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Interim report January – September 2015

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Third quarter, July - September 2015, in brief

  • Net sales SEK 655 million (605)
  • Operating profit SEK 39 million (44)
  • Profit after financial items SEK 44 million (45)
  • Equity ratio 62% (59)
  • Earnings per share after tax SEK 1.96 (1.81)

Nine months, January - September 2015, in brief

  • Net sales SEK 2 129 million (1 913)
  • Operating profit SEK 147 million (117)
  • Profit after financial items SEK 157 million (118)
  • Equity ratio 62% (59)
  • Earnings per share after tax SEK 7.04 (5.12)

Third quarter
Net sales totalled SEK 655 million (605) in the third quarter, an increase of SEK 50 million compared to the same period in the previous year. Sales excluding acquisitions and currency rose by 4%. Profit after financial items was SEK 44 million (45) in the third quarter, a decrease of SEK 1 million.

Earnings per share increased from SEK 1.81 to SEK 1.96 after, among other things, having achieved the status as a “high tech” company in China (meaning R&D and patents locally), which reduces taxes from 25% to 15%.

Swedish operations have a decreased net margin compared to third quarter in 2014. A number of actions have been completed during Q2 and Q3, which will improve the profitability.

Our companies in Eastern Europe and China have all had good development. India and Mexico are still making losses but show improvement.

Equity in the group was SEK 1 156 million (980) at the end of the quarter.

First nine months
Net sales totalled SEK 2 129 million (1 913), an increase of SEK 216 million compared to the same period in the previous year. Sales excluding acquisitions and currency rose by 6%. Profit after financial items was SEK 157 million (118), an increase of SEK 39 million compared to same period previous year.

During the second quarter the profit has been affected by a restructuring cost of SEK 8.7 million. This cost is due to reduction of staff and unused facilities in conjunction with redundancies at AQ Enclosure Systems AB in Vaggeryd and the structural changes of AQ Mekatronik AB in Västerås and AQ Elautomatik AB in Surahammar.

Significant events during the period
Start-up of the company in Thailand is completed. The company has about twenty employees, a few punching machines and they have a leased factory facility in the outskirts of Bangkok. The company is managed by AQ Holmbergs in China. Deliveries will start in Q4 to a telecom customer.

The restructuring of AQ Elautomatik with the move of operations in Surahammar to Västerås and the merger with the business in AQ Mekatronik will be ready November 1.

The downsizing of AQ Enclosure in Vaggeryd is now completed. A number of big customers are now getting their deliveries from AQ’s factories in Bulgaria and Estonia.

A big effort is ongoing to develop parts for a new truck to a big customer. About one hundred tools for injection moulding and sheet metal processing are being produced. All tools shall be ready during Q4. Sales is not expected until second half of 2016.

A new robot tube bending machine is being put into operation at AQ Segerström in Eskilstuna. There are new investments in injection moulding machines of about SEK 10 million, a smaller 200 ton 2K (two component) and a larger 1500 ton at AQ Plast in Västerås and Anderstorp respectively.

Significant events after the end of the period
No significant events after the end of the period.

Segment reporting
The Group operates in two business segments: Components, which produces transformers, wiring

systems, mechanical components, punched sheet metal and injection-moulded thermoplastics and

System, which produces systems, power and automation solutions and assembles complete machines

in close collaboration with the customers.

See table and diagram in attached document!

Information of parent company
The parent company, AQ Group AB, focuses primarily on leadership and development of the Group.

Company sales are, as in previous years, almost exclusively of sale of management services to subsidiaries. Purchases from the subsidiaries do not exist to any appreciable extent.

The drawing up of the interim report
The interim report has been prepared in accordance with the Swedish Annual Accounts Act as well as

IFRS, applying IAS 34, Interim Financial Reporting, which contains general requirements for the design, structure and minimum information requirements in the interim report. The accounting and valuation principles applied are the same as used in the latest annual report for 2014. The report has not been audited.

Significant estimates and evaluations for accounting purposes
The company has in preparing the interim report gone through and evaluated risks and uncertainties according to the description given in the annual report of 2014 and assessed that there have been no significant changes. Information about risks and uncertainties affecting the company can be found in the annual report of 2014.

Future prospects
The goal of the Groups is continued profitable growth, organically by 5% and through acquisitions by 10% over time. The goal for profit after financial items is 8%. The Board of directors are not giving any forecast for turn-over or profit.

The listing of the company on OMX Nasdaq instead of AktieTorget is planned for end of 2016.

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