Interim Report January – June 2021

Reporting period January – June

• Net sales increased 24.6 per cent to SEK 8,370 (6,720) million. Organically, net sales grew by 16.8 per cent.
• EBITA* increased 50.2 per cent to SEK 1,834 (1,221) million.
• The EBITA margin* improved 3.7 percentage points to 21.9 (18.2) per cent.
• Profit before tax grew 57.0 per cent to SEK 1,534 (977) million.
• Net profit for the period grew 57.2 per cent to SEK 1,151 (732) million.
• Earnings per share increased 56.2 per cent till SEK 2.50 (1.60).
• Cash flow from operating activities decreased 6.4 per cent to SEK 1,179 (1,259) million
• The pandemic did not negatively affect the market situation during the period.
• Ten new businesses were consolidated during the period with total annual net sales of
  about SEK 1,240 million.

Reporting period April – June

• Net sales increased 46.2 per cent to SEK 4,501 (3,079) million. Organically, net sales grew by 33.7 per cent.
• EBITA* increased by 79.1 per cent to SEK 1,019 (569) million
• The EBITA margin* improved 4.1 percentage points to 22.6 (18.5) per cent.
• Profit before tax grew 95.9 per cent to SEK 866 (442) million.
• Net profit for the period grew 95.8 per cent to SEK 650 (332) million.
• Cash flow from operating activities increased 9.4 per cent to SEK 858 (784) million.

Summary of financial performance  

COMMENTS FROM THE CEO

Lifco’s primary target is to increase its earnings every year through organic growth as well as acquisitions. Net sales increased by 24.6 per cent to SEK 8,370 (6,720) million in the first half of the year, driven by organic growth and acquisitions. Exchange rate effects negatively impacted sales. The generally favourable market environment was a strong contributing factor to the organic growth of 16.8%.

During the first half of the year, EBITA* increased by 50.2 per cent to SEK 1,834 (1,221) million and the EBITA margin* improved by 3.7 percentage points to 21.9 (18.2) per cent. Improvements in profitability are a result of organic growth, Lifco’s continual focus on profit margins, acquisitions and continued low sales and marketing activities as a result of the pandemic. Earnings per share during the period increased 56.2 per cent till SEK 2.50 (1.60).

All three business areas reported good sales and earnings growth during the first half of the year, and the development was stable in all divisions, except for Forest, for the six-month period. The quarterly comparison is affected by the negative effects of the pandemic in 2020 that primarily occurred during the second quarter 2020 and mainly affected the Dental business area. During the first six months 2021 the pandemic did not have any significant negatively impact on Lifco’s sales and profit.

During the first half of the year, Lifco consolidated ten acquisitions, of which four in the Dental business area, four in Systems Solutions and two in Demolition & Tools. The acquisitions in Dental mean that Lifco continued to strengthen its position in the German market with Kaniedenta, Kentzler-Kaschner and Rissmann Dental, and carried out a small bolt-on acquisition in the Czech Republic. Acquisitions in Demolition & Tools pertained to both of the Italian companies Cangini Benne and MultiOne. Cangini Benne is a leading manufacturer of attachments for excavators and front loaders and MultiOne manufactures mini loaders. Systems Solutions’ business was expanded with three British companies: T. Freemantle, a global manufacturer of cartoning and sleeving machinery; Cleveland Cascades, a global manufacturer of bespoke dry bulk loading chutes; and Spinaclean, which develops and sells vacuum cleaners and pressure washers for indoor and outdoor high-level cleaning. An assets and liabilities acquisition was consolidated in Systems Solutions pertaining to the German company ErgoPack’s distributor in the US. The acquisitions will have a positive impact on Lifco’s results and financial position during the year.

