Railcare Group — Interim / Quarterly Report 2021

Aug 19, 2021

Interim Report January-June 2021

Second quarter

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First six months of the year

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Significant events in the second quarter

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Significant events after the period

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r fifalleral Suimillar y
Amounts in SEK million, unless otherwise stated	Apr-Jun 2021	Apr-Jun 2020	Jan-Jun 2021	Jan-Jun 2020	full-year 2020
Net sales	91.1	105.3	180.0	211.2	401.3
Operating profit/loss (EBIT)	-2.5	14.3	6.2	31.7	60.4
Operating margin, %	-2.7	13.5	3.4	15.0	15.0
Net profit/loss for the period	-3.0	9.9	3.2	22.8	43.8
Equity/assets ratio, %	36.7	35.4	36.7	35.4	37.4
Earnings per share after dilution, SEK	-0.12	0.41	0.13	0.95	1.82

railcare

CEO's comments

During the second quarter, we had an operating profit (EBIT) of SEK -2.5 million and sales of SEK 91.1 million, which gives an operating margin of -2.7 percent. The second quarter is seasonally the most difficult quarter for the construction side, in terms of volume and results. The construction side in Sweden and the United Kingdom has significantly lower volume and results than last year which was a record quarter. The Transport Scandinavia segment, on the other hand, has a growth of 13.2 percent and Machine Sales also reports increased sales compared with the second quarter of the previous year.

For the first half of the year, the Transport Scandinavia segment reports very strong growth of 24.7 percent. Stable for the Machine Sales segment and a seasonally difficult first half-year for both Construction Sweden and Construction Abroad. It looks very bright going forward, partly for the already booked projects from the autumn onwards, new contracts for the transport operations, and with the investment, we are making going forward with Asia, Europe, and the United Kingdom. We have also been very successful with our new battery-powered MPV and carried out projects for Trafikverket.

On the construction side, the second quarter has been difficult with significantly lower volumes than in previous years. Volumes have decreased by the equivalent of SEK 23 million compared with the second quarter last year. Seasonally, the second quarter is the most difficult for the construction side since the projects for the summer period have not fully started. The planned projects with cable management started in early April as planned, however, the remaining projects have been moved forward in time by Trafikverket. It hits hard in the quarter, but the projects remain and have started from mid-July onwards.

In June, all tests and approvals were in place, and on 21 July, the first real project started with Railcare's new innovation MPV. the world's largest battery-powered railway maintenance machine. For four weeks, cable lowering was undertaken along the Karlstad-Skåre, Sweden railway line. Railcare's operators were on site together with two machines, one of which was the battery-powered MPV that had a press screening in October 2020. The machine was developed by Railcare in collaboration with Northvolt, Epiroc, and ABB.

Within lining, we carried out a number of projects during the quarter and have more enquiries than usual for the future, which is positive for the rest of the year.

Transport Scandinavia had a strong second quarter with growth of 13.2 percent compared with the same period last year. During the quarter, we had good utilisation with the transport of iron ore to Kaunis Iron and LKAB, standby locomotives in Borlänge, Sweden, and a number of contract transports for various track replacements.

The transports of iron ore for Kaunis Iron go according to plan with two rounds per day, seven days a week between Pitkäjärvi, Sweden, and Narvik, Norway. The contract to transport iron ore is worth SEK 740 million and is valid until November 2031.

Railcare has signed an extended agreement with LKAB. The agreement entails an extension to three rounds per day and extends throughout the year. The previous agreement covered two rounds per day and is valid until the end of August 2021.

Transport for construction work is in full swing and there are many track replacements projects in the autumn for all locomotives and train drivers. We perform transports of ballast to NRC with an order value of SEK 3 million, locomotives for track replacements for Leonhard Weiss with an order value of SEK 28 million, and locomotives for track replacements for Infrakraft with an order value of SEK 7 million.

On 1 July, Railcare T received a permit to run trains in Norway. The project with Kaunis Iron also includes shunting during loading and unloading, which was carried out by subcontractors in Narvik. Being able to carry out transports and shunting also in Norway under our own auspices is

an important piece of the puzzle in the work of further developing, optimising, and quality assuring our assignment with ore transports for Kaunis Iron.

To cope with the number of new projects that lie ahead, Railcare T hired six new train drivers during the quarter.

In Construction Abroad, volumes during the second quarter decreased by the equivalent of SEK 8.7 million compared with the same period last year. The same as for Construction Sweden where projects have been re-planned for the autumn and onwards. During the quarter, we carried out work on most of Network Rail's routes.

During the second quarter, we received an extension for the framework agreement we have with Network Rail, the agreement is valid until 1 July 2022. We have also reduced the number of permanent employees by six for the operations in the UK and this to create better conditions for the future.

In June, Railcare attended the Railway Exhibition Rail Live in Long Marston, UK. Many customers from Network Rail visited us at the exhibition stand and it was fun to meet the customers in real life after a long period of working from home for the majority of our customers. There is a definite need for us to meet and create new projects together for the future.

