Q4 2017

Bo AnnvikCEO

Summary 2017

• Record high sales and earnings

• Favourable market conditions

• 12 acquisitions with total annual sales of SEK 1.3 billion

• Net sales rose 15% to 14,847 MSEK (12,955)

• Adjusted EBITA 11.8%

• EBITA rose 9% to 1,613 MSEK (1,484)

• EBITA margin 10.9% (11.5)

• Earnings per share rose 9% to SEK 8.54 (7.80)

• Prosed dividend SEK 3.75 (3.20) +17%

• New organization structure and management team

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Highlights fourth quarter 2017

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

• Continued good development in the Nordic countries,Benelux and Germany

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

• Restructuring of Sander Meson group

• Acquisition of Inovatools in Germany

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Financial summary fourth quarter 2017

• Order intake rose 13% to 3,895 MSEK (3,434)

• Net sales rose 12% to 3,932 MSEK (3,499)

• Restructuring costs of 132 MSEK

• Excluding restructuring costs EBITA rose 10% to 431 MSEK, corresponding to an EBITA-margin of 11.0%

• EBITA declined 24% to 299 MSEK (391)

• EBITA margin 7.6% (11.2%)

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Market conditions

• Sweden: ↗

• Finland: ↗

• Norway: oil & gas → other →

• Denmark: →

• UK: →

• Ireland: →

• Benelux: ↗

• Switzerland: →

• Germany: ↗

• North America: →

• Asia: ↗

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Order intake

• Q4: Order intake rose 13% to 3,895 MSEK (3,434) whereof organic 6%

• FY 2017: Order intake rose 16% to 15,051 MSEK (13,004) 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

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Net sales

• Q4: Net sales rose 12% to 3,932 MSEK (3,499) whereof organic 5%

• FY 2017: Net sales rose 15% to 14,847 MSEK (12,955) whereof organic 5%

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EBITA

• Q4: Excl. restructuring costs: EBITA 431 MSEK EBITA-margin 11.0%EBITA declined 24% to 299 MSEK (391) whereof organic 4% EBITA-margin 7.6% (11.2)

• FY 2017: Excl. restructuring costs: EBITA 1,745 MSEK Adjusted EBITA-margin 11.8%EBITA rose 9% to 1,613 MSEK (1,484) whereof organic 8%EBITA-margin 10.9% (11.5)

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Organic Acquisitions Currency Restructuring Total

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Growth bridge 2017

Q4 Q4

MSEK 2017 Org Acq F/X Restruct Total 2016

Order intake

3,895 6% 8% -1% - 13% 3,434

Net sales 3,932 5% 8% -1% - 12% 3,499

EBITA 299 4% 7% -1% -34% -24% 391

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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

11. Inovatools, DE 330 MSEK November

12. Tradinco B.V., NL 70 MSEK December

Total 1 ,270 MSEK

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

Engineering & Equipment• Net sales: 461 MSEK (415) +11%, whereof organic +11%

• EBITA: 43 MSEK (29) +48%

• EBITA-margin: 9.3% (7.0)

• Positive business climate

• Stable demand in most customer segments

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

Flow Technology• Net sales: 613 MSEK (580) +6%, whereof organic +4%

• EBITA: 52 MSEK (38) +37%

• EBITA-margin: 8.5% (6.6)

• Stable demand

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

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

Fluids & Mechanical Solutions• Net sales: 474 MSEK (445) +7%, whereof organic +5%

• EBITA: 52 MSEK (54) -4%

• EBITA-margin: 11.0% (12.1)

• Stable demand

• Higher costs within some units

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

Industrial Components• Net sales: 831 MSEK (690) +20%, whereof organic +7%

• EBITA: 96 MSEK (76) 26%

• EBITA-margin: 11.6% (11.0)

• Continued strong demand in Sweden and Norway

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

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

Measurement & Sensor Technology• Net sales: 387 MSEK (338) +14%, whereof organic +14%