In the second quarter, Lifco announced the acquisition of four companies that will be consolidated into Systems Solutions during the third quarter 2021. These acquisitions pertain to the Italian companies DVG De Vecchi and Next Hydraulics, the German company Bode Components and Swedish Elvärmeprodukter i Skellefteå. The first three are market leaders in their respective niches. DVG De Vecchi manufactures and distributes components for coffee machines and Next Hydraulics manufactures telescopic cranes mainly used on light vehicles and also produces stabilisers for vehicles. Bode Components manufactures safety products for elevators and Elvärmeprodukter i Skellefteå sells heating products for floor, roof, ground and frost protection.

Lifco’s financial position remains solid and interest-bearing net debt amounted to 1.2 times EBITDA* at 30 June 2021, which is well in line with our target of interest-bearing net debt of a maximum of three times EBITDA* and means that Lifco possesses the financial scope to make additional acquisitions.

Per Waldemarson

President and CEO

GROUP PERFORMANCE IN JANUARY – JUNE

Sales increased 24.6 per cent to SEK 8,370 (6,720) million. Organic growth was 16.8 per cent, acquisitions attributed 10.8 per cent and exchange rate effects had a negative impact on sales of 3.0 per cent. During the first half of the year, the German company Rissmann Dental, the Czech company Medema and the British companies T. Freemantle, Cleveland Cascades and Spinaclean as well as the majority of the German companies Kaniedenta and Kentzler-Kaschner and the Italian companies Cangini Benne and MultiOne were consolidated. The assets and liabilities acquisition of German ErgoPack’s distributor in the US was also consolidated during the period.

EBITA* increased 50.2 per cent to SEK 1,834 (1,221) million and the EBITA margin* improved 3.7 percentage points to 21.9 (18.2) as a result of organic growth, Lifco’s continual focus on profit margins, acquisitions and continued low sales and marketing activities as a result of the pandemic. Exchange rate effects had a negative impact on EBITA* of 4.0 per cent. During the period, 39 (34) per cent of EBITA* was generated in EUR, 25 (29) per cent in SEK, 12 (14) per cent in NOK, 7 (7) per cent in GBP, 5 (8) per cent in DKK, 5 (3) per cent in USD and 7 (5) per cent in other currencies.

Net financial items were SEK -34 (-28) million.

Profit before tax grew by 57.0 per cent to SEK 1,534 (977) million and net profit for the period increased by 57.2 per cent to SEK 1,151 (732) million.

Average capital employed excluding goodwill increased by SEK 141 million during the first half of the year, to SEK 2,079 million at 30 June 2021, compared with SEK 1,938 million at 31 December 2020. EBITA* in relation to average capital employed excluding goodwill increased during the period to 159 per cent from 139 per cent at year-end.

The Group’s net debt increased by SEK 1,746 million from 31 December 2020 to SEK 6,522 million at 30 June 2021, of which liabilities related to put/call options and additional considerations for acquisitions amounted to SEK 1,348 (908) million. Interest-bearing net debt increased by SEK 1,244 million since year-end and amounted to SEK 4,486 (3,815) million at 30 June 2021.

The net debt/equity ratio at 30 June 2021 was 0.7 (0.7) and net debt/EBITDA* was 1.8 (1.9) times. Interest-bearing net debt/EBITDA* was 1.2 (1.4) times. At period-end, 45 (41) per cent of the Group’s interest-bearing liabilities were denominated in EUR.

Cash flow from operating activities decreased by 6.4 per cent during the first half of the year, to SEK 1,179 (1,259) million, mainly on the back of the favourable market environment, which led to increased sales and therefore higher accounts receivable. Cash flow from investing activities was SEK -1,671 (-871) million, which was mainly attributable to acquisitions.

GROUP PERFORMANCE IN THE SECOND QUARTER

Sales increased by 46.2 per cent to SEK 4,501 (3,079) million in the second quarter. Organic growth was 33.7 per cent, acquisitions contributed 15.0 per cent while foreign exchange gains had a negative impact of 2.5 per cent. The comparison is affected by the negative effects of the pandemic primarily for the second quarter of 2020 that chiefly affected the Dental business area.

