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KÄHRS HOLDING AB (PUBL) QUARTER 2 | 2017

Net sales up 5 per cent quarter over quarter

Strong sales growth in the Nordics and Other Markets segments

Improved operating EBITArose 23 per cent

INTERIM REPORT

2KÄHRS GROUP'S INTERIM REPORT JANUARY–JUNE | 2017

KEY PERFORMANCE INDICATORS FOR THE GROUP

SEKmApr-June

2017Apr-June

2016Jan-June

2017Jan-June

2016Jan-Dec

2016Jul 2016-

June 2017

Net sales 792 755 1,574 1,450 2,894 3,018

EBITA 45 57 109 107 133 135

EBITA, % 5.7% 7.5% 6.9% 7.4% 4.6% 4.5%

Operating EBITA 75 61 144 114 227 257

Operating EBITA, % 9.5% 8.1% 9.1% 7.9% 7.8% 8.5%

Operating profit (EBIT) 46 57 109 107 133 135

Operating profit (EBIT), % 5.8% 7.5% 6.9% 7.4% 4.6% 4.5%

Operating profit excl. items affecting comparability (operating EBIT) 76 61 144 114 227 257

Operating profit excl. items affecting comparability (operating EBIT), % 9.6% 8.1% 9.1% 7.9% 7.8% 8.5%

Operating profit excl. depreciation and items affecting comparability (adjusted EBITDA) 99 84 192 159 320 353

Operating profit excl. depreciation and items affecting comparability (adjusted EBITDA), % 12.5% 11.1% 12.2% 11.0% 11.1% 11.7%

Profit for the period 35 35 80 68 59 71

Profit for the period, % 4.4% 4.6% 5.1% 4.7% 2.0% 2.4%

Earnings per share before and after dilution, SEK 1.17 1.17 2.67 2.27 1.97 2.37

Net cash flows from operating activities 41 51 31 -15 187 232

Net debt 946 650 946 650 526 946

Equity ratio, % 15.3% 21.0% 15.3% 21.0% 21.5% 15.3%

Return on capital employed, % 15.0% 18.7% 15.0% 18.7% 17.2% 15.0%

STABLE SALES GROWTH AND STRONG OPERATING PROFIT

SECOND QUARTER, APRIL – JUNE 2017

• Net sales totalled SEK 792 million (755), an increase of 5 per cent compared with the same period in 2016. Organic sales growth was 3 per cent

• Operating EBITA rose 23 per cent and totalled SEK 75 million (61), corresponding to an operating margin of 9.5 per cent (8.1)

• Operating profit (EBIT) for the second quarter dropped 19 per cent to SEK 46 million (57), cor-responding to 5.8 per cent (7.5). The decrease can be attributed to non-recurring items of SEK 30 million (4) in the quarter, primarily related to changes in the production structure

• Consolidated profit for the quarter was SEK 35 million (35)

• In June, the company completed a refinancing, leading to a more efficient capital structure for Kährs going forward

• The company paid shareholders a dividend of SEK 219 million in June

PERIOD JANUARY – JUNE 2017

• Net sales for the period totalled SEK 1,574 million (1,450), an increase of 9 per cent compared with the same period in 2016. Organic sales growth was 5 per cent

• Operating EBITA rose 26 per cent compared with the same period in 2016 and totalled SEK 144 mil-lion (114), corresponding to an operating margin of 9.1 per cent (7.9)

• Operating profit (EBIT) for the period was SEK 109 million (107), corresponding to 6.9 per cent (7.4), including a negative impact for non-recur-ring items of SEK 35 million (7) relating to changes in production structure

• Consolidated profit for the period was SEK 80 million (68)


“The Kährs Group continues to improve strongly. We have a good strategic platform to continue our profitable growth, with strength in our production facilities, our wide range of products and our well-established international sales organisation.”

Kährs Group showed stable sales growth in the second quarter of 2017 at 5 per cent. The trends for all three of our hardwood flooring segments were positive during the second quarter, while the resilient flooring segment had a weaker quar-ter after a strong start to the year. Consolidated operating EBITA increased by 23 per cent during the quarter to SEK 75 million or 9.5 per cent.

Net sales for the second quarter rose 5 per cent compared with last year, reaching SEK 792 million. The favourable trend continues in most of our core markets, where the projects market accounts for an increasing share of our sales, related in part to an increase in market share. Profit for the Group before items affecting comparability (operating EBITA) was SEK 75 million, SEK 14 million better than the same period in 2016 and an increase of 23 per cent. We continue to achieve this improvement in earnings through good sales growth accompanied by the stable development of our gross margin, as well as by leveraging our investments and market-related initiatives.

Our largest segment, Nordics, showed continued good sales growth. During the first half of the year we signed multi-year agreements with a number of major market participants, including both construction companies and property owners. Net sales reached SEK 370 million, an increase of 7 per cent compared with the same period last year.

The Europe Segment grew 5 per cent for the quarter and we saw robust growth in the two largest markets in this segment, Germany and the UK. A significant part of the market growth in these countries is generated in new construction and reno-vation projects.