In the Machine Sales segment, construction of a Ballast Feeder is currently underway in the workshop, which will be used in our own operations for hire in Sweden or abroad. Construction of machine parts for Loram has been completed and delivered to the customer during the second quarter. The third power pack that Loram has ordered will be delivered during the fourth quarter of 2021.

Asia is a large market and Railcare is now ready to step into a new market that includes many railways, subway, and mining tracks. The establishment will take place in Hong Kong and we expect to begin preparations in the second half of 2021. At the moment, Railcare has many projects out on tender where our innovative machines are suitable for the customer's demand. With our modern, sustainable, and efficient machines and with our home markets as a foundation this strategic investment is the next step in Railcare's company development.

Railcare has a very exciting journey ahead where we have adjusted in Group management to better meet the planned expansion. As the world opens up after the pandemic, we can now begin to respond to the requests that have come from Asia, among other places. In addition, fulfill a more targeted investment in our second home market, the United Kingdom, and create new opportunities for establishments in other European countries.

We have many orders in the order portfolio for 2021, but also going forward in the long-term agreements that we have signed in many of our companies. In Sweden, major investments are being made with historically high investments in railways and infrastructure for a long time to come. In many countries, major maintenance efforts on the railway are needed and there is great interest in our innovative solutions for the railway, not least with our latest innovation the battery-powered maintenance machine for the railway.

With innovative solutions for the railway and with our staff as our main resource, we are building the Railcare of the future.

Daniel Öholm CEO

Financial summary – Railcare Group

Net sales

Operating expenses

Operating profit

Net profit/loss for the period

Cash Flow

Equity/assets ratio

Employees

Financial summary – business segments

Construction Sweden

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Amounts in SEK 000, unless otherwise stated	Apr-Jun 2021	Apr-Jun 2020	Change, 00	Jan-Jun 2021	Jan-Jun 2020	Change, 00
Net sales	23,731	46,918	-49.4	54,701	88,902	-38.5
Profit/loss after financial items	-7,091	2.652	-367.4	-5.606	11,177	-150.2
Net margin, %	-29.9	5.7	-35.5	-10.2	12.6	-22.8

Construction Abroad

Amounts in SEK 000, unless otherwise stated	Apr-Jun 2021	Apr-Jun 2020	Change, 00	Jan-Jun 2021	Jan-Jun 2020	Change, 00
Net sales	9,572	18.264	-47.6	28,238	35,695	-20.9
Profit/loss after financial items	-2,327	1,717	-235.5	1,814	2.554	-29.0
Net margin, %	-24.3	9.4	-33.7	6.4	7.2	-0.7

railcane

Transport Scandinavia

Net sales for the segment Transport Scandinavia increased by 13.2 percent in the second quarter 2021 year-on-year, totalling SEK 51.8 million (45.8).

The increased sales were primarily due to transports for LKAB not carried out in the corresponding quarter of the previous year.

Profit after financial items decreased to SEK 4.8 million (5.8).

Railcare signed an extended and expanded agreement with LKAB. The agreement increases delivery to three transportations per day and spans the period until year end. The previous agreement encompassed two transportations per day and expires at the end of August 2021.

Iron ore transports for Kaunis Iron continued according to plan.

Utilisation in the locomotive workshop was in line with the previous year, although major work not completed by the end of the quarter will not be recognized until the third quarter.

Net sales increased by 24.7 percent in the first half year in year-on-year terms, totalling SEK 100.2 million (80.3). Profit after financial items increased year-onyear, amounting to SEK 8.4 million (7.1).

Key performance indicators - Transport Scandinavia

Amounts in SEK 000, unless otherwise stated	Apr-Jun 2021	Apr-Jun 2020	Change, 00	Jan-Jun 2021	Jan-Jun 2020	Change, 00
Net sales	51,846	45,793	13.2	100,168	80.337	24.7
Profit/loss after financial items	4,770	5.808	-17.9	8.417	7.057	19.3
Net margin, %	9.2	12.7	-3.5	8.4	8.8	-0.4

Machine Sales

Net sales in the segment Machine Sales increased in the second quarter of 2021 year-on-year, totalling SEK 19.8 million (8.5).

The increase was mainly due to sales of machine parts to Loram with delivery at the end of the second quarter.

Profit after financial items amounted to SEK 2.7 million (3.0).

In the first half year, net sales amounted to SEK 24.6 million (35.0). Profit after financial items amounted to SEK 1.7 million (8.0). The lower sales and profit were due to the delivery of three generator wagons to Infranord in the first quarter 2020.