EBITA* increased 79.1 per cent to SEK 1,019 (569) million and the EBITA margin* improved 4.1 percentage points to 22.6 (18.5) as a result of Lifco’s continual focus on profit margins, acquisitions and continued low sales and marketing activities as a result of the pandemic. Exchange rate effects had a negative impact on EBITA* of 3.9 per cent. During the second quarter, 37 (32) per cent of EBITA* was generated in EUR, 26 (30) per cent in SEK and 13 (16) per cent in NOK, 8 (8) per cent in GBP, 5 (1) per cent in USD, 4 (7) per cent in DKK and 7 (6) per cent in other currencies.

Net financial items were SEK -20 (-22) million.

Profit before tax grew by 95.9 per cent to SEK 866 (442) million. Net profit for the period grew 95.8 per cent to SEK 650 (332) million.

Average capital employed excluding goodwill increased by SEK 180 million to SEK 2,079 million at 30 June 2021, compared with SEK 1,899 million at 31 March 2021. EBITA* relative to average capital employed excluding goodwill increased from 151 per cent at 31 March 2021 to 159 per cent at 30 June 2021.

From 31 March 2021, the Group’s net debt increased by SEK 618 million to SEK 6,522 million. Dividends amounted to SEK 620 (34) million for the quarter. At the Annual General Meeting on 23 April 2021, the dividend for the 2020 financial year was set at SEK 6.00 per share, which is equivalent to a dividend of SEK 1.20 per share after the share split in May 2021. The total dividend to shareholders for the 2020 financial year was SEK 545.1 million, and was paid on 30 April 2021.

Cash flow from operating activities increased 9.4 per cent to SEK 858 (784) million, mainly on the back of improved operating profit for the quarter. Cash flow from investing activities was SEK -799 (-44) million, which was attributable to acquisitions and investments.

FINANCIAL PERFORMANCE – BUSINESS AREAS

Dental

The companies in Lifco’s Dental business area are leading suppliers of consumables, equipment and technical service to dentists across Europe, and the business area also has operations in the US. Lifco sells dental technology to dentists in the Nordic countries and Germany, and develops and sells medical record systems in Denmark, Sweden and Germany. The business area also includes a number of manufacturers which produce fitting products for dentures, disinfectants, saliva ejectors, bite registration and dental impression materials, bonding agents and other consumables that are sold to dentists through distributors around the world. In recent years, Dental has through acquisitions and organic growth increased its earnings in manufacturing, dental technology and software faster than in distribution, which has had a positive impact on margin growth in the business area.

Net sales in Dental increased by 32.0 per cent to SEK 2,656 (2,012) million during the first half of the year, positively affected by organic growth and acquisitions. The quarterly comparison is affected by the negative effects of the pandemic in 2020 that primarily occurred during the second quarter of 2020.

EBITA* increased by 55.8 per cent to SEK 600 (385) million during the first half of the year and the EBITA margin* improved by 3.5 percentage points to 22.6 (19.1) per cent. Profitability was impacted positively from organic growth, Lifco’s continual focus on profit margins, acquisitions and continued low sales and marketing activities as a result of the pandemic.

The dental market remains generally stable. The results of individual companies in Lifco’s Dental business may in any individual quarter be influenced by significant fluctuations in exchange rates, calendar effects (such as Easter), gained or lost contracts in procurements of consumables by public-sector or major private-sector customers and fluctuations in the delivery of equipment. In the second quarter of the year, there were no individual events that had a substantial impact on the earnings of the Dental group as a whole.

