Ratos — Interim / Quarterly Report 2023

Apr 27, 2023

Interim report Q1 2023

Interim report January-March, 2023

Q1 2023

• Adjusted1) EBITA amounted to SEK 324m (253)
• Operating profit amounted to SEK 285m (5)
• Profit in the year-earlier period was negatively impacted by an unrealised loss of SEK -100m related to the revaluation of shares in Dun & Bradstreet Holding Inc and restructuring costs of SEK -130m attributable to Diab
• Diluted earnings per share amounted to SEK -0.09 (-0.66)
• Cash flow from operating activities amounted to SEK 507m (-379)
• Leverage excluding finance leases was 2.2x (0.9x)

Significant events during and after the end of the quarter

• HL Display, which is part of the Industry business area, acquired the company Akriform Plast AB on 15 February, and the companies Oechsle Display Systems and werba print & display were acquired on 3 April
• During the quarter, Ratos initiated the process for a compulsory buy-out of the remaining shares in Semcon. The process is expected to be completed in the second quarter of 2023

	Q1	Q1	LTM Full Year
	2023 2023	2022	Change%	Rolling	2022 2022	Change%
Net sales	7,817	6,220	26%	31,472	29,875	5%
EBITDA	661	334	98%	3,285	2,958	11%
EBITA, adjusted1⁾	324	253	28%	2,038	1,966	4%
EBITA %, adjusted1⁾	4.1%	4.1%		6.5%	6.6%
EBITA	324	22	pos	2,020	1,718	18%
EBITA %	4.1%	0.4%		6.4%	5.8%
Operating profit	285	5	pos	1,898	1,618	17%
Profit/loss before tax	90	-98	pos	1,367	1,178	16%
Profit/loss for the period	57	-139	141%	1,075	879	22%
Basic earnings per share, SEK	-0.09	-0.66	86%	2.26	1.69	34%
Diluted earnings per share, SEK	-0.09	-0.66	86%	2.26	1.68	35%
Cash flow from operating activities2⁾	507	-379	pos	2,317	1,431	62%
Leverage excl. financial leasing	2.2x	0.9x		2.2x	2.5x
Return on capital employed excl. financial leasing	10.0%	11.3%		10.0%	10.2%

Ratos Group, SEKm

1⁾ For reconciliation of EBITA, adjusted see page 18. For definition see page 21.

2⁾ Cash flow metric is changed from 1 January 2023 retroactively, for more information see page 15 "Note 1 Accounting principles".

Adjusted EBITA up 28% in the first quarter – sales growth remains favourable

Adjusted EBITA amounted to SEK 324m (253) for the quarter, up 28%. EBITA was negatively impacted by Plantasjen, whose earnings declined SEK 111m, mainly due to adverse weather in March. The Group's sales in the quarter increased 26% to SEK 7,817m, of which 8% was organic growth. Demand remained favourable, with a high order intake in the quarter. Our acquired companies performed well and have already created synergies with other group companies. Cash flow improved, and Ratos's leverage declined to 2.2x.

Demand in the first quarter remained favourable. Net sales for the period amounted to SEK 7,817m (6,220), up 26% year on year. Organic sales growth in the period amounted to 8%. Demand remained high, and our order books were at record-breaking levels.

The first quarter is a quiet quarter for Ratos due to seasonal effects. Adjusted EBITA amounted to SEK 324m, up 28%. Reported EBITA totalled SEK 324m, compared with SEK 22m in the year-earlier period.

All companies performed well with the exception of Plantasjen and Speed Group. Aibel's EBITA also declined, but only due to phasing of its projects. The company has good prospects to deliver yet another record-breaking year in 2023.

Ratos's leverage declined to 2.2x in the quarter as a result of higher EBITDA and improved operational cash flow.

To make it easier to analyse the Ratos Group, we decided to report sales and EBITA for Plantasjen separately. The seasonally dependent Plantasjen is a relatively large company in the Group, whose sales and EBITA vary considerably between quarters.

Development of Ratos's business areas of Ratos's areas

EBITA for the Construction & Services Construction & ServicesServices business area amounted to SEK 284m (292), down 2%, and the EBITA margin was 6% (8). Aibel's EBITA declined during the quarter compared with the preceding year. The company generates limited earnings at the start of major projects. The construction companies continued to deliver a strong performance, and it bears repeating that these projects almost exclusively comprise commercial and public properties. The exposure to residential construction is very limited. The business area's net sales for the first quarter amounted to SEK 4,515m, a year-on-year increase of 23%. Organic growth amounted to 19%. The structural effect was 6% and pertained to the acquisition of NVBS.

EBITA for the Consumer ConsumerConsumer business area amounted to SEK -162m (-75). The decline in earnings in Plantasjen was significantly lower than in the year-earlier period. Other companies improved their earnings during the quarter compared with the year-earlier period. Plantasjen posted EBITA of SEK -215m (-103) for the quarter. Plantasjen's sales in March were negatively impacted by adverse weather in Norway and Sweden. Net sales for the business area amounted to SEK 1,017m (1,279) for the quarter, down 21% year on year. The consumer market continued to be negatively impacted by high inflation, with a decline in household purchasing power, particularly with respect to durable consumer goods.

Adjusted EBITA for the Industry IndustryIndustry business area amounted to SEK 252m (87) for the quarter, and the adjusted EBITA margin was 11% (7). This significant improvement in earnings was attributable to acquired EBITA in Semcon and Knightec and to the fact that all other companies in the business area improved their earnings in the quarter compared with the earlier-period. Net sales in Industry amounted to SEK 2,285m for the quarter, up 79%. This increase was primarily attributable to acquisitions and to growth in all other companies. Organic growth amounted to 7% and the structural effect amounted to 66%. The collaboration between Knightec and Semcon developed quickly, with the companies working together to create a stronger and more complete offering, which resulted in new business during the quarter.

HL Display signed agreements for three acquisitions in the quarter. HL Display has since its acquisition journey started in 2021 acquired seven companies which have generated, and will continue to generate, major industrial synergies.