Key performance indicators - Machine Sales

Amounts in SEK 000, unless otherwise stated	Apr-Jun 2021	Apr-Jun 2020	Change, 00	Jan-Jun 2021	Jan-Jun 2020	Change, 00
Net sales	19,799	8.491	133.2	24,588	35.000	-29.7
Profit/loss after financial items	2,682	2,955	-9.2	1,695	7,962	-78.7
Net margin, %	13.5	34.8	-21.3	6.9	22.7	-15.9

Parent Company

Financial targets

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Dividend

Significant events after the end of the period

Annual General Meeting 2021

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Ten largest shareholders 30 June 2021	Number of shares	Proportion of share capital and votes (%)
Norra Västerbotten Fastighets AB	2,721,335	11.3
TREAC Aktiebolag	2,415,000	10.0
Marklund family through companies	2,233,905	9.3
Dahlqvist family through companies	2,002,155	8.3
Ålandsbanken AB	1,279,762	5.3
Avanza Pension insurance company	917,669	3.8
Bernt Larsson	726,303	3.0
Norrlandsfonden	455,000	1.9
Nordnet Pensionsförsäkring AB	425,714	1.8
Emil Burén	313,918	1.3
Ten largest shareholders	13,490,761	56.0
Other shareholders	10,633,406	44.0
Total	24,124,167	100.0

Significant risks and uncertainties

Transactions with related parties

The Board's and CEO's assurances

Catharina Elmsäter-Svärd Ulf Marklund Anna Weiner Jiffer Chairman Board member, Deputy CEO Board member

Board member Board member Board member

Adam Ådin Anders Westermark Björn Östlund

Daniel Öholm CEO

FINANCIAL REPORTS

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME IN SUMMARY

Amounts in SEK 000	Note	Apr-Jun 2021	Apr-Jun 2020	Jan-Jun 2021	Jan-Jun 2020	full-year 2020
Net sales	చి	91,047	105,289	179,982	211,241	401,301
Capitalised work on own account		3,464	743	4,860	1,404	16,217
Other operating income		1,338	1,746	2,375	2,355	3,603
Total		95,848	107,778	187,218	215,000	421,120
Raw materials and consumables		-33,720	-31,099	-54,058	-62,504	-121,740
Other external costs		-15,689	-15,252	-28,482	-30,552	-58,868
Personnel costs		-34,937	-33,164	-70,389	-62,910	-124,575
Depreciation and impairment of
property, plant and equipment and		-13,755	-13,549	-27,483	-26,248	-53,266
intangible assets
Other operating expenses		-225	-461	-606	-1,098	-2,285
Total operating expenses		-98,326	-93,524	-181,018	-183,313	-360,733
Operating profit/loss (EBIT)		-2,478	14,254	6,199	31,688	60,386
Financial income		54		54		2
		-1,044	-1,224	-2,132	-2,403	-4,820
Financial expenses Net financial items		-990
			-1,224	-2,077	-2,403	-4,818
Share of profit after tax from
associated companies reported		56	34	140	88	347
according to the equity method
Profit/loss before tax		-3,412	13,064	4,262	29,373	55,915
Income tax		448	-3,116	-1,022	-6,591	-12,139
Net profit/loss for the period		-2,963	9,948	3,241	22,782	43,776
Other comprehensive income:
Items that may be reclassified to
profit/loss for the period
Exchange rate differences from the		-109	-747	102	-36	-389
translation of foreign operations
Other comprehensive income for the period, net of tax		-109	-747	102	-36	-389
Total comprehensive income for the
period		-3,072	9,201	3,343	22,746	43,387

Amounts in SEK	Apr-Jun 2021	Apr-Jun 2020	Jan-Jun 2021	Jan-Jun 2020	full-year 2020
Earnings per share before dilution*	-0.12	0.41	0.13	0.95	1.82
Earnings per share after dilution*	-0.12	0.41	0.13	0.95	1.82
Average number of shares	24,124,167	24,124,167	24,124,167	23,947,122	24,036,128
Number of shares outstanding on the reporting date	24,124,167	24,124,167	24,124,167	24,124,167	24,124,167

CONSOLIDATED STATEMENT OF FINANCIAL POSITION IN SUMMARY

Amounts in SEK 000 Note	30 Jun 2021	30 Jun 2020	31 Dec 2020
ASSETS
Non-current assets
Intangible assets
Capitalised development costs	1,399	2,262	1,830
Patents	312	337	299
Goodwill	7,283	7,315	7,274
Transportation licence	1,435	479	685
Total intangible assets	10,428	10,392	10,088
Property, plant and equipment 4
Buildings and land	30,164	35,087	33,257
Locomotives and wagons	132,924	136,343	135,316
Mobile machinery	152,340	159,573	155,562
Vehicles	6,292	7,276	6,521
Equipment, tools, fixtures and fittings	6,543	6,022	5,898
Construction in progress	72,199	46,804	66,907
Total property, plant and equipment	400,461	391,105	403,461
Financial non-current assets
Holdings reported according to the equity method	773	573	832
Deposits	658	658	658
Deferred tax assets	559	107	925
Other non-current receivables	3,954	3,954	3,954
Total financial non-current assets	5,943	5,292	6,369
Total non-current assets	416,832	406,789	419,918
Current assets
Inventories
Raw materials and consumables	13,654	12,115	11,865
Work in progress	12,078	6,905	7,659
Total inventories	25,733	19,020	19,524
Current receivables
Accounts receivable	39,765	41,616	44,905
Current tax receivables	2,356		655
Other current receivables	2,354	1,795	1,809
Prepaid expenses and accrued income	10,495	13,332	9,792
Total current receivables	54,969	56,743	57,161
Cash and cash equivalents	3,684	9,270	24,785
Total current assets	84,386	85,033	101,470
TOTAL ASSETS	501,219	491,822	521,388

CONSOLIDATED STATEMENT OF FINANCIAL POSITION IN SUMMARY, cont.