As of January 2021, the German operations Kaniedenta and Rissmann Dental were consolidated. Kaniedenta produces and sells dental consumables primarily for the German market. The company had a turnover of about EUR 29 million in 2019 and has 35 employees. The acquisition comprised the majority of the shares. Rissmann Dental is a dental laboratory and had sales of approximately EUR 4.1 million in 2019. The company has about 50 employees. The acquisition was an assets and liabilities acquisition. As of February 2021, the majority of the German company Kentzler-Kaschner was consolidated, which sells consumables to the dental market, mainly in Germany. The company had a turnover of about EUR 3.6 million in 2020 and has 20 employees. As of March 2021, the Czech company Medema was consolidated, which sells consumables and smaller sized equipment to dental clinics and dental laboratories in the Czech Republic. The company had a turnover in 2020 of about CZK 26 million, corresponding to about EUR 1 million. The company has four employees and the acquisition comprised all of the shares.

Demolition & Tools

The Demolition & Tools business area develops, manufactures and sells equipment for the construction and demolition industries. The Group is the world’s leading supplier of demolition robots and crane attachments. The Group is also one of the leading global suppliers of excavator attachments. The business area’s EBITA margin may fluctuate between quarters due to single, major special orders and changes to the product mix.

Net sales increased by 36.0 per cent to SEK 2,226 (1,637) million in the first half of the year, driven by organic growth and acquisitions. The market environment was generally good. EBITA* increased by 69.3 per cent to SEK 601 (355) million during the same period and the EBITA margin* improved by 5.3 percentage points to 27.0 (21.7) per cent. The EBITA margin* was impacted positively by organic growth, profitable special orders, Lifco’s continual focus on profit margins, acquisitions and continued low sales and marketing activities as a result of the pandemic.

As of February 2021, the majority of the Italian company MultiOne was consolidated, a leading manufacturer of mini loaders and attachments. The company had a turnover of around EUR 27 million in 2020 and has 46 employees. From April 2021, the majority of the shares of the Italian company Cangini Benne, a leading manufacturer of attachments for excavators and front loaders, were consolidated. Cangini Benne had a turnover of about EUR 35 million in 2020 and has 115 employees.

Systems Solutions

Through its operating units, the Systems Solutions business area operates in industries offering systems solutions. Systems Solutions is divided into five divisions: Construction Materials, Contract Manufacturing, Environmental Technology, Service and Distribution (previously Interiors for Service Vehicles) and Forest.

Net sales in Systems Solutions increased by 13.6 per cent to SEK 3,488 (3,071) million during the first half of the year, mainly on the back of organic growth in all divisions except Forest. The market environment for Systems Solutions was generally favourable during the period.

During the first half of the year, EBITA* increased by 29.7 per cent to SEK 695 (536) million and the EBITA margin* improved by 2.4 percentage points to 19.9 (17.5) per cent. Improvements in profitability are a result of Lifco’s continual focus on profit margins, organic growth, acquisitions and continued low sales and marketing activities as a result of the pandemic.

Construction Materials reported good performance in sales and profitability in the first half of the year.

Contract Manufacturing reported stable sales and profitability development during the six-month period.

Environmental Technology had a strong development in sales and profitability during the period due to healthy demand for consumer durables and continued healthy demand in the aftermarket segment.

Service and Distribution saw a good development in sales and profitability during the first half of the year as a result of acquisitions, a favorable market situation and profitability focus.

Forest had lower sales and improved earnings and profitability during the first six months of the year, which was due to the project-related part of the business, in which sales and earnings can fluctuate substantially between the quarters. These variations do not usually correlate with the underlying market situation but instead depend largely on the outcome of specific projects.

In the Environmental Technology division, the British company Cleveland Cascades was consolidated as of February 2021, a global leader in the design and manufacture of bespoke dry bulk loading chutes. The company had a turnover of around GBP 5.1 million in 2020 and has some 30 employees. The acquisition comprised all of the shares. In the Service and Distribution division, the British company T. Freemantle was consolidated as of January 2021, a niche manufacturer of cartoning and sleeving machinery. The company had a turnover of around GBP 5.0 million in 2019 and has some 40 employees. The acquisition comprised all of the shares. From April 2021, the British company Spinaclean, which develops and sells vacuum cleaners and pressure washers for indoor and outdoor high-level cleaning, was consolidated into the Environmental Technology division. Spinaclean had a turnover of about GBP 5.8 million in 2020 and has some 20 employees. The acquisition comprised all of the shares. ErgoPack’s distributor in the US was also consolidated in the Environmental Technology division from May 2021. The company had a turnover of about USD 4.2 million in 2020, all of which was generated by the German company ErgoPack GmbH, which Lifco acquired in 2019. The acquisition of the distributor in the US was an assets and liabilities acquisition.