The Other Markets segment also performed well during the second quarter with sales totalling SEK 174 million, an increase of 9 per cent.

The Resilient Global segment reported somewhat weaker sales for the quarter, with a 16 per cent decline, which can be in part explained by a very strong second quarter the previous year but also by a weak development in Finland. The potential of this business is high, however, and demand for PVC-free products is generally growing stronger in the important pro-jects market, which drives growth in this segment.

We continue to implement our business plan and our strategic initiatives, where purchasing of oak raw material is a priority area. For example, we signed a strategically important supply agreement with Södra during the quarter, where our coopera-tion model will facilitate a long-term approach to forestry and a steady supply of oak. Another priority area is the projects market, where we established our own global project organi-sation to strengthen our presence in this segment. We have also expanded our network of showrooms as meeting places for architects and designers in local and global projects. Today there are six showrooms, including in Stockholm, London and New York.

The digitalisation journey continues and we are developing our marketing aimed at consumers, retailers and project cus-tomers. One component of this is the e-commerce service launched during the quarter for B2B customers in Sweden and Norway. We are also increasing our social media presence in selected core markets to strengthen brand awareness among consumers.

The Kährs Group continues to improve strongly. We have a good strategic platform to continue our profitable growth, with strength in our production facilities, our wide range of products and our well-established international sales organisation.

Christer Persson

President and CEO

CHIEF EXECUTIVE’S COMMENTS

STABLE SALES GROWTH AND STRONG OPERATING PROFIT FOR SECOND QUARTER 2017


KÄHRS INTERIM REPORT JANUARY–JUNE 2017

ABOUT THE KÄHRS GROUPThe Kährs company was founded in 1857 by Johan Kähr, who began to make wooden kitchen utensils; in 1919 AB Gustaf Kähr was formed with a focus on manufacturing hardwood flooring. In 2012 Kährs merged with Karelia-Upofloor and formed Kährs Group, a world-leading flooring company. The parent company, Kährs Holding AB, has its registered office in Nybro, Sweden. Headquarters are located in Malmö. The Group has approximately 1,700 employees and annual sales of EUR 300 million.

The Group's main products are hardwood and resilient flooring for various applications and environments. Sales are global and the Group’s four operating segments consist of three geographic segments for hardwood flooring, Nordics, Europe and Other Markets, as well as a segment for resilient flooring, Resilient Global. Production facilities are located in Sweden, Finland, Russia, Romania and Poland.

Chairman: Anders Wassberg

CEO: Christer Persson

MARKETIn general, the global flooring market continued to develop favourably during the second quarter, though we see major differences in the markets in which Kährs operates.

Both the Swedish and Norwegian markets have shown good growth in the first half of 2017. The projects market is robust in both of these markets and the need for new con-struction and renovations continues to be strong. Stabilising oil prices provide the conditions for an improved market for both flats and single-family homes in Norway. In Finland, the situation is improving, especially in the projects market. The consumer market continues to be somewhat cautious.

In Central Europe and the UK we continue to see a stable trend in the core markets where the Kährs Group operates. Germany is undergoing moderate market growth, generated primarily in the projects market in large cities, while con-sumer demand is slightly weaker. The UK market continues to grow regarding both projects and consumers and we have not seen any negative effects of Brexit to date, other than the weakened GBP. In Switzerland, the market is stable with a limited growth rate.

We see a continued challenging market situation in Russia, although there are some signs of recovery. In the Russian market, we see growing consumer interest in less expensive products, especially laminate flooring.

In the US we have a strong underlying market with robust growth in both the retail segment and the projects market. Demand for both single-family homes and apartments con-tinues to be strong. Strong customer relationships and partnerships are becoming increasingly important in the US market in response to a growing focus on nationwide pro-grammes between construction companies and suppliers.

For the resilient flooring market we continue to see vary-ing trends in the core markets where the Kährs Group oper-ates. In Finland, the market is weak, but we see a growing need for renovation. The Swedish market is stable and is driven primarily by demand from the healthcare sector. In Central Europe, growth is mainly in Germany where the pro-jects market is improving and in the US we have a favourable market with a growing focus on PVC-free flooring in public buildings.


GROUP PERFORMANCE JANUARY–JUNE 2017

NET SALESSecond quarterTotal Group net sales amounted to SEK 792 million (755), an increase of SEK 37 million or 5 per cent compared with the second quarter of 2016. The improvement can be attrib-uted to a stable and favourable trend for hardwood floor-ing, while sales of resilient flooring are more volatile over the quarter since essentially all sales occur in the projects market.

Calculated in local currencies, sales growth was 3 per cent.

January – June Net sales for the Group the January to June period amounted to SEK 1,574 million (1,450), an increase of 9 per cent com-pared with the corresponding period in 2016. The Nordics and Other Markets segments showed the highest growth of 12 per cent and 8 per cent, respectively.

Calculated in local currencies, organic growth was 5 per cent for the period.