Amounts in SEK 000	Note	30 Jun 2021	30 Jun 2020	31 Dec 2020
EQUITY
Share capital		9,891	9,891	9,891
Other capital provided		36,565	36,565	36,565
Reserves		1,382	1.633	1,280
Retained earnings (comprehensive income for the period included)		135,890	126,132	147,126
Total equity attributable to Parent Company shareholders		183,729	174,220	194,862
LIABILITIES
Non-current liabilities
Deferred tax liabilities		38,237	27,644	38,170
Liabilities to credit institutions		97,664	106,747	107,659
Lease liability		30,948	40,885	33,654
Total non-current liabilities		166,849	175,277	179,483
Current liabilities
Lease liability		16,101	22,975	26,045
Liabilities to credit institutions		53,652	53,196	59,494
Overdraft facility		4,726
Accounts payable		37,762	25,084	25,139
Prepayments from customers		4.439		5,848
Current tax liabilities		283	5,093	861
Other liabilities		3,319	5,831	2,680
Accrued expenses and deferred income		30,359	30,146	26,977
Total current liabilities		150,641	142,325	147,044
TOTAL EQUITY AND LIABILITIES		501,219	491,822	521,388

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY IN SUMMARY

		Share	Other capital		Retained earnings (incl. profit for the
Amounts in SEK 000	Note	capital	provided	Reserves	period)	Total equity
Opening balance as of 1 January 2020		9,435	32,178	1,669	110,589	153,870
Net profit/loss for the period					22,782	22,782
Other comprehensive income				-36		-36
Total comprehensive income				-36	22,782	22,746
Transactions with shareholders
Conversion of debenture		456	4,387			4,843
Dividend					-7,237	-7,237
Closing balance as of 30 June 2020		9,891	36,565	1,633	126,132	174,220
Opening balance as of 1 January 2021		9,891	36,565	1,280	147,126	194,862
Net profit/loss for the period					3,241	3,241
Other comprehensive income				102		102
Total comprehensive income				102	3,241	3,343
Transactions with shareholders
Dividend					-14,475	-14,475
Closing balance as of 30 June 2021		9,891	36,565	1,382	135,890	183,729

CONSOLIDATED CASH FLOW STATEMENT IN SUMMARY

	Apr-Jun	Apr-Jun	Jan-Jun	Jan-Jun	full-year
Amounts in SEK 000 Note	2021	2020	2021	2020	2020
Cash flow from operating activities
Operating profit	-2,478	14,254	6,199	31,688	60,386
Adjustment for
non-cash items	13,772	12,070	27,484	24,671	21,835
Interest paid	-1,045	-1,206	-2,132	-2,367	-4,784
Interest received	54		54		2
Income tax paid	-719	-560	-2,821	-1,097	-1,756
Cash flow from operating activities	9,584	24,558	28,784	52,895	105,683
before changes in working capital
Cash flow from changes in working
capital
Increase/decrease in inventories	-4,254	364	-6,245	3,914	2,788
Increase/decrease in operating	-10,525	-815	4,371	-25,941	-26,136
receivables
Increase/decrease in operating liabilities	17,869	-922	14,491	353	516
Total changes in working capital	3,090	-1,373	12,617	-21,674	-22,832
Cash flow from operating activities	12,674	23,185	41,401	31,221	82,851
Cash flow from investment activities Investments in intangible assets	-225	-115		-187
Investments in property, plant and			-873		-462
equipment	-12,786	-14,400	-21,791	-24,657	-53,410
Acquisitions of subsidiaries, net effect
on cash and cash equivalents				-2,617	-2,617
Dividends from associated companies	200	200	200	200	200
Divestment of property, plant and		2,002		2,150	2,150
equipment	-12,811	-12,313	-22,464	-25,111	-54,139
Cash flow from investment activities
Cash flow from financing activities
Loans raised		5,700		16,020	34,020
Net change in overdraft facility	4,726		4,726
Amortisation of loans Amortisation of lease liabilities	-6,935	-6,039	-15,837	-13,233	-24,006
Dividend paid	-7,164 -14,475	-7,556 -7,237	-14,700 -14,475	-14,521 -7,237	-28,600 -7,237
	-23,848	-15,132	-40,286	-18,971	-25,823
Cash flow from financing activities
Cash flow for the period	-23,985	-4,260	-21,349	-12,861	2,889
Cash and cash equivalents at the beginning of the period	27.766	13,727	24,785	22,012	22,012
Exchange rate difference in cash and
cash equivalents	-97	-197	248	119	-116
Cash and cash equivalents at the end
of the period	3,684	9,270	3,684	9,270	24,785