ACQUISITIONS

Lifco made the following consolidations in the first six months of the year:

Further information on the acquisitions is provided on page 18. The figures for net sales and number of employees refer to estimated annual net sales and the number of employees at the acquisition date.

Taken together, the acquisitions will have a positive impact on Lifco’s results and financial position in the current year.

OTHER FINANCIAL INFORMATION

Employees

The average number of employees was 5,784 (5,446) in the first half of the year. At the end of the period, the number of employees was 6,014 (5,382). Acquisitions added around 360 employees.

Events after the end of the reporting period

On 8 June 2021, Lifco announced the acquisition of all shares in Elvärmeprodukter i Skellefteå, which sells heating products for floor, roof, ground and frost protection, mainly in Sweden. The company had a turnover of around SEK 38 million in 2020 and has eleven employees. Elvärmeprodukter i Skellefteå will be consolidated in the Systems Solutions business area, Construction Materials division, from July 2021.

On 23 April 2021, Lifco announced the acquisition of the majority of the shares of the Italian company DVG De Vecchi, a leading manufacturer and distributor of coffee machines. DVG De Vecchi had a turnover of about EUR 16 million in 2020 and has 39 employees. DVG De Vecchi will be consolidated in the Systems Solutions business area, Service and Distribution division from July 2021.

On 24 June 2021, Lifco announced the acquisition of the majority of the shares of the Italian company Next Hydraulics, a leading manufacturer of telescopic cranes mainly used on light vehicles. The company also produces stabilisers for vehicles. Next Hydraulics had a turnover of about EUR 21 million in 2020 and has 43 employees. Next Hydraulics will be consolidated in the Systems Solutions business area, Service and Distribution division from July 2021.

On 30 June 2021, Lifco announced the acquisition of all shares in the German company Bode Components, a leading manufacturer of safety products for elevators. Bode Components generated sales of about EUR 5 million in 2020 and has nine employees. Bode Components will be consolidated in the Systems Solutions business area, Construction Materials division, from August 2021.

The individual acquisitions will not have a significant impact on Lifco’s earnings and financial position in the current year.

Related party transactions

No significant transactions with related parties took place during the period.

Division of the company’s shares (share split)

On 23 April 2021, the Annual General Meeting resolved, in accordance with the Board’s proposal, to approve a division of the company’s shares (share split) so that each current share is divided into five new shares of the same class (5:1 split). On 28 April 2021, the Board announced that the record date for the split would be 7 May 2021, meaning that the last day for trading of the share before the split was Wednesday, 5 May 2021, and the first day of trading in the split shares was Thursday, 6 May 2021.

The total number of shares in the company after the split increased from 90,843,260 to 454,216,300 shares, of which 30,379,850 were Class A shares and 422,836,450 were Class B shares. The Class A shares represent 303,798,500 votes and the Class B shares represent 423,836,450 votes, for a total of 727,634,950 votes. The share capital is unchanged at SEK 18,168,652.

The company’s shares received new ISIN codes in connection with the split: Class A shares: SE0015949193, Class B shares: SE0015949201.