Sustainability and partnerships Sustainability and partnerships

Corporate Sustainability Reporting Directive (CSRD) is part of EU's agenda for sustainable financing and a key component for meeting the targets of the European Green Deal. As the new directive is implemented the requirements for sustainability reporting will increase. Going forward, sustainability reporting will require greater transparency and comparability. Ratos plans to devote a great deal of focus to this area during the year.

It is gratifying to see new partnerships developing between the companies in the Group – in specific business areas and between the companies in general. Earlier, I mentioned the ongoing collaboration between Semcon and Knightec. Another example is HL Display and Speed Group, which have entered into a long-term partnership agreement concerning logistics services.

Overall, Ratos's performance in the quarter was significantly better than I dared to hope for a year ago when the full-scale invasion of Ukraine and all of its consequences became a reality. The strength of our management model, based on follow-up and earnings generation in a highly decentralised group, is becoming clear as our companies create synergies between themselves, on their own initiative. However, our progress towards becoming a group focused on infrastructure and technological solutions is moving somewhat more slowly than planned due to significantly weaker M&A and capital markets. Ratos continued to deliver improved earnings despite a turbulent global backdrop.

Jonas Wiström, President and CEO

Group performance Q1 2023

Net sales

Net sales in the period amounted to SEK 7,817m (6,220), up 26% year on year. Organic sales growth in the period amounted to 8%. Construction & Services and Industry reported organic sales growth, while Consumers' sales declined organically. Currency effects had a positive impact of SEK 6m (0%) on net sales. The structural effect amounted to SEK 1,083m (17%) and was mainly attributable to the acquisitions of Semcon and Knightec in the Industry business area and NVBS in the Construction & Services business area.

EBITA

Adjusted EBITA during the quarter amounted to SEK 324m (253). The adjusted EBITA margin was 4.1% (4.1). The change in earnings was due to higher earnings in the Industry business area and pertains to organic EBITA growth as well as acquired EBITA through Semcon and Knightec. Construction & Services was impacted by a seasonally weak quarter, with Aibel reporting low earnings due to the phase of its projects. Earnings in the Consumer business area declined during the quarter, primarily due to lower sales in Plantasjen. Construction & Services was impacted in the quarter by non-recurring costs of SEK 21m for efficiency programmes in Speed Group.

Financial performance Q1 2023

	Net sales				EBITA, adjusted
SEKm	Q1 2023	Q1 2022	Change %	Rolling	LTM Full Year Full Year Full Year 2022	Q1 2023	Q1 2022	Change %	Rolling	LTM Full Year Full Year 2022
Construction & Services	4,515	3,668	23%	17,749	16,901	284	292	-2%	1,269	1,276
Consumer	1,017	1,279	-21%	6,724	6,986	-162	-75	-115%	337	424
Industry	2,285	1,280	79%	7,007	6,002	252	87	pos	610	445
Group costs						-50	-50	1%	-179	-179
Elimination of internal sales	-0	-7		-8	-15
Net sales and adjusted EBITA Net and adjusted EBITA	7,817 7,817	6,220	26%	31,472	29,875	324	253	28%	2,038	1,966
Revaluation and gain/loss listed shares Items affecting comparability Amortisation and impairment of intangible assets in							-100 -130	100% 100%	-18	-118 -130
connection with company acquisitions						-39	-17	-127%	-122	-100
Consolidated operating profit						285	5	pos	1,898	1,618
Finance net						-195	-103	-88%	-531	-440
Profit/loss before tax						90	-98	pos	1,367	1,178
Tax						-33	-41	18%	-292	-299
Profit/loss for the period						57	-139 57 -139	141%	1,075	879

1,000 1,200 1,400 1,600 1,800 2,000 2,200 2,400

Adjusted EBITA, quarterly and LTM, SEKm

Adjusted EBITA, LTM, SEKm

Sales bridge Q1

	Net sales
2022, SEKm	6,220
Structure, %	17%
Currency, %	0%
Other, %	0%
Organic growth, %	8%
Total, %	26%
2023, SEKm	7,817

Net sales, LTM, SEKbn

		Growth %				27.4	29.9	31.5
			22.6	24.3	25.8
20.7 -1.3%	21.1 2.3%	21.6 2.4% 4.2%			7.9% 5.9%	6.5% 8.9%		5.3 %
Q1 2021	Q2	Q3	Q4	Q1 2022	Q2	Q3	Q4	Q1 2023

Construction & Services

Net sales

Net sales for the first quarter amounted to SEK 4,515m, a year-on-year increase of 23%. Of this increase, 19% was driven by strong organic growth of services in construction and critical infrastructure and 6% was driven by completed acquisitions.

The business area is well equipped with record-breaking order books in an uncertain market. Both projects in progress and the order books in the construction operations contain a large share of partnering projects and have very limited exposure to the housing market.

EBITA

EBITA for the business area amounted to SEK 284m (292) for the quarter, down 2%, and the EBITA margin was 6.3% (8.0). The decline in earnings was attributable to lower earnings generation in Aibel due to the phase of its projects and to non-recurring costs of SEK 21m for efficiency programmes in Speed Group.

Financial performance

	Q1	Q1	Change	LTM	Full Year Full	Change
SEKm	2023 2023	2022 2022	%	Rolling Rolling	2022	%
Net sales	4,515	3,668	23%	17,749	16,901	5%
EBITA, adjusted	284	292	-2%	1,269	1,276	-1%
EBITA %, adjusted	6.3%	8.0%		7.1%	7.6%
EBITA	284	292	-2%	1,269	1,276	-1%
EBITA %	6.3%	8.0%		7.1%	7.6%
Operating profit	264	276	-4%	1,188	1,199	-1%
Operating profit %	5.9%	7.5%		6.7%	7.1%
Cash flow from operating activities1⁾	521	182	pos	1,910	1,691	13%
Return on capital employed excl. financial leasing %	16%	25%		16%	16%
Average number of employees					7,816

1⁾ Cash flow metric is changed from 1 January 2023 retroactively, for more information see page 15 "Note 1 Accounting principles".

