BRAinvest annual report 2018 by Thorn Reklambyrå AB

Annual Report 2018

BrA Invest TABLE OF CONTENTS Introduction 4-7 Company Presentations Management Review Consolidated Income Statement Consolidated Balance Sheet

8-18 19-23 25 26-27

Consolidated changes in equity

Consolidated Cash Flow Statement

Income Statement for the Parent Company Balance Sheet for the Parent Company

29 30-31

Changes in Equity for the Parent Company

Cash Flow Statement for the Parent Company

Additional Information

33-42

Signatures 43 Auditor’s Report Presentation of the Board of Directors/Auditor

44-45 46

The major focus of the year has been our infrastructure investments in KB and in BAB. The picture is taken from BAB’s new office in Malmö. .

BRA INVEST – BETTER BUSINESS

BrA Invest

Major infrastructure investments and a good result! In essence, the BrA Invest Group wrapped up 2018 according to plan as all businesses (except Draken) experienced good growth and we achieved a significant improvement in results for the Group’s big company KB Components. The only fly in the ointment was BAB, which suffered a major mishap in a project in Lund which alone almost eliminated that company’s earnings for the year. Despite this, the Group was able to report its second strongest year (and this without any property sales) since the business, in its current structure, began in 2008. The major focus of the year has been infrastructure investments in new (completely renovated), spruce premises for both KB in Örkelljunga and for BAB in Malmö. Add to this a completely new and ultra-modern tool workshop for KB in Örkelljunga and the biggest acquisition in the Group’s history, DKI Plast s.r.o. in Slovakia, which altogether has meant the year’s investments exceed SEK 200 million. We believe in our companies, invest in them and are convinced that this leads to positive results in the future! KB Components has had a very strong year, with 15% growth (half organic and half acquisitions) and a result at EBITA level of almost 10%. Thus we have attained the goal of ”Nolato-level” earnings, which we have long strived for! The operations in all production units, except Anderstorp, are showing improvements in results. We have deliberately chosen to move a great deal of the labour-intensive assembly and production from KB Components Plastunion in Anderstorp and place it instead with Kaunas. This has benefited our unit in Lithuania, which is demonstrating healthy profits, while creating some ”holes” in Anderstorp. These holes will gradually be filled in 2019, partly, by the first automotive project in this unit, i.e. battery boxes for Volvo Cars’ forthcoming electric cars. Therefore we are continuing on the well-trodden and successful path of working with highly automated production in our Swedish units and working with more labour-intensive operations in Lithuania. At the start of July, KB Components stepped up as owner of DKI Plast s.r.o. in Slovakia. This company, which works mainly with extrusion (25%) and injection moulding (75%) lighting armatures of different types, is an excellent complement to KB’s other operations and customer bases. DKI was

founded in 1946, a year before Anders Månsson founded Konstruktionsbakelit, and has a long history similar to KB’s, in which the operation, up until 2013 was run from Denmark. The move from Denmark to the current premises in Zilina, Slovakia occurred over a ten-year period and was implemented by the DKI’s founder’s (who by the way was a friend of Anders Månsson) three sons. Utilising their right of age, they chose to divest their company to us, something we are very happy about. The acquisition of DKI, which has a turnover of just under SEK 200 million, means that we reset the balance of customers, to 50% automotive and 50% other industry, something we strive towards to avoid too much of an overweight and a centre of gravity on the vehicle side. At the end of the year, our Chinese factory in Wuxi finally began to deliver larger volumes of products when the sill moulds for Volvo Cars got started. This business, which in 2018 also declared a large deficit, will in 2019, turnover almost SEK 50 million and we are hopeful that this will be sufficient to achieve a zero result. The investment and start-up in China has been expensive and has taken longer than we planned but we are now in a situation with five major customers who are successively increasing volumes in this ultra-modern factory environment.

These customers appreciate our investment in China and like the fact that we can service them locally where they have their various assembly lines, i.e. in North America, Eastern Europe and in China. Our strategy of becoming a global injection moulding player with a strong central and technically-skilled main unit in Örkelljunga has succeeded and we are very optimist about the future! Dogman has continued with its strategy of acquiring larger stores at reasonable prices to counteract the trend we are seeing where several chain customers are taking care of sourcing themselves and taking business volumes from us. On the wholesale side, Dogman has been somewhat up and down. In Norway, we have made big steps forward by gaining business with customers like Norgesgruppen, while in Sweden we are gradually dropping volumes, mainly with ICA, which has long been our largest and most important customer. Dogman has skilfully navigated in this environment by both supporting a traditional customer base of retail chains and independent pet food retailers as well as buying up stores. At the end of the year, we had five stores, two in Bergen, one in Gothenburg and two in Helsingborg and in total on a rolling twelve-month basis had a turnover of around SEK 100 million. These stores are very profitable even if our concept store in Väla, Helsingborg is running at a loss, as Continues overleaf

4 – ANNUAL REPORT 2018

From left: Lars Holtskog, Åke Waldt, Jörgen Sabel, Kenneth Andersson, Maria Gumabon, Pierre Olofsson, Stefan Andersson, Roger Jönsson and Christer Andersson.

ANNUAL REPORT 2018 – 5

BRA INVEST – BETTER BUSINESS

cont. 2018 – Major infrastructure investments and a good result! planned, during this, its first operational year. The e-commerce investment for the consumer, which Dogman launched in spring 18, ought, at the time of writing (March 19), to have been up for a while now. However we did run into some issues with the supplier of this system (Ateles), which led to major delays and additional costs, and we have therefore lost six months compared to plan. This need not be a major problem if we ensure that the system that is eventually launched is both user-friendly and effective. In terms of results, Dogman has, in this difficult context, kept figures reasonably positive. We are not delivering to the full extent of 2017, but not far behind. The plan for 2019 is to continue the transformation of Dogman to an e-commerce company, while at the same time supporting current customers in our traditional good manner and selectively acquiring appropriate stores. In this context, we expect Dogman to grow significantly in terms of turnover in 2019 and deliver a result at least on par with 2018! In the same way as, last year, I stated that BAB/3Hus ended 2017 in a fantastic manner, unfortunately 2018 was somewhat of a belly flop. In the context of the drastic organic growth that BAB has operated within in recent years, we’ve seen a very many good staff members join, but also some not so good. We have mainly managed growth well and the business area north-west Skåne is a very effective profitability machine which after many years of fine tuning works very well. The Malmö business area, which is starting to approach a turnover of SEK 500 million, has experienced major changes during the year, including moving into a fantastic new office/depot in the eastern part of Malmö while a number of major projects have been implemented. One of these, Eddan in Lund, which was taken at an order value of SEK 35 million unfortunately went completely wrong both in terms of cost and time. This project, alone, generated a loss