PARENT COMPANY INCOME STATEMENT IN SUMMARY

Amounts in SEK 000	Note	Apr-Jun 2021	Apr-Jun 2020	Jan-Jun 2021	Jan-Jun 2020	full-year 2020
Net sales		10,962	10,955	18,025	17,217	30,189
Other operating income		176	4	188	60	127
Total operating income		11,139	10,959	18,213	17,276	30,316
Operating expenses
Raw materials and consumables		-3,899	-3,213	-3,924	-3.299	-3,300
Other external costs		-3,224	-4,724	-6,466	-7,633	-14,168
Personnel costs		-5,283	-3,008	-9,574	-5,782	-11,937
Depreciation and impairment of property, plant and equipment and intangible assets		-103	-41	-200	-81	-163
Other operating expenses		-12	-22	-12	-31	-80
Total operating expenses		-12,521	-11,008	-20,176	-16,826	-29,648
Profit from participations in associated companies and jointly controlled companies		200	200	200	200	200
Operating profit		-1,183	151	-1,762	650	868
Profit/loss from financial items
Profit from participations in Group companies			4,346	2,404	4,346	4,346
Other interest income and similar profit/loss items					72	73
Interest expenses and similar profit/loss items		-22	-5	-22	-41	-53
Total profit/loss from financial items		-22	4,341	2,382	4,377	4,366
Profit/loss after financial items		-1,205	4,491	619	5,027	5,234
Appropriations						70
Tax on net profit/loss for the period		278	-214	373	-325	-547
Net profit/loss for the period		-927	4,277	993	4,702	4,757

PARENT COMPANY BALANCE SHEET IN SUMMARY

Amounts in SEK 000	Note	30 Jun 2021	30 Jun 2020	31 Dec 2020
ASSETS
Intangible assets
Patents Total intangible assets		312 312	337 337	299 299
Property, plant and equipment
Buildings		4,196	2,945	4,304
Equipment, tools, fixtures and fittings		294	175	344
Total property, plant and equipment		4,489	3,120	4,648
Financial non-current assets
Participations in Group companies		38,336	38,336	38,336
Participations in associated companies		204	204	204
Total financial non-current assets		38,540	38,540	38,540
Total non-current assets		43,341	41,997	43,487
Current assets
Current receivables
Accounts receivable		13
Receivables from Group companies		400		10,070
Current tax receivables		83
Other receivables		2		33
Prepaid expenses and accrued income		1,305	3,211	828
Total current receivables		1,802	3,211	10,931
Cash and cash equivalent			2,867	1,789
Total current assets		1,802	6,078	12,720
TOTAL ASSETS		45,143	48,075	56,207

PARENT COMPANY BALANCE SHEET IN SUMMARY, cont.

Amounts in SEK 000	Note	30 Jun 2021	30 Jun 2020	31 Dec 2020
EQUITY AND LIABILITIES
Equity
Restricted equity
Share capital		9,891	9,891	9.891
Total restricted equity		9.891	9,891	9,891
Non-restricted equity
Share premium reserve		17,446	23,024	23,024
Retained earnings			4,140	4,140
Net profit/loss for the period		993	4,702	4,757
Total non-restricted equity		18,439	31,866	31,921
Total equity		28,330	41,757	41,812
Current liabilities
Accounts payable		2,163	2,379	966
Overdraft facility		9,804
Current tax liabilities			124	498
Liabilities to Group companies		18	389	10,028
Other liabilities		1,150	372	622
Accrued expenses and deferred income		3,678	3,054	2,281
Total current liabilities		16,813	6,318	14,395
TOTAL EQUITY AND LIABILITIES		45,143	48,075	56,207

NOTES

Note 1 General information

Railcare Group AB (publ) ("Railcare"), Corp. ID no. 556730-7813 is a Parent Company registered in Sweden with its registered office in Skellefteå, at the address Näsuddsvägen 10, SE-932 32 Skelleftehamn, Sweden.

Unless otherwise stated, all amounts are given in SEK thousands (SEK 000). Figures in brackets refer to the corresponding period in the previous year.

Note 2 Basis of preparation for the financial statements

Railcare's consolidated accounts have been prepared in accordance with the Annual Accounts Act, the Swedish Financial Reporting Board's recommendation RFR 1 Supplementary Accounting Rules for Groups, International Financial Reporting Standards (IFRS) and the interpretations of the IFRS Interpretations Committee (IFRS IC) as adopted by the EU. This Interim Report has been prepared in accordance with IAS 34 Interim Financial Reporting and the Annual Accounts Act.

The accounts of the Parent Company have been prepared in accordance with the Annual Accounts Act and the Swedish Financial Reporting Board's recommendation RFR 2 Accounting for legal entities. The Interim Report for the Parent Company has been prepared in accordance with the Annual Accounts Act.

The accounting principles applied are consistent with those described in the Railcare Group's Annual Report 2020.

The fair value of financial assets and liabilities is estimated to correspond to book value.