Sales bridge, net sales

Q1
2023
3,668
6%
-2%
0%
19%
23%
4,515

EBITA, LTM, SEKm Net sales, LTM, SEKm

The Construction & Services business area's focus is on building and maintaining a sustainable society. The service offering ranges from constructing new sustainable buildings and maintaining critical infrastructure to energy supply and managing material flows. The business area's operations benefit from current social developments and trends such as urbanisation, growing populations, the need for renewable energy and efficient resource management. The business area comprises the companies Aibel, airteam, HENT, NVBS, Presis Infra, Speed Group and SSEA Group.

Consumer

Net sales

Net sales in the business area for the first quarter amounted to SEK 1,017m (1,279), down 21% year on year. Organic growth was negative and amounted to -20%. Plantasjen's net sales for the first quarter amounted to SEK 542m, down 18% year on year. Plantasjen's sales were negatively impacted by adverse weather in March and a general decline in consumer purchasing power.

EBITA

EBITA for the business area amounted to SEK -162m (-75) for the quarter, and the EBITA margin was -16.0% (-5.9). The decline in earnings was attributable to weaker earnings in Plantasjen, which reported EBITA of SEK -215m compared with SEK -103m in the year-earlier period. Plantasjen's earnings for the quarter were primarily negatively impacted by the adverse weather in March. Other companies in the business area improved their earnings during the quarter compared with the year-earlier period.

Financial performance

	Q1	Q1	Change	LTM	Full Year Full	Change
SEKm	2023 2023	2022 2022	%	Rolling Rolling	2022 2022	%
Net sales1⁾	1,017	1,279	-21%	6,724	6,986	-4%
EBITA, adjusted1⁾	-162	-75	-115%	337	424	-20%
EBITA %, adjusted	-16.0%	-5.9%		5.0%	6.1%
EBITA	-162	-75	-115%	337	424	-20%
EBITA %	-16.0%	-5.9%		5.0%	6.1%
Operating profit/loss	-163	-77	-114%	333	420	-21%
Operating profit/loss %	-16.1%	-6.0%		4.9%	6.0%
Cash flow from operating activities2⁾	-276	-507	46%	134	-97	pos
Return on capital employed excl. financial leasing %	4%	18%		4%	6%
Average number of employees					1,609
1⁾ Refer to page 19 for Plantasjens Net sales and EBITA, adjusted.

2⁾ Cash flow metric is changed from 1 January 2023 retroactively, for more information see page 15 "Note 1 Accounting principles".

EBITA, LTM, SEKm

Sales bridge, net sales

Q1
2023
1,279
0%
0%
-20%
-21%
1,017

The Consumer business area works to simplify and improve life for consumers. To us, simplifying and improving life means, for example, making life healthier and more sustainable, and saving time. The business area consists of companies that are well positioned in relation to strong prevailing macrotrends such as spending holidays at home, growing interest in outdoor activities and interior design and horticulture. The business area comprises the companies KVD, Oase Outdoors and Plantasjen.

Industry

Net sales

Net sales in the business area for the first quarter amounted to SEK 2,285m (1,280), up 79%. The increase was attributable to the acquired companies Semcon and Knightec and to growth in all other companies. Organic growth amounted to 7% for the quarter. The structural effect amounted to 66% and pertained to the acquisitions of Semcon and Knightec.

EBITA

Adjusted EBITA for the business area amounted to SEK 252m (87) for the quarter, up 190% year on year. The adjusted EBITA margin was 11.0% (6.8). The improvement in earnings was mainly attributable to the acquired companies Semcon and Knightec. All companies in the business area improved their earnings during the quarter compared with the year-earlier period.

Financial performance

	Q1	Q1	Change	LTM	Full Year Full	Change
SEKm	2023 2023	2022 2022	%	Rolling Rolling	2022 2022	%
Net sales	2,285	1,280	79%	7,007	6,002	17%
EBITA, adjusted	252	87	pos	610	445	37%
EBITA %, adjusted	11.0%	6.8%		8.7%	7.4%
EBITA	252	-43	pos	610	315	94%
EBITA %	11.0%	-3.4%		8.7%	5.3%
Operating profit/loss	234	-44	pos	581	303	92%
Operating profit/loss %	10.2%	-3.4%		8.3%	5.1%
Cash flow from operating activities1⁾	271	79	pos	475	284	67%
Return on capital employed excl. financial leasing %	9%	7%		9%	9%
Average number of employees					5,659

1⁾ Cash flow metric is changed from 1 January 2023 retroactively, for more information see page 15 "Note 1 Accounting principles".

Adjusted EBITA, LTM, SEKm

Sales bridge, net sales

	Q1
	2023
2022, SEKm	1,280
Structure, %	66%
Currency, %	6%
Other, %	0%
Organic growth, %	7%
Total, %	79%
2023, SEKm	2,285

Net sales, LTM, SEKm

The Industry business area develops market-leading industrial companies that are based in the Nordics but export to the entire world. The companies are active in more than 30 countries across five continents. The companies in the Industry business area are exposed to high-growth markets such as energy-efficient lighting, lightweight material, renewable energy, grocery, product development in Swedish industry and pharmacology. The business area comprises the companies Diab, HL Display, Knightec, LEDiL, Semcon, and TFS Healthcare.

Financial outlook, Ratos Group

Cash flow Q1

Cash flow for the quarter amounted to SEK -405m (-465), of which cash flow from operating activities accounted for SEK 507m (-379). Cash flow from investing activities amounted to SEK -163m (-126) and cash flow from financing activities to SEK -749m (41).

The change in cash flow for the quarter was mainly attributable to operating activities, with operating profit amounting to SEK 285m (5), dividends received from associates amounting to SEK 122m (-) and changes in working capital amounting to SEK -54m (-581). Financing activities were mainly impacted by the change in external loans, which amounted to SEK -730m (435) for the quarter.

Tax Q1

The tax expense for the Group amounted to SEK -33m (-41) and profit before tax to SEK 90m (-98). The effective tax rate for the quarter was thus 37% (negative), primarily because tax loss carry-forwards in certain countries were not capitalised.