OPERATING PROFITSecond quarterOperating EBITA totalled SEK 75 million (61), corresponding to an operating margin of 9.5 per cent (8.1) and an increase of 23 per cent. This improvement can be explained by higher sales and a good margin trend. Operating profit (EBIT) was SEK 46 million (57) or 5.8 per cent (7.5). This worsening of EBIT of SEK 11 million can be attributed to non-recurring items of SEK 30 million (4) related to changes in the pro-duction structure, especially the closure of the production facility in Tuupovaara, Finland. Exchange rate effects had a positive impact on the Group's operating profit of SEK 4 million.

The Group’s total depreciation and amortisation of prop-erty, plant and equipment for the second quarter amounted to SEK 24 million (26).

January – June Operating EBITA was SEK 144 million (114), corresponding to an operating margin of 9.1 per cent (7.9). Operating profit (EBIT) for the period was SEK 109 million (107), correspond-ing to 6.9 per cent (7.4). This improvement of SEK 2 million was achieved through solid sales growth and a stable gross margin, thereby offsetting the high non-recurring items of SEK 35 million (7) for the period. Exchange rate effects had a positive impact on the Group's operating profit of SEK 10 million.

The Group’s total depreciation and amortisation of prop-erty, plant and equipment for the period amounted to SEK 48 million (49).

NET SALES

Quar

ter

Net sales

Net sales, rolling 12 months

OPERATING EBITA

Operating EBITA

Operating EBITA, rolling 12 months

Quar

ter

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2014 2015 2016 2017

Q20

500

1 000

1 500

2 000

2 500

3 000

3 500

300

400

500

600

700

800

900

0

60

120

180

240

300

0

20

40

60

80

100

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2014 2015 2016 2017

Q2

GROUP

SEKm

Apr- June 2017

Apr- June 2016

Jan- June 2017

Jan- June 2016

Jan-Dec

2016

Jul 16- June 17

Net sales 792 755 1,574 1,450 2,894 3,018

Organic growth, % 3 % 7 % 5 % 6 % 7 % 7 %

Operating EBITA 75 61 144 114 227 257

Operating EBITA, % 9.5 % 8.1 % 9.1 % 7.9 % 7.8 % 8.5 %




NET SALES BY PRODUCT GROUP QUARTER 2, 2017

NET SALES BY SEGMENT QUARTER 2, 2017

Nordics 47%

Europe 25%

Other Markets 22%

Resilient Global 6%

NET SALES BY SEGMENT JANUARY–JUNE 2017

NET SALES BY PRODUCT GROUP JANUARY–JUNE 2017

Nordics 48%

Europe 25%

Other Markets 20%

Resilient Global 7%

Hardwood Flooring 87%

Resilient Flooring 7%

Other 6%

Hardwood Flooring 87%

Resilient Flooring 7%

Other 6%


NET SALES AND OPERATING PROFIT BY SEGMENT

Second quarterThe segment demonstrated robust sales growth of 7 per cent to SEK 370 million (347) for the second quarter. Growth in the quarter was stable in both Sweden and Norway, with strong momentum in the new construction and renovation markets in which Kährs is gaining market share. The recov-ery in Finland is sluggish and sales are still volatile, though the situation is improving, especially in the projects market.

Operating EBITA for the quarter was SEK 42 million (40), corresponding to an operating margin of 11.4 per cent (11.5).

January – JuneSales in the segment rose 12 per cent and totalled SEK 759 million (676) during the period and operating EBITA totalled SEK 84 million (64), corresponding to an operating margin of 11.1 per cent (9.5).

Second quarterNet sales for the segment amounted to SEK 197 million (188) for the quarter, an increase of 5 per cent. The larger mar-kets in which the Kährs Group is active, including France, Germany and the UK, showed positive growth during the period, while Switzerland reported a somewhat weaker quarter. A significant part of the market growth in these countries is generated in the projects segment.

Operating EBITA was SEK 19 million (15) for the second quarter, corresponding to an operating margin of 9.6 per cent (8.0).

January – JuneSales in the segment rose 4 per cent and totalled SEK 385 million (371) during the period and the segment’s operating EBITA was SEK 37 million (35), corresponding to an operating margin of 9.6 per cent (9.4).

Second quarter Net sales for Other Markets amounted to SEK 174 million (159) for the quarter, an increase of 9 per cent. The two largest markets in the segment, Russia and the US, contin-ued to develop in different directions. The Russian market is weak and sales dropped compared with the same period last year. The market trend in the US sales continues to be favourable and the Kährs Group demonstrated robust sales growth in the second quarter.

Operating EBITA for the period was SEK 9 million (-1), cor-responding to an operating margin of 5.2 per cent (-0.6).

January – JuneSales in the segment rose 8 per cent to SEK 322 million (297) during the period and with an operating EBITA of SEK 11 mil-lion (3), corresponding to an operating margin of 3.4 per cent (1.0).

Second quarterNet sales for Resilient Global amounted to SEK 51 million (61) for the second quarter, a decrease of 16 per cent. The sales trend is favourable in Germany, stable in Sweden and the US, but continues to be weak in Finland. Demand for PVC-free flooring is growing in the markets where the Kährs Group operates.

Operating EBITA was SEK 5 million (7) for the quarter, corresponding to an operating margin of 9.8 per cent (11.5).