Note 3 Segment information

Description of segments and principal activities:

Railcare's Group Management is the highest executive decision-making body in the Railcare Group and evaluates the Group's financial position and earnings and makes strategic decisions. Company management has determined the operating segments based on the data processed by Group Management and which is used as a basis for allocating resources and evaluating results of operations.

Group Management has identified four reportable segments in the Group's operations:

Construction Sweden

Railway construction work involving machinery and personnel and renovation of glass-fibre lined culverts beneath railways, roads and industrial areas in Sweden.

Construction Abroad

Railway construction work involving machinery and personnel in countries other than Sweden, currently predominantly in the UK.

Transport Scandinavia

Special transports involving locomotives, wagons and personnel, as well as repair and upgrading services for locomotives and wagons performed in workshops.

Machine Sales

Sales of machines primarily outside Sweden, as well as marketing focused on new areas in which Railcare's construction services can be implemented.

The 'Group-wide' item is used for reconciliation purposes and includes Group Management and other Groupwide services.

Group Management primarily uses profit after financial items to assess consolidated earnings.

Railcare Group AB (publ) | Corp. ID no. 556730-7813 Page 19 of 27

railcape

Income

Sales between segments are conducted on market terms. Income from external customers reported to Group Management is valued in line with the Consolidated statement of comprehensive income.

		Apr-Jun 2021			Apr-Jun 2020
	Segment income	between segments	Sales Income from external customers	Segment income	between segments	Sales Income from external customers
Construction Sweden	23,731	3.451	20,280	46,918	4,409	42.509
Construction Abroad	9,572	1,385	8,187	18,264	2,839	15,425
Transport Scandinavia	51,846	1,548	50,298	45,792	1,610	44,182
Machine Sales	19,799	7,907	11,891	8,491	5,723	2,768
Group-wide	10,962	10,572	391	11,023	10,618	405
Total	115,910	24,864	91,047	130,488	25,199	105,289

		Jan-Jun 2021			Jan-Jun 2020			full-year 2020
	Segment income	between segments	Sales Income from external customers	Segment income	Sales between segments	Income from external customers	Segment income	Sales between segments	Income from external customers
Construction Sweden	54,701	6,368	48,333	88,902	7,536	81,366	159,027	14,595	144,432
Construction Abroad	28,238	3,614	24,624	35,695	4,954	30,741	59,891	9,809	50,082
Transport Scandinavia	100,168	8,288	91,880	80,337	8,187	72,150	184,025	14,284	169,741
Machine Sales	24,588	10,188	14,400	35,000	8,781	26,219	82,653	47,123	35,530
Group-wide	18,025	17,280	745	17,217	16,452	765	30,189	28,674	1,515
Total	225,720	45,738	179,982	257,151	45,910	211,241	515,785	114,485	401,301

railcare

Profit/loss after financial items

	Apr-Jun 2021	Apr-Jun 2020	Jan-Jun 2021	Jan-Jun 2020	full-year 2020
Construction Sweden	-7,091	2,652	-5,606	11,177	17,625
Construction Abroad	-2,327	1,717	1,814	2,554	1,830
Transport Scandinavia	4,770	5,808	8,417	7,057	24,245
Machine Sales	2,682	2,955	1,695	7,961	11,330
Group-wide	-1,502	-102	-2,197	536	539
Total	-3,468	13,030	4,122	29,285	55,568
Profit/loss after financial items	-3,468	13,030	4,122	29,285	55,568
Share of profit after tax from associated companies reported according to the equity method	56	34	140	88	347
Profit/loss before tax	-3,412	13,064	4,262	29,373	55,915

The Group's customers are private and public operators in the railway industry and vary according to area of operations. The Group's customers are largely repeat customers based on long-term relationships.

Sales comprise Income from services, Sales of goods and Leasing. A breakdown of income is provided below.

	Income from services		Sales of goods		Leasing		Total
	Apr-Jun	Apr-Jun	Apr-Jun		Apr-Jun Apr-Jun	Apr-Jun	Apr-Jun	Apr-Jun
Segment	2021	2020	2021	2020	2021	2020	2021	2020
Construction Sweden	20,280	42,509					20,280	42.509
Construction Abroad	7,964	15,211	18		205	214	8.187	15.426
Transport Scandinavia	44,371	40.017	2,979	1.063	2,945	3,101	50,294	44,182
Machine Sales	1,392	955	10,499	1,813			11,891	2,768
Group-wide	395	404					395	404
Total	74,402	99,096	13,496	2,877	3,149	3,316	91,047	105,289