Financial position and leverage

The Group's cash and cash equivalents at the end of the period amounted to SEK 2,072m (2,532 at 31 December 2022) and interest-bearing net debt including financial lease liabilities totalled SEK 10,614m (10,468 at 31 December 2022). Including financial lease liabilities, the Group's leverage at the end of the period amounted to 3.2x (3.5x at 31 December 2022). The Group's interest-bearing net debt excluding financial lease liabilities amounted to SEK 4,826m (4,798 at 31 December 2022). Leverage excluding financial lease liabilities at the end of the period amounted to 2.2x (2.5x at 31 December 2022). The total translation effect of currency for interest-bearing liabilities amounted to approximately SEK -200m, of which approximately SEK -70m related to liabilities to credit institutions and approximately SEK -130m to financial lease liabilities.

At the end of the period, the Group's interest-bearing liabilities to credit institutions amounted to SEK 6,316m (6,869 at 31 December 2022).

Ratos's equity

At 31 March 2023, Ratos's equity (attributable to owners of the parent) amounted to SEK 11,670m (12,289 at 31 December 2022), corresponding to SEK 36 (38) per share outstanding.

Parent company

The parent company's operating loss amounted to SEK -49m (-34) for the period. The parent company's profit before tax amounted to SEK 132m (-21) and was positively impacted by dividends from Group companies of SEK 192m. Cash and cash equivalents in the parent company amounted to SEK 956m (410 at 31 December 2022).

The parent company has a related party relationship with its Group companies. For more information, refer to Note 28 in the 2022 Annual Report. No new types of significant transactions were carried out with related parties during the year compared with those presented in the most recent Annual Report.

Ratos share data

Earnings per share amounted to SEK -0.09 (-0.66) before dilution and SEK -0.09 (-0.66) for the period. Profit for the period attributable to owners of the parent was negative and was impacted by lower earnings in Plantasjen and Aibel. The closing price for Ratos's Class B shares on 31 March 2023 was SEK 31.62. The total return on Class B shares in the first quarter amounted to -21.7%, compared with the performance for the SIX Return Index, which was 8.7%.

Number of shares and

repurchased/sold shares

At the beginning of the year, Ratos owned no treasury shares. No new shares were issued during the period. At 31 March 2023, the total number of shares and shares outstanding in Ratos (Class A and B shares) amounted to 325,898,988 and the number of votes to 108,763,253.

Resolutions at the 2023 Annual General Meeting

Information on resolutions passed at the 2023 Annual General Meeting is available at www.ratos.com. The Annual General Meeting resolved on a dividend for the 2022 financial year of SEK 0.84 (1.20) per Class A and B share. The dividend was paid through Euroclear Sweden on 4 April 2023. The Meeting resolved, in accordance with the proposal from the Board, to introduce the long-term incentive programme 2023/2027 for the CEO and other key personnel, which will include convertibles and warrants.

Significant events during and after the

end of the quarter

HL Display, which is part of the Industry business area, acquired the Swedish company Akriform Plast AB on 15 February. The company is a producer of bulk bins and custom-made solutions for grocery retail and branded goods suppliers throughout the Nordics.

On 3 April, HL Display acquired the German company Oechsle Display Systems, a manufacturer of communication and shelf management solutions, and werba print & display, a provider of print and display solutions.

During the quarter, Ratos initiated the process for a compulsory buy-out of the remaining shares in Semcon. The process is expected to be completed in the second quarter of 2023.

Interest-bearing net debt and leverage1), SEKm

Financial statements

Consolidated income statement

	Q1	Q1	Full Year
SEKm	2023 2023	2022 2022	2022
Net sales	7,817	6,220	29,875
Other operating income	31	44	155
Cost of goods and services sold	-4,393	-3,822	-18,186
Employee benefit costs	-2,102	-1,492	-6,494
Depreciation/amortisation and impairment of property, plant and equipment and intangible assets and right-of-use assets	-376	-329	-1,340
Other external costs	-762	-602	-2,529
Capital gain/loss from Group companies		-0	-0
Share of profit/loss from investments recognised according to the equity method	69	88	255
Revaluation and capital gain/loss listed shares		-100	-118
Operating profit	285	5	1,618
Net financial items1⁾	-195	-103	-440
Profit/loss before tax	90	-98	1,178
Income tax	-33	-41	-299
Profit/loss for the period	57 57	-139 -139	879
Profit/loss for the period attributable to:
Owners of the parent	-28	-215	548
Non-controlling interests	85	76	331
Earnings per share, SEK
- basic earnings per share	-0.09	-0.66	1.69
- diluted earnings per share	-0.09	-0.66	1.68

1⁾ See page 20 for a specification of the finance net

Consolidated statement of comprehensive income

	Q1	Q1	Full Year
SEKm	2023 2023	2022 2022	2022
Profit/loss for the period	57 57	-139 -139	879
Items that will not be reclassified to profit or loss:
Remeasurement of defined benefit pension obligations, net			46
Tax attributable to items that will not be reclassified to profit or loss			-4
			42
Items that may be reclassified subsequently to profit or loss:
Translation differences for the period	-342	236	392
Change in hedging reserve for the period	5	-10	-9
Tax attributable to items that may be reclassified subsequently to profit or loss	-1	2	1
	-339 -339	228 228 228	384
Other comprehensive income for the period	-339 -339 -339	228 228 228	426 426
Total comprehensive income for the period	-282 -282 -282	89 89 89	1,305 1,305
Total comprehensive income for the period attributable to:
Owners of the parent	-280	-24	913
Non-controlling interest	-2	113	392