January – JuneSales in the resilient flooring segment rose 2 per cent to SEK 108 million (106) for the period and operating EBITA totalled SEK 12 million (12), corresponding to an operating margin of 11.1 per cent (11.3).

EUROPE

SEKm

Apr- June 2017

Apr- June 2016

Jan- June 2017

Jan- June 2016

Jan-Dec

2016

Jul 16- June 17

Net sales 197 188 385 371 723 737

Organic growth, % 3% 14% 4% 11% 9% 5%

Operating EBITA 19 15 37 35 69 71

Operating EBITA, % 9.6% 8.0% 9.6% 9.4% 9.5% 9.6%

NORDICS

SEKm

Apr- June 2017

Apr- June 2016

Jan- June 2017

Jan- June 2016

Jan-Dec

2016

Jul 16- June 17

Net sales 370 347 759 676 1,323 1,406

Organic growth, % 7% 11% 11% 6% 7% 9%


Operating EBITA, % 11.4% 11.5% 11.1% 9.5% 9.5% 10.4%

RESILIENT GLOBAL

SEKm

Apr- June 2017

Apr- June 2016

Jan- June 2017

Jan- June 2016

Jan-Dec

2016

Jul 16- June 17

Net sales 51 61 108 106 194 196

Organic growth, % -19% 39% -2% 7% -1% -5%


Operating EBITA, % 9.8% 11.5% 11.1% 11.3% 5.7% 5.6%

OTHER MARKETS

SEKm

Apr- June 2017

Apr- June 2016

Jan- June 2017

Jan- June 2016

Jan-Dec

2016

Jul 16- June 17

Net sales 174 159 322 297 654 679

Organic growth, % -4% 11% -4% 6% 4% 0%

Operating EBITA 9 -1 11 3 21 29

Operating EBITA, % 5.2% -0.6% 3.4% 1.0% 3.2% 4.3%


NORDICS - 370 SEKm EUROPE - 197 SEKm

OTHER MARKETS - 174 SEKm

NET SALES BY SEGMENT AND MARKETAPRIL–JUNE 2017

RESILIENT GLOBAL - 51 SEKm

Sweden 66%

Norway 18%

Other 16%

Germany 42%

UK 22%

Other 36%

USA 38%

Russia 29%

Other 33%

Finland 37%

US 32%

Other 31%


NET DEBT

SEKm30 June

201730 June

201631 Dec

2016

Shareholder loans - 205 220

Liabilities to credit institutions 1,032 791 785

Other 6 6 5

Total interest-bearing liabilities 1,038 1,002 1,010

Less

Shareholder loans - -205 -220

Cash and cash equivalents includ-ing Interest-bearing receivables -92 -147 -264

Net debt 946 650 526

Interest coverage ratio, times 13.6 10.7 11.9

Net debt/EBITDA ratio, times 2.7 2.1 1.7

The Company increased its borrowing from banks by SEK 300 million during the second quarter and at the same time repaid its shareholder loans of SEK 231 million. In addition, shareholders were paid a dividend of SEK 219 million. Net debt in relation to adjusted EBITDA was 2.7 times (2.1 times) as at 30 June, with the interest coverage ratio 13.6 times (10.7 times).

The Group’s cash and cash equivalents as at 30 June 2017 was SEK 92 million, compared with SEK 134 million as at 30 June 2016. The Group has utilised SEK 150 million of the existing revolving credit facility (RCF) of SEK 200 million. The Group also utilised SEK 55 million of the existing invest-ment credit facility of SEK 100 million. Consequently, avail-able liquidity for the Group was SEK 187 million as at 30 June 2017, which provides a good capacity forward.

TAX EXPENSETax expense for the second quarter of 2017 amounted to SEK 11 million (8) and for the January to June period SEK 23 million (17).

CASH FLOW AND INVESTMENTSSecond quarterCash flow from the operating activities was SEK 41 million (51). Total working capital increased by SEK 22 million (27) during the quarter. Net working capital was SEK 51 million higher as at 30 June compared with the same date in 2016, totalling SEK 909 million (858). More capital is tied up in inventories, a seasonal increase of SEK 41 million, and trade payables are SEK 11 million lower than at the same time last year.

Investments for the second quarter amounted to SEK 12 million (19), mainly related to production equipment.

In June, the company completed a refinancing, leading to a more efficient capital structure for Kährs going forward. The company increased its borrowing from banks by SEK 300 million, while repaying shareholder loans of SEK 231 mil-lion and paying a dividend of SEK 219 million.

January – June Cash flow from the operating activities during the entire period amounted to SEK 31 million (-15). Working capital increased by SEK 109 million, compared with an increase of SEK 149 million for the same period in 2016.

Investments for the January to June period amounted to SEK 22 million (31), mainly related to production equipment.

NET FINANCIAL EXPENSESSecond quarterNet financial expenses amounted to SEK 0 million (14) for the second quarter of 2017, where exchange rate gains were in parity with interest expenses.

January – JuneNet financial expenses amounted to SEK 6 million (22) for the period.