6 – ANNUAL REPORT 2018

of SEK 18 million for the company and cancelled out much of BAB’s annual profit. Many measures to do with procedures, follow-up projects, bids and more have now been taken to avoid similar incidents occurring in the future. During the year, 3Hus completed stage 1 of the Ejdern area in Örkelljunga, 32 rental apartments which were ready for moving in at the end of April 2018 and, at the time of writing, have all been rented out. Stage 2 will be started during the third quarter of 2019, with planned moving in around autumn 2020. Otherwise, activity around new exploratory projects has been very intensive during the year! We have recruited a project developer to, for example, manage participation in more municipal land allocation projects, which continue to come our way within our business region. We won one of these, the Råå area in south Helsingborg, during the spring after tough competition with a dozen other project developers. This project, which will have a turnover of around SEK 400 million is currently in the design phase and if all goes to plan, we will start selling tenant-owned apartments here during the second half of 2019 and make the first spade mark on the land in 2020. The ambition for 3Hus is to build a portfolio of development projects so that over time, in a stable fashion, we can have an increasing volume of annual construction starts while also successfully completing (complete sales) earlier started projects. This type of own developed business is traditionally the branch of the larger construction companies that is most profitable and our ambition is to keep an operating margin for this kind of business clearly over 10%. Draken in Reftele did not deliver according to plan but in 2018 experienced a setback in which it ”only” managed an operating result of zero. Lots of small issues occurred meaning the overall picture was poor. However we are getting on with the

finicky work of improving this operation and have clear hopes for a stronger 2019 than 2018. For BrA Invest as a whole, the Group’s consolidated equity during the 2018 calendar year developed as follows: Opening Balance:

MSEK 325,9

Closing Balance:

MSEK 380,3

The following adjustments must be added to this: Dividends paid to shareholders in MSEK 7,5

BrA Invest

Dividends paid to minority shareholders in MSEK 1,75

KB:

MSEK 1,5

Dogman:

The ”value” created by the companies within the BrA Group in 2018 can then be summed up to MSEK 65,1 and the Group’s return on equity during the year amounted to 20%, in line with the target of a 20% return on the Group’s visible equity. If we look at the time since the Group was formed, the annual returns on visible equity are as follows: Return on visible equity 2005-2012 2013

70 %/år 12,9 %

2014

19,8 %

2015

65,3 %

2016

21,3 %

2017

41,9 %

2018

20,0 %

If we take a look at our operations and core (MSEK)

Draken

Capital employed (approximate)

EBIT

Returns (%)

35 (35)

0 (2)

0 (6)

Dogman

120 (100)

24 (33)

20 (33)

600 (450)

74 (66)

12 (15)

BAB/3Hus

220 (200)

9 (61)

4 (30)

Group

975 (785) 107 (138)

11 (18)

companies during the calendar year and work with returns relative to capital employed, the situation is approximately as follows: (figures within parenthesis apply to 2017) The difference between the Group’s EBIT and the total of the four operations’ EBIT is in certain costs (MSEK 6) which are taken centrally. The decline in return which we are seeing for the year compared to 2017 is linked entirely to BAB/3Hus. We have not sold any property during the year and BAB has, as mentioned earlier, delivered a much poorer result than both 2017 and, above all, compared to the plan we have had. The higher tied-up capital in the Group within, primarily KB, reflects the major investments we have carried out within this Group, both in Örkelljunga and in the form of the acquisition of DKI. We are not satisfied with the poorer returns we are seeing for the Group as a whole, even if the picture is not entirely fair as we have taken the whole investment (acquisition) of DKI at the same time as we are only counting six months of the company’s earnings. The major problem is however BAB/3Hus which both ties up more capital and has seriously declined its earnings. 2018 must be labelled a moderate year for our construction/property business and we count on significant improvements ahead! The consolidated result for the whole year 2018 is worse than for the whole year 2017. In addition to the problems referred to above within BAB, we have also this year been working against a strong head wind in terms of currency. The Swedish krona has weakened significantly against both the USD and the Euro. Somewhat simplified, BrA Invest net consumes MUSD 1 and MEuro 2 per month and when the krona weakened quickly, as it did during the first half of 2018, we did not have time to compensate for this with our customers. It was, above all, KB and Draken that were impacted and only at the end of the year have we reached a balance. Thus we did not succeed in fulfilling the ”promise” that I

laid out in last year’s Message from the CEO that the operating result would increase in 2018 compared to 2017. Furthermore we did not manage to meet two of the three targets, BAB 5% on the last row, KB 10% and Dogman 15%, but perseverance is the key to success, and the targets remain in place and we are going to get there sooner rather than later! The year 2019 has the conditions to be the best year in BrA Invest’s history. KB is trending strongly and if we are not hit by a violent global economic blow then this operation will deliver a really good 2019. BAB is to

make a comeback from 2018 and Dogman continues steadily on it’s repositioning journey. As Kamprad used to say, ”We have lot’s of undone work ahead of us!

CEO Stefan Andersson ANNUAL REPORT 2018 – 7

BRA INVEST – BETTER BUSINESS

Fastighets AB 3Hus

Major increase in property development activities Fastighets AB 3Hus is the BrA Group’s real estate company based in Åstorp, north-west Skåne. The business concept is to develop properties for long-term and sustainable ownership. Our current property portfolio consists of both commercial premises and residential properties, mainly situated in the local area. The property portfolio generates good returns and constitutes a stable base for 3Hus’ operations. Together with the construction companies/sister companies BAB construction AB, 3Hus is a player that controls the entire construction and property chain from bare soil to complete end product. This, and the financial strength of the parent company, provides potential to be a long-term partner in projects that create profitability and growth for all. The business area is gradually expanding and now operates across the entire west of Skåne as well as southern Halland. Our ambition is to pave the way for BAB’s expansion. At the start of May, Ejdern 16 in Örkelljunga municipality was completed, 32 rental apartments. This was the first stage in a larger centrally-located area for which we have a letter of intent with the municipality to develop. Next stage, Ejdern 14 with another 38 rental apartments, which will be started during the third quarter of 2019, and moving in is planned for autumn 2020. During the year we have drastically increased our property development. During the summer we recruited our first dedicated property developer and, at the time of writing, another colleague is starting this work, both very skilled and experienced. We have approached many municipalities, property owners and estate agents and taken part in a number of land allocation tenders, which meant that we have already built up a considerable project portfolio. The project is often dependent

CEO Christer Andersson 8 – ANNUAL REPORT 2018

on the development planning process which is why there is uncertainty about the delivery times. However we expect to carry out design and marketing for several of the projects in 2019 to then make the first mark in the land in 2020 for around 250 new houses. The ambition is to build a depot of various development projects with different lead times so that over time we can stably increase volumes of annual construction starts at the same time as we successfully complete (complete sales) earlier started projects. Our ambition is to keep an operating margin for this business that exceeds 10% with a margin. The production of new-built properties has fallen recently and many reports on the economy are flagging up continued falling investment volumes. At the same time, the demographic need remains and is going to be there for a long time ahead, but we need to find ways to build properties for those who need them and where they are needed. There is a major need in the market for qualitative and architecturally attractive housing at reasonable prices, however mobility is limited.