Annual General Meeting 2021

The 2021 Annual General Meeting was held on 23 April in Stockholm. The main resolutions of the Meeting were as follows: • The dividend for the 2020 financial year was set at SEK 6.00 per share (before the 5:1 share split). The record date for the right to dividends was set at 27 April 2021, with payment on 30 April 2021. • Carl Bennet, Ulrika Dellby, Annika Espander, Dan Frohm, Erik Gabrielson, Ulf Grunander, Johan Stern, Caroline af Ugglas, Axel Wachtmeister and Per Waldemarson were re-elected members of the Board. Carl Bennet was re-elected Chairman of the Board. • The registered public accounting firm PricewaterhouseCoopers AB was re-elected as the company’s auditors for a one-year term. • Fees for the Board and auditors were adopted, as were principles for the work of the Nomination Committee. • Resolution to approve a division of the company’s shares (share split) so that each current share is divided into five new shares of the same class (5:1 split).

Board members and senior executives have acquired synthetic call options in Lifco

The Board of Directors of Lifco was informed by the company’s principal shareholder, Carl Bennet AB, on 31 May 2021 that Board members and senior executives in Lifco have acquired synthetic call options in Lifco issued by Carl Bennet AB.

Carl Bennet AB has offered all Board members elected by the general meeting, excluding Carl Bennet, and all senior executives in Lifco, 21 people in total, to acquire synthetic call options in Lifco issued by Carl Bennet AB. In total 415,201 options were acquired at a price corresponding to the market value of the options on the date of transaction, according to an external valuation statement. The total market value of the options at the time of the transaction has been calculated at SEK 9.5 million.

The synthetic call options are related to the Lifco Class B share and have a maturity of four years and may be exercised during the period 1 March–31 May 2025. The exercise price per option is SEK 223.71, corresponding to 122 per cent of the volume-weighted average price paid for the Lifco Class B share on Nasdaq Stockholm during the period 24–28 May 2021. When exercising the option, the option holder will receive a cash payment from the option issuer corresponding to the market value of the share at the time of the exercise reduced by the exercise price. The terms and conditions for the options contain a cap, entailing that the maximum payout for each option is SEK 326.40. The options are not subject to any transfer restrictions. 

Lifco has not been involved in the offer, which was provided by Carl Bennet AB to Board members and senior executives in Lifco on its own initiative. The offer does not incur any costs for Lifco.

Risks and uncertainties

The risk factors which have the biggest impact for Lifco are the competitive situation, structural changes in the market and general level of economic activity. Lifco is also exposed to financial risks, including currency risks, interest rate risks, credit and counterparty risks.

During the first six months 2021 the pandemic did not have any significant negatively impact on Lifco’s sales and profit. Lifco continues to monitor the effects of the pandemic.

The Parent Company is affected by the above risks and uncertainties in its capacity as owner of the subsidiary companies. For further information on Lifco’s risks and risk management, see the 2020 Annual Report.

Accounting policies

The Group’s interim report has been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. In respect of the Parent Company, the report has been prepared in accordance with the Annual Accounts Act and Recommendation RFR 2 Financial Reporting for Legal Entities of the Swedish Financial Reporting Board. The accounting policies have been applied in accordance with those which are presented in the 2020 Annual Report and should be read in conjunction with these.

In the first quarter of 2021, the Group changed its accounting policies concerning call/put options issued in non-controlling interests. Changes in value of these options were previously recognised in profit or loss. The changed accounting policy means that these changes in value are instead recognised in equity as shareholder transactions. The Group is of the opinion that this reporting is justified since it better reflects the significance of the transaction and thus provides a more true and fair view. Comparative figures have been recalculated for 2020 without this leading to any material impact on the reporting.

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

DECLARATION OF THE BOARD OF DIRECTORS

The Board of Directors and Chief Executive Officer warrant and declare that this six-month report gives a true and fair view of the Parent Company’s and Group’s operations, financial positions and results, and that it describes significant risks and uncertainties faced by the Parent Company and the companies included in the Group.

Enköping, 16 July 2021

FINANCIAL CALENDAR

The report for the third quarter will be published on 22 October.

The year-end report and the report for the fourth quarter will be published on 2 February 2022.

