Profilgruppen — Interim / Quarterly Report 2017

Jul 18, 2017

Interim report January 1- June 30, 2017

Continued profitable growth and decision to increase capacity

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

Second quarter

• Turnover MSEK 364.3 (303.9), up 20 percent compared to previous year
• Operating profit MSEK 31.9 (19.3), after positive one-time effects of MSEK 2.9
• Operating margin 8.8 percent (6.4), excluding one-time effects 8.0 percent
• Net income MSEK 23.8 (14.2)
• Cash flow from operating activities MSEK 24.0 (45.3)
• Earnings per share SEK 3.01 kr (1.84)

First six months

• Turnover MSEK 701.5 (564.5), up 24 percent compared to previous year
• Operating profit MSEK 58.4 (26.4), after positive one-time effects of MSEK 2.9
• Operating margin 8.3 percent (4.7), excluding one-time effects 7.9 percent
• Net income MSEK 43.6 (19.0)
• Cash flow from operating activities MSEK 12.7 (46.7)
• Earnings per share SEK 5.44 kr (2.62)

Per Thorsell, CEO of ProfilGruppen, comments:

"The profit development creates a good feeling and gives positive feedback to all our employees that our continuous work with improvements through all parts of the business gives effect.

The fact that we now also have made a direction decision to invest in new technology and increased capacity in our facility in Åseda creates even more power to the organisation. It also gives a clear signal to our customers that we want to continue to grow together and develop us in order to satisfy their needs even better."

pen.

Market

The market for aluminium extrusions in Europe continues to grow and according to the latest report of European Aluminium Association (EAA), the delivery volumes in Europe have increased by approximately two percent during the first six months of 2017 compared to the same period 2016.

Turnover

During the first six months the turnover for the Group amounted to MSEK 701.5 (564.5), an increase of about 24 percent compared to the same period previous year. The delivery volumes have increased about 15 percent to 15,300 tonnes (13,250) of aluminium extrusions with a higher level of added value.

The operations in PG&WIP are now up in full production and have contributed with about half of the increase in turnover. During the first six months of 2016 the business was in the intitial phase with a negative result.

ProfilGruppen continues to have a very positive development in the domestic market and the rest of the increase in turnover is mainly related to Swedish customers.

The share of exports amounted to 42 percent (43) of delivered volume, and 45 percent (44) of the turnover. The export in the subsidiary PG&WIP with a high share of added value is the explanation to increased turnover in relation to sold volume.

During the first six months the Group manufactured 15,250 tonnes (13,150) of aluminium extrusions.

Comments on the result

The operating profit for the first six months amounted to MSEK 58.4 (26.4). This is equivalent to an operating margin of 8.3 percent (4.7), which is at the highest level that ProfilGruppen has performed so far. A one-time effect of MSEK 2.9 has effected the result positively and regards a capital gain from sale of property.

The increased result has been achieved by increased volumes and capacity utilization and a higher level of added value. Margin improvements and efficiency measures in the organization has also contributed. About 70 percent of delivered aluminium profiles was added value, which is an increase compared to the first six months of 2016 of about 10 percent. A contributing factor are the increased deliveries from PG&WIP that has a high level of added value.

The profit after financial items amounted to MSEK 55.9 (24.4). The profit after tax amounted to MSEK 43.6 (19.0).

Earnings per share totalled SEK 5.44 (2.62). The average number of shares in thousands was 7,399 (7,399).

The return on capital employed amounted to 29.7 percent (15.4).

The second quarter

Turnover amounted to MSEK 364.3 (303.9). During the quarter 7,950 tonnes (6,900) of aluminium extrusions were delivered, an increase by 15 percent compared to the same period 2016. The production was 7,600 tonnes (7,050). The share of exports amounted to 42 percent (40) of volume, and 46 percent (45) of turnover.

The operating profit amounted to MSEK 31.9 (19.3), which is equivalent to an operating margin of 8.8 percent (6.4).

Interim report January 1 - June 30, 2017 ProfilGruppen AB (publ) Page 2 of 10

A one-time effect of MSEK 2.9 has effected the result positively and regards a capital gain from sale of property.