To meet the demand we are tying ourselves to development projects on stationary properties in surrounding areas to the larger cities and currently there are already several agreements on land acquisition. Together with BAB, we have also started projects to create production and cost-effective concept houses for different constructions that we can develop in large scale. We are furthest along in developing terrace houses of various sizes but work is underway on multi-storey family houses and sheltered housing. Our first concept house is expected to have started production in 2020. In 2019, 3Hus will continue working with its sister company BAB to create a stronger player in the southern Swedish construction and property market, playing a crucial role in society and making a difference!

Fastighets AB 3Hus*

Key Figures 2018 (2017)

Part of the BrA Invest Group since 2008 BrA Invest’s stake is 100% Net sales MSEK 9,4 (MSEK 6,2) EBIT MSEK 0,0 (MSEK 28,0) Number of employees 2 (1) *including other property companies

BRA INVEST – BETTER BUSINESS

BAB bygg

Project impairment losses lower the result – a lost year but yet not... BAB is a construction company with a history stretching back a whole century. The company’s head office is situated in Åstorp, in the north-west of Skåne, and it has branches in Malmö and Halmstad. The company has 330 employees and turnover amounted to over MSEK 951 in 2018. The company provides construction services, contracts and facilities. Customers are predominantly local authorities, government, industry and property and management companies. The business area is gradually expanding and now operates across the entire west of Skåne as well as southern Halland. After several years with a high rate of expansion and good development of results, 2018 was a disappointment. The operation has basically continued to remain strong with a good organisation supported by stable processes, but unfortunately we completely failed with the project Eddan in Lund, a new build of student apartments. In this individual project, everything went wrong and the losses are gigantic and, primarily, entirely explain the weak result in 2018. The rest of the explanation is linked to far too optimistic forecasts in several projects in 2017, which have had to be compensated with impairment losses in 2018. Altogether, these failures have given us a drop in results in 2018 of around MSEK 25.

Hallane regions have delivered a strong year in which both Contracts and Construction Service achieved sales and profitability goals. The Malmö region was brutally impacted by the problem project the Eddan district and thus delivered a catastrophic year. For the Facilities region, growth was good but the result unsatisfactory. For both the Malmö Region and the Facilities Region however the underlying business is healthy.

In 2019 we will return to our good old form and the conditions are right to succeed. Orders are larger than ever, the projects healthy and the organisation is growing gradually stronger. The work of fine tuning processes, continuous improvements and the BAB-school are going according to plan and this improves self-confidence and the ability to implement.

During the year our facilities region has changed its name from Wilhelmssons Mark & Entreprenad AB to BAB anläggning AB and at the start of 2018 BAB Byggtjänst AB changed its name to BAB bygg AB. This means that in the future we can market our entire service within Contracts/Construction Services/Systems under one and the same brand, BAB.

During the past year, there have been large differences in performance between our different regions. Our north-west Skåne and

In the autumn we established the new function Machine Depot. The function will work in the same way as if it was an external machine rental and the aim is for internal invoices to be at least MSEK 20 in 2019. The price of rental is in accordance with what we are offered on the market, which will thus give the company a serious injection of results compared to renting machines and equipment externally.

CEO Kenneth Andersson 10 – ANNUAL REPORT 2018

During the year we established a new office in Fosie, Malmö. The relocation was done during November and with this as our new base for the future all conditions are in place to put BAB on the map in the expansive Malmö-Lund region.

For 2019, the goal is to grow the business by at least 20% and exceed sales of SEK 1 billion. The operating profit target is, as previously, 5%, but if we were to end up on the range of 3-4%, this is also acceptable and, relative to other comparable companies, a good result. In order to meet the goal, we have set in place detailed plans of action for each region and every support function. There will be growth in all regions. The sister company 3Hus has drastically expanded its project development in 2018 and thus will build up a considerable project portfolio. From late 2019, we will start producing these. At the start of 2019, the order backlog amounted to approximately MSEK 1,050. MSEK 500 of this is accounted for by production in the north-west Skåne region, 400 in the Malmö region, 100 in the Halland region and 50 in the Facilities region. The majority of the backlog of orders is to be processed and the results offset during 2019. In 2019, BAB will continue working under the owners’ directives with its sister company Fastighets AB 3Hus to create a stronger player in the southern Swedish construction and property market, playing an important role in society and making a difference!

BAB bygg (Group)

Key Figures 2018 (2017) Part of the BrA Invest Group since 2008 BrA Invest’s stake is 100% Net sales MSEK 951,5 (MSEK 808,0) EBIT MSEK 8,6 (MSEK 32,9) Number of employees 308 (267)

BRA INVEST – BETTER BUSINESS

Dogman

Dogman transforms We entered 2018 with courage and determination to implement a number of major changes within the business model, organisation and product focus. A journey of change that started the year before but was planned to continue into 2018 and up until 2020. Setting a plan around what the company needed to do was one thing, but to actually have the courage to implement a number of controversial changes in a stable and profitable business was another. We had a clear picture when we started the year about how the market and consumer behaviour would change over the next few years and 2018 was thus designated a ”transformation year”. With growth of 13% and an annual turnover of MSEK 349, we can, in many ways, state that we made the right decision in 2018. The business has moved from one division to three and is now defined through Wholesale, Retail and E-commerce. Within the wholesale business, some of our industry ideas were confirmed during the year with customers who found it difficult to resist their retail competitors with the effect being that focus was moved from quality to price as a means of competition. At the same time we gained more confidence on new markets from larger customers over our quality, price, brand and ability to deliver, not least from digital players, with whom we are much stronger with our brand, but also because of our ability to deliver the digital technology desired by the customer. An activity planned for 2018 was to take ambitious steps towards export, which began with participation in the world’s largest pet industry exhibition, Interzoo in Nürnberg. An exhibition that was followed by participation in Europe’s largest horse and rider exhibition Spoga in Cologne. A good result altogether and with huge potential ahead for the brands Jacson and Dogman. Within retail, we opened the doors of Dogman’s first Swedish store at the end of April

