		OCI 31 Dec 2019
Group
Property, plant and equipment	23.6	17.6	0.0	41.2
Pension provisions	-1.1	0.0	-0.4	-1.5
Tax allocation reserves	14.3	1.3	0.0	15.6
Items recognised in hedging reserve	-0.6	0.0	0.6	0.0
Other	-0.5	0.4	0.0	-0.2
	35.7	19.3	0.2	55.1
Parent company
Property, plant and equipment	3.9	-0.5	0.0	3.4
	3.9	-0.5	0.0	3.4
Change in recognised deferred tax liability	1 Jan 2018	through P/L	Recognised Recognised through	OCI 31 Dec 2018
Group
Property, plant and equipment	22.8	0.8	0.0	23.6
Pension provisions	-1.3	0.0	0.2	-1.1
Tax allocation reserves	12.0	2.3	0.0	14.3
Items recognised in hedging reserve	-0.9	0.0	0.3	-0.6
Other	-0.4	-0.1	0.0	-0.5
	32.2	3.0	0.5	35.7

Property, plant and equipment 3.9 0.0 0.0 3.9

3.9 0.0 0.0 3.9

11 INTANGIBLE ASSETS

		Group
Goodwill	2019	2018
Accumulated cost
At beginning of year	12.8	12.8
At end of year	12.8	12.8
Acc. impairment losses At beginning of year	2.8	2.8
At end of year	2.8	2.8
IT systems
Accumulated cost
At beginning of year	21.5	4.8
New acquisitions	9.3	16.7
At the end of the year	30.8	21.5
Acc. amortisation
At beginning of year	0.0	0.0
Amortisation for the year	1.8	0.0
At the end of the year	1.8	0.0
Carrying amount at end of year	39.0	31.5

Impairment test for cash-generating units containing goodwill

ProfilGruppen tests the value of goodwill at least once a year and when there is an indication of impairment. The impairment test for goodwill is based on a calculation of value in use. Goodwill is attributable to the activities of ProfilGruppen Extrusions AB, which is also the cash-generating unit tested. A statement of cash flows has been used as the basis for the valuation and the first three years are based on the budget and strategic plans, which are adopted by management. The margin is expected to improve as a result of increased demand and measures to improve efficiency. The cash flows forecast after the first four years are based on an annual growth rate of 2.0 per cent (2.0), which in turn is based on the expected rate of GDP growth, which the market for extrusions normally follows. The new present value of forecast cash flows has been estimated using a discount rate of 11.47 per cent before tax (11.19), which has been calculated using a weighted average cost of capital. A sensitivity analysis of the impairment test has been made, showing that reasonable changes in the discount rate, weighted average cost of capital, rate of growth and gross margin calculation parameters do not result in an impairment loss.

Parent company

Group Parent company

12 PROPERTY, PLANT AND EQUIPMENT

	Group		Parent company
Land and buildings	2019	2018	2019	2018
Accumulated cost
At beginning of year	199.3	157.7	165.0	123.4
New acquisitions	40.6	41.6	40.5	41.6
Reclassifications	1.1	0.0	1.1	0.0
Disposals and scrapping	0.0	0.0	0.0	0.0
At end of year	241.0	199.3	206.6	165.0
Acc. depreciation and impairment
Opening balance	73.4	69.6	52.1	49.1
Disposals and scrapping	0.0	0.0	0.0	0.0
Scheduled depreciation for the year	3.8	3.8	2.9	3.0
At end of year	77.2	73.4	55.0	52.1
Acc. impairment
Opening balance	2.7	2.7	2.7	2.7
Reversal of impairment losses	0.0	0.0	0.0	0.0
Impairment losses for the year	0.0	0.0	0.0	0.0
At end of year	2.7	2.7	2.7	2.7
Carrying amount at end of year	161.1	123.2	148.9	110.2
of which buildings	143.9	109.5	132.2	96.9
land	6.3	6.3	5.9	5.9
land improvements	10.9	7.4	10.8	7.4

relating to property, plant and equipment
At beginning of year	58.6	51.9	1.1	0.0
Reclassifications	-11.8	-51.9	-1.1	0.0
New acquisitions	133.7	58.6	4.6	1.1
Carrying amount at end of year	180.5	58.6	4.6	1.1
Total carrying amount, property plant and equipment	523.2	362.9	176.9	113.4

Useful lives	Group		Parent company
Land and buildings
Real estate, depending on component		30–50 years		30-50 years
Permanent equipment	10–40 years		10-40 years
Land improvements	20 years		20 years
Land equipment	10 years		10 years
Machinery and equipment
Extrusion presses		20 years
Anodising equipment and other press equipment	10–15 years
Spare parts for machinery	5–10 years
Processing and measuring machinery	5–7 years
Equipment	5-10 years
Transportation

Construction in progress and advances 2019 2018 2019 2018

Depreciation is on a straight-line basis, based on expected useful life.

IT investments 4–5 years

Machinery and equipment		Group		Parent company
	2019	2018	2019	2018
Accumulated cost
Opening balance	659.6	587.5	5.7	5.0
New acquisitions	34.8	20.7	21.4	0.7
Reclassifications	10.7	51.9	0.0	0.0
Translation differences	0.0	0.0	0.0	0.0
Disposals and scrapping	-1.1	-0.5	0.0	0.0
At end of year	704.0	659.6	27.1	5.7
Acc. scheduled depreciation
Opening balance	464.5	419.4	3.6	3.5
Disposals and scrapping	-1.1	-0.3	0.0	0.0
Translation differences	0.0	0.0	0.0	0.0
Scheduled depreciation for the year	45.0	45.4	0.1	0.1
At end of year	508.4	464.5	3.7	3.6
Acc. impairment losses
At beginning of year	14.0	14.0	0.0	0.0
Impairment losses for the year	0.0	0.0	0.0	0.0
At end of year	14.0	14.0	0.0	0.0
Carrying amount at end of year	181.6	181.1	23.4	2.1

The cost of the non-current assets that are fully depreciated but are still used in the business is MSEK 296.9 (290.5). At 31 December 2019, ProfilGruppen had contractual obligations to acquire property, plant and equipment of MSEK 49.0.

The Group's accumulated cost includes capitalised interest of MSEK 3.1 (3.1). No interest has been capitalised during this year or the previous year. Equipment belonging to the parent company refers to land equipment and permanent equipment.

	Group		Parent company
Depreciation by function	2019	2018	2019	2018
Cost of goods sold	49.0	49.2	3.1	3.1
Selling expenses	0.0	0.0	0.0	0.0
Administrative expenses	0.1	0.1	0.0	0.0
	49.1	49.3	3.1	3.1

13 RIGHT-OF-USE ASSETS

		Group
Right-of-use assets	2019	2018
Accumulated cost
Effect of transition to IFRS 16	12.8	0.0
New acquisitions	7.8	0.0
Disposals and scrapping	0.0	0.0
At end of year	20.6	0.0
Acc. depreciation and impairment
Opening balance	0.0	0.0
Disposals and scrapping	0.0	0.0
Scheduled depreciation for the year	6.8	0.0
At end of year	6.8	0.0
Carrying amount at end of year	13.8	0.0

14 FINANCIAL FIXED ASSETS

This item consists of shares in outside companies. The investment is unlisted and is measured in accordance with Level 3.

15 INVENTORIES

		Group
	2019	2018
Raw materials and consumables	81.7	99.1
Work in progress	76.4	97.7
Finished products and goods for resale	73.9	50.7
	232.0	247.5

No portion of inventories has been measured at net realisable value.

16 TRADE RECEIVABLES

	Group
	2019	2018
Trade receivables	204.7	224.7
Provision for expected credit losses	-2.0	0.0
	202.7	224.7

For other information on customer credits, see Note 19.

17 EQUITY

Translation reserve	2019	2018
Translation reserve, opening balance	0.3	0.2
Translation differences for the year	-0.2	0.1
Translation reserve, closing balance	0.1	0.3

Share capital and voting rights

All shares have a fair value of SEK 5 per share. All shares are fully paid up. All existing shares are series B shares and have equal rights to a share in the company's assets and profits. During the year, there has been no change in the number of shares, which has remained at 7,398,775.

First refusal and conversion

There is no pre-emption clause in the articles of association.

Other paid-up capital

This item refers to equity that has been put up by the owners. This includes a portion of share premium reserves transferred to the statutory reserve as at 31 December 2005. Any future transfers to the share premium reserves will also be accounted for as paid-up capital.