The underlying profit increase is an effect of high delivery and production volumes in combination with margin improvements and increased efficiency in the business.

The profit after financial items amounted to MSEK 30.5 (18.2). Earnings per share totalled SEK 3.01 (1.84).

Capacity investment for further growth

ProfilGruppen has during the last couple of years had a strong organic growth due to new customers and an increase in trust and demand from existing customers. Meanwhile, one of the company's three press lines is getting aged and is limited in efficiency.

The Board of Directors has today, against the background of this development and with support from the pilot study that has been communicated earlier, taken a direction decision of an investment in a new press line for aluminium profiles with modern and effective techonology in close proximity to the exisiting facilities in Åseda. The conditions for the investment are for instance the costs for ground and and infrastructure, financing and technical efficiency of the machine equipment. If all the conditions are in place a decision is expected to be taken before the year-end and the investment will be made in 2018-2019.

The investment, that comprises both machines and property, is assessed to amount to about MSEK 230 and to adding production capacity of about 10,000 tonnes of aluminium profiles annually.

Investments during the period

Investments during the first half year amounted to MSEK 15.5 (12.6), and consists of continual enhancements. The investment project of about MSEK 50 with granted funding that was released in October 2016 regarding an automated production line for interior details is on-going but has only effected the investments in this period by MSEK 1.2.

Financing and liquidity

Cash flow from current operations amounted to MSEK 12.7 (46.7) and after investments to MSEK-5.2 (34.9). The lower cash flow is mainly explained by higher working capital needs as a consequence of higher delivery volume and increased level of inventory.

The liquidity reserve as of 30 June 2017 amounted to MSEK 126.5 (116.2).

The balance sheet total as of 30 June 2017 was MSEK 695.9 (574.7). Net debt amounted to MSEK 112.7 (99.4) as of 30 June 2017 and net debt/EBITDA was 0.8 (1.8). When the financial targets were revised in the beginning of the year the target of Net debt ratio in the interval of 0,75-1,00 was replaced with the new target net debt/EBITDA of < 2,0. It will better explain the interest bearing debt situation of the Group in relation to its profitability.

Personnel

The average number of Group employees during the first six months was 419 (365). The number of Group employees as of 30 June 2017 totaled 450 (381).

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Significant risks and uncertain factors

The company's risks and risk management have not significantly changed since publishing of the 2016 Annual Report.

Outlook for 2017

The market situation is assessed to be stable during the coming quarters.

Outlooks for 2017 published on April 25, 2017: The year has in terms of sales had a stable start. The market situation is assessed to be stable during the coming quarters.

Calendar

Financial information for 2017 will be provided quarterly:

Interim Report, third quarter $\bullet$ October 24, 2017, 14.00

Åseda, July 18, 2017

The Board of Directors, ProfilGruppen AB (publ) Org. No. 556277-8943

The Interim Report has not been audited.

Gruppen.