CEO Pierre Olofsson 12 – ANNUAL REPORT 2018

in Väla, Helsingborg. A store that we define as one of Sweden’s most well-stocked, which in addition to being a store, fills the function of our wholesale store, which inspires our corporate customers about how they can design their stores with help from Dogman. In total, our fleet is five stores, as during the year we acquired two more. Within e-commerce most of the year was spent on developing a new modern software platform to the advantage of sales-driven activities on existing platforms. An extensive project that has been as slow as it has been costly, but which we are preparing to launch in spring 2019 and make our entire range accessible to the digital customer. The goal of 10% sales will be achieved in the whole sales business through new products and there we are especially pleased with the development that has taken place within the ”non-consumables” category, where we, as planned, are taking shares within an area in which we are working towards our ”fair share” of the market. A range which has also grown significantly during the year is Jacson, for which we want to be able to offer a larger range within the horse segment and not only for riders. Strategically, Jacson is facing a very exciting journey, with the products experiencing a significant boost in design and quality, and can be measured against many of the absolutely biggest brands but at significantly more modest prices. In terms of results, customer movement and currency has had an impact on us in the short term. During the transformation we managed to keep results relatively healthy by

keeping a profit margin of 7% and a return on working capital of 20%. At the end of the year, we implemented an organisational change at the marketing department linked to ”new Dogman” which in practice has meant outsourcing what, by definition, can be seen as traditional marketing work in the form of catalogues, packaging originals and sales materials. A change that has gone hand in hand with fewer salespeople in the field to support, less packaging production and digitisation and standardisation of sales material. On the staff side, new digital posts have been advertised such as Social Media Strategist, Web Content Designer and Digital Marketer, all in accordance with digitising the organisation in terms of the market but also a boost to push coming e-commerce sales. Certification as a ”Great Place to Work” from 2017 was resumed in 2018, a certification which has more importance in a year characterised by change and many new people mainly in-store. Most likely it is the company’s strong and well-defined culture of happy employees that has meant we have gone through change with good results. We are now taking aim towards 2019, with growth in our sights!

Dogman (Group)

Key Figures 2018 (2017) Part of the BrA Invest Group since 2007 BrA Invest’s stake is 90% Net sales MSEK 348,6 (MSEK 307,6) EBIT MSEK 24,4 (MSEK 32,5) Number of employees 133 (107)

BRA INVEST – BETTER BUSINESS

Draken i Reftele

2018 an intermediate year Draken i Reftele is one of Sweden’s oldest plastic production companies, founded in 1964. Since 2005 the company has been part of BrA Invest and a couple of years ago it went through a number of major structural changes. The changes to the business that we started in 2016 have paved the way to creating a long-term profitability in the company, in a tough industry. Draken’s vision is to be one of Sweden’s most flexible and effective film conversion companies within manufacturing of industrial packaging and technical films in polymer material, mainly polyethylene. With our broad machine park for film extrusion, printing and conversion, Draken offers one of the market’s broadest ranges of plastic film products for industrial use and technical film. Innovative materials and cost-effective prescription solutions mean there is a high degree of product flexibility and in combination with the extensive machine park this creates added value for our customers. Examples of products include packaging film, bags, sacks, hoods and construction films, and all the products can be tailored to the customer or manufactured in standard forms in small or large series. Being dedicated and systematic in combination with our commitment and knowledge, we live with our business concept, ”Only world-class is good enough”. In 2016 the business underwent a major reorganisation, resulting in a streamlined organisation and dramatically reduced costs. In 2017 we witnessed a good result of this which is why we raised our expectations for 2018. Unfortunately we did not manage to fulfil our promises as our process of change lost pace and in doing so delivered a weak financial result. In order to raise the pace again we have introduced a 10-point programme in which we involve all employees in different improvement measures. Our business skills are improving in everything and

CEO Jörgen Sabel 14 – ANNUAL REPORT 2018

today we have a very structured sales and purchasing system. The operating organisation that was introduced in the autumn of 2016 with newly adapted operating times continues and continuously increases the efficiency of our plant during operating hours. During the year we changed our sales organisation in order to be more active on the market. Draken has many faithful customers who have been with us for several years. We are growing well with old customers and we are constantly bringing in new ones. Unfortunately one of our old faithful customers chose to leave the plastic material polyethylene and place large volumes in new choices of material outside of Sweden. We had some indications that this could happen but it still took us by surprise when it occurred without warning. We began the spring with huge efforts to replace the lost volume. The work was successful and we have returned to full volume for the whole year although we could not save the financial whole-year result. This change was difficult for us but in hindsight we managed to create a company less exposed to risk going ahead, without dropping our margins. We are thus acting with healthy self-confidence, more aggressively and in a more structured manner on the market in order to increase volumes to the groups of machines of our choosing. Our business in Norway has speeded up again after several years of stagnation after we launched a new partnership, which increased our sales capacity on the Norwegian market. During the year we found new suppliers and new ways of handling raw materials, which will improve our purchase of raw materials and supplies ahead. In combination with improved

product recipes, this increases our margins, giving us a greater competitive advantage. In 2017 and 2018 plastic packaging has been attacked strongly by legislation and media. In addition there is huge debate about microplastics and plastics in the oceans and coastal environments. We back the work for change that is needed to create a better environment. Up until today, Draken’s business has been impacted very little by this as the products we produce have not been directly affected. In order to join the environmental debate, in recent years we have worked on acquiring knowledge about alternative plastics. We are working actively to find recycled material of good quality and plastic granules produced from raw materials that do not originate from traditional oils or which are starch-based. Currently we have a number of new products that we offer our customers to be able to meet the demands of the market in the future. The company continues to have a good dialogue with staff, authorities and union organisations. We are developing together and implementing in consensus the work that aims to make Draken a stable, secure and profitable employer. In order to prepare further, in 2019 we are to invest in further training for our staff. We continue to educate/ train with the aim of becoming more skilful in operating our machines more efficiently, with increased quality and with fewer cassations. The future for Draken is to continue on the same track, i.e. increase our businessmanship for purchases and sales, more effective recipes, invest in cost efficiency, taking more volumes and creating a functioning cohesive organisation with focus on quality and capacity. With hard work comes profitability.