FURTHER INFORMATION

Media and investor relations: Åse Lindskog, ir@lifco.se, telephone: +46 730 24 48 72.

TELECONFERENCE

Media and analysts are welcome to call in to a teleconference, where CEO Per Waldemarson and CFO Therése Hoffman will present the interim report. After the presentation, there will be an opportunity to ask questions.

Time: Friday, 16 July at 10:30 a.m. CEST

Link to the presentation: https://tv.streamfabriken.com/lifco-q2-2021

Telephone numbers:

Sweden +46 8 566 427 03
UK +44 3333 00 92 63
US +1 631 913 14 22, pin code USA: 27098911#

LIFCO IN BRIEF

Lifco offers a safe haven for small and medium-sized businesses. Lifco’s business concept is to acquire and develop market-leading niche businesses with the potential to deliver sustainable earnings growth and robust cash flows. Lifco is guided by a clear philosophy centred on long-term growth, a focus on profitability and a strongly decentralised organisation. The Group has three business areas: Dental, Demolition & Tools and Systems Solutions. At year-end, the Lifco Group consisted of 175 operating companies in 31 countries. In 2020, Lifco reported EBITA of SEK 2,702 million on net sales of SEK 13.8 billion. The EBITA margin was 19.6 per cent. Read more at www.lifco.se.

CONDENSED CONSOLIDATED INCOME STATEMENT

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

SEGMENT OVERVIEW

Lifco’s operations are monitored and evaluated by the CEO and resources are allocated based on information from the three operating segments Dental, Demolition & Tools and Systems Solutions. The defined quantitative limits have been exceeded only by Dental and Demolition & Tools. One further operating segment, Systems Solutions, is presented. This operating segment consists of a merger of those divisions which have similar economic characteristics and which do not individually meet the defined quantitative limits. These divisions are Construction Materials, Contract Manufacturing, Environmental Technology, Service and Distribution and Forest.

NET SALES TO EXTERNAL CUSTOMERS

No sales are made between the segments.

Net sales by type of income:

EBITA

A breakdown of results by segment is made up to and including EBITA. EBITA is reconciled to profit before tax in accordance with the following table:

CONDENSED CONSOLIDATED BALANCE SHEET

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

ACQUISITIONS IN 2021

Ten new businesses were consolidated in the first half of the year. The acquisitions pertain to the assets in the German company Rissmann Dental and ErgoPack’s distributor in the US, and to all of the shares in the Czech company Medema and the British companies T. Freemantle, Cleveland Cascades and Spinaclean. The consolidated acquisitions also include the majority of both of the German companies Kaniedenta and Kentzler-Kaschner as well as both of the Italian companies Cangini Benne and MultiOne.

The purchase price allocation includes all acquisitions made during the first half of the year.

Acquisition-related expenses of SEK 23 million are included in administrative expenses in the consolidated income statement for the first half of the year. Since the respective consolidation dates, the acquired companies have added SEK 594 million to consolidated net sales and SEK 158 million to EBITA. If the businesses had been consolidated as of 1 January 2021, net sales for the year would have increased by a further SEK 150 million and EBITA would have increased by a further SEK 39 million.

FINANCIAL INSTRUMENTS

¹ Other liabilities classified as financial instruments refer to mandatory put/call options related to non-controlling interests and additional considerations.

The carrying amount is the same as the fair value. Financial instruments at fair value are classified into different levels depending on how fair value is determined. All financial instruments at fair value in the Lifco Group have been classified as level 3, i.e. non-observable inputs. The fair value of short-term borrowings is equal to the carrying amount, as the discount effect is insignificant.

KEY PERFORMANCE INDICATORS

CONDENSED PARENT COMPANY INCOME STATEMENT

¹ Invoicing of Group-wide services.

² Net financial items include SEK 623 (771) million in dividends received during the six-month period.

CONDENSED PARENT COMPANY BALANCE SHEET