Interim Report January 1 – June 30, 2018

The second quarter of 2018 has been challenging for LEAX. Overall, demand continued at a high level in all our segments and in most markets. However, one of our major customers has during the quarter changed its product range which has had an adverse impact on net sales. We were not able to fully adjust our capacity and cost level as this change came at a late stage. This change in product range is now completed and volumes after the vacation period are expected to be in line with the first quarter of 2018. With our other customers we have seen continued high volumes.

LEAX continues to strive for better profitability and we have during the quarter intensified our activities in addressing products with low profitability. Actions have been carried out to either improve the profitability or phase out these products. Some of these actions have already been implemented but for most of them we will see an effect during the coming quarters.

Highlights of the second quarter of 2018:

• Net Sales amounted to SEK 462,2 million (432,5)
• Operating profit before depreciation (EBITDA) decreased to SEK 16,6 million (19,2)
• Earnings before tax (EBT) decreased to SEK -14,1 million (-4,0)
• Profit margin before tax (EBT%) amounted to -3,9%, (-0,9%)
• Cash flow from operating activities amounted to SEK 17,8 million (-63,9)
• Net income for the period decreased to SEK -15,3 million (65,7)*

Highlights of the first six months of 2018:

• Net Sales amounted to SEK 935,4 million (840,1)
• Operating profit before depreciation (EBITDA) increased to SEK 56,0 million (51,1)
• Earnings before taxes (EBT) decreased to SEK -0,9 million (0,4)
• Profit margin before tax (EBT%) amounted to -0,1% (0)
• Cash flow from operating activities amounted to SEK 31,7 million (-43,5)
• Net income for the period decreased to SEK -5,0 million (75,5)*

* Net income in the second quarter of 2017 had a positive effect from discontinued business of SEK 64,1 million and for the first six months of 2017 the corresponding effect was SEK 69,6 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 22 August 2018 at 15:00 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 2017 amounted to approx. 1.7 billion SEK.