Summary consolidated statement of financial position

SEKm	2023-03-31 2023-03-31	2022-03-31	2022-12-31
ASSETS
Non-current assets
Goodwill	14,580	10,353	14,811
Other intangible non-current assets	2,027	1,424	2,096
Property, plant and equipment	1,726	1,525	1,725
Right-of-use assets	5,228	5,199	5,100
Financial assets	1,410	2,203	1,675
Deferred tax assets	376	318	357
Total non-current assets	25,348 25,348	21,022 21,022	25,764
Current assets
Inventories	2,661	2,531	2,477
Accounts receivable	3,640	3,095	3,699
Current receivables	2,691	1,115	2,703
Cash and cash equivalents	2,072	1,836	2,532
Total current assets	11,063 11,063	8,577 8,577	11,411
Total assets	36,411 36,411	29,599 29,599	37,175
EQUITY AND LIABILITIES
Equity including non-controlling interests	13,099 13,099	12,858 12,858	13,788
Non-current liabilities
Interest-bearing liabilities	11,358	7,458	11,318
Non-interest bearing liabilities	1,669	910	1,668
Pension provisions	59	75	60
Other provisions	45	38	44
Deferred tax liabilities	741	442	742
Total non-current liabilities	13,871 13,871	8,924 8,924	13,832
Current liabilities
Interest-bearing liabilities	1,374	1,562	1,723
Non-interest bearing liabilities	7,586	5,711	7,393
Provisions	480	544	439
Total current liabilities	9,440 9,440	7,817 7,817	9,555
Total liabilities	23,312 23,312	16,741 16,741	23,387
Total equity and liabilities	36,411 36,411	29,599 29,599	37,175

Summary statement of changes in consolidated equity

	2023-03-31 2023-03-31 2022-03-31 2022-03-31 2022-12-31
SEKm	Owners of the parent	Non controlling interest	Total equity	Owners of the parent	Non controlling interest	Total equity	Owners of the parent	Non controlling interest	Total equity
Opening equity	12,289	1,499	13,788	11,940	1,387	13,326	11,940	1,387	13,326
Total comprehensive income for the period	-280	-2	-282	-24	113	89	913	392	1,305
Dividends	-274	-61	-335	-390	-147	-537	-390	-262	-651
Non-controlling interests' share of capital contribution and new issue		0	0					-0	-0
Transfer of treasury shares				2		2	2		2
Conversion of convertible loan to shares							33		33
The value of the conversion option of the convertible debentures							7		7
Option premiums							9		9
Put options, future acquisitions from non-controlling interests	-64	32	-33	-2	-21	-23	-227	-567	-794
Acquisition of shares in subsidiaries from non-controlling interests	-1	-39	-40				4	-10	-6
Disposal of shares in subsidiaries to non-controlling interests				-1	2	1	-1	36	35
Non-controlling interests at acquisition					0	0		522	522
Closing equity equity	11,670 11,670	1,429	13,099	11,525	1,333	12,858	12,289	1,499	13,788

Summary consolidated statement of cash flows

	Q1	Q1	Full Year
SEKm	2023 2023	2022 2022	2022
Operating activities
Operating profit	285	5	1,618
Adjustment for non-cash items	423	457	1,227
	708	462	2,845
Received dividends from associated companies	122
Interest and financial items, net	-138	-153	-476
Income tax paid	-132	-107	-301
Cash flow from operating activities before change in working capital n capital	560 560	202	2,068
Cash flow from change in working capital
Increase (-)/Decrease (+) in inventories	-330	-641	-487
Increase (-)/Decrease (+) in operating receivables	90	-179	-1,062
Increase (+)/Decrease (-) in operating liabilities	187	238	913
Cash flow from operating activities	507 507	-379 -379	1,431
Investing activities
Acquisition, group companies	-48	-53	-4,542
Disposal, group companies		5	5
Investments and disposal, intangible assets/property, plant and equipment	-114	-78	-405
Investments and disposal, financial assets	-0		685
Cash flow from investing activities	-163 -163	-126 -126	-4,257
Financing activities
Non-controlling interests' share of issue/capital contribution	0		0
Transfer of treasury shares		2	2
Option premiums paid			17
Repurchase/final settlements options	-0		-11
Acquisition and disposal of shares in subsidiaries from non-controlling interests	-4	1	-0
Dividends paid		-390	-390
Dividends paid, non-controlling interests	-15	-8	-248
Borrowings	777	852	9,957
Amortisation of loans	-1,271	-192	-5,519
Amortisation of financial lease liabilitities	-236	-225	-816
Cash flow from financing activities	-749 -749	41 41	2,991
Cash flow for the period	-405 -405	-465 -465	165
Cash and cash equivalents at the beginning of the period	2,532	2,230	2,230
Exchange differences in cash and cash equivalents	-56	72	138
Cash and cash equivalents at the end of the period	2,072	1,836	2,532

Summary parent company income statement

SEKm	Q1 2023 2023	Q1 2022 2022	Full Year Year 2022
Other operating income	0	7	15
Administrative expenses	-49	-41	-149
Depreciation of property, plant and equipment	-0	-0	-1
Operating profit/loss	-49 -49	-34 -34	-135
Gain from sale of participating interests in group companies			110
Dividends from group companies	192		102
Net financial items1⁾	-12	14	94
Profit/loss after financial items	132 132	-21 -21	172
Group contribution, recieved			92
Profit/loss before tax	132 132	-21 -21	264
Income tax	14	3	56
Profit/loss for the period	145 145	-18 -18	320

1⁾ See page 20 for a specification of the finance net

Parent company statement of comprehensive income

SEKm	Q1 2023 2023	Q1 2022 2022	Full Year Full Year 2022
Profit/loss for the period	145 145	-18 -18	320
Other comprehensive income for the period	0	0	0
Total comprehensive income for the period	145 145	-18 -18	320

Summary parent company balance sheet

SEKm	2023-03-31 2023-03-31	2022-03-31 2022-03-31 2022-03-31	2022-12-31 2022-12-31
ASSETS
Non-current assets
Property, plant and equipment	4	3	3
Financial assets	10,754	7,984	10,150
Receivables from group companies	4,875	4,986	6,180
Deferred tax assets	144	77	130
Total non-current assets	15,776 15,776	13,050 13,050	16,464
Current assets
Current receivables	47	59	48
Receivables from group companies	2,728	1,238	1,741
Cash and cash equivalents	956	474	410
Total current assets	3,730 3,730	1,771 1,771	2,199
Total assets	19,507 19,507	14,821 14,821	18,663
EQUITY AND LIABILITIES
Equity	9,846 9,846	9,588 9,588	9,975
Non-current liablities
Interest-bearing liabilities, group companies	81	948	206
Interest-bearing liabilities	6,178	2,116	6,237
Convertible debentures	79	76	79
Deferred tax liabilities	3	2	3
Total non-current liabilities	6,341 6,341	3,142 3,142	6,524
Current provisions	95	70	86
Current liabilities
Interest-bearing liabilities, group companies	2,781	1,318	1,464
Interest-bearing liabilities	100	652	590
Non-interest bearing liabilities, group companies	0
Non-interest bearing liabilities	344	50	25
Total current liabilities	3,225 3,225	2,020 2,020	2,079
Total equity and liabilities	19,507 19,507	14,821 14,821	18,663