Draken i Reftele

Key Figures 2018 (2017) Part of the BrA Invest Group since 2005 BrA Invest’s stake is 100% Net sales MSEK 77,6 (MSEK 81,3) EBIT MSEK -0,1 (MSEK 1,8) Number of employees 32 (33)

BRA INVEST – BETTER BUSINESS

KB Components

Harvest and develop! KB Components continued, in 2018, the eternal journey towards combining major investments in the future while at the same time harvesting the fruits of previous years’ investments. We almost met our goal of having an operating margin (EBITA) of 10% with good organic growth at the same time as we made major investments in infrastructure in Örkelljunga and in the largest acquisition in the Group’s history, i.e. DKI Plast s.r.o. in Slovakia. On a rolling 12 month-basis (counting also DKI) the Group had a turnover of over SEK 1 billion and in addition we have a growing trend on a monthly basis which is why there are high hopes for 2019. 2018 is the year in which we achieved ”Nolato” (Industrial) earnings; in 2019, we will surpass them! The strategy that KB has developed over time of gathering cutting edge skills within technology, purchasing, quality and sales centrally in Örkelljunga has demonstrated itself to be more and more successful. Our customers appreciate that we can support them locally where we (and they) have production as well as that there are resources centrally that can resolve slightly more advanced problems if necessary. During the year we have had more proof of this and customers such as Kautex, Alfdex, VolvoCars and Stoneridge etc. have chosen to work with us globally and they appreciate that we can give them support they, with all right, demand and require. We can also see that our own organisation has completely embraced this method of working. This ”embrace”, which means that acquired businesses have access to many contact points immediately after joining via the head office in Örkelljunga, has been implemented well and in addition we are seeing spontaneous contacts between e.g. companies in Mexico and China who often need to manage shared tenders and customers. This development is very positive and something that we are happy about! This year, the office section at the unit in Örkelljunga was completely renovated with accompanying

CEO Stefan Andersson 16 – ANNUAL REPORT 2018

restaurant and changing room. In addition we have carried out significant construction work outdoors, which, for example, provides us with around 50 new parking spaces (of which a dozen are equipped with charging posts) right outside the main entrance. Furthermore, the tool workshop has been equipped with an ultra-modern machine park which should manage tools of up to at least 50 tonnes in weight and, in other words, we have established the infrastructural conditions so this business can take us into the 2050s! There have also been major investments in our other plants. Anderstorp, Wuxi and Puebla have all received several new machines and equipment for projects and operations that either began in 2018 or that will begin in 2019. I would like to say that we have never been better prepared to take in new deals than we are now and this leads right into our major focus for 2019: organic growth! The Group’s orders received for the year started up poor but ended up strong. The first half of the year found it difficult to get going while the second half of the year things speeded up significantly. Customers such as Haldex, VW, Stoneridge, Kautex, Alfdex and others gave us new business that altogether in fully expected volumes will yield sales of around MSEK 150. This is good and evidence that we are competitive. At the time of writing, there are several procurements under way which, in the case of a positive outcome, will give us significant new volumes from 2020 and onwards.

The Group’s various units have a capacity structure that approximately is as follows: Growth (MSEK)

Utilisation Utilisation (rolling now) (2019 plan)

Capacity

Örkelljunga

380

400

600

Kaunas

170

180

250

Anderstorp

130

160

200

Puebla

120

140

250

Zilina

180

190

250

Wuxi

100

Total

1000

1 100

1 650

We can grow organically by 50% without having to expand existing buildings. Moreover in several cases we have free production capacity in existing machine parks so with the ”right” new business we will not have to invest as much ahead as we have done so far. The situation in general for KB is, thus, better than ever. We are however not satisfied but will continue to follow the proven track both developing and harvesting...!

KB Components (Group)

Key Figures 2018 (2017)

Part of the BrA Invest Group since 2009 BrA Invest’s stake is 93,75% (from 2019-01-20) Net sales MSEK 909,5 (MSEK 788,5) EBIT MSEK 74,0 (MSEK 65,8) Number of employees 854 (622)

BRA INVEST – BETTER BUSINESS

BrA Invest CKS AB Corporate ID number: 556753-2501

Management Review

In 2018 BrA Invest consolidated the position established in 2017, with three heavy, strong businesses in which there is growth both organically and via acquisition. During the year, the Group stabilised its situation, grew and further strengthened its balance sheet at the same time as investing long term for the future in all of our businesses. The total investment volume (excluding acquisitions) in existing businesses, mainly KB and BAB, totalled over MSEK 180 with the majority going to KB in Örkelljunga which implemented a complete renovation of office, restaurant and changing room as well as establishing the industry’s most modern tool workshop which can now handle very heavy, large tools. BAB got a completely new office/warehouse, Åstorp model (sugar cube) for just over MSEK 60 and acquisitions within KB and Dogman can be added to this totalling just over MSEK 120. All in all, a year in which we demonstrate that we have faith in our companies and are investing long term for the future! BrA Invest CKS AB

BAB bygg AB 100%

Fastighets AB 3Hus 100%

KB Components AB 93,75%

Draken i Reftele AB 100%

Dogman AS

BAB anläggning AB 90,1%

KB Components Lithuania

Dogman AB 90%

KB Components Plastic Technology (Wuxi) Co., Ltd.

KB Components Plastunion AB

KB Components Lunketec

KB System AB

KB Components DKI Plast s.r.o.

Dogman ApS

Dogman OY

KB Components Canada Inc. 84%

Group Structure on 2 April 2019 The BrA Invest Group had a turnover of MSEK 2 233,9, an increase of 15% compared to the previous year (half the increase is acquisitions, the rest organic) and reported an operating profit of MSEK 97,1, a decrease of 30% compared to 2017. The poorer operating result compared to 2017 is linked to BAB, which experienced a huge setback in a project in Lund, which cost the company as much as MSEK 18. The comparative figures for 2017 are interfered with by the property sale (Brf Backsippan) which alone provided a profit of MSEK 27 and for which we had no equivalent in 2018. Our key figures were still strong and, at the end of 2018, we had total assets amounting to MSEK 1 363,1, shareholders’ equity of MSEK 380,3 (equity ratio of 27,9%) and a net debt (interestbear-

18 – ANNUAL REPORT 2018

ing loans less cash) of MSEK 478,5. At the end of 2017, we had a net debt of MSEK 315,1, that is an increase during the year of MSEK 163, linked to the aforementioned major investments and acquisitions. The debt measure Net Debt/EBITDA went from 1,7 as of 31/12/2017 to 2,9 as of 31/12/2018. KB Components as a group continued its strong journey with significant growth both in sales and profitability. We are currently at EBITA level of just over 9% and this is even though for the third year in a row we have made huge losses in our Chinese operation which is still being built up. The year’s biggest event otherwise was the acquisition of DKI Plast s.r.o. in Slovakia which was completed at the start of July. This single

acquisition is the biggest investment in KB Components’ (and BrA Invest’s) history. For the first time we are buying a company that, at the point of acquisition, is demonstrating good profitability (over 10% on the last row) and therefore we have to pay more for a new business than we have ever done before. The price of this company is the equivalent of just over 3,5 *EBITDA on a debt-free basis and this provides a goodwill of MEuro 5,8. DKI gives us a very good injection-moulding and extrusion business in central Europe with non-automotive customers and sales of almost MSEK 200 and with a young tool park. If we can ”embrace” this company in our traditional manner, this addition to the KB group will bring us much joy in the future!