Statement of comprehensive income in short

		Q 2	Q 2	$Q1-2$	$Q1-2$	R12
MSEK	Note	2017	2016	2017	2016	2017	2016
Net turnover		364,3	303,9	701.5	564,5	1269,0	1 1 3 2 , 0
Cost of goods solds	$\overline{2}$	$-313.2$	$-264.7$	$-601.1$	$-497.2$	$-1085.1$	$-981.2$
Gross Margin		51,1	39,2	100,4	67,3	183,9	150,8
Other operating revenues		2,9	0,0	2,9	0,0	2,9	0,0
Selling expenses		$-12,2$	$-12,6$	$-24,7$	$-24,3$	$-47,7$	$-47,3$
Administrative expenses		$-9.9$	$-7.3$	$-20.1$	$-16.6$	$-37.3$	$-33,8$
Other operating expenses		0,0	0,0	$-0,1$	0,0	$-0,7$	$-0,6$
Operating profit/loss		31,9	19,3	58,4	26,4	101,1	69,1
Financial income		$-0,1$	0,1	0.1	0,5	0.3	0,7
Financial expenses		$-1,3$	$-1,2$	$-2,6$	$-2,5$	$-4,9$	$-4,8$
Net financial income/expense		$-1,4$	$-1,1$	$-2,5$	$-2,0$	$-4,6$	$-4,1$
Income after financial items		30,5	18,2	55,9	24,4	96,5	65,0
Tax		$-6,7$	$-4,0$	$-12,3$	$-5,4$	$-20,8$	$-13,9$
Net income for the period		23,8	14,2	43,6	19,0	75,7	51,1
Other comprehensive income (net after tax)
Items that will subsequently be reclassified to net income:
Changes in hedging reserve		0,6	$-2,3$	1,6	$-2,1$	1,7	$-2,0$
Translation differences		0,0	0,0	0,0	0,0	0,2	0,2
Items that will subsequently not be reclassified to net income:
Revaluation of defined benefit obligation		0.0	0,0	0.0	0,0	$-0,4$	$-0,4$
Comprehensive income for the period		24,4	11,9	45,2	16,9	77,2	48,9
Net income for the period attributable to:
Owners of the parent		22,2	13,6	40,2	19,4	69,3	48,5
Non-controlling interests		1,6	0,6	3,4	$-0,4$	6,4	2,6
Total comprehensive income for the period attributable to:
Owners of the parent		22,8	11,3	41,8	17,3	70,8	46,3
Non-controlling interests		1,6	0,6	3,4	$-0,4$	6,4	2,6
Earnings per share (before and after dilution), SEK		3,01	1,84	5,44	2,62	9,38	6,56
Average number of shares, thousands		7399	7399	7399	7399	7399	7399

Statement of financial position in short

	30 Jun	30 Jun	31 Dec
MSEK Note	2017	2016	2016
Assets
Intangible fixed assets	10,8	10,0	10,0
Tangible fixed assets	264,4	247,7	268,5
Financial fixed assets	0,2	1,3	1,2
Total fixed assets	275,4	259,0	279,7
Inventories	167,9	121,6	146,3
Current receivables $\overline{4}$	241,8	193,0	169,6
Liquid assets	10,8	1,1	11,3
Total current assets	420,5	315,7	327,2
Total assets	695,9	574,7	606,9
Shareholders' equity
Total equity attributable to the parent Company's shareholders	282.5	233,8	262,8
Non-controlling interests	11,1	3,3	7,8
Total equity	293,6	237,1	270,6
Liabilities
Interest-bearing liabilities	49,1	72,8	65,7
Interest-free liabilities	28,5	31,2	28,0
Total long-term liabilities	77,6	104,0	93,7
Interest-bearing liabilities and provisions 4	74.5	27,7	34,2
Interest-free liabilities	250,2	205,9	208,4
Total short-term liabilities	324,7	233,6	242,6
Total shareholders' equity and liabilities	695,9	574,7	606,9

Interim report January 1 – June 30, 2017
ProfilGruppen AB (publ)
Page 5 of 10

_Profil
Jruppen.

Statement of changes in equity in short

	Q 2	0 2	$Q_1-2$	$Q_1-2$
MSFK	2017	2016	2017	2016	2016
Opening balance, total equity	291.4	225.2	270.6	220.2	220,2
Changes attributable to owners of the parent:
Comprehensive income for the period	22.8	11.3	41.8	17.3	46,3
New share issue	0,0	0,0	0,0	$_{0,0}$	$_{0,0}$
Changes attributable to non-controlling interests:
Comprehensive income for the period	1.6	0.6	3,4	$-0.4$	2.6
New share issue	$-22,2$	0.0	$-22.2$	0,0
Closing balance, total equity	293.6	237.1	293.6	237.1	270.6