Summary parent company statement of changes in equity

SEKm	2023-03-31 2023-03-31	2022-03-31 2022-03-31	2022-12-31
Opening equity	9,975 9,975	9,994 9,994	9,994
Comprehensive income for the period	145	-18	320
Dividends	-274	-390	-390
Transfer of treasury shares		2	2
Conversion of convertible loan to shares			33
The value of the conversion option of the convertible debentures			8
Deferred tax, conversion option			-2
Option premiums			9
Closing equity	9,846 9,846	9,588 9,588	9,975

Note 1 Accounting principles

Ratos's consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and associated interpretations (IFRIC), as endorsed by the EU. This interim report was prepared in accordance with IAS 34, Interim Financial Reporting, and applicable provisions in the Swedish Annual Accounts Act. The parent company also applies RFR 2 Accounting for Legal Entities.

As of 1 January 2023, Ratos has changed the presentation of its cash flow statement to harmonise its reporting against comparable companies. The difference entails that, as of 1 January 2023, interest rates and other incoming and outgoing financial payments are classified as operating activities rather than investing and financing activities, as was previously the case. The operation key figure "Cash flow from operations" has been replaced with "Cash flow from operating activities" in the tables for the Group and the business areas. All comparative figures have been changed in accordance with this amendment, and in all other respects, the reporting and measurement principles are unchanged compared with those applied in Ratos's 2022 Annual Report. The new and revised IFRS standards which came into force in 2023 have not had any material effect on the Ratos Group's financial statements.

Amounts are presented in SEK million (SEKm) unless otherwise stated. Rounding may apply in tables and calculations, which means that the stipulated total amounts are not always an exact amount of the rounded amounts.

Note 2 Risks and uncertainties

Ratos is a business group that makes it possible for independent mid-sized companies to develop more rapidly by being a part of something larger. A focus on people, leadership, culture and values is a key component of Ratos. These operations include inherent risks attributable to both Ratos and the companies. These mainly comprise market, operational and transaction risks and can include both general risks, such as external factors and macroeconomic development, as well as company and sector-specific risks.

The financial risks consist of liquidity risk, interest rate risk, credit risk and currency risk. There are several financial risks to which most of the companies are exposed, primarily related to loans, trade receivables, trade payables and derivative instruments. The risks to which the companies are exposed are managed by each individual company.

Ratos is exposed to financial risks, mainly in terms of value changes in the companies and liquidity risk. Ratos's future earnings development is dependent to a large extent on the success of the underlying companies, which in turn is dependent on, among other things, how successful each company's management group and board of directors are at developing the company and implementing value-adding initiatives.

A more detailed description of the material risks and uncertainties to which the Group and the parent company are exposed is provided in the Directors' Report and in Notes 25 and 31 in the 2022 Annual Report.

Note 3 Financial instruments

Ratos applies fair value measurements to a limited extent and mainly for derivatives, synthetic options, contingent considerations and put options. These items are measured according to levels two and three, respectively, in the fair value hierarchy.

In the statement of financial position at 31 March 2023, the net value of derivatives, level 2, amounted to SEK 7m (1 at 31 December 2022), of which SEK 14m (7 at 31 December 2022) was recognised as an asset and SEK 7m (6 at 31 December 2022) as a liability.

In the statement of financial position at 31 March 2023, the total value of financial instruments measured at fair value in accordance with level 3 was SEK 2,105m (2,058 at 31 December 2022). The change is presented in the table below.

Change, level 3	Synthetic options options		Call and put Call and put options options		Contingent considerations Contingent considerations
SEKm	2023-03-31 2023-03-31	2022-12-312022-12-31 2022-12-31	2023-03-31 2023-03-31 2023-03-31	2022-12-31 2022-12-312022-12-31	2023-03-31 2023-03-31 2023-03-31	2022-12-31 2022-12-31
Opening balance	153	144	1,669	830	236	194
Recognised in comprehensive income	24	18	-34	44	0	12
Recognised against equity			33	221
Newly issued/subsequent expenditure		2		566	47	49
Acquisitions, Group companies				8		26
Settlements	0	-11			-23	-46
Closing balance	176	153	1,668	1,669	260	236

Note 4 Acquired and divested companies

Acquisitions within business areas

Construction & Services

In 2022, NVBS acquired the companies Ratatek and TKBM Entreprenad AB. The preliminary acquisition analyses during the first quarter of 2023 were updated after the final acquisition balances were determined, which entailed an adjustment to the purchase price of SEK 31m.

In 2022, SSEA Group acquired the company Kiruna Målbygg AB. The preliminary acquisition analysis during the first quarter of 2023 was updated after the final acquisition balance was determined, which entailed an adjustment to the purchase price of SEK 1m.

Consumer

On 2022 March, Plantasjen acquired Flyinge Plantshop AB. The preliminary acquisition analysis during the first quarter of 2023 was updated after the final acquisition balance was determined, which entailed an adjustment to the purchase price of SEK 3m.

Industry

HL Display, which is part of the Industry business area, acquired the Swedish company Akriform Plast AB on 15 February. The company is a producer of bulk bins and custom-made solutions for grocery retail and branded goods suppliers throughout the Nordics. The company had sales of SEK 85m for the last 12 months as per 31 March 2023.

In the first quarter of 2023, TFS conducted a minor acquisition of assets and liabilities in its subsidiary in Israel. The total purchase price amounted to EUR 0.2m.

The preliminary acquisition analyses for the add-on acquisitions carried out during the year and updated items pertaining to established acquisition analyses for previous acquisitions are presented below.