ANNUAL REPORT 2018 – 19

BRA INVEST – BETTER BUSINESS

Management Review cont. The unit in Örkelljunga has, during the year, worked hard to finetune the new production (VCC and Scania) which was established in 2017. This has taken a little longer than we thought and, above all, has cost a little more than planned. It was not really until the fourth quarter that we saw the positive effects on profitability that these great big volumes we have had should in all fairness have brought earlier. As we enter 2019, our major customers within vehicles have communicated further higher volumes for 2019 and ahead, which is very pleasing. It is great that it will bring strong development to Örkelljunga and thus the whole of the KB Components group, as the development in this our largest (represents almost 40% of KB’s turnover) unit is extremely important to us. The very strong profitability journey in Kaunas continued this year! This unit is finetuned and efficient and we continue to gradually move production here from both Anderstorp and Örkelljunga. Our chrome galvanising operation, formerly Ecogalvanic, was merged into KB Components UAB during the year and it has continued its strong journey although we have not had the volumes we originally planned for. The only cause for concern in the Lithuanian operation is the growing difficulty getting hold of production staff. We are witnessing wage pressure that we have not seen previously as a result of several large international groups establishing factories in Kaunus and competing for labour. We have chosen to deal with this threat partly by increasing automation and we have good local competence within this area who are eager to pursue this development. In Wuxi we have made a loss for the year of MSEK 6 on sales of no more than just over MSEK 6, sales which mainly were generated in November-December when we finally got going with deliveries of sill moulds for VCC. What is pleasing however is that this business is growing strongly and in 2019 we are going to supply rocking moulders to both VCC and a sub-contractor (IYU) of theirs in China. Together with other customers (5 in total, currently) 2019 will be the first year in which we seriously are going to produce and supply larger volumes from this factory. The volume 20 – ANNUAL REPORT 2018

forecast for 2019 is at MSEK 40 and it is our ambition to achieve a result of zero for the company. Anderstorp has had a mediocre year with the move out of labour-intensive production to Kaunas, production that will be replaced by highly automated business for, e.g. VCC in 2019. In Puebla, Mexico, we have expanded the factory significantly and continued to install machines to manage growth there. Our factory in Puebla is currently extremely modern and we have had lots of good feedback from customers who are almost shocked over the modernisation this business has been through. Orders to the Puebla unit have been strong and we are therefore going to continue to grow this business organically, significantly in the coming years. As this is being written (March 2019) KB has after the end of the financial year (middle of January 2019) acquired the assets of a company in Windsor, Canada (directly south of Detroit on the border with the US) in a deal that was initiated by a customer, Kautex, which we have in both China and in Puebla. The business in Windsor, PM Plastics has had an owner who has gone through a ”light” version of reconstruction outside of the legal system and with Kautex’ good memory (they represent 2/3 of the volumes in the factory), we were able to carry out this deal in a very short space of time. PM Plastics (KB Components Canada Inc. in the future) has sales of around MUSD 8, is reasonably profitable and, above all, they have good contacts with the important customer base in the Detroit area, with whom we have long wanted closer contact. With this acquisition, KB becomes a completely global company and is very well positioned for the future! For Dogman, the year has been marked by the changing purchasing behaviour of customers (wholesale and retail) and above all the end customer. E-commerce within the industry is increasing, although not as quickly as believed, retailers led by ICA continue their journeys towards more of their own brands and more and more specialist shops

are choosing to enter large chains, which often have their own wholesale businesses and thus threaten Dogman’s position on the market. In this context, Dogman has acted and navigated according to our plan and during the year, two specialist shops have been acquired, one in Helsingborg and one in Gothenburg. Together with the concept store in Väla, which opened in April, we have a store operation that ”rolls” around MSEK 100 on an annual basis and which is reasonably profitable. We are going to continue this journey into 2019 and ahead, i.e. acquire larger stores in good locations and at reasonable prices. The fear we have had that the customer segment wholesale would fall back considerable as a consequence of our investment in our own stores has not been realised although we have had one or two negative reactions. Altogether, the experiences so far of this journey are overwhelmingly very positive. The investment in e-commerce that started during the spring should really have meant that by the autumn we would really have been underway with internet sales to the consumer. Unfortunately the project was drastically delayed and became significantly more expensive and we have a major dispute with the supplier (Ateles) which at the time of writing has been resolved and which, if everything goes to plan, will mean we go live with this investment in April. In terms of results 2018 was worse than 2017 for Dogman, and the reasons for this are the transformation of the company mentioned above which have also meant, organisationally, major changes for our employees. Focus in the future is more on marketing and building our brand in social media. To facilitate this change and, at the same time, boost our ability to market to consumers, our entire marketing department has been outsourced and new skills are replacing employees who used to work with more traditional marketing, packaging design and catalogue sales. The fantastic organic growth BAB has had in recent years continued in 2018.

