Q2 2017

Bo AnnvikCEO

Jan ÖhmanCFO

Highlights second quarter 2017

• Strong underlying demand

• Easter-effect

• Positive momentum in most operations, with growth inorder intake, sales and earnings

• Good development in Finland

• Lower volumes for valves for power generation and continued low volumes in the marine segment having an impact on earnings and EBITA-margin

• Two acquisition in the second quarter and four in July

2

Financial summary second quarter 2017

• Order intake rose 15% to 3,952 MSEK (3,422)

• Net sales rose 13% to 3,749 MSEK (3,317)

• EBITA rose 13% to 458 MSEK (405)

• EBITA margin 12.2% (12.2%)

• Profit after tax rose 17% to 303 MSEK (259) corresponding to earnings per share of SEK 2.52 (2.16)

• Return on operating capital 20% (22)

• Net debt/equity ratio 79% (96)

3

Market conditions

• Sweden: ↗

• Finland: ↗

• Norway: oil & gas → other →

• Denmark: →

• UK: →

• Ireland: →

• Benelux: ↗

• Switzerland: →

• Germany: →

• North America: ↗

• Asia: ↗

4

Order intake

• Q2: Order intake rose 15% to 3,952 MSEK (3,422) whereof organic 4%

• YTD 2017: Order intake rose 18% to 7,624 MSEK (6,488) whereof organic 6%

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Q1 -05 Q1 -06 Q1 -07 Q1 -08 Q1 -09 Q1 -10 Q1 -11 Q1 -12 Q1 -13 Q1 -14 Q1 -15 Q1 -16 Q1 -17

Order intakemov 12m

MSEK

Order intakeMSEK

Order intake Order intake moving 12 mos

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Organic Acquisitions Currency Total

MSEK

growth Q2 2017

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18%

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Organic Acquisitions Currency Total

MSEK

growth YTD 2017

Net sales

• Q2: Net sales rose 13% to 3,749 MSEK (3,317) whereof organic 3%

• YTD 2017: Net sales rose 16% to 7,282 MSEK (6,280) whereof organic 5%

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Net salesmov 12m

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Net salesMSEK

Net sales Net sales moving 12 mos

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Organic Acquisitions Currency Total

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Organic Acquisitions Currency Total

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EBITA

• Q2: EBITA rose 13% to 458 MSEK (405) whereof organic 0%EBITA-margin 12.2% (12.2)

• YTD 2017: EBITA rose 21% to 864 MSEK (716) whereof organic 6%

• EBITA-margin 11.9% (11.4)

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EBITAmov 12m

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MSEK

growth YTD 2017

Margins

Gross profit 33.8% of sales (34.4)YTD 33.9% (34.0)

EBITA margin 12.2% of sales (12.2)YTD 11.9% (11.4)

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Net salesMSEK

Net sales GP 2 margin

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Net salesMSEK

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Net salesMSEK

Net sales EBITA-margin EBITA-marginmov 12m

Growth bridge 2017

9

Q2 Q2

MSEK 2017 Organic Acquisitions Currency Total 2016

Order intake 3,952 4% 9% 2% 15% 3,422

Net sales 3,749 3% 8% 2% 13% 3,317

EBITA 458 0% 10% 3% 13% 405

YTD June YTD June

MSEK 2017 Organic Acquisitions Currency Total 2016

Order intake 7,624 6% 10% 2% 18% 6,488

Net sales 7,282 5% 9% 2% 16% 6,280

EBITA 864 6% 13% 2% 21% 716

Acquisitions 2017

Annual sales Possession

1. RS Technics B.V., NL 20 MSEK January

2. Sunflower Medical Ltd, UK 50 MSEK January

3. Ellard Ltd, UK 100 MSEK February

4. Türenfabrik, CH 70 MSEK March

5. Pro-Flex AS, NO 100 MSEK April

6. MaxxVision, DE 80 MSEK April

7. Wennerström Ljuskontroll AB, SE 110 MSEK July

8. Elma Instruments A/S, DK 180 MSEK July

9. Young Black Ltd, UK 110 MSEK July

10. Tubeworkx B.V., NL 50 MSEK July

Total 870 MSEK

10

9,6%10,8%

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Q2 -16 Q3 -16 Q4 -16 Q1 -17 Q2 -17

Engineering & Equipment• Net sales: 452 MSEK (397) +14%, whereof organic +9%

• EBITA: 51 MSEK (38) +34%

• EBITA-margin: 11,3% (9,6)

• Continued growth

• All-time high levels in some of the companies

9,3%

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Q2 -16 Q3 -16 Q4 -16 Q1 -17 Q2 -17