	Income from services		Sales of goods		Leasing		Total
	Jan-Jun	.lan-.lun	Jan-Jun		Jan-Jun Jan-Jun	.Jan-Jun	Jan-Jun	.Jan-Jun
Segment	2021	2020	2021	2020	2021	2020	2021	2020
Construction Sweden Construction Abroad Transport Scandinavia Machine Sales	48,333 24,194 81.904 1,824	81.367 30,454 63.041 4,312	22 3.868 12,576	2.356 21,906	409 6,108	287 6,754	48.333 24.624 91.880 14,400	81,367 30,741 72,150 26,219
Group-wide	745	764					745	764
Total	157,000	179,938	16,466	24,262	6,516	7,041	179,982	211,241

railcane

Note 4 Non-current assets

		Locomoti
	Buildings ves and		Mobile	tools, fixtures Construction
	and land		wagons machinery	Vehicles	and fittings in progress		Total
30 June 2020
Opening carrying amount	30.790	129,169	165,405	7,604	5,545	31,912	370,425
Exchange rate differences	-83	25	30	-5			-33
Purchases/capitalised expenses for the year	8.264	16.010		2,807	412	21,364	48.857
Reclassifications		5,192	765		606	-6,471	92
Disposals and scrappings		-522		-1,918	-50		-2,490
Depreciation	-3,885	-13,531	-6,627	-1,211	-491		-25,745
Closing carrying amount 30 June 2020	35,086	136,342	159,573	7,276	6,022	46,805	391,105
Of which, right-of-use assets	25.931	32.798	2,317	7,229	37		68,312
30 June 2021
Opening carrying amount	33,257	135,316	155,562	6,521	5,898	66,907	403,461
Exchange rate differences	67	22	30		15		135
Purchases/capitalised expenses for the year	856	1,219	3,362	1,593	204	20,337	27,571
Reclassifications		10,661			1,058	-11,682	36
Disposals and scrappings				-429	-8	-3,362	-3,800
Depreciation	-4,017	-14,294	-6,614	-1,394	-623		-26,942
Closing carrying amount 30 June 2021	30,164	132,924	152,340	6,292	6,543	72,199	400,461
Of which, right-of-use assets	19.864	22.294	2.052	6.259			50.470

KEY PERFORMANCE INDICATORS, RAILCARE GROUP IN SUMMARY

Amounts in SEK 000, unless otherwise stated	Apr-Jun 2021	Apr-Jun 2020	Jan-Jun 2021	Jan-Jun 2020	full-year 2020
Net sales	91,047	105,289	179,982	211,241	401,301
Sales growth, %	-13.5	15.5	-14.8	20.0	8.3
Operating profit/loss (EBIT)	-2,478	14,254	6,199	31,688	60,386
Operating margin, %	-2.7	13.5	3.4	15.0	15.0
Net profit/loss for the period	-2,963	9,948	3,241	22,782	43,776
Net financial items	-990	-1,224	-2,077	-2,403	-4,818
Total assets	501,219	491,822	501,219	491,822	521,388
Equity/assets ratio, %	36.7	35.4	36.7	35.4	37.4
Key performance indicators per
share, SEK
Earnings per share before dilution	-0.12	0.41	0.13	0.95	1.82
Earnings per share after dilution	-0.12	0.41	0.13	0.95	1.82
Equity per share	7.62	7.22	7.62	7.22	8.08
Dividend per share, SEK	0.6	0.3	0.6	0.3	0.3

QUARTERLY DATA, RAILCARE GROUP SUMMARY

	02	Q1	04	Q3	02	01	04	03	02
Amounts in SEK million	2021	2021	2020	2020	2020	2020	2019	2019	2019
Net sales	91.0	88.9	95.6	94.5	105.3	106.0	93.5	101.0	91.2
Capitalised work on own account	3.5	1.4	11.3	3.5	0.7	0.7	1.0	2.3	3.2
Other operating income	1.3	1.0	0.2	1.0	1.7	0.6	0.8	0.1	0.6
Total	95.8	91.4	107.2	99.0	107.8	107.2	95.3	103.5	94.9
Raw materials and consumables	-33.7	-20.3	-31.7	-27.5	-31.1	-31.4	-37.6	-33.7	-34.5
Other external costs	-15.7	-12.8	-13.9	-14.4	-15.3	-15.3	-12.2	-12.2	-11.1
Personnel costs	-34.9	-35.5	-32.7	-29.0	-33.2	-29.7	-31.2	-28.1	-33.1
Depreciation and impairment	-13.8	-13.7	-13.6	-13.4	-13.5	-12.7	-12.7	-12.5	-12.6
of property, plant and equipment
Other operating expenses	-0.2	-0.4	-1.0	-0.2	-0.5	-0.6	-0.3	-0.2	-0.4
Total operating expenses	-98.3	-82.7	-92.9	-84.5	-93.5	-89.8	-93.8	-86.7	-91.5
Operating profit/loss (EBIT)	-2.5	8.7	14.3	14.4	14.3	17.4	1.5	16.8	3.4
Financial income	0.1	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Financial expenses	-1.0	-1.1	-1.2	-1.2	-1.2	-1.2	-1.4	-1.5	-1.5
Net financial items	-1.0	-1.1	-1.2	-1.2	-1.2	-1.2	-1.4	-1.5	-1.5
Share of profit after tax from
associated companies reported	0.1	0.1	0.2	0.1	0.0	0.1	0.1	0.1	0.1
according to the equity method
Profit/loss before tax	-3.4	7.7	13.2	13.3	13.1	16.3	0.2	15.4	2.0
Taxes	0.4	-1.5	-2.0	-3.6	-3.1	-3.5	0.0	-3.3	-0.9
Net profit/loss for the period	-3.0	6.2	11.2	9.8	9.9	12.8	0.2	12.0	1.1
Equity/assets ratio, %	36.7	39.5	37.4	36.4	35.4	36.2	33.5	33.4	29.9