Unfortunately and perhaps as a result of the rapid growth, the Malmö office has been affected during the year by major problems and losses, especially in one project, but also results have deviated in a number of other projects which, overall led to BAB experiencing its worst year for some time. Operating results of barely 1% are clearly under par and without some own projects within 3Hus this figure would have been even worse. BAB has been given a reminder that reality is not always only positive and upwards, which in the long term is certainly good, given the larger projects we both have/operate and strive to receive! The infrastructure in BAB has drastically strengthened during the year with the major investment in new premises in Malmö. These premises are ultra-modern in their design and profile and in the long term will give us

the stability and potential for growth that the rapidly growing Lund-Malmö region deserves. Furthermore, at the end of the year, BAB started to extend its head office in Åstorp, an investment of MSEK 25, which will be ready for moving in during the autumn 2019 and will provide a further 25 offices spaces. Even though the result for BAB as a whole is a disappointment, some of these operations are going very well. The north-west Skåne region is well-managed and very profitable. The Halmstad region is also working well while both the facilities business and, primarily, Malmö have been big disappointments and have produced losses this year. 3Hus has not realised any real estate during the year, however it has been very active in various tenders and municipal procurement processes. For example, 3Hus has won the

land allocation tender for the Fregatten district in Råå, Helsingborg, a 74 apartment/ terraced house that, if everything goes to plan with the final planning development plan etc. means that production can begin at the start of 2020. Ejdern 16 in Örkelljunga with 32 rental apartments, centrally located beside the bus station and the shopping centre was completed by 3Hus in April. Plans for Ejdern 14, an additional 32 rental apartments beside Ejdern 16, are fully underway and we intend to launch this project in autumn 2019. BAB/3Hus, i.e. our construction/property business has, thus, as a whole had a weak year in terms of results (medium year), which reflects the character this type of business has. ANNUAL REPORT 2018 – 21

BRA INVEST – BETTER BUSINESS

Management Review cont. However we have made major investments for the future and the portfolio of own projects that has been built up during the year together with the very large external order backlog for BAB, means we are looking to the future with optimism, with the goal of gradually starting more and more of our own housing projects, at the same time as we divest, each year, a number of these and achieve a more even result over time. Draken delivered a zero result for the year (operating result), clearly a poorer outcome than we had planned and expected. The reason for this deterioration from 2017 (MSEK 2 in operating results) is that a major customer lowered their orders at the start of the year without warning and our margins fell as a result of a poor deve-

borrowing is in euros, in which the translation losses alone over the year amounted to MSEK 10.

lopment in raw material prices and of the Euro/SEK relationship. Last year we promised a significant improvement in results for BrA during the year compared to 2017, something we have not managed to fulfil. This is due to the problems above within BAB but perhaps even more due to the disadvantageous weakening of the kronor during the year towards both the USD and the Euro. The krona weakened 5% against the euro and 15% against the dollar and this weakening happened quickly in Q1, which meant our subsidiaries (Dogman, KB and Draken) simply did not have time to compensate against their customers. The Group had a net outflow per month of around MEuro 2 and MUSD 1 and to this should be added that a significant part of the Group’s

Msek

160

2400 2200

1400

140

1200

2000

Despite this somewhat poorer result for the Group, both compared to 2017 and compared to what we expected, BrA Invest delivered, regardless of how we measure it, excellent progress and returns for the whole year 2018. The finances and balance sheet are stronger than ever, the trends in our various companies look good, we have invested significantly for the future in all our operations and thus we can make the same promise we did for 2018: If currencies remain in our favour, i.e. that the krona strengthens, we can promise a significant improvement on results in 2019!

120

1800

1000

1600

100

1400

800

1200 1000

600

800

400

200

200 0

400

600

2012 2013 2014 2015 2016 2017 2018

Net sales

2012 2013 2014 2015 2016 2017 2018

Profit after financial items

2012 2013 2014 2015 2016 2017 2018

Balance sheet total

The Parent Company’s results and financial position Several years overview (thousand SEK)

Key events in 2018

Proposed distribution of profit

- Dogman acquires two stores, one in Gothenburg and one in Helsingborg - Dogman opens its concept store in Väla shopping centre in Helsingborg

The following amounts are at the disposal of the Annual General Meeting (in SEK):

- KB Components acquires DKI Plast s.r.o. in Slovakia

Retained earnings

119 399 871

- The construction operation establishes the names BAB bygg and BAB anläggning

Profit for the year

28 160 133

Total

147 560 004

- 3Hus completes the Ejdern 16 district in Örkelljunga, 32 rental apartments

The Board of Directors proposes the following distribution of profit:

Significant events after the end of the financial year

Carried forward

132 560 004

Summa

147 560 004

Dividend to shareholders

- BrA Invest increases its stake in KB Components AB from 91.25% to 93.75%

15 000 000

For more information about the company’s results and financial position, please refer to the income statements and balance sheets for both the Group and the Parent Company, with additional disclosures and notes. All amounts are stated in thousands of SEK.

2017

2016

2015

2014

2013

2012

2 233 864

1 950 367

1 590 362

1 518 689

1 419 107

1 278 531

1 260 159

80 914

127 877

67 703

44 317

32 746

26 390

16 593

1 363 133

1 099 818

993 333

943 446

781 155

724 038

611 251

Equity including minority interests

380 285

325 856

284 230

254 537

162 114

135 617

123 802

Equity ratio incl. minority interests

27,9%

29,6%

28,6%

27,0%

20,7%

18,7%

20,3%

3,6%

6,6%

4,3%

2,9%

2,3%

2,1%

1,3%

Balance sheet total

Profit margin Interest coverage ratio Return on equity

2015

2014

2013

2012

6 200

2 700

3 750

5 100

5 064

4 920

4 165

22 430

65 220

54 297

11 103

5 020

945

18 893

420 891

317 834

352 337

167 637

148 040

115 570

129 455

35,2%

39,8%

36,6%

46,5%

37,9%

40,1%

Environment

Within the operating branches of production of plastic components and production of plastic products, activities are carried out which according to the Environmental Act must be reported. The management of the company are not aware of any changing market conditions or significant need for clean-ups. Neither have any permit conditions been breached.

Ownership Of the shares in BrA Invest CKS AB, Stefan Andersson owns 33.4%, Kenneth Anderson owns 33.3% and Christer Anderson owns 33.3%

Financial risks can primarily be divided into the following categories: interest rate risk, currency risk, credit risk and liquidity risk.

2018

Net profit after financial items

Equity ratio (%) Average number of employees

2016

Financial risk management

The Group’s results and financial position Net sales

Balance sheet total

2017

Comparison figures for 2012 have not been recalculated in accordance with BFNAR 2012:1, which can mean comparisons may not be accurate.

- KB Components establishes KB Components Canada Inc. (84% ownership) via the asset acquisition of PM Plastics in Windsor

(thousand SEK)

Net sales Profit after financial items

2018

5,0

9,2

6,1

7,4

4,7

3,8

2,7

18,1%

34,0%

19,6%

15,3%

15,6%

14,0%

5,1%

Interest rate risk Existing interest-bearing debt carries variable interest rates. Currency risk The business is in principle exposed to certain transaction risks. The company does not normally use forward contracts or similar financial instruments. Credit risk The business involves a large number of customers with varying credit ratings. The company has so far been affected by very few customer losses, due in part to credit checks and credit limits. The credit risk is assessed to be limited. Liquidity risk In recent years, the Group has reported large positive cash flows from the companies’ operations. Investments made have been financed with loans and equity. Continued positive profitability means the liquidity risk is assessed to be low.

