Interim Report January – December 2018

During the quarter we saw a more stable Swedish krona which reduced the negative currency effect on our earnings experienced previously. Also, we have seen positive effects from the previously announced program to increase profitability. Most of the activities to increase margins on products with low profitability have been implemented and we observed a positive trend in our profit levels compared to earlier quarters.

The ongoing investment projects for the passenger car business went according to plan during the quarter and these investments continue also during the coming quarters. We expect a positive effect on revenues during the end of 2019 from these projects with a full effect during 2020.

The high industrial activity among our customers is likely to continue in the next quarter. However, LEAX is prepared to take measures if or when a downturn in the activity occurs.

Highlights of the fourth quarter of 2018:

-          Net Sales amounted to SEK 488,7 million (439,2)

-          Adjusted operating profit before depreciation (Adjusted EBITDA) amounted to SEK 34,7 million (42,3)

-          Earnings before tax (EBT) decreased to SEK 0 million (10,5)

-          Profit margin before tax (EBT%) amounted to 0%, (2,4%)

-          Cash flow from operating activities amounted to SEK 122 million (37,9)

-          Net income for the period amounted to SEK 9,1 million (30,7)*

Highlights of the year of 2018:

-          Net Sales amounted to SEK 1 818,1 million (1 628,3)

-          Adjusted operating profit before depreciation (Adjusted EBITDA) amounted to SEK 110,5 million (120,6)

-          Earnings before taxes (EBT) decreased to SEK -17,6 million (4,1)

-          Profit margin before tax (EBT%) amounted to -1,0% (0,3)

-          Cash flow from operating activities amounted to SEK 145 million (7,7)

-          Net income for the period decreased to SEK -6,6 million (100,3)*

* Net income 2017 had a positive effect from discontinued business of SEK 84,9 million. The effect from discontinued business in the fourth quarter of 2017 was SEK 15,3 million.

Contact details:

Henrik Fagrenius, President & CEO

Telephone: +46 (0) 221 346 89

E-mail: henrik.fagrenius@leax.com

The information was submitted for publication, through the agency of the contact person set out above, on February 28, 2019 at 08:30 CEST.

About LEAX:

LEAX Group is the parent company of a group (“LEAX Group”) with more than 1,200 employees. LEAX Group has operations in Köping, Falun, Falköping and Tidaholm in Sweden, Riga and Rezekne in Latvia, Curitiba in Brazil, Detmold in Germany, Mezökövesd in Hungary and Wuxi in China. LEAX Group is a manufacturer of mechanical components and subsystems for the heavy vehicle industry, passenger cars, mining and construction industries and other engineering industries. LEAX Group also delivers customized gearboxes for various mechanical engineering industries. LEAX Group’s sales for 2018 amounted to approx. SEK 1.8 billion.