Translation reserve

The translation reserve includes all exchange rate differences that arise during translation of financial statements from foreign operations which have prepared their statements in a currency other than that used in the Group's financial statements. The parent company and Group present their financial statements in Swedish kronor.

Hedging reserve

The hedging reserve contains the effective share of the accumulated net change in fair value of a cash flow hedging instrument attributable to hedging transactions that have not yet occurred, see table in Note 21 under Derivatives.

Own shares and repurchases

No individual shares are owned by the company itself or its subsidiaries and the repurchase of individual shares is currently not relevant. There are no programmes of convertibles or options that involve the dilution of share capital.

Dividend

After the closing day, the Board has proposed that no dividend will be paid for the 2019 financial year. The calculated average number of shares in 2019 is 7,398,775 (7,398,775). The dividend is subject to approval by the Annual General Meeting on 21 April 2020. During the year, MSEK 37.0 in dividends were paid to the shareholders.

It is proposed that the available profits be appropriated as follows:

	SEK 134,173,042
	SEK 134,173,042
SEK	0

Parent company

Restricted funds Restricted funds refers to share capital and other restricted equity. Restricted

funds are not available for dividend payment.

Non-restricted equity

The balanced profit is formed by the preceding year's non-restricted equity after any dividend has been paid. Profit brought forward, together with the profit for the year, make up the total non-restricted equity, i.e. the sum available for dividends to shareholders.

18 EARNINGS PER SHARE

The calculation of earnings per share is based on the consolidated profit/loss for the year, attributable to the parent company's shareholders, amounting to MSEK 73.9 (80.5) and a weighted average number of shares in 2019 amounting to 7,398,775 (7,398,775), which is calculated in accordance with IAS 33. There is no dilution.

19 INTEREST-BEARING LIABILITIES

	Group
	Long-term		Current
Interest-bearing liabilities	2019	2018	2019	2018
Bank loans	149.1	78.6	23.8	17.4
Bank overdraft facilities	-	-	124.9	28.8
Lease liabilities	6.4	0.0	7.8	1.2
	155.5	78.6	156.5	47.4

The parent company's liabilities to credit institutions refer to drawn overdraft facilities.

That portion of the bank loans which is payable within twelve months from the balance sheet date is classified as current. The lender agreement contains key performance indicators that the company must meet, see Note 21. Of total long-term interest-bearing liabilities, MSEK 125.2 (30.8) was raised in EUR.

PREPAID AND ACCRUED 20INCOME AND EXPENSES

Prepaid expenses and		Group		Parent company
accrued income		2018	2019	2018
Prepaid salaries	2.5	1.1	0.0	0.0
Accrued income	0.5	0.8	0.0	0.0
Other prepaid expenses	6.3	5.5	0.0	0.0
	9.3	7.4	0.0	0.0

	Group		Parent company

Accrued expenses and deferred income	2019	2018	2019	2018
Holiday pay and other personnel expenses	64.1	60.6	0.0	0.1
Accrued Directors' fees	0.7	0.6	0.7	0.6
Deferred income	19.8	28.5	0.0	0.0
Other accrued expenses	5.9	13.4	0.4	0.5

21 FINANCIAL INSTRUMENTS

The Group's financial instruments include bank loans, trade payables, finance leases and derivatives, which may constitute a liability or asset depending on the fair value of the instrument. The purpose of the liabilities is to fund the Group's operations. The Group's financial instruments also include assets in the form of trade receivables and cash and cash equivalents generated in the operations. The Group's derivatives may also constitute assets at the closing date.

As a result of its activities, the Group is exposed to various types of financial risk. Financial risk refers to fluctuations in the company's profit and cash flow as a result of changes in exchange rates, interest rates, raw material prices and refinancing and credit risks.

The company's Board of Directors examines and approves policies for handling these risks as described below. The Group's central finance department is responsible for handling financial transactions and risks in accordance with established policies.

Derivatives

Derivatives are used only for financial hedging purposes and not as speculative investments. The Group uses two types of derivatives to hedge cash flows: interest rate swaps and foreign exchange forwards.

In the consolidated statement of financial position, interest rate swaps have been recognised as other current liabilities in the amount of MSEK 0.3 (1.3) while foreign exchange forwards have been recognised as current assets in the amount of MSEK 1.6 (1.2) and as other current liabilities in the amount of MSEK 1.2 (2.8). There is no ineffectiveness related to interest rate swaps or foreign exchange forwards either for 2018 or 2019.

Derivatives have the following impact on the consolidated statement of financial position and income statement:

Accured expenses and	Group		Parent company
deferred income	2019	2018	2019	2018
Holiday pay and other personnel expenses	64.1	60.6	0.0	0.1
Accrued Directors' fees	0.7	0.6	0.7	0.6
Deferred income	19.8	28.5	0.0	0.0
Other accrued expenses	5.9	13.4	0.4	0.5
	90.5	103.1	1.1	1.2

	Group
Interest rate swap contracts	2019	2018
Carrying amount (liability)	0.3	1.3
Nominal amount	40.0	40.0
Maturity date	30 Apr 2020	30 Apr 2020
Hedge ratio	100%	88%
Change in value of outstanding derivative instruments since 1 January	-1.0	-0.9
Change in value of hedged item
to determine effectiveness	-1.0	-0.9
Foreign exchange forwards
Carrying amount (asset)	1.6	1.2
Carrying amount (liability)	1.2	2.8
Nominal amount, EUR	138.0	179.9
Nominal amount, DKK	26.0	17.9
Nominal amount, NOK	8.6	9.8
Maturity (last maturity date of concluded forward contracts)	18 Aug 2021	21 Sep 2020
Hedge ratio for 12 months from 31 Dec 2019, EUR	84%	78%
Hedge ratio for 12 months from 31 Dec 2019, DKK	86%	60%
Hedge ratio for 12 months from 31 Dec 2019, NOK	53%	55%
Change in value of outstanding derivative instruments since 1 January	1.5	0.8
Change in value of hedged item to determine effectiveness	1.5	0.8
Weighted average of forward rates for the year (including forward points), EUR	10.46	10.01
Weighted average of forward rates for the year (including forward points), NOK	1.44	1.40
Weighted average of forward rates for the year (including forward points), NOK	1.07	1.07

Hedging reserve	Foreign exchange Interest rate forward contracts	swaps	Total
Hedging reserve, opening balance 1 Jan 2018	-1.7	-1.7	-3.4
Plus: change in fair value
hedging instruments recognised in OCI	-1.5	0.9	-0.6
Plus: deferred tax	0.3	-0.2	0.1
Less reclassified to income	2.2	0.0	2.2
Less deferred tax	-0.5	0.0	-0.5
Hedging reserve, closing balance 31 Dec 2018	-1.2	-1.0	-2.2
Hedging reserve, opening balance 1 Jan 2019	-1.2	-1.0	-2.2
Plus: change in fair value
hedging instruments recognised in OCI	0.3	1.0	1.3
Plus: deferred tax	-0.1	-0.2	-0.3
Less reclassified to income	1.5	0.0	1.5
Less deferred tax	-0.3	0.0	-0.3
Hedging reserve, closing balance 31 Dec 2019	0.2	-0.2	0.0

Currency risks

The foreign exchange risk arises from the fact that changes in exchange rates have a negative impact on the Group's earnings and equity. Currency exposure arises from payment flows in foreign currency (transaction exposure), mainly in connection with the Group's sales of products for export. Sales in foreign currencies represent about 40 per cent of total revenue. The currency in which the greatest share of export sales is done is EUR, but since raw materials are in part purchased in EUR, exposure is considerably reduced.

Under ProfilGruppen's currency policy, 50–70 per cent of the expected net inflow in each currency over the next six to eighteen months should be hedged. Management has a mandate to hedge up to 100 per cent for periods of up to 24 months. Hedge accounting is used for the foreign exchange forwards, and during the year, no (no) amounts for ineffective hedges have been recognised in the income statement. Foreign exchange forwards are presented above under Derivatives.

At 31 December 2019, receivables in foreign currency totalled MSEK 48.3 (47.7) and liabilities in foreign currency were MSEK 146.8 (66.5). Of the liabilities in foreign currency, MSEK 125.3 (30.8) are interest-bearing, see Note 19.