DEFINITIONS

General	All amounts in tables are in SEK 000 unless otherwise stated. All values in brackets are comparative figures for the corresponding period in the preceding year unless otherwise stated. Amounts in tables and other summaries have been rounded individually. Accordingly, minor rounding differences can be found in totals.
	This Interim Report refers to a number of financial measures not defined in accordance with IFRS,
Alternative key performance
indicators	known as alternative key performance indicators. Railcare uses these key performance indicators to
	monitor and analyse the financial outcome of the Group's operations and its financial position.
		These alternative key performance indicators are intended to supplement, not replace, the financial
		measures presented in accordance with IFRS. See definitions and further information below.
Key performance indicators	Definition/calculation	Purpose
Operating profit/loss (EBIT)	Calculated as net profit/loss for the	This key performance indicator illustrates the
	period before tax, participations in the	Company's profit/loss generated by operating
	earnings of associated companies and	activities.
	financial items.
Net financial items	Net financial items are calculated as	This key performance indicator illustrates the net
	financial income less financial	amount resulting from the Company's financial
	expenses.	activities.
Net margin	The net margin is calculated as income	This performance indicator illustrates how much of
	after financial items divided by net sales.	the Company's earnings remain after all expenses,
		excluding corporation tax, have been deducted.
Total assets	Calculated as the total of the Company's
	assets at the end of the period.
Equity per share, SEK	Calculated as equity divided by the	This key performance indicator illustrates the
	number of shares outstanding at the end	Company's net worth per share.
	of the period.
Sales growth, %	Calculated as the difference between net	This key performance indicator illustrates the
	sales for the period and net sales for the	Company's growth and historical performance,
	preceding period, divided by net sales for	contributing to an understanding of the Company's
	the preceding period.	development.
Operating margin, %	Calculated as operating income divided	This key performance indicator illustrates how much
	by net sales.	of the Company's profit/loss is generated by its
		operating activities.
		This key performance indicator illustrates the
Equity/assets ratio, %	Calculated as equity divided by total
	assets.	Company's financial position and long-term payment
		ability.
Dividend per share, SEK	Dividend per share approved by a General
	Meeting at which the Annual Report for
	the specified financial year is adopted.
Earnings per share before dilution,	Calculated as profit/loss attributable to	This key performance indicator illustrates the
SEK	the Parent Company's shareholders	Company's earnings per share, excluding any dilution
	divided by the weighted average number	effect from outstanding convertibles.
	of shares outstanding in the period.
Earnings per share after dilution,	To calculate earnings per share after	This key performance indicator illustrates the
SEK	dilution, the weighted average number of	Company's earnings per share, excluding any dilution
	outstanding shares is adjusted for the	effect from outstanding convertibles.
	dilution effect of all potential shares. The
	Parent Company has a category of
	potential common shares with a dilution
	effect: convertible debentures. The
	convertible debentures are assumed to
	have been converted into shares and net
	profit is adjusted to eliminate interest
	expenses less tax effect. Convertible
	debentures do not give rise to a dilution
	effect when the interest per share that
	may be received upon conversion exceeds
	earnings per share before dilution.

GLOSSARY

CP6

Control Period 6. The UK government has earmarked funds of approximately GBP 47.9 billion for railways between 2019 and 2024.

MPV

Railcare is developing a new generation of battery-powered Multi Purpose Vehicle, MPV. An MPV is a versatile working vehicle used in rail maintenance. All testing was completed and all approvals obtained in June 2021. On 21 July 2021, Railcare launched its first live project with the new innovation MPV, the world's largest battery-powered maintenance machine for the railway industry.

Infrastructure Bill

On 16 April 2021, the Swedish government presented a new infrastructure bill. The plan encompasses the period 2022–2033 with a total framework of SEK 876 billion1.

Railvac

Maintenance contracts with Railvac 16,000-machines that are able to perform various types of track maintenance on the railways using vacuum technology.

l https://www.regeringen.se/pressmeddelanden/2021/04/storsta-ekonomiska-amen-nagonsin-for-transportinfrastrukturatgarder/

Press releases in the second quarter 2021

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Financial calendar

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About Railcare Group

Railcare Group AB (publ)

Railvac in 3D

For further information, please contact:

Daniel Öholm, CEO Telephone: +46 (0)70–528 01 83 E-mail: daniel.oholm@railcare.se

Sofie Dåversjö, IR and Communications Manager Telephone: +46 (0)72–528 00 09 E-mail: sofie.daversjo@railcare.se

This information is such as Railcare Group AB (publ) is required to disclose under the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, for publication on 19 August 2021 at 7:30 a.m. CEST.

This document is essentially a translation of Swedish language original thereof. In the event of any discrepancies between this translation and the original Swedish document the latter shall be deemed correct.