Comparison figures for 2012 have not been recalculated in accordance with BFNAR 2012:1, which can mean comparisons may not be accurate. 22 – ANNUAL REPORT 2018

ANNUAL REPORT 2018 – 23

BRA INVEST – BETTER BUSINESS

Consolidated Income Statement INCOME STATEMENT for

Note

2018

2017

4,7

2 233 864

1 950 367

Operating income: Net sales Change in inventories Capitalised work for own account Profit or loss on disposal of net assets Other operating income

4 657

-83

94 711

91 208

27 347

2 759

2 120

2 335 991

2 070 959

-1 239 650

-1 054 238

-203 932

-184 038

Operating costs: Commodities and consumables Goods for resale Other external costs Employee costs

6,8

-222 672

-195 281

-505 973

-431 184

-65 840

-48 360

-808

-19 978

-2 238 875

-1 933 079

97 116

137 880

Amortisation of tangible and intangible fixed assets Other operating costs

Operating profit

Profit on financial investments: Interest income

3 867

5 548

Interest costs

-20 069

-15 551

80 914

127 877

-17 175

-24 054

63 739

103 823

57 664

98 458

6 075

5 365

63 739

103 823

Profit after financial items Tax on the year’s profit PROFIT FOR THE YEAR

Attributable to: The Parent Company's shareholders Holdings without controlling influence

24 – ANNUAL REPORT 2018

ANNUAL REPORT 2018 – 25

BRA INVEST – BETTER BUSINESS

Consolidated Balance Sheet

Consolidated Balance Sheet BALANCE SHEET as of 31 December

Note

2018

2017

BALANCE SHEET as of 31 December

ASSETS

EQUITY AND LIABILITIES

Fixed assets

Equity

Intangible fixed assets

Share capital

Balanced expenses

155

Trademarks

Goodwill

74 282

22 603

74 354

22 758

377 378

275 969

2017

Other equity

100

296 409

204 135

57 664

98 458

354 173

302 693

Profit for the year Equity attributable to the Parent Company's shareholders Holdings without controlling influence

Tangible fixed assets Buildings and land

2018

Note

Total equity

26 112

23 163

380 285

325 856

Discontinued costs in other property

3 000

4 567

Plant and machinery

204 994

126 628

Fixtures and fittings

29 815

29 327

Provisions

New construction in progress and advances

81 169

90 833

Provisions for tax

39 622

42 234

696 356

527 324

Other provisions

3 526

3 623

43 148

45 857

7 212

7 363

Long-term liabilities

7 252

7 403

Construction loans

29, 31

25 229

Other liabilities to credit institutions

31, 32

240 092

128 347

777 962

557 485

3 447

12 135

243 539

165 711

Total provisions

Financial fixed assets Other long-term securities Other long-term receivables

Total fixed assets

Other liabilities Total long-term liabilities

Current assets Short-term liabilities

Inventories, etc. Commodities and consumables Products in manufacturing Finished goods and goods for sale Advances to suppliers

85 752

71 186

Overdraft facilities

29, 31

216 479

136 165

2 210

4 178

Other liabilities to credit institutions

31, 32

29 007

33 718

147 128

115 042

Advance payments from customers

4 627

704

239 717

191 110

Short-term receivables Accounts receivable

279 673

243 250

Current tax assets

5 390

1 854

Other receivables

14 643

12 217

Earned but not invoiced income

18 261

60 781

Prepaid costs and accrued income

20 454

14 267

338 421

332 369

Accounts payable

Cash at bank and in hand Total current assets

10 510

7 033 585 171

8 344 542 333

26 – ANNUAL REPORT 2018

1 363 133

1 099 818

221 320

11 033

16 185

Other liabilities

57 156

78 388

Accrued costs and prepaid income Total short-term liabilities TOTAL EQUITY AND LIABILITIES

84 495

75 360

696 161

562 394

1 363 133

1 099 818

Consolidated changes in equity Share capital Amount at the start of the year, 01/01/2018

100

Other equity Profit for the year 204 135

98 458

Appropriation of profits according to the Annual General Meeting Dividends paid to shareholders

90 958

-98 458

Dividends to holdings without controlling influence Translation difference for the year

TOTAL ASSETS

1 258

292 593

Current tax liabilities

Short-term placements Short-term securities

5 398

1 316

Profit for the year Amount at the end of the year, 31/12/2018

100

296 409

Equity, Parent Company

Holdings without controlling influence

Total equity

302 693

23 163

325 856

-7 500

-3 250

1 316

124

1 440

57 664

6 075

63 739

57 664

354 173

26 112

380 285

ANNUAL REPORT 2018 – 27

BRA INVEST – BETTER BUSINESS

Consolidated Cash Flow Statement CASH FLOW STATEMENT for

Income Statement for the Parent Company Not

2018

2017

Operating activities

Not

2018

2017

2 700

Operating income:

Operating profit Adjustments for items that do not affect cash flow

INCOME STATEMENT for

Interest received

97 116

137 880

Net sales

6 200

58 482

41 828

Other operating income

528

5 546

Total operating income

6 205

2 723

Interest paid

-13 143

-15 549

Tax for the year

-29 578

- 17 188

Operating costs:

113 405

152 517

Other external costs

Changes to inventory

-19 236

-11 842

Employee costs

Changes to operating receivables

62 287

-58 558

Total operating costs

Changes to operating liabilities

15 814

209 145

172 270

291 262

-104

Net investments in tangible fixed assets

-178 365

-209 557

Interest income

8 415

8 326

Acquisitions of net assets in the Group companies

-117 207

-21 542

Interest costs

-7 911

-5 176

Total financial items

28 254

73 224

Profit after financial items

22 430

65 220

10 913

17 934

-5 047

-9 614

Cash flow from operating activities before changes to operating capital

Cash flow from operating activities Investment activities

Operating profit

Sales of net assets in the Group companies

27 875

180

-5 070

-295 392

-208 398

Changes to overdrafts

62 285

-22 046

Changes to loans

79 660

5 479

Changes to long-term receivables Cash flow from investment activities Financing activities

-9 718

567

Dividends

-7 500

-75 000

13 941

Transactions with holdings without controlling influence Dividends to holdings without controlling influence

-3 250

-2 250

121 477

-79 309

CASH FLOW FOR THE YEAR

-1 