To finance investments in machinery for our new press, a loan of MEUR 13.5 will gradually be raised. At year-end, the investment totalled approximately MEUR 13.0 and the loan totalled MEUR 12.0. The euro loan creates a currency exposure that the company does not normally have, which could have an impact on earnings. For 2019, the loan had a negative impact on net financial items of MSEK 1.3.

Translation exposure associated with the Group's overseas sales companies, which consists of each company's equity and liabilities to the parent company, is marginal.

Where a net flow has not been hedged, changes in exchange rates affect profit before tax and equity as per the following:

		Profit before tax, MSEK	Equity, MSEK
EUR	Change +/- 10%	+/- 14	+/- 11
DKK	Change +/- 10%	+/- 2	+/- 2
NOK	Change +/- 10%	+/- 2	+/- 1

Interest rate risk

Interest rate risk refers to the risk that changes in market interest rates will have a negative impact on ProfilGruppen's earnings. To minimise this risk, the Group borrows at fixed rates and enters into interest rate swaps. How quickly a change in interest rates feeds through to the net interest expense depends on the fixed-rate terms of the loans. Under the Group's financial policy, the fixedrate term may not exceed 60 months. During reporting, hedge accounting is applied when there is an effective link between a hedged loan and an interest rate swap. Interest rates for 40 per cent of all non-current interest-bearing liabilities are hedged in one of the ways described above for the periods and levels specified in the following table.

Fixed rate until	Non-current interest-bearing liabilities, MSEK	Interest rate incl. margin (%)
2020	40.0	4.0
2022	22.1	3.0

The parent company has no non-current interest-bearing liabilities. If interest rates in 2019 were to rise by one percentage point, this would increase the interest expense by MSEK 1.5 on a full-year basis.

The swaps have the effect that ProfilGruppen receives variable interest and pays fixed interest. The Group has classified the interest rate swaps as hedging instruments in a cash flow hedge of future interest payments. ProfilGruppen measures the effectiveness of the hedge relationship at each reporting date. The interest rate swap and the loan have the same currency, base rate (STIBOR 3M) and interest rate fixing date, and the loan volume is not less than the nominal value of the interest rate swap, which means that there is a strong financial relationship between the loan and the interest rate swap.

Market risks

Market risks consist primarily of declining demand and changes in raw material prices. ProfilGruppen's production is characterised by a high proportion of fixed costs, meaning activities are highly volume-dependent. Small variations in demand thus have a relatively large impact on profit. Aluminium prices have historically shown significant mobility. The price risk that does exist is reduced by including raw material clauses in contracts with customers. There is a certain price risk in inventory, however. The raw material policy means that raw materials are mainly purchased in proportion to orders in hand.

Raw material purchases for periods longer than six months are based on contracts with customers. Raw materials are purchased in Swedish krona or euro. Follow-ups and checks are performed by a raw materials group made up of representatives from the purchasing, finance and marketing organisations at management level.

Credit risks

Customer credits in ProfilGruppen must be handled in accordance with the Group's credit policy. The company's management is responsible for ensuring that the credit policy is familiar to all parties involved in the sales process and for it being adapted where necessary.

Credit assessments are made and credits are monitored by the Group's Credit Controller, and around 60 per cent (60) of the Group's annual sales are insured under a credit insurance policy. Decisions on exceptions from the credit insurance policy are made annually by the CFO and CEO.

Maximum exposure to credit risks as of 31 December 2019 amounts to MSEK 239.0 (239.6). The largest individual receivable amounts to 5 per cent (9) of the total credit risk. The distribution of the credit risk is shown in the following table.

Concentration of credit risk at 31 Dec 2019	Number of customers number of customers	Percentage of
Exposure < MSEK 1.0	402	91%
Exposure MSEK 1.0-5.0	33	7%
Exposure > MSEK 5	6	1%
	441	100%

31 Dec 2019	Not past due	1-30 days past due	30+ days past due	Total
Expected credit loss	0.0	0.0	-2.0	-2.0
Value of gross trade receivables	182.8	13.8	8.1	204.7
Provision for losses	0.0	0.0	2.0	2.0

Liquidity risks

No significant liquidity risks are included in the company's financial instruments. Due dates for interest-bearing liabilities are presented in Note 19. In addition to the Group's cash and cash equivalents, on the closing date there were unutilised credit facilities to a value of MSEK 116.9 (340.3).

The agreement with lenders contains key performance indicators that the company is required to meet. These had been met at 31 December 2019.

The following table shows an analysis of the Group's financial liabilities by remaining maturity from the balance sheet date. The amounts indicated in the table are the contractual, undiscounted cash flows. Future cash flows in respect of interest have been calculated based on the interest rate at the balance sheet date. Derivatives have been included in the time interval at their fair values, as the contractual maturity dates are not material to understanding the timing of the cash flows.

Maturity analysis

financial liabilities			On demand < 3 months 3-12 months 1–5 years > 5 years
Interest-bearing liabilities	124.9	3.5	26.1	103.6	63.3
Lease liabilities	0.0	2.1	6.2	6.7	0.2
Other liabilities	26.3	250.8	9.3	0.0	0.0
Derivatives	0.0	0.5	1.0	0.0	0.0
Total at 31 Dec 2019	151.2	256.9	42.6	110.3	63.5
Interest-bearing liabilities	28.8	4.8	14.5	50.2	37.9
Finance lease liabilities	0.0	1.1	0.1	0.0	0.0
Other liabilities	24.0	222.7	8.4	0.0	0.0
Derivatives	0.0	1.3	1.5	1.2	0.0
Total at 31 Dec 2018	52.8	229.9	24.5	51.4	37.9

Carrying amount and fair value of financial instruments

	Group
		Carrying	Fair
Class	amount		value		Category
	2019	2018	2019	2018
Financial assets	0.2	0.2	0.2	0.2	Financial assets at fair value
Trade receivables	202.7	224.7	202.7 224.7		Financial assets at amortised cost
Accrued income	0.5	0.8	0.5	0.8	Financial assets at amortised cost
Other receivables	40.0	18.0	40.0	18.0	Financial assets at amortised cost
of which forward contracts	1.5	1.2	1.5		1.2 Derivatives designated as hedging instruments
Cash and cash equivalents	29.9	26.1	29.9	26.1	Financial assets at amortised cost
Interest-bearing liabilities 312.0		126.0	307.9 130.4		Financial liabilities at amortised cost
Trade payables	190.2	228.5	190.2 228.5		Financial liabilities at amortised cost
Accrued expenses	90.5	102.2		90.5 102.2	Financial liabilities at amortised cost
Other liabilities	7.1	17.4	7.1	17.4	Financial liabilities at amortised cost
of which forwards	1.2	2.8	1.2		2.8 Derivatives designated as hedging instruments
interest rate swaps	0.3	1.2	0.3		1.2 Derivatives designated as hedging instruments

No reclassification between categories has been carried out during the year.

Forward contracts have been measured at observable market prices for currencies at the balance sheet date, i.e. in accordance with Level 2 under IFRS 13. Valuation models or techniques for discounted cash flows are used to determine the rate for interest rate swaps. The discount rate used is a market-based rate for similar instruments on the closing date. The value thus agrees with Level 2 under IFRS 13.

Capital administration

The main goal of the Group's capital administration is to maintain a high credit rating and a well-balanced capital structure. In order to retain or change the capital structure, the Group can adjust the dividend to the shareholders, return capital to the shareholders or conduct a new issue.

The net debt/equity ratio is defined as interest-bearing liabilities and provisions less cash and cash equivalents in relation to equity. The net debt/equity ratio at the end of the year was 0.72 (0.31).

	Group
	2019	2018
Interest-bearing liabilities	312.0	126.0
Interest-bearing provisions	18.2	16.3
Cash and cash equivalents	-29.9	-26.1
Total net debt	300.3	116.2
Equity	416.9	374.4
Reserves in equity	-0.1	1.9
Equity to manage	416.8	376.3
Total capital to manage	717.1	492.5
Net debt/equity ratio	0.72	0.31

PLEDGED ASSETS AND 22 CONTINGENT LIABILITIES

		Group	Parent company
	2019	2018	2019	2018
Pledged assets for Group companies' liabilities to credit institutions
Property mortgages Floating charges Shares in subsidiaries	82.9 241.5 226.7	82.9 241.5 174.8	76.7 0.0 73.8	76.7 0.0 73.8
Contingent liabilities Guarantees for ProfilGruppen Extrusions AB Guarantees for PG&WIP AB	- -	- -	25.3 0.0	26.7 10.0
Guarantee commitments FPG/PRI	0.2	0.2	0.0	0.0

23 INVESTMENTS IN GROUP COMPANIES

Company	Corp. ID no.	Number of shares	Share, per cent	Equity incl. portion of untaxed reserves1		Carrying amount2
Subsidiary
PG&WIP AB	556248-8949	1,000	70		42.2 14.1 (14.1)
ProfilGruppen Extrusions AB	556206-5119	940,000	100	209.1 73.7 (73.7)
ProfilGruppen Manufacturing AB	556262-3990	1,000	100	2.2		0.1 (0.1)
					87.9 (87.9)

Subsidiary of ProfilGruppen Extrusions AB

ProfilGruppen GmbH, Germany	-	-	100
ProfilGruppen Norge AS, Norway	-	100	100

1) Represents that portion of equity over which the Group has a controlling interest. 2) The value for the previous year is stated in parentheses.