• EBITA: 65 MSEK (51) +27%

• EBITA-margin: 16.8% (15.1)

• Stable demand in most regions and applicable segments

• Healthy margins

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Special Products• Net sales: 1,178 MSEK (1,040) +13%, whereof organic

+0%

• EBITA: 133 MSEK (144) -8%

• EBITA-margin: 11.3% (13.8%)

• Variations in demand. Healthy business situation in Germany and Benelux offsets situation in UK and Switzerland

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

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Earnings per share

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SEKQ4: -32% SEK 1.42 (2.08)YTD: 9% SEK 8.54 (7.80)Proposed dividend: SEK 3.75 (3.20) +17%

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Financial targets

2017 Target

Growth 15% >10%

EBITA-margin 10.9% >10%

Return on operating capital 19% >20%

Net debt/equity ratio 74% <100%

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Income statement

MSEK Q4 2017 Q4 2016 % 2017 2016

Net sales 3,932 3,499 12% 14,847 12,955

Gross profit 1,299 1,159 12% 4,966 4,348

% 33.0% 33.1% 33.4% 33.6%

Operating expenses -1,004 -851 18% -3,534 -3,126

% -25.5% -24.3% -23.8% -24.1%

Other -56 27 -52 50

Operating profit 239 335 -29% 1,380 1,272

Financial net -17 -17 -70 -78

Earnings before tax (EBT) 222 318 -30% 1,310 1,194

% 5.6% 9.1% 8.8% 9.2%

EBITA 299 391 -24% 1,613 1,484

% 7.6% 11.2% 10.9% 11.5%

Earnings per share, SEK 1.42 2.08 -32% 8.54 7.80

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Balance sheet

MSEK 31 Dec 2017 31 Dec 2016

Intangible fixed assets 4,947 39% 4,267 39%

Tangible and financial fixed assets 1,757 14% 1,568 14%

Inventories 2,517 20% 2,249 20%

Receivables 2,881 23% 2,637 24%

Cash and cash equivalents 464 4% 332 3%

Total assets 12,566 11,053

Equity 5,168 41% 4,399 40%

Interest-bearing liabilities 4,293 34% 3,960 36%

Non-interest-bearing liabilities 3,105 25% 2,694 24%

Total equity and liabilities 12,566 11,053

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Financial key data

MSEK 31 Dec 2017 31 Dec 2016 31 Dec 2015

Adjusted EBITA margin, % 11.8 11.5 12.0

EBITA margin, % 10.9 11.5 12.0

Return on operating capital, % 19 20 22

Return on equity, % 22 24 26

Interest-bearing net debt, SEK million 3,829 3,628 2,949

Net debt/equity ratio, % 74 82 80

Net debt/EBITDA, times 2.1 2.2 1.8

Equity ratio, % 41 40 40

Key ratios per share

Earnings per share, SEK 8.54 7.80 7.44

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Margins

Gross profit 33.0% of sales (33.1)YTD 33.4% (33.6)

EBITA margin 7.6% of sales (11.2)YTD 10.9% (11.5)

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New Business Areas 2018

• New Business Areas established

– to strengthen platform for continued profitable growth of current portfolio companies

– to maintain a high acquisition pace

– to better utilize the international skills within the Group

• Business Area ‘Special Products’, with a majority of the companies outside Nordics, dissolved into three new Business Areas, with geography as linkage:

– Benelux

– DACH

– UK

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• Flow Technology (Product/technology commonalities)

• Measurement & Sensor Technology(Product/technology commonalities)

• Fluids & Mechanical Solutions

• Industrial Components

• Finland (Engineering & Equipment)

• Benelux

• DACH

• UK

New Business Areas 2018

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30%

16%

20% 10%

Management Group extended and strengthened

• As a result of the new Business Areas, the existing Group Management is extended and strengthened

• Better utilize the international skills within the company

• Reflect our international business scope and growth potential

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» Sustainable

» Profitable

» Growth

Business objective

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Thank you!Q&A