Statement of cash flows in short

	Q 2	Q 2	$Q_1 - 2$	$Q1-2$	R 12
MSEK	2017	2016	2017	2016	2017	2016
Operating activities
Operating profit/loss	31.9	19.3	58,4	26,4	101.1	69.1
Depreciation and write-down	9.5	9.4	18,8	17,7	36,1	35,0
Adjustment for other non-cash items	$-3,4$	0,0	$-5,9$	0,1	$-6,0$	0,0
Interest received/paid	$-1,3$	$-0,9$	$-2,3$	$-1,7$	$-4,1$	$-3,5$
Paid income tax	$-1,5$	$-0,9$	$-3,5$	0,7	$-6,8$	$-2,6$
Cash flow prior to change in working capital	35,2	26,9	65,5	43,2	120,3	98,0
Inventories	$-7,4$	$-2,6$	$-21,6$	8,7	$-46,2$	$-15,9$
Operating receivables	$-17,4$	$-12,4$	$-72,1$	$-57,8$	$-52,5$	$-38,2$
Operating liabilities	13,6	33,4	40,9	52,6	29,2	40,9
Cash flow from operating activities	24,0	45,3	12,7	46,7	50,8	84,8
Acquisition of property. plant and equipment	$-7,1$	$-1,8$	$-21,7$	$-11,8$	$-50,7$	$-40,8$
Sale of property, plant and equipment	3,8	0,0	3,8	0,0	3,8	0,0
Cash flow from investing activities	$-3,3$	$-1,8$	$-17,9$	$-11,8$	$-46,9$	$-40,8$
Rights issue/Shareholders' contributions1)	$-22,2$	0,0	$-22,2$	0,0	$-20.7$	1,5
Loans raised	0.0	0,0	0.0	5,7	16.3	22,0
Change in bank overdraft facility utilized	11,6	$-38,9$	40,0	$-40,7$	34,2	$-46,5$
Repayment of loans	$-6.6$	$-6,6$	$-13,5$	$-8,1$	$-25,1$	$-19,7$
Cash flow from financing activities	$-17,2$	$-45,5$	4,3	$-43,1$	4,7	$-42,7$
Cash flow for the period	3,5	$-2,0$	$-0,9$	$-8,2$	8,6	1,3
Liquid assets, opening balance	7,1	3,1	11,3	9,3	1,1	9,3
Translation differences in liquid assets	0.2	0,0	0.4	0,0	1.1	0,7
Liquid assets, closing balance	10,8	1,1	10,8	1,1	10,8	11,3
Liquidity reserve			126,5	116,2		165,1

1) During the fourth quarter 2016 a rights issue related to non-controlling interests has increased the cash with MSEK 1.5.

Profil
Gruppen.

	Q 2	Q 2	$Q_1 - 2$	$Q_1 - 2$	R12
The Group	2017	2016	2017	2016	2017	2016
Net turnover, MSEK	364,3	303,9	701,5	564,5	1269,0	1 1 3 2 , 0
Income before depreciation, MSEK	41,4	28,7	77,2	44,1	137,2	104,1
Operating income/loss, MSEK	31,9	19,3	58,4	26,4	101,1	69,1
Operating margin, %	8,8	6,4	8,3	4,7	8,0	6,1
Income after financial items, MSEK	30,5	18,2	55,9	24,4	96,5	65,0
Profit margin, %	8,4	6,0	8,0	4,3	7,6	5,7
Return on equity, %	32,6	24,5	30,9	16,6	28,5	20,8
Return on capital employed, %	30,8	21,9	29,7	15,4	26,9	19,0
Cash flow from operating activities, MSEK	24,0	45,3	12,7	46,7	50,8	84,8
Investments, MSEK	7,0	3,3	15,5	12,6	53,7	50,8
Liquidity reserve, MSEK		÷,	126,5	116,2		165,1
Net debt, MSEK		$\sim$	112,7	99,4	٠	88,6
Interest-bearing liabilities and		i.	0,8	1,8	ä,	0,9
interest-bearing provisions, MSEK		$\sim$	123,6	100,5		99,9
Net debt/equity ratio		٠	0,4	0,4	×,	0,3
Total assets, MSEK		٠	695.9	574.7		606,9
Equity ratio, %		٠	42,2	41,3	÷,	44,6
Capital turnover			3,6	3,1	3,4	3,1
Proportion of risk-bearing capital, %			46,3	46,7		49,2
Interest coverage ratio	24,0	15,9	22,2	10,7	20,5	14,5
Average number of employees	434	376	419	365	406	379
Net turnover per employee (average), TSEK	840	808	1674	1547	3 1 2 6	2987
Income after fin, per employee (average), TSEK	70	48	133	67	238	171
Average number of shares, thousands (no dilution)	7399	7399	7399	7399	7399	7399
Number of shares, end of period, thousands	7399	7399	7399	7399	7399	7399
Earnings per share, SEK	3,01	1,84	5,44	2,62	9,38	6,56
Equity per share, SEK		$\sim$	38,18	31,61		35,53