The Boards of all the Swedish companies, including the parent company, have their registered offices in Uppvidinge Municipality.

Non-controlling interests	2019	2018
Non-current assets	14.6	22.1
Current assets	25.2	24.2
Equity	18.1	13.0
Non-current liabilities	7.3	8.5
Current liabilities	14.4	24.8
Revenue	61.8	65.2
Profit or loss	6.6	3.0
Comprehensive income	6.6	3.0

24 STATEMENT OF CASH FLOWS

No cash and cash equivalents other than cash and bank balances exist; therefore, the definition of cash and cash equivalents is the same in both the statement of cash flows and the balance sheet.

	Group Parent company
Adjustment for non-cash items	2019	2018		2019 2018
Depreciation, amortisation and impairment of assets	57.7	49.3	3.1	3.1
Capital gain/loss on sale
of non-current assets	0.0	-0.1	0.0	0.0
Unrealised exchange rate differences	1.3	1.3	0.0	0.0
Provisions for pensions	0.2	-0.3	0.0	0.0
Other profit/loss items not affecting liquidity	0.0	0.3	0.2	0.2
	59.2	50.5	3.3	3.3
Investments in non-current assets
Capitalised in the balance sheet	218.6	137.7	66.5	43.4
of which related to new extrusion facility	183.4	86.6	22.6	22.6
Unpaid	-9.3	-22.9	0.0	-10.4
of which related to new extrusion facility	-8.2	-14.5	0.0	-3.0
Investments from previous year, paid this year	22.8	5.2	10.4	0.2
of which related to new extrusion facility	15.0	0.0	3.0	0.0
	232.1	120.0	76.9	33.2
Exchange rate differences in cash and cash equivalents
Foreign exchange gains (+)/-losses (-)
in opening cash and cash equivalents	0.1	0.1	0.0	0.0
Foreign exchange gains (+)/-losses (-)
in change in cash and cash equivalents	0.2	0.0	0.0	0.0
	0.3	0.1	0.0	0.0

		Group	Parent company

Interest-bearing liabilities	2019	2018	2019	2018
At beginning of year	126.0	100.7	48.3	19.1
Adjustment OB as a result of IRFS 16 Leases	12.8	-	-	-
New leases	7.8	0.0	-	-
Borrowings	94.4	34.8	0.0	0.0
Repayments	-25.0	-19.6	0.0	0.0
Foreign exchange gains (-)/-losses (+)	1.9	-1.7	0.0	0.0
Change in overdraft facility	94.1	11.8	115.3	29.2
At end of year	312.0	126.0	163.6	48.3

RELATED PARTIES 25 AND TRANSACTIONS

The parent company has associated relations which involve a decisive influence over its subsidiaries, see Note 23. For information on liabilities to and receivables from subsidiaries, see the parent company balance sheet. The parent company's revenue comprises revenues for services and rents from subsidiaries. These rents are determined based on market terms.

Of the total voting rights of ProfilGruppen AB, the Board members Bengt Stillström and Mats Egeholm control 28.4 per cent (28.4) and 10.5 per cent (10.5), respectively. The other Board members together control 0.1 per cent (0.0) of the voting rights. Senior executives control a total of 0.1 per cent (0.2) of the voting rights in ProfilGruppen AB.

For salaries and other remuneration, as well as costs and obligations related to pensions and similar benefits for the Board, CEO and other senior executives, see Note 4.

EVENTS AFTER THE END OF 26 THE FINANCIAL YEAR

Since the year-end the external situation has undergone a drastic change due to the Corona infection. The effects of the regulations etc. that are made in different countries will have an impact on business in general and lead to an impact on ProfilGruppen which we cannot yet assess. The Board of Profil-Gruppen considers it important that the company stays strong, can avoid risks and seize opportunities that may arise as a result of the situation. The Board therefore reviewed its proposal for a dividend and now proposes to the AGM that no dividend for the 2019 financial year be given.

The undersigned affirm that the Group and annual accounts have been prepared in accordance with the IFRS international accounting standards as adopted by the EU and with generally accepted accounting principles and provide a fair representation of the Group's and the company's position and profits and that the Group Directors' Report and the Directors' Report provide a fair summary

ÅSEDA, 19 MARCH 2020

of the development of the Group's and company's activities, position and profits and describe significant risks and factors of uncertainty that the companies that form part of the Group face.

Kåre Wetterberg Chairman of the Board	Fredrik Zöögling CEO		Magnus Gabrielsson Board member Employee representative	Kent Johansson Board member Employee representative
Mats Egeholm Board member	Monica Bellgran Board member	Bengt Stillström Board member	Thomas Widstrand Board member	Jörgen Abrahamsson Board member
		Our auditor's report was submitted on 19 March 2020 Ernst & Young AB

Franz Lindström Authorised public accountant

FINANCIAL TERMS

TERM	DESCRIPTION	REASON FOR USE
Proportion of risk-bearing capital	Equity and deferred tax liabilities expressed as a percentage of total assets.	Relevant from a credit perspective, shows the ability to sustain losses.
Return on equity	Profit/loss for the year expressed as a percentage of average equity during the period. In reporting interim periods, the results are extrapolated to cover a twelve-month period.	Relevant from a shareholder perspective, as it reflects the return on the shareholders' capital for the period.
Return on capital employed	Earnings before tax and financial expense as a percentage of average capital employed for the period. See the definition of capital employed below.	Relevant for investors and lenders, as it shows the return on capital that requires a return. Used for optimising capital allocation.
Total assets	The value of all assets, such as property, plant and equip ment, inventories, trade receivables, and cash and cash equivalents.	Relevant for giving stakeholders a simple means of monitoring changes in consolidated total assets.
Equity per share	Equity excluding non-controlling interests divided by the number of shares.	A relevant measure for investors which shows the size of the debt to the owners that is related to each share.
Investments	Non-current assets acquired during the period.	Relevant for showing the overall size of the investments that are made to maintain the existing capacity and generate growth.
Capital turnover rate	Revenue divided by average capital employed.	Relevant for assessing how quickly capital is used on average. A type of measure of capital efficiency.
Cash flow from operating activities	Cash flow from operating activities excluding financing and investments.	Relevant for enabling investors to monitor the capacity of the company's operating activities to generate cash flow for financing new investments, repayments of debt and dividends, and for assessing the need for new financing.
Cash flow per share	Cash flow from operating activities divided by average number of shares.	Relevant for relating cash-generating capacity to the number of shares.
Liquidity reserves	Cash and bank balances and non-utilised credit commit ments from banks at end of period.	Relevant for assessing the company's ability to finance its future opera tions and variations in monetary flows through the company.
Net debt to EBITDA	Net interest-bearing debt divided by earnings before depre ciation, amortisation and impairment. For interim periods, rolling 12 month earnings are used.	Relevant for assessing the company's ability to repay loans, which is of interest to lenders and investors.
Net interest-bearing debt	Interest-bearing liabilities and interest-bearing provisions (provisions for pensions) less cash and cash equivalents and interest-bearing assets.	Relevant for assessing the total interest-bearing debt used by the company.
Net debt/equity ratio	Net interest-bearing debt divided by equity.	Relevant for assessing the capital structure, the breakdown between equity and debt capital.
Profit/loss before depre ciation, amortisation and impairment (EBITDA)	Operating profit/loss before scheduled depreciation and impairment losses.	Relevant as a measure of the company's operational capacity to gener ate cash flow before capital tied up in operating activities and financial flows.
Earnings per share	Profit or loss for the period excluding earnings attributable to non-controlling interests divided by average number of shares.	Relevant for enabling investors to assess the return on and valuation of the shares.
Profit margin	Profit/loss before tax expressed as a percentage of revenue.	Relevant for assessing how large a share of revenue is retained as profits. Can also be used for comparisons between companies. The measure also shows the company's ability to sustain negative deviations.
Interest coverage ratio	Profit/loss before tax and financial expense divided by financial expense.	Relevant for lenders as a measure of the company's ability to meet interest expenses.
Operating margin	Operating profit/loss as a percentage of revenue.	Relevant for assessing how large a share of revenue is retained as profits from the company's operating activities. Can also be used for comparisons between companies.
Operating profit	Profit/loss before tax and financial items.	Relevant as a measure of the earnings generated by the company's operating activities.
Equity ratio	Equity expressed as a percentage of total assets.	Relevant as a measure of current self-financing, as it shows how large a portion of the assets is equity-funded.
Net asset value per share	See equity per share.
Capital employed	Equity and interest-bearing liabilities.	Relevant for showing the share of total capital that is used in the operating activities, and is one component for measuring the operational return.