FINANCIAL POSITIONThe Group’s total assets amounted to SEK 2,135 million as at 30 June 2017 (2,164) and the equity ratio was 15.3 per cent (21.0).

The Group’s net debt was SEK 946 million as at 30 June 2017, compared with SEK 650 million as at 30 June 2016.


GENERAL INFORMATIONEVENTS AFTER BALANCE SHEET DATE No significant events in addition to those included in this report have occurred after the balance sheet date.

RELATED-PARTY TRANSACTIONS Transactions with related parties are priced in accordance with market terms and prices. Related parties refer to com-panies over which Kährs Holding AB (publ) has a control-ling or significant influence in terms of the operational and financial decisions. Related parties also include those com-panies and individuals, such as the board of directors and members of management, who have the ability to control or exercise significant influence over the Group’s financial and operational decisions.

RISKS AND UNCERTAINTIES Kährs is a global company with operations in many coun-tries and as such exposed to a number of commercial and financial risks. Accordingly, risk management is an important process for Kährs in its work to achieve established tar-gets. Efficient risk management is an ongoing process con-ducted within the framework of business controlling, and is a continuing review of the operations and forward-looking assessments of the business. Kährs long-term risk exposure is not assumed to deviate from the inherent exposure asso-ciated with Kährs’ ongoing business operations.

PARENT COMPANY Net sales in the parent company for January to June 2017 totalled SEK 0 million (0) with a profit after tax of SEK 12 million (11). The parent company’s income statement and balance sheet are presented on pages 16–17 in this interim report.

EMPLOYEES As at 30 June 2017 the Group had 1,740 employees, an increase of 124 compared with 30 June 2016 (1,616). This increase in personnel mainly relates to blue collar employ-ees at our production plants.

FINANCIAL REPORTING CALENDAR 2017-2018

Kährs Holding AB (publ)’s interim reporting as well as its annual financial reports are available on the Kährs Group website www.kahrsgroup.com.

Reporting calendar:

Interim report Q2, 2017 11 August 2017

Interim report Q3, 2017 13 November 2017

Year-end Report full-year 2017 13 February 2018

GOVERNING TEXT This interim report has been prepared in both Swedish and English. The Swedish text shall govern for all purposes and prevail in the event of any discrepancy between the versions.


Nybro, 11 August 2017

KÄHRS HOLDING AB (PUBL)

The information in this interim report is that which Kährs Holding AB (publ) is required to disclose under the Swedish Securities Market Act

and/or the Financial Instruments Trading Act. The information was submitted for publication at 15 p.m. CET on Friday 11 August 2017.

This interim report has not been reviewed by the company’s auditors.

The Board of Directors and the CEO certify that the interim report provides a true and fair overview of the operations, financial position and results of the Parent Company and the Group and describes the material risks

and uncertainties faced by the Parent Company and the companies in the Group.

Peter Ericsson Communication and Compliance Telefon: +46 70 461 10 39 Email: [email protected]

For further information, please contact:

Christer Persson President and CEO Phone: +46 70 271 20 14 Email: [email protected]

Address:

Kährs Holding AB (publ)

Dunderbergsgatan 10

382 28 Nybro

Sweden

Phone: +46 481 460 00

www.kahrsgroup.com

Corporate Identity number:

556534-2481

Anders Wassberg

Chairman

Jakob Jakobsson

Employee representative

Stefan Karlsson

Employee representative

Eva Lindqvist

Member

Bertel Langenskiöld

Member

Christer Persson

President and CEO

Sven-Gunnar Schough

Member

Hannu Paitula

Member

Carl Johan Falkenberg

Member

Johanna Arantola-Hattab

Member


CONSOLIDATED INCOME STATEMENT

SEKm noteApr-June

2017Apr-June

2016Jan-June

2017Jan-June

2016Jan-Dec

2016Jul 2016-

June 2017

Net sales 2 792 755 1,574 1,450 2,894 3,018

Cost of goods sold 3 -637 -590 -1,245 -1,135 -2,261 -2,371

Gross profit 155 165 329 315 633 647

Selling and distribution expenses 3 -79 -78 -163 -156 -317 -324

Administrative expenses 3 -31 -26 -60 -49 -112 -123

Other operating income 5 1 7 1 2 8

Other operating expenses -4 -5 -4 -4 -47 -47

Share of results of associated companies - 0 - 0 -26 -26

Operating profit (EBIT) 2 46 57 109 107 133 135

Financial income 2 0 1 2 7 1

Financial expenses -2 -14 -7 -24 -63 -41

Profit before tax 46 43 103 85 77 95

Tax -11 -8 -23 -17 -18 -24


Attributable to:

Shareholders of the parent company 35 35 80 68 59 71

Non-controlling interests 0 0 0 0 0 0

Total 35 35 80 68 59 71

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

SEKmApr-June

2017Apr-June

2016Jan-June

2017Jan-June

2016Jan-Dec

2016Jul 2016-

June 2017


Other comprehensive income

Items that may be reclassified in the income statement:

Translation differences -18 18 -6 27 54 21

Other comprehensive income, net of tax 17 53 74 95 54 92

Total comprehensive income for the period 17 53 74 95 113 92

Attributable to:

Shareholders of the parent company 17 53 74 95 113 92

Non-controlling interests 0 0 0 0 0 -

Total 17 53 74 95 113 92


FINANCIAL STATEMENTS


CONSOLIDATED STATEMENT OF FINANCIAL POSITION

SEKm note30 June

201730 June

201631 Dec

2016

ASSETS

Non-current assets

Intangible assets 1 1 1

Tangible assets 635 649 664

Investments in associated companies - 8 -

Other financial assets 7 5 7

Deferred tax assets 81 84 83

Total non-current assets 724 747 755

Current assets

Inventories 785 745 734

Trade receivables 473 473 406

Derivatives 4 - 1

Other current assets 57 65 36

Cash and cash equivalents 92 134 264

Total current assets 1,411 1,417 1,441

TOTAL ASSETS 2,135 2,164 2,196

EQUITY AND LIABILITIES

Equity

Share capital 0 0 0

Reserves -125 -145 -118

Retained earnings including profit for the period 451 599 590

Total 326 454 472

Attributable to non-controlling interests 0 0 0

Total equity 326 454 472

Non-current liabilities

Interest bearing liabilities 4 1,036 1,000 1,008

Provisions for pensions 1 1 1

Other provisions 18 2 18

Deferred tax liabilities 14 10 8

Total non-current liabilities 1,069 1,013 1,035

Current liabilities

Interest bearing liabilities 4 2 2 2

Other provisions 57 23 38

Trade payables 349 360 365

Income tax payable 12 11 3

Derivatives - 8 4

Other current liabilities 320 293 277

Total current liabilities 740 697 689

TOTAL EQUITY AND LIABILITIES 2,135 2,164 2,196


CONSOLIDATED STATEMENT OF CASH FLOWS

SEKmApr-June

2017Apr-June

2016Jan-June

2017Jan-June

2016Jan-Dec

2016Jul 2016-

June 2017

Operating activities

Profit before tax 44 43 102 85 77 94

Other non-cash items 30 43 59 67 166 158

Cash flow before interest and tax 74 86 161 152 243 252

Interest received 0 0 0 0 1 1

Interest paid -6 -7 -12 -14 -27 -26

Income tax paid -5 -1 -9 -4 -12 -16

Net cash flow from operating activities beforechange in working capital 63 78 140 134 205 211

Change in working capital

Change in inventories -25 -39 -51 -63 -23 -11

Change in operating receivables 14 -39 -90 -142 -45 7

Change in operating liabilities -11 51 32 56 50 26


Investing activities

Investment in tangible assets -12 -19 -22 -31 -78 -69

Investment in financial assets 0 0 0 0 -2 -2

Proceeds from sale of tangible assets 0 0 0 0 0 0

Net cash flows from investing activities -12 -19 -22 -31 -80 -71

Financing activities

Dividend -219 - -219 - - -219

Proceeds from borrowings 300 25 300 25 25 300

Repayment of borrowings -261 -25 -261 -25 -50 -286

Net cash flows from financing activities -180 0 -180 0 -25 -205

Cash flow for the period -151 32 -171 -46 82 -43

Cash and cash equivalents at beginning of period 245 101 264 179 179 134

Exchange-rate differences in cash and cash equivalents -2 1 -1 1 3 1

Cash and cash equivalents at end of period 92 134 92 134 264 92


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

SEKmShare

capital

Contributions of other

capital ReservesRetained earnings Total

Non- controlling

interestsTotal

equity

As at 1 January 2017 0 0 -118 590 472 0 472

Profit for the period - - 0 80 80 0 80

Other comprehensive income - - -7 0 -7 0 -7

Transactions with shareholders:

Dividend - - - -219 -219 - -219

As at 30 June 2017 0 0 -125 451 326 0 326

SEKmShare

capital



Non- controlling

interestsTotal

equity

As at 1 January 2016 0 0 -172 531 359 0 359

Profit for the period - - 0 68 68 0 68

Other comprehensive income - - 27 0 27 0 27

As at 30 June 2016 0 0 -145 599 454 0 454

SEKmShare

capital



Non- controlling

interestsTotal

equity

As at 1 January 2016 0 0 -172 531 359 0 359

Profit for the period - - - 59 59 0 59

Other comprehensive income - - 54 0 54 0 54

As at 31 December 2016 0 0 -118 590 472 0 472


PARENT COMPANY INCOME STATEMENT

SEKmApr-June

2017Apr-June

2016Jan-June

2017Jan-June

2016Jan-Dec

2016Jul 2016-

June 2017

Net sales - - - - - -

Cost of goods sold - - - - - -

Gross profit - - - - - -

Selling and distribution expenses - - - - - -

Administrative expenses -2 -2 -3 -3 -6 -6

Other operating income 4 4 9 9 21 21

Other operating expenses -9 -5 -15 -10 -24 -29

Operating profit (EBIT) -7 -3 -9 -4 -9 -14

Financial income 25 17 39 32 53 60

Financial expenses -9 -6 -16 -14 -39 -41

Group contribution received - - - - 75 75

Profit excluding tax 9 8 14 14 80 80

Income tax expense -1 -2 -2 -3 -15 -14


Attributable to shareholders of the parent company 8 6 12 11 65 66

Total 8 6 12 11 65 66

PARENT COMPANY STATEMENT OF COMPREHENSIVE INCOME

SEKmApr-June

2017Apr-June

2016Jan-June

2017Jan-June

2016Jan-Dec

2016Jul 2016-

June 2017


Other comprehensive income

Items that may be reclassified in the income statement:

Translation differences - - - - - -

Other comprehensive income, net of tax - - - - - -

Total comprehensive income for the period 8 6 12 11 65 66

Attributable to shareholders of the parent company 8 6 12 11 65 66

Total 8 6 12 11 65 66



PARENT COMPANY STATEMENT OF FINANCIAL POSITION

SEKm30 June

201730 June

201631 Dec

2016

ASSETS

Non-current assets

Financial assets 1,429 1,170 1,195

Deferred tax assets - 14 2

Total non-current assets 1,429 1,184 1,197

Current assets

Other current assets 23 28 31

Cash and cash equivalents 40 90 216

Total current assets 63 118 247

TOTAL ASSETS 1,492 1,302 1,444

EQUITY AND LIABILITIES

Equity

Share capital 0 0 0

Retained earnings including profit for the period 160 313 367

Total 160 313 367

Non-controlling interests - - -

Total equity 160 313 367


Interest bearing liabilities 1,051 809 800

Total non-current liabilities 1,051 809 800

Current liabilities

Trade payables 11 9 9

Other current liabilities 270 171 268

Total current liabilities 281 180 277

TOTAL EQUITY AND LIABILITIES 1,492 1,302 1,444


NET SALES BY SEGMENT, EXTERNAL CUSTOMERS

SEKmApr-June

2017Apr-June

2016Jan-June

2017Jan-June

2016Jan-Dec

2016Jul 2016-

June 2017

Nordics 370 347 759 676 1,323 1,406

Europe 197 188 385 371 723 737

Other Markets 174 159 322 297 654 679

Resilient Global 51 61 108 106 194 196

Net sales Group, external customers 792 755 1,574 1,450 2,894 3,018

OPERATING EBITA BY SEGMENT

SEKmApr-June

2017Apr-June

2016Jan-June

2017Jan-June

2016Jan-Dec

2016Jul 2016-

June 2017

Nordics 42 40 84 64 126 146

Europe 19 15 37 35 69 71

Other Markets 9 -1 11 3 21 29


Operating EBITA 75 61 144 114 227 257

OPERATING PROFIT (EBIT) PER SEGMENT

SEKmApr-June

2017Apr-June

2016Jan-June

2017Jan-June

2016Jan-Dec

2016Jul 2016-

June 2017

Nordics 26 39 65 61 101 105

Europe 14 13 31 32 57 56

Other Markets 2 -2 3 2 -34 -33



NOTES

NOTE 1. ACCOUNTING POLICIESThis interim report is prepared in accordance with the Swedish Annual Accounts Act and IAS34, Interim Financial Reporting. For information regarding the accounting poli-cies applied, see the Consolidated Financial Statements for fiscal year 2016.

The preparation of the financial reports in accordance with IFRS requires management to make judgments and estimates, as well assumptions, which affect the application

The information provided below is provided from the per-spective of management, which means that it is presented in the manner used in internal reporting. Identification of reportable segments is based on internal reporting to the chief operating decision-maker. The Group has identified the CEO as the chief operating decision-maker. The Company’s management and reporting are based on operating profit by operating segment, i.e., geographic region for Hardwood

of the accounting principles and the carrying amounts in the income statement and statement of financial position. Estimates and assumptions are based on historical experi-ence and a number of factors that seem reasonable under current circumstances. The results of these estimates and assumptions are then used to determine the carry-ing amounts of assets and liabilities that otherwise are not clearly indicated by other sources. Actual outcomes may deviate from these estimates and judgments.

NOTE 2. SEGMENT

Flooring and global division for Resilient Flooring. The Group divides Hardwood Flooring into three geographic segments: Nordics, Europe and Other Markets. The largest markets in the Nordics are Sweden, Norway and Finland. In the Europe segment, the largest markets are Germany, the UK and Switzerland, and in the Other Markets segment, the largest markets are the US, Russia and China. Total assets/liabili-ties per segment are not reported to the chief operating decision-maker.