The key ratios above are a summary of the financial report in order to give an
overview of ProfilGruppen´s financial position.
Definitions are given at www.profilgruppen.se

Rounding differences may occur. When calculating key ratios: return on equity,
return on capital employed and capital turnover the result and turnover for the
period have been adjusted upward to 12 months. The key ratios p controlling interest, except Earnings per share and Equity per share.

The parent company

The turnover of the parent company amounted to MSEK 11.1 (11.1) and comprises by 98 percent of payments for rents and services from companies in the Group. Profit after financial items amounted to MSEK 9.3 (7.3).

During the second quarter a property was sold that previously has been rented out, which has caused an other operating income of MSEK 2.1. Due to different accounting principles this capital gain in the Group instead amounts to MSEK 2.9.

No investments has been done in the parent company during the first six months of 2017 (none).

Of the current receivables are MSEK 54.8 (24.7) receivables from group companies. The parent company's interest-bearing liabilities amounted to MSEK 18.9 (1.0) as of 30 June 2017. The change in the parent company's liquidity during the period has been MSEK 0 (0).

The parent company employs none (none).

The parent company's risks and uncertain factors do not significantly differ from the Group.

Income statement in short - the parent company¹⁾

	Q 2	Q 2	$Q_1-2$	$Q1-2$
MSEK Note	2017	2016	2017	2016	2016
5 Turnover	5,5	5,5	11,1	11,1	22,3
Cost of goods sold	$-0,8$	$-0,8$	$-2,2$	$-2,0$	$-3,3$
Gross Margin	4,7	4,7	8,9	9,1	19,0
Other operating revenues	2,1	0,0	2,1	0,0	0,0
Administrative expenses	$-0,9$	$-1,0$	$-1,8$	$-1,9$	$-3,3$
Other operating expenses	0,0	0,0	0,0	0,0	0,0
Operating income	5,9	3,7	9,2	7,2	15,7
Result from shares in group companies	0,0	0,0	0,0	0,0	0,0
Interest income and similar income and expense items	0,1	0,0	0,2	0,1	0,3
Interest expenses and similar income and expense items	$-0,1$	0,0	$-0,1$	0,0	$-0,1$
Income after financial items	5,9	3,7	9,3	7,3	15,9
Appropriations	0,0	0,0	0,0	0,0	14,6
Income before tax	5,9	3,7	9,3	7,3	30,5
Tax	$-1,2$	$-0,9$	$-2,0$	$-1,7$	$-6,7$
Net income for the period	4,7	2,8	7,3	5,6	23,8

¹⁾ The parent companys income statement also constitutes its comprehensive incomes statement

Balance sheet in short - the parent company

	30 Jun	30 Jun	31 Dec
MSEK Note	2017	2016	2016
Assets
Tangible assets
Tangible fixed assets	74,2	78,4	77,7
Financial assets	88,0	84,5	88,0
Total fixed assets	162,2	162,9	165,7
Current assets
Current receivables	54,9	24,8	51,2
Cash and bank balances	0,4	0,4	0,4
Total current assets	55,3	25,2	51,6
Total assets	217,5	188,1	217,3
Equity and liabilities
Equity	163,4	160,2	178,3
Untaxed reserves	25,2	17,8	25,2
Provisions for taxes	3,6	4,1	3,6
Long-term liabilities	0,5	1,0	0,8
Current liabilities	24,8	5,0	9,4
Total equity and liabilities	217,5	188,1	217,3

Notes

Note 1 - Accounting Principles

The interim report has been prepared in accordance with IAS 34 Interim Financial Reporting. The parent company accounting has been prepared in accordance with the Swedish Annual Accounts Act (ÅRL) and the Swedish Financial Reporting Standards Council 's RFR 2 Accounting for Legal Entities. The accounting principles applied are identical to the ones used for the latest annual report with exception for the new or revised standards, amendments and interpretations issued by the International Accounting Standards Board (IASB) as approved by the European Commission for application within the EU and shall be applied from 1 January 2017. None of these have had an effect on the income statement, balance sheet or cash flow of the Group. The accounting principles are described in the Annual Report 2016.