The key performance indicators are based on figures for the Group, including non-controlling interests, except for earnings per share and net asset value per share. For further information on the reconciliation of the Group's alternative performance measures, see ProfilGruppen's website, www.profilgruppen.se/corporate.

AUDITOR'S REPORT

To the general meeting of the shareholders of ProfilGruppen AB (publ), corporate identity number 556277-8943

REPORT ON THE ANNUAL ACCOUNTS AND CONSOLIDATED ACCOUNTS

Opinions

We have audited the annual accounts and consolidated accounts of ProfilGruppen AB (publ) for the year 2019. The annual accounts and consolidated accounts of the company are included on pages 24-50 in this document.

In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the parent company as of 31 December 2019 and its financial performance and cash flow for the year then ended in accordance with the Annual Accounts Act. The consolidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the group as of 31 December 2019 and their financial performance and cash flow for the year then ended in accordance with International Financial Reporting Standards (IFRS), as adopted by the EU, and the Annual Accounts Act.

We therefore recommend that the general meeting of shareholders adopts the income statement and balance sheet for the parent company and the group.

Our opinions in this report on the annual accounts and consolidated accounts are consistent with the content of the additional report that has been submitted to the parent company's audit committee in accordance with the Audit Regulation (537/2014) Article 11.

Basis for Opinions

We conducted our audit in accordance with International Standards on Auditing (ISA) and generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor's Responsibilities section. We are independent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements. This includes that, based on the best of our knowledge and belief, no prohibited services referred to in the Audit Regulation (537/2014) Article 5.1 have been provided to the audited company or, where applicable, its parent company or its controlled companies within the EU.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.

Key Audit Matters

Key audit matters of the audit are those matters that, in our professional judgment, were of most significance in our audit of the annual accounts and consolidated accounts of the current period. These matters were addressed in the context of our audit of, and in forming our opinion thereon, the annual accounts and consolidated accounts as a whole, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the Auditor's responsibilities for the audit of the financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial statements.

Inventory valuation

Description

Inventories amounts to 232 MSEK and represent a significant share of the Group's total assets. Inventories consist of both raw materials, products in progress and finished products. As shown in Note 1 in the annual report, inventories are valued at the lowest of historical cost and net realizable value. Inventory valuation is based on manually prepared calculations, in which there are elements of assessments by management that may affect the valuation significantly. There is also a risk of inventory obsolescence due to price sensitivity in both raw materials and finished products, which requires assessments when determining the obsolescence allowance. The inventory valuation thus includes key estimates and assessments made by the company, see note 1. Overall, this means that inventories have been a key audit matter of the audit.

How our audit addressed this key audit matter

We have audited the company's calculations through test checks and analysis of significant parameters. We have also audited management's assessment of obsolescence through analysis of slow-moving products, analysis of gross profit margins and test checks of purchase and selling prices in accordance with contracts. We have audited the appropriateness of the disclosures in the annual report.

Other Information than the annual accounts and consolidated accounts

This document also contains other information than the annual accounts and consolidated accounts and is found on pages 1-23. The Board of Directors and the Managing Director are responsible for this other information.

Our opinion on the annual accounts and consolidated accounts does not cover this other information and we do not express any form of assurance conclusion regarding this other information.

In connection with our audit of the annual accounts and consolidated accounts, our responsibility is to read the information identified above and consider whether the information is materially inconsistent with the annual accounts and consolidated accounts. In this procedure we also take into account our knowledge otherwise obtained in the audit and assess whether the information otherwise appears to be materially misstated.

If we, based on the work performed concerning this information, conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Board of Directors and the Managing Director

The Board of Directors and the Managing Director are responsible for the preparation of the annual accounts and consolidated accounts and that they give a fair presentation in accordance with the Annual Accounts Act and, concerning the consolidated accounts, in accordance with IFRS as adopted by the EU. The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the preparation of annual accounts and consolidated accounts that are free from material misstatement, whether due to fraud or error.

In preparing the annual accounts and consolidated accounts, The Board of Directors and the Managing Director are responsible for the assessment of the company's and the group's ability to continue as a going concern.

They disclose, as applicable, matters related to going concern and using

the going concern basis of accounting. The going concern basis of accounting is however not applied if the Board of Directors and the Managing Director intends to liquidate the company, to cease operations, or has no realistic alternative but to do so.

The Audit Committee shall, without prejudice to the Board of Director's responsibilities and tasks in general, among other things oversee the company's financial reporting process.

Auditor's responsibility

Our objectives are to obtain reasonable assurance about whether the annual accounts and consolidated accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and generally accepted auditing standards in Sweden will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual accounts and consolidated accounts.

A further description of our responsibilities for the audit of the annual accounts and the consolidated accounts is located at Revisors-inspektionen's (the Swedish Inspectorate of Auditors) website at: http://www.revisorsinspektionen.se/rn/showdocument/documents/rev_dok/revisors_ansvar.pdf. This description forms part of our auditor's report.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

Opinions

In addition to our audit of the annual accounts and consolidated accounts, we have also audited the administration of the Board of Directors and the Managing Director of ProfilGruppen AB (publ) for the year 2019 and the proposed appropriations of the company's profit or loss.

We recommend to the general meeting of shareholders that the profit be appropriated (loss be dealt with) in accordance with the proposal in the statutory administration report and that the members of the Board of Directors and the Managing Director be discharged from liability for the financial year.

Basis for opinions

We conducted the audit in accordance with generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor's Responsibilities section. We are independent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.

Responsibilities of the Board of Directors and the Managing Director

The Board of Directors is responsible for the proposal for appropriations of the company's profit or loss. At the proposal of a dividend, this includes an assessment of whether the dividend is justifiable considering the requirements which the company's and the group's type of operations, size and risks place on the size of the parent company's and the group's equity, consolidation requirements, liquidity and position in general.

The Board of Directors is responsible for the company's organization and the administration of the company's affairs. This includes among other things continuous assessment of the company's and the group's financial situation and ensuring that the company's organization is designed so that the accounting, management of assets and the company's financial affairs otherwise are controlled in a reassuring manner. The Managing Director shall manage the ongoing administration according to the Board of Directors' guidelines and instructions and among other matters take measures that are necessary to fulfill the company's accounting in accordance with law and handle the management of assets in a reassuring manner.

Auditor's responsibility

Our objective concerning the audit of the administration, and thereby our opinion about discharge from liability, is to obtain audit evidence to assess with a reasonable degree of assurance whether any member of the Board of Directors or the Managing Director in any material respect:

has undertaken any action or been guilty of any omission which can give rise to liability to the company, or
in any other way has acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association.

Our objective concerning the audit of the proposed appropriations of the company's profit or loss, and thereby our opinion about this, is to assess with reasonable degree of assurance whether the proposal is in accordance with the Companies Act.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with generally accepted auditing standards in Sweden will always detect actions or omissions that can give rise to liability to the company, or that the proposed appropriations of the company's profit or loss are not in accordance with the Companies Act.

A further description of our responsibilities for the audit of the administration is located at Revisorsinspektionen's (the Swedish Inspectorate of Auditors) website at: http://www.revisorsinspektionen.se/rn/showdocument/documents/ rev_dok/revisors_ansvar.pdf. This description forms part of our auditor's report.