	SEKm
Intangible assets	3
Property, plant and equipment	10
Right-of-use assets	10
Financial assets	0
Trade receivables	14
Current assets	10
Cash and cash equivalents	3
Non-current liabilities	-2
Current liabilities	-23
Net identifiable assets and liabilities identifiable assets and liabilities	24 24
Goodwill	39
Purchase price	63
of which, paid in cash	28
of which, contingent consideration	35

Acquisition of Semcon

In 2022, Ratos acquired Semcon AB (publ) through a public offer. The preliminary acquisition analysis during the first quarter of 2023 was updated after the final acquisition balance was determined. No material changes were identified.

During the quarter, Ratos initiated the process for a compulsory buy-out of the remaining shares in Semcon. The process is expected to be completed in the second quarter of 2023.

Final acquisition analysis Semcon Final analysis Semcon

	SEKm
Intangible assets	427
Property, plant and equipment	23
Right-of-use assets	66
Deferred tax asset	3
Trade receivables	306
Current assets	249
Cash and cash equivalents	203
Non-controlling interest	-36
Deferred tax liability	-157
Non-current liabilities and provisions	-36
Current liabilities and provisions	-440
Net identifiable assets and liabilities liabilities	609 609
Goodwill	2,125
Purchase price	2,734
of which, paid in cash	2,734

Key figures

For definitions, see page 21

	Q1	Q1	Full Year Full Year
SEKm	2023 2023	2022 2022	2022
Leverage excl. financial leasing	2.2x	0.9x	2.5x
Leverage	3.2x	2.7x	3.5x
Equity ratio, %	36.0	43.4	37.1
Return on equity, %	6.1	6.3	4.6
Return on capital employed excl. financial leasing, %	10.0	11.3	10.2
Return on capital employed, %	8.6	9.2	8.6
⁾ Key figures per share1 Key per
Total return, %	-21.7	-13.6	-26.6
Dividend yield, %			2.0
Market price, SEK	31.62	48.84	41.49
Dividend, SEK			0.84
Equity attributable to owners of the parent, SEK2⁾	35.81	35.49	37.71
Basic earnings per share, SEK	-0.09	-0.66	1.69
Diluted earnings per share, SEK	-0.09	-0.66	1.68
Average number of ordinary shares outstanding:
– before dilution	325,898,988	324,685,348	325,223,889
– after dilution	326,024,625	325,048,043	326,442,359
Total number of registered shares	325,898,988	324,738,820	325,898,988
Number of shares outstanding3⁾	325,898,988	324,738,820	325,898,988
– of which, Class A shares	84,637,060	84,637,060	84,637,060
– of which, Class B shares	241,261,928	240,101,760	241,261,928

1⁾ Relates to Class B shares unless specified otherwise

2⁾ Equity attributable to owners of the parent divided by the number of outstanding ordinary shares at the end of the period

3⁾ After redemption and transfer of Ratos own shares

Reconciliations between alternative performance measures (APM) and IFRS

Ratos applies financial measures that are not defined in IFRS but are so-called alternative performance measures (APMs). The alternative performance measures presented are considered to be valuable supplementary information for analysts and other stakeholders for the evaluation and assessment of the Group's financial performance and position. Ratos's definitions of these performance measures may differ from other companies and, accordingly, these are not always comparable with similar performance measures used in other companies.

The following reconciliations and accounts pertain to subcomponents included in the material alternative performance measures used in this report. Reconciliation is made against the most reconcilable item, subtotal or total provided in the financial statements for the corresponding period. Definitions are available at www.ratos.com and on page 21 of this report.

Organic growth

	Q1	Q1	Full Year Full Year
SEKm	2023 2023	2022 2022	2022
Growth Net Sales, %	26% 26%	40% 40%	32%
Net sales	7,817 7,817	6,220 6,220	29,875
Acquired net sales	1,083	1,102	4,629
Effects from change in currency	6	209	914
Other		-3	-39
Net sales, adjusted	6,730 6,730	4,909 4,909	24,371
Divested net sales in the comparison period		1	7
Net sales, adjusted in the comparison period	6,220 6,220	4,431 4,431	22,544
Elimination of internal net sales	0	-7	-15
Organic growth	511 511	485 485	1,841
Organic growth, %	8%	11%	8%

EBITDA, EBITA and operating profit

	Q1	Q1	Full Year Year
SEKm	2023 2023	2022 2022	2022
EBITDA	661 661	334 334	2,958
Depreciations and impairment	-337	-312	-1,240
EBITA	324	22	1,718
Revaluation and capital gain/loss listed shares		-100	-118
Restructuring costs		-130	-130
Adjusted EBITA	324	253	1,966
Amortisation and impairment of intangible assets in connection with company
acquisitions	-39	-17	-100
Operating profit	285	5	1,618

Interest-bearing net debt

SEKm	2023-03-31 2023-03-31	2022-03-31 2022-03-31 2022-03-31	2022-12-31
Interest-bearing liabilities, other	6,943	3,325	7,371
Provisions for pensions	59	75	60
Interest-bearing assets	-106	-78	-101
Cash and cash equivalents	-2,072	-1,836	-2,532
Interest-bearing net debt excl. financial leasing	4,826 4,826	1,485 1,485	4,798
Financial leasing liabilities	5,789	5,696	5,670
Interest-bearing net debt incl. financial leasing	10,614 10,614	7,181 7,181	10,468