Note 2 - Depreciation and write-down of fixed assets

MSEK	Q 2 2017	02 2016	$O1-2$ 2017	$Q1-2$ 2016	R 12 2017	2016
Intangible fixed assets	0.0	0,0	0,0	0.0	0.0	0,0
Land and buildings	1.0		2.0	2.0
		1.0			v.	3.1
Machinery and equipment	8.5	8.4	16,8	15,7	32.4	31,3
Total	9,5	9,4	18,8	17,7	36,1	35,0
of which write-down	$_{0,0}$	$_{0,0}$	0,0	$_{0,0}$	0.0	0,0

Note 3 - Pledged assets and contingent liabilities

	30 Jun	30 Jun	31 Dec
MSEK	2017	2016	2016
Property mortgages	84.8	84.8	84,8
Floating charges	241.5	241.5	241,5
Shares in subsidiaries	166.7	137.7	131,7
Guarantees for other companies	0.7	0.7	0.7
Guarantee commitments FPG/PRI	0,2	0,2	0,2

Note 4 - Financial instruments, valued at fair value in statement of financial position

MSEK	30 Jun 2017	$30$ Jun 2016	31 Dec 2016
Short-term receivables:
Currency derivatives	0.6	0,4	0.4
Short-term non interest-bearing liabilities;
Interest rate derivatives	2.7	3,8	3,2
Currency derivatives	0,9	$_{\perp,8}$
Both interest rate- and currency derivatives are primarily used for hedge and are valued on level 2 according to IFRS 13.

Both interest rate- and currency derivatives are primarily used for hedge and are valued on level 2 according to IFRS 13.

Note 5 - Related transactions

No significant related transactions that significantly affect the Groups results or financial statement have been made during the period. Apart from the intragroup rental income in the parent company no significant related transactions have been done regarding the parent company either.

Brief facts about ProfilGruppen

• The vision is to be the most coveted provider of innovative solutions for aluminium extrusions in northern Europe $\bullet$
• Started in 1981 in Åseda, Sweden
• Listed on the Stockholm Stock Exchange in 1997 and is included in the Small Cap list $\bullet$
• A large part, about 40 percent, of the deliveries are exported, mainly in the northern Europe $\bullet$
• Aluminium extrusions are used within many industries, for example construction, automotive industry, telecommunications/electronics $\bullet$ and furnishings
• The company is certified in accordance with ISO/TS 16949, ISO 14001 and ISO50001 $\bullet$
• The manufacturing of extrusions exclusively takes place in Åseda and includes:
• Extrusion of aluminium profiles in three production lines
  • Anodizing facility for surface treatment $\bullet$
  • Further processing of aluminium extrusions in the form of cutting processing, bending and stamping
• $\bullet$ Fully automated facility for processing, coating and packaging of interior design details
• A dozen subcontractors broadens the range of processing possibilities $\bullet$
• A partnership with ProfilGruppen should be uncomplicated and involve personal commitment $\bullet$

ProfilGruppen AB in Åseda is a supplier of turnkey customized aluminium components and extrusions.

Our vision is that we will be the most coveted provider of innovative solutions for aluminium extrusions in northern Europe.

For more information, please contact

Per Thorsell, President and CEO Mobile: +46 (0)70-240 78 40 per.thorsell@profilgruppen.se

Ulrika Bergmo Sköld, CFO Mobile: +46 (0)73-230 05 98 ulrika.bergmo.skold@profilgruppen.se

This information is of the type that ProfilGruppen AB (publ) is obligated to disclose in accordance with the Market Abuse Regulation and Nasdag Stockholm:s regulation for issuers. The information was issued through Per Thorsell for publication on July 18, 2017 at 14:00 CET.

Current information and photographs for free publication are available at www.profilgruppen.se