Ernst & Young AB, Box 854, 391 28 Kalmar, was appointed auditor of Profil-Gruppen AB by the general meeting of the shareholders on the 16 April 2019 and has been the company's auditor since the 31 March 2007

Kalmar 19 March, 2020 Ernst & Young AB

Franz Lindström

Authorized Public Accountant

CORPORATE GOVERNANCE REPORT OF PROFILGRUPPEN 2019

ProfilGruppen is a Swedish public company, whose shares are listed on the Stockholm Stock Exchange's SmallCap list. Corporate governance at ProfilGruppen is therefore based on the Swedish Corporate Governance Code (the Code), the Companies Act, the Annual Accounts Act, the Market Abuse Regulation, the rules and regulations of the Stockholm Stock Exchange, the Articles of Association, adopted formal work plans, and other applicable laws and regulations.

DEVIATIONS FROM THE SWEDISH CORPORATE GOVERNANCE CODE

One deviation from the Code has been made. The deviation relates to the Nominating Committee and is explained under "Nominating Committee" below.

ANNUAL GENERAL MEETING 2019

The Annual General Meeting was held on 16 April 2019 in Åseda. The AGM was attended by shareholders, personally or by proxy, representing approximately 68.2 per cent of the total number of voting rights in the company. The meeting was attended by the then CEO, Per Thorsell, and the Group's management, the company's auditors and the Board of Directors. The Chairman of the Board, Kåre Wetterberg, was appointed to chair the meeting. The minutes from the meeting have been published on the company's website. It was resolved to re-elect Bengt Stillström, Kåre Wetterberg, Mats Egeholm, Monica Bellgran and Thomas Widstrand, and to elect Jörgen Abrahamsson as a new Board member. Kåre Wetterberg was also elected Chairman of the Board.

ANNUAL GENERAL MEETING 2020

The Annual General Meeting 2020 will be held on 21 April 2020, at 4 p.m. in Folkets Hus in Åseda. Shareholders wishing to submit proposals to the Nominating Committee may contact the Nominating Committee by e-mail at [email protected] or by writing to Valberedningen, ProfilGruppen AB, Box 36, SE-364 21 Åseda. Shareholders wishing to submit an issue for discussion at the AGM may do so by writing to the Chairman of ProfilGruppen at the above address or by sending an e-mail to [email protected]. Information about the date, place and deadline for submission of proposals was notified in connection with the interim report for the third quarter of 2019.

NOMINATING COMMITTEE

At the 2019 Annual General Meeting it was resolved that the Nominating Committee should consist of four members and to charge the Chairman of the Board with the task of contacting the three largest shareholders before the end of the third quarter and, in consultation with the same, appoint members who, along with the Chairman of the Board, will constitute the Nominating Committee. The Nominating Committee appoints a chairman from among its members.

In preparation for the Annual General Meeting 2019, representatives of the company's largest shareholders were contacted, in accordance with a resolution of a previous shareholders' meeting, and invited to appoint one member each to the Nominating Committee. The composition of the Nominating Committee was published on the company's website on 18 October 2019.

The Nominating Committee for the 2020 Annual General Meeting comprises:

Lars Johansson, shareholder, chairman of the Nominating Committee 14.5% shares
Bengt Stillström, Ringvägen Venture AB	28.4% shares
Mats Egeholm, shareholder	7.2% shares
Kåre Wetterberg, Chairman of the Board

Under the Code, a majority of the members of the Nominating Committee must be independent of the company and its management. At least one of the members must be independent of the shareholder, or group of shareholders acting in concert in respect of the management of the company, which holds the largest share of voting rights. The Chairman of the Board or another Board member should not be chairman of the Nominating Committee. The company's

major shareholders have appointed the Nominating Committee and its chairman based on what they believe is appropriate and are aware that this constitutes a deviation from the Code.

Since its appointment the Nominating Committee has held three meetings at which minutes have been taken. The members of the Committee have also had contacts with each other and with the members of the Board and have studied the Board's evaluation of its work.

BOARD COMPOSITION AND REMUNERATION

At the 2019 Annual General Meeting, it was decided that the number of members should be six, with no deputies. In addition, the Board normally comprises two members and two deputies appointed by the employees.

The composition of the Board since the Annual General Meeting 2019 is presented on page 57. All AGM-elected Board members were independent of the company in 2019. Bengt Stillström and Mats Egeholm are major shareholders of the company. The major shareholders are independent of each other.

As regards the composition of the Board, the Nominating Committee bases its proposals on the requirements for diversity and breadth in respect of expertise, experience, background and gender prescribed in the Code. These guidelines also serve as a diversity policy. The goal is to achieve a Board composition that is appropriate with regard to the company's activities, stage of development and other circumstances. In respect of the past year, the Nominating Committee stated that the representation of women on the Board was somewhat low but that there were no suitable female candidates among the major owners.

In accordance with decisions made at the AGM, the fee paid to Board members for the period until the next AGM amounts to a total of kSEK 1,175 (965). Fees are paid only to Board members elected by a general meeting of shareholders, as shown below. The Chairman of the Board has not received any remuneration in addition to his Directors' fees.

Board member	Role	Remuneration
Kåre Wetterberg	Chairman	400,000
Jörgen Abrahamsson	Board member	155,000
Monica Bellgran	Board member	155,000
Mats Egeholm	Board member	155,000
Bengt Stillström	Board member	155,000
Thomas Widstrand	Board member	155,000
Total fees		1,175,000

THE WORK OF THE BOARD OF DIRECTORS

Following the election of its members, the Board of Directors holds a constituent Board meeting, at which the formal work plan for the coming year is adopted. The Board's mandate to the CEO is formulated in a set of instructions for the CEO.

Since the 2019 Annual General Meeting, the Board has met on seven occasions.

Attendance at these is shown the following table. Key issues at these meetings are drawn from the formal work plan. Among others, the following matters were addressed during the year:

2019

April	inaugural meeting
June	strategy discussions
August	interim report, second quarter
September	project review
October	interim report for the third quarter, evaluation of the work of the
	Board, forecast for 2019 and Audit Committee matters
December	adoption of budget

2020

February year-end report, accompanying press release, auditor's report and Remuneration Committee issues

Board member attendance and number of meetings

Board	Board meetings
Bengt Stillström	7
Emelie Bergström2	7
Jörgen Abrahamsson	7
Kent Johansson1	7
Kåre Wetterberg	7
Magnus Gabrielsson1	6
Mats Egeholm	7
Mikael Ekbring2	7
Monica Bellgran	7
Thomas Widstrand	6
Total number of meetings since 2019 AGM	7
1) Appointed by the employees, regular Board member 2) Appointed by the employees, deputy

In addition, one meeting to adopt the annual report and two meetings to appoint a CEO were held remotely.

Before ending its activities for 2019, the Board will hold at least one more meeting. The meeting has been planned for April, when the interim report for the first quarter of 2020 will be discussed, among other matters.

The company's CEO and CFO, who is also the Board's secretary, were present at these meetings.

Members of the Board of Directors receive monthly reports from the management team on the company's current financial and operational development. A procedure for annual evaluation of the work of the Board exists. In 2019, a majority of Board members completed written questionnaires covering the work of the Board in general, their own performance and the work of the Board Chairman. The Chairman has not been involved in compiling the questionnaires concerning his work. The evaluation serves as a basis for an action plan for improvements and contributes to the work of the Nominating Committee.

REMUNERATION COMMITTEE AND AUDIT COMMITTEE

Since the constituent Board meeting in 2019, the Audit Committee consists of all members of the Board. The actions taken to quality-assure the company's financial statements and audits, contacts with the auditors and internal control have been monitored and have thus been evaluated by all members of the Board. The work of the external auditors has been evaluated and the Board has made a recommendation to the Nominating Committee ahead of the appointment of auditors at the 2020 Annual General Meeting.

At the constituent meeting, the Board appointed a Remuneration Committee consisting of Thomas Widstrand, Mats Egeholm and Kåre Wetterberg. Guidelines and levels of remuneration for the management team are drafted by the Remuneration Committee and adopted by the Board. The committee also produces a draft set of principles for remuneration of senior executives, which is submitted for adoption by the Annual General Meeting. Neither the CEO nor the HR Manager are members of the committee, but are invited to attend meetings when their presence is appropriate. Since the Annual General Meeting 2019, the committee has held one meeting, with all members present, and has communicated several times by e-mail and telephone.

Salary for management in 2019 consisted of one fixed element and one variable element. The size of variable remuneration has been linked to the consolidated operating profit.

The total variable remuneration for 2019 is SEK 562,400, distributed among eight persons (SEK 461,700, six persons). The principles for remuneration define a ceiling for variable pay of 30 per cent of the fixed salary.

CEO AND SENIOR MANAGEMENT

ProfilGruppen's senior management comprises the CEO and seven different Function Managers.

The CEO, Per Thorsell, handed in his notice at the beginning of the year and left the company in August 2019. The company's former Sales and Marketing Director Per Owe Isacson took over as Acting CEO. In October 2019, Fredrik Zöögling took up the post of President and CEO. Fredrik Zöögling has many years' experience from senior positions in industry, most recently as CEO of Ebersprächer Exhaust Technology AB. The composition of the management team is presented on page 58.

The CEO is responsible for planning, managing and following up on day-to-day operations. The CEO runs the business in accordance with the framework established by the Board, which includes a set of work instructions. The CEO is responsible for keeping the Board informed on operations and for ensuring that the Board has the necessary data for decisions.

The senior management team holds regular management meetings. These meetings focus on the Group's strategic and operational progress and on assessments of results.

AUDITORS

At the 2019 Annual General Meeting, the registered accountancy company Ernst & Young AB was appointed as auditor for the period until the 2020 AGM. At the same meeting Franz Lindström was appointed chief auditor.

For the purpose of examining the Board of Directors' management of the company and meeting the Board's need for information, the auditors have since the 2019 AGM participated in two meetings with the Board. Apart from the audit and consultancy tasks on auditing and tax issues, the auditors have no other tasks at the ProfilGruppen Group.

Information on remuneration for the auditors can be found in Note 5 to the financial statements.

ARTICLES OF ASSOCIATION

The Articles of Association are available on the company's website and can only be amended by a resolution of a general shareholders' meeting.

SHARE INFORMATION

Each share in ProfilGruppen corresponds to one vote. Information on major shareholders is found in the Directors' Report. More information about ProfilGruppen is found on page 59.

THE BOARD'S REPORT ON INTERNAL CONTROL FOR 2019

The Board is responsible for the company having good internal control. Responsibility for maintaining an effective control environment and the ongoing work on internal control and risk management has been delegated to the senior management team. The five main activities included in ProfilGruppen's work on internal control are creation of a control environment, risk assessment, control activities, information and communication, and follow-up.

CONTROL ENVIRONMENT

An important element of the Board's work is creating a relevant and effective control environment. The Board's formal work plan and instructions for the company's CEO aim to ensure clear allocation of roles and division of responsibility, which promotes effective management of the operation's risks.

The Board has also established a number of governing documents that are important for internal control. Examples of such documents include policies for the granting of credit, raw material purchases, currency hedging, remuneration and information security.

The Board evaluates the company's operational performance and results through monthly reports submitted by management, assessing economic outcomes and key performance indicators against targets.

ProfilGruppen has a simple legal and operational structure, which facilitates clarification of division of responsibility and swift action in the event of changed conditions. A clear delegation of responsibilities and authority form the basis for the Board's work to ensure compliance with internal control principles and applicable laws and regulations. All decisions concerning, for example, the overall strategy, acquisitions, major investments and general financial issues are prepared by management and made by the Board.

RISK ASSESSMENT

The company's CFO is responsible for annually assessing the risks in the financial reporting presented to the Board. An annual general risk assessment is a part of the Board's strategy work. The assessment and management of the most significant risks for ProfilGruppen are described in greater detail in the risk section of the annual report.

CONTROL ACTIVITIES

The principal means of control are the detailed financial follow-up reports that are compiled each month. Work to prepare these includes analysis of deviations from, among other things, set goals and budgets. In addition to these general quality checks, there are daily checks of authorisations, access rights for IT systems and similar.

INFORMATION AND COMMUNICATION

The governing documents are distributed via the intranet and by other means. There are guidelines for external communication which ensure that Profil-Gruppen meets the stringent requirements concerning provision of accurate information to the financial markets.

FOLLOW-UP

The Board has the task of evaluating how the company's internal control system functions, as well as keeping up to date on important evaluations and assessments that provide the basis for the financial statements. The company's CFO is responsible for regular follow-up of the internal control and reports her findings to the Board at least once a year. The basis for financial governance and control is produced by the company's finance department.

At least once a year the Board meets with the external auditors to discuss the auditors' assessment of the company's internal control. The auditors report their findings to the Board through regular reviews and a year-end audit of the third quarter's interim report and the annual accounts. In view of the above the Board has determined that there is currently no need for a separate internal audit or review function.

Åseda, 19 March 2020 The Board of ProfilGruppen AB

AUDITOR'S REPORT ON THE CORPORATE GOVERNANCE STATEMENT

To the general meeting of the shareholders of ProfilGruppen AB (publ), corporate identity number 556277-8943

Engagement and responsibility

It is the Board of Directors who is responsible for the corporate governance statement for the year 2019 on pages 54-56 and that it has been prepared in accordance with the Annual Accounts Act.

The scope of the audit

Our examination has been conducted in accordance with FAR's auditing standard RevU 16 The auditor's examination of the corporate governance statement. This means that our examination of the corporate governance statement is different and substantially less in scope than an audit

conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examination has provided us with sufficient basis for our opinions.

Opinions

A corporate governance statement has been prepared. Disclosures in accordance with chapter 6 section 6 the second paragraph points 2-6 the Annual Accounts Act and chapter 7 section 31 the second paragraph the same law are consistent with the annual accounts and the consolidated accounts and are in accordance with the Annual Accounts Act.

Kalmar 19 March 2020 Ernst & Young AB

Franz Lindström Authorized Public Accountant

CONTACTS

Fredrik Zöögling President and CEO Telephone +46 474 551 10 [email protected]

Ulrika Bergmo Sköld

CFO Telephone +46 474 551 20 [email protected]

OTHER INFORMATION

This is a translation of the Swedish version of the annual report. In case of any discrepancies, the Swedish version shall prevail.

The relevant information is always available on our website: www.profilgruppen.se

Graphic design/photography: Effect Reklambyrå / ProfilGruppen

BOARD OF DIRECTORS

1. Bengt Stillström Born 1943 M.Sc.Eng Board member since 2012 Formerly CEO and founder of AB Traction, currently Chairman of the same company. Other directorships/principal positions: Board member of Ringvägen Venture AB and Atlasbalans AB Shareholding in ProfilGruppen: 2,099,983

2. Jörgen Abrahamsson

Born 1967 Secondary school Board member since 2019 Other directorships/positions: CEO/President Gränges Europe Shareholding in ProfilGruppen: 0

3. Monica Bellgran

Born 1966 Ph.D. Board member since 2017 Other directorships/positions: Professor of Industrial Produc tion Management at the Södertälje campus of the KTH Royal Institute of Technology and Manager of KTH's research platform: Industrial Transformation, Vice Chairman of the Royal Swedish Academy of Engineering Sciences, Section 1 and member of the Delegation for Circular Economy Shareholding in ProfilGruppen: 0

4. Mats Egeholm

Born 1945 B.Sc.Econ. Former CFO of ProfilGruppen (1980–2004) Board member since 2010 Other directorships/positions: CEO of Östers Support AB (publ) Shareholding in ProfilGruppen: 777,918

5. Thomas Widstrand 3

Born 1957 B.Sc.Econ. Board member since 2012 Other directorships/positions: President and CEO of Troax Group AB Shareholding in ProfilGruppen: 0

6. Kåre Wetterberg

Born 1949 M.Sc.Eng Chairman since 2013 Other directorships/positions: Consultant in the international aluminium industry and industrial advisor in the venture capital industry Shareholding in ProfilGruppen: 4,213

7. Magnus Gabrielsson

Born 1980 Employed at ProfilGruppen since 2000 Employee Representative Board member since 2018 Shareholding in ProfilGruppen: 0

8. Emelie Bergström

Born 1982 Employed at ProfilGruppen since 2002 Employee Representative Deputy since 2012 Shareholding in ProfilGruppen: 0

9. Kent Johansson 1

Born 1955 Employed at ProfilGruppen since 1981 Employee Representative Board member since 2019 Shareholding in ProfilGruppen: 0

10. Mikael Ekbring

Born 1966 Employed at ProfilGruppen since 1986 Employee Representative Deputy since 2019 Shareholding in ProfilGruppen: 400

1) The Board member, in accordance with the Swedish Code of Corporate Governance, is considered to be dependent of the company and management.
2) This Board member is a major shareholder of the company.
3) Independent of the company and its management and of the company's major shareholders.
The shareholdings include any indirect holdings through companies or related parties.