NOTE 3. ITEMS AFFECTING COMPARABILITY

NOTE 4. INTEREST BEARING LIABILITIES

SEKmApr-June

2017Apr-June

2016Jan-June

2017Jan-June

2016Jan-Dec

2016Jul 2016-

June 2017

Operating profit excl. items affecting comparability 76 61 144 114 227 257

Production footprint changes -25 -3 -28 -6 -39 -61

Provision for legal dispute in the US - - - - -43 -43

Other items affecting comparability -5 -1 -7 -1 -12 -18


SEKm30 June

201730 June

201631 Dec

2016


Shareholder loans 1 - 205 220

Finance lease 3 3 3

Loan Facility A 195 250 225

Loan Facility B 650 453 470

Financing costs 2 -18 -17 -15

Revolving Credit Facility (RCF) 150 50 50

Utilised investment credit 55 55 55

Other loans 1 1 0

Total non-current interest bearing liabilities 1,036 1,000 1,008

Current liabilities

Finance lease 1 1 1

Other loans 1 1 1

Total current interest bearing liabilities 2 2 2

Total interest-bearing liabilities 1,038 1,002 1,010

1 Shareholder loans to Nanna II S.C.A., interest compounded annually 2 Accrued financing costs spread over the term of the loans


CONSOLIDATED KEY PERFORMANCE INDICATORS

SEKmApr-June

2017Apr-June

2016Jan-June

2017Jan-June

2016Jan-Dec

2016Jul 2016-

June 2017

Net sales 792 755 1,574 1,450 2,894 3,018

EBITA 45 57 109 107 133 135

EBITA, % 5.7% 7.5% 6.9% 7.4% 4.6% 4.5%

Operating EBITA 75 61 144 114 227 257

Operating EBITA, % 9.5% 8.1% 9.1% 7.9% 7.8% 8.5%



Operating profit excl. items affecting comparability (operating EBIT) 76 61 144 114 227 257

Operating profit excl. items affecting comparability (operating EBIT), % 9.6% 8.1% 9.1% 7.9% 7.8% 8.5%

Operating profit excl. depreciation and items affecting comparability (adjusted EBITDA) 99 84 192 159 320 353

Operating profit excl. depreciation and items affecting comparability (adjusted EBITDA), % 12.5% 11.1% 12.2% 11.0% 11.1% 11.7%


Profit for the period, % 4.4% 4.6% 5.1% 4.7% 2.0% 2.4%



Investments 12 19 22 31 78 69

Total cash flow -151 32 -171 -46 82 -44

Total assets 2,135 2,164 2,135 2,164 2,196 2,135

Cash and cash equivalents at end of period 92 134 92 134 264 92

Net working capital 909 858 909 858 775 909

Net debt 946 650 946 650 526 946

Equity 326 454 326 454 472 326

Capital employed 946 855 946 855 746 946

Equity ratio, % 15.3% 21.0% 15.3% 21.0% 21.5% 15.3%

Return on Equity, % 21.6% 16.7% 21.6% 16.7% 14.2% 21.6%

Return on capital employed, % 15.0% 18.7% 15.0% 18.7% 17.2% 15.0%

Interest coverage ratio, times 13.6 10.7 13.6 10.7 11.9 13.6

Net debt/EBITDA ratio, times 2.7 2.1 2.7 2.1 1.7 2.7

Number of employees, end of period 1,740 1,616 1,740 1,616 1,665 1,740


DEFINITIONS

NET SALES

The Group’s total income, after deduction of bonuses and discounts, VAT and other taxes related to sales

EBITA

Earnings after depreciation, amortisation and impair-ment but before deduction for impairment of goodwill as well as amortisation and impairment of other intan-gible assets that arose in conjunction with company acquisitions

OPERATING EBITA

EBITA before items affect-ing comparability

OPERATING PROFIT EBITDA

Operating profit before depreciation/amortisation

ADJUSTED EBITDA

Operating profit before depreciation/amortisa-tion and items affecting comparability

KÄHRS HOLDING AB (PUBL) Kährs Holding AB (publ) is a world-leading flooring manufacturer in hardwood and resilient flooring with a number of strong brands in its product portfolio, including Kährs, Karelia and Upofloor. The Company’s innovations have shaped the indus-try throughout history and Kährs Group is dedicated to providing the market with innovative new flooring solutions. Kährs Group, which delivers products to more than 70 countries, is the market leader in Sweden, Finland, Norway and Russia and holds a strong position in other key markets, such as the UK and Germany. The Group has approximately 1,700 employees and annual sales of EUR 300 million.

www.kahrsgroup.com

OPERATING PROFIT (EBIT)

Earnings before financial items and tax

OPERATING MARGIN, EBIT IN PER CENT

Calculated as EBIT above as a percentage of net sales for the period

OPERATING EBIT

Operating profit before items affecting comparability

ORGANIC GROWTH

Sales growth excluding currency effects and acquisitions

NET DEBT

Net interest-bearing debt (excluding shareholder loans) and interest-bearing assets, as well as cash and cash equivalents

NET DEBT/EBITDA RATIO

Net debt excluding financial leasing in relation to operat-

ing profit before deprecia-tion/amortisation and items affecting comparability (Adjusted EBITDA)

NET WORKING CAPITAL

Inventories and trade receivables, less trade payables

RETURN ON EQUITY

Profit after tax for the period as a percentage of average equity excluding shares without controlling interests

RETURN ON CAPITAL EMPLOYED

Operating profit (EBIT) as a percentage of average capital employed. Capital employed refers to net debt plus share capital plus shareholder loans

EQUITY RATIO

Equity as a percentage of total assets

interim report - cisionmedia.ne.cision.com/l/oupzlgnw/mb.cision.com/main/... · return on capital...

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