Flow Technology• Net sales: 617 MSEK (591) +4%, whereof organic -2%

• EBITA: 57 MSEK (55) +4%

• EBITA-margin: 9,2% (9,3)

• Positive momentum in most companies

• Continued low invoicing for companies within the the marine segment with impact on earnings and margin

• Acquisitions

13,9%12,5% 12,1% 13,1% 13,1%

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Q2 -16 Q3 -16 Q4 -16 Q1 -17 Q2 -17

Fluids & Mechanical Solutions• Net sales: 487 MSEK (404) +21%, whereof organic 7%

• EBITA: 64 MSEK (56) +14%

• EBITA-margin: 13,1% (13,9)

• Positive demand situation in most segments

• Stable performance

• Acquisitions

11,1% 11,2%11,0%

10,2%

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0100200300400500600700800

Q2 -16 Q3 -16 Q4 -16 Q1 -17 Q2 -17

Industrial Components• Net sales: 706 MSEK (649) +9%, whereof organic +1%

• EBITA: 79 MSEK (72) 10%

• EBITA-margin: 11,2% (11,1)

• Healthy demand

• Acquisitions

15,2%17,3%

15,1% 16,6%19,2%

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Q2 -16 Q3 -16 Q4 -16 Q1 -17 Q2 -17

Measurement & Sensor Technology• Net sales: 385 MSEK (297) +30%, whereof organic +16%

• EBITA: 74 MSEK (45) +64%

• EBITA-margin: 19,2% (15,2)

• Strong momentum in most regions and applicable segments

• Improved margins and changed mix

• Acquisitions

16,0%

14,3%13,8%

15,4%

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Special Products• Net sales: 1 115 MSEK (991) +13%, whereof organic -1%

• EBITA: 153 MSEK (159) -4%

• EBITA-margin: 13,7% (16,0%)

• Stable demand and performance in most companies

• Lower volumes of valves for power generation having an impact on earnings and EBITA-margin

• Acquisitions

Income statement

MSEK Q2 2017 Q2 2016 % Mov 12 m 2016

Net sales 3,749 3,317 13% 13,957 12,955

Gross profit 1,268 1,140 11% 4,678 4,348

% 33.8% 34.4% 33.5% 33.6%

Operating expenses -867 -790 10% -3,302 -3,126

% -23.1% -23.8% -23.7% -24.1%

Other -1 3 32 50

Operating profit 400 353 13% 1,408 1,272

Financial net -16 -22 -71 -78

Earnings before tax (EBT) 384 331 16% 1,337 1,194

% 10.2% 10.0% 9.6% 9.2%

EBITA 458 405 13% 1,632 1,484

% 12.2% 12.2% 11.7% 11.5%

Earnings per share, SEK 2.52 2.16 17% 8.76 7.80

Balance sheet

MSEK 30 Jun 2017 31 Dec 2016 30 Jun 2016

Intangible fixed assets 4,420 38% 4,267 39% 4,010 38%

Tangible and financial fixed assets 1,603 14% 1,568 14% 1,419 14%

Inventories 2,348 20% 2,249 20% 2,111 20%

Receivables 2,890 25% 2,637 24% 2,649 25%

Cash and cash equivalents 351 3% 332 3% 302 3%

Total assets 11,612 11,053 10,491

Equity 4,651 40% 4,399 40% 3,861 37%

Interest-bearing liabilities 4,034 35% 3,960 36% 4,021 38%

Non-interest-bearing liabilities 2,927 25% 2,694 24% 2,609 25%

Total equity and liabilities 11,612 11,053 10,491

Financial key data

MSEKMov 12 m

Q2 2017Mov 12 m

Q2 201631 Dec 2016 31 Dec 2015

EBITA margin, % 11.7 12.0 11.5 12.0

Return on operating capital, % 20 22 20 22

Return on equity, % 24 26 24 26

Interest-bearing net debt, SEK million 3,683 3,719 3,628 2,949

Net debt/equity ratio, % 79 96 82 80

Net debt/EBITDA, times 2.0 2.2 2.2 1.8

Equity ratio, % 40 37 40 40

Key ratios per share

Earnings per share, SEK 8.76 7.89 7.80 7.44

Earnings per share

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Q1 -08 Q1 -09 Q1 -10 Q1 -11 Q1 -12 Q1 -13 Q1 -14 Q1 -15 Q1 -16 Q1 -17

SEK Q2: 17% SEK 2.52 (2.16)YTD: 26% SEK 4.69 (3.73)

Financial targets

18

YTD 2017 Target

Growth 16% >10%

EBITA-margin 11.9% >10%

Return on operating capital 20% >20%

Net debt/equity ratio 79% <100%

Q2 2017

Q & A