SENIOR MANAGEMENT

1. Fredrik Zöögling

President and CEO Born 1966 M.Sc. in Mechanical Engineering No significant directorships outside the company, no shareholdings in other companies which are significant for the company. No related parties have shareholdings or financial instruments in the company. Employed since 2019 Holding: 0

2. Fredrik Uhrbom

Head of Automotive and Global Accounts Born 1972 Employed since 2013 Holding: 1,606

3. Ulrika Bergmo Sköld CFO Born 1967 Employed since 2015 Holding: 2,000

The above shareholdings refer to ProfilGruppen AB

Holding: 1,000

5. Torgny Magnusson Head of Extrusion Manufacturing Born 1961 Employed since 1982 Holding: 2,850

6. Andreas Lindberg Supply Chain Manager Born 1975 Employed since 2016 Holding: 2,000

7. Martin Bergman Head of Processing Born 1976 Employed since 2018 Holding: 0

8. Richard Nylin Head of Marketing and Sales Born 1969 Employed since 2013 Holding: 1,200

SHARE INFORMATION

ProfilGruppen was listed on the OTC List of the Stockholm Stock Exchange on 19 June 1997 and is currently traded on the Small Cap list of Nasdaq Stockholm. The stock symbol is PROF AB. At 30 December 2019, the company had a market capitalisation of MSEK 751.0. The number of shares traded in the market was 7,398,775.

DIVIDEND POLICY

ProfilGruppen's overall aim is to give shareholders a high total yield, partly though share dividends and partly through increased share value. The company's dividend policy is to distribute 40–50 per cent of earnings after tax over a business cycle, having regard to capital requirements and the capital structure. The Board proposes to the Annual General Meeting of 2020 that no dividend for the 2019 financial year will be given.

GEOGRAPHIC DISTRIBUTION OF OWNERSHIP TOP 5, VOTING RIGHTS, %

The number of shareholders participating in the IPO was 2,922. Information on the company's major shareholders is found in the

Directors' Report. SHARE CAPITAL

SHAREHOLDERS

ProfilGruppen has a share capital of MSEK 37.0. The shares have a quotient value of SEK 5 per share. All shares in the market carry the same voting rights and entitle the holder to the same share of the company's earnings and capital. There is no dilution.

At 30 December 2019, the company had 2,508 shareholders, which is a decrease of 52 compared with the beginning of 2018.

SHARE PRICE PERFORMANCE

At year-end, the share price had increased by 2.6 per cent compared with 31 December 2018. Over the same period, the Stockholm Stock Exchange's OMXSSCPI index (small cap industry) gained 22 per cent.

SHAREHOLDER CATEGORIES, VOTING RIGHTS, %

¹ Investment firms & brokerages, fund managers, insurers and pension institutions, pension funds 2 Aid organisations and trade unions

(AT 30 DEC 2019)

SIZE CATEGORY	NUMBER OF SHAREHOLDERS	NUMBER OF SHARES	SHAREHOLING/VOTING RIGHTS, %
1 - 500	1,994	266,409	3.60%
501 - 1,000	233	180,045	2.43%
1,001 - 5,000	208	449,709	6.08%
5,001 - 10,000	27	195,793	2.65%
10,001 - 15,000	9	118,080	1.60%
15,001 - 20,000	8	145,041	1.96%
20,001 -	29	6,043,698	81.69%
TOTAL	2,508	7,398,775	100%

(AT 30 DEC 2019)

OWNERSHIP STRUCTURE

PROGRESS.

For us, development is about fine-tuning processes. A partnership with ProfilGruppen should be uncomplicated and involve personal commitment. This requires a competent organisation that continually strives for efficiency. We take that step, every day.

ProfilGruppen AB

Box 36 | SE-364 21 Åseda | Tel +46 474 550 00 | www.profilgruppen.se

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Profilgruppen — Annual Report 2019

3191_10-k_2020-03-26_62c33e95-54f5-48b1-a01e-a997e954ef5b.pdf

CONTENTS FAST FACTS

SUSTAINABILITY REPORT 2019

ANNUAL REPORT 2019

657

PROFILGRUPPEN ALUMINIUM ESTABL. 1981 EUROPE'S MOST MODERN PRESS ANODISING FACILITY FOUR PRESSES ISO 14001 ISO 50001 IATF 16949 NETWORK OF SUBCONTRACTORS FULLY AUTOMATED LISTED EXCHANGE STOCK PERSONAL INVOLVEMENTPROFESSIONALISM UNCOMPLICATED COOPERATION SWEDISH

FACILITY FOR PROCESSING, LACQUERING AND PACKAGING INTERIOR FITTINGS

GLOSSARY

THE PAST YEAR

1. NEW EXTRUSION PLANT

ENERGY EFFICIENCY AT ALL STAGES

EUROPE'S MOST MODERN PRESS

FOCUSING ON HEALTH AND SAFETY

LOCAL PROFILES

2. NEW CEO

3. FIRE AT THE ANODISING UNIT

4. NEW ERP SYSTEM

WHY PROFILGRUPPEN? environment through eco-smart products. A constant striving for efficiency adds value for customers and investors, and this requires a skilled and dedicated workforce.

1. ALUMINIUM – OUR CHOICE, TOMORROW'S MATERIAL

2. THE CUSTOMERS – BROAD DEMAND

3. DESIGN – CUSTOMER VALUE

4. EXTRUSION – FLEXIBLE MANUFACTURING

5. SURFACE TREATMENT – AN EVEN STRONGER EXTRUSION

6. PROCESSING – ENDLESS POSSIBILITIES

7. THE PRODUCT– COMPLEXITY MADE SIMPLE

NEW POTENTIAL FOR GROWTH

EXTRAORDINARY CHALLENGES STRENGTHEN THE ORGANISATION

INCREASED MARKET SHARE IN SWEDEN

DEDICATED EMPLOYEES

FULL SPEED AHEAD

SUSTAINABLE DRIVE

STRONG ROOTS IN SMÅLAND

THE GROUP CONSISTS OF

SCOPE OF THE REPORT

CARING FOR THE BUSINESS

A SOUGHT-AFTER PARTNER

LONG-TERM PROFITABILITY

FREE AND FAIR COMPETITION

"Our vision is to be the preferred supplier of innovative aluminium extrusion solutions in northern Europe"

CARING FOR THE ENVIRONMENT

A CLIMATE-SMART MATERIAL

Delivered volume, tonnes

MANY PRACTICAL BENEFITS

WHY CHOOSE ALUMINIUM?

EFFECTIVE RECYCLING

"A very high share of the material is already recycled"

DEMAND EXCEEDS THE SUPPLY OF RECYCLED MATERIAL

HYDROPOWER IS SUPERIOR

Share of primary raw material produced using non-fossil energy sources, per cent

MATERIAL AND ENERGY EFFICIENCY

ALL SCRAP IN THE PROCESS IS RECYCLED

Scrap percentage

ALL ELECTRICITY FROM HYDROPOWER

Energy use in extrusion, kWh per produced tonne

"All electricity from hydropower"

FACILITATING REUSE

TRANSPORTS

EFFICIENT MANAGEMENT IS THE KEY

Carbon dioxide emissions, kg per transported tonne of aluminium extrusions

ENVIRONMENT-RELATED CONDITIONS

NO HARMFUL EMISSIONS TO WATER

Sulphate emissions, tonnes

OPERATIONS SUBJECT TO PERMIT AND NOTIFICATION REQUIREMENTS

THE BASIS: OUR ENVIRONMENTAL POLICY

ENVIRONMENTAL POLICY

OUR BASIC POSITION IS

WE SHALL

CARING FOR THE INDIVIDUAL

PERSONAL COMMITMENT

A STABLE BASIS FOR INDIVIDUAL RIGHTS

RESPECT AND EQUAL TREATMENT

A SAFE AND SECURE WORKPLACE

"Sick leave in our company is comparatively low"

WELLBEING AND JOB SATISFACTION

HEALTHIER AND STRONGER TOGETHER

OPENNESS AND WHISTLE-BLOWING

CORE VALUES

CONTINUOUS IMPROVEMENT – SEBASTIAN FRANZÉN

Profilgruppen Annual Report 2019