Segments by quarter, summary

	Q1	Q1	Q2	Q3	Q4	Full Year
Net sales, SEKm	2023	2022 2022	2022 2022	2022	2022	2022
Construction & Services	4,515	3,668	4,098	4,059	5,077	16,901
Consumer	1,017	1,279	3,018	1,540	1,148	6,986
- whereof Plantasjen	542	661	2,118	887	740	4,407
Industry	2,285	1,280	1,310	1,441	1,971	6,002
Elimination of internal net sales	0	-7	-6	-2	0	-15
Ratos group	7,817 7,817	6,220 6,220	8,420	7,039	8,195	29,875
	Q1	Q1	Q2	Q3	Q4	Full Year
EBITDA, SEKm	2023	2022 2022	2022 2022	2022	2022	2022
Construction & Services	383	374	369	410	493	1,646
Consumer	-15	62	799	162	-42	982
Industry	341	178	142	195	239	754
Revaluation and capital gain/loss listed shares		-100	-18			-118
Items affecting comparability		-130				-130
Group costs	-49	-49	-53	-28	-45	-175
Ratos group	661 661	334 334	1,239	739	646	2,958
	Q1	Q1	Q2	Q3	Q4	Full Year
EBITA, adjusted, SEKm	2023	2022 2022	2022 2022	2022	2022	2022
Construction & Services	284	292	278	313	394	1,276
Consumer	-162	-75	664	25	-189	424
- whereof Plantasjen	-215	-103	565	6	-142	325
Industry	252	87	76	123	160	445
Group costs	-50	-50	-54	-29	-46	-179
Ratos group	324	253	963	432	318	1,966
	Q1	Q1	Q2	Q3	Q4	Full Year
Operating profit/loss, SEKm	2023	2022	2022	2022	2022	2022
Construction & Services	264	276	259	292	373	1,199
Consumer Industry	-163 234	-77 87	662 76	24 118	-191 152	420 433
Revaluation and capital gain/loss listed shares		-100	-18			-118
Items affecting comparability		-130				-130
Group costs	-50	-50	-54	-29	-53	-186
Ratos group	285	5	925	406	282	1,618
	Q1	Q1	Q2	Q3	Q4	Full Year
Profit/loss before tax, SEKm	2023	2022	2022	2022	2022	2022
Construction & Services	224	239	234	257	340	1,070
Consumer	-261	-134	592	-32	-294	132
Industry	191	64	58	94	4	221
Revaluation and capital gain/loss listed shares		-100	-18			-118
Items affecting comparability		-130				-130
Group costs	-64	-37	-42	24	59	4
Ratos group	90	-98	825	343	109	1,178

Specification of net financial items

	Q1	Q1	Change	Full Year
Ratos Group, SEKm	2023 2023	2022 2022	%	2022
Interest income	18	1	pos	15
Interest expense	-81	-17	neg	-124
Interest expense financial leasing	-71	-66	-7%	-266
Net interest	-134	-82	-64%	-375
Net exchange rate effects	-27	0	neg	-9
Other financial items	-34	-22	-53%	-56
Net financial items	-195	-103	-88%	-440

	Q1	Q1 Change		Full Year
Parent company, SEKm	2023 2023	2022 2022	%	2022
Net interest	26	32	-19%	149
Net exchange rate effects	-16	-10	-60%	-19
Other financial items	-22	-8	neg	-36
Net financial items	-12	14	neg	94

Definitions

Dividend yield

Proposed dividend on ordinary shares expressed as a percentage of the Class B share's closing price at the period's last trading day.

Total return

Price development of Class B shares including reinvested dividends (this year's paid dividend) on ordinary shares.

Return on equity

Profit for the period attributable to owners of the parent for the last 12 months divided by average equity attributable to owners of the parent during the five most recent quarters.

Return on capital employed

Adjusted EBITA for the last 12 months as a percentage of average capital employed during the five most recent quarters.

EBITDA

EBITA with depreciation, amortisation and impairment reversed (Earnings Before Interest, Tax, Depreciation and Amortisation).

EBITDA margin

EBITDA expressed as a percentage of net sales.

EBITA

Operating profit before impairment of goodwill as well as amortisation and impairment of other intangible assets that arose in conjunction with company acquisitions and similar transactions (Earnings Before Interest, Tax and Amortisation).

EBITA margin

EBITA expressed as a percentage of net sales.

Equity per share

Equity attributable to owners of the parent divided by the number of outstanding ordinary shares at the end of the period.

Adjusted EBITA

EBITA adjusted for capital gains and the revaluation of listed shares and non-recurring items affecting comparability at the business area level.

Adjusted EBITA margin

Adjusted EBITA expressed as a percentage of net sales.

Cash flow from operating activities

Includes cash flow from operating profit, dividends received from associates, interest and financial items, income tax paid, and changes in working capital.

Average number of employees

Total number of hours worked during the most recent full year restated as full-time positions. Also includes average number of employees in key associates.

Organic growth

Net sales growth in comparable units. The effects of acquisitions, divestments and exchange rate changes are excluded.

Basic earnings per share

Profit for the period attributable to owners of the parent company divided by the average number of outstanding ordinary shares.

Diluted earnings per share

When calculating diluted earnings per share, earnings and the average number of shares are adjusted to take into account the effects of potential ordinary shares, which, for the reported periods, pertain to convertible debt instruments and warrants issued to employees.

Interest-bearing net debt

Interest-bearing liabilities (including financial lease liabilities) and pension provisions minus interest-bearing assets and cash and cash equivalents.

Capital employed

Equity, non-controlling interests and interest-bearing liabilities.

Leverage

Interest-bearing net debt in relation to EBITDA for the last 12 months.

Equity ratio

Reported equity expressed as a percentage of total assets. Non-controlling interests are included in equity.

Last 12-month period

The most recent 12 months.

Investor presentation

27 April 9:00 am Webcast: https://youtube.com/live/LKaop4fJ4Uk

Financial calendar

2023 Interim report Q2 2023 19 July Interim report Q3 2023 23 October

Stockholm, 27 April 2023 Ratos AB (publ)

Jonas Wiström President and CEO

For further information, please contact:

Jonas Wiström, President and CEO, +46 8 700 17 00 Jonas Ågrup, CFO and IR, +46 8 700 17 00 Josefine Uppling, Vice President Communication & Sustainability, +46 8,700 17 00

This report has not been reviewed by Ratos's auditors.

This is information that Ratos AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 7:00 a.m. CEST on April 27, 2023.

Ratos AB (publ) Sturegatan 10, Mailbox 511 SE-114 11 Stockholm Tel: +46 8 700 17 00 www.ratos.com Reg. no. 556008-3585

Ratos is a business group consisting of 16 companies divided into three business areas: Construction & Services, Consumer and Industry. Our business concept is to own and develop companies that are or can become market leaders. We have a distinct corporate culture and strategy – everything we do is based on our core values: Simplicity, Speed in Execution and It's All About People. We enable independent companies to excel by being part of something larger. People, leadership, culture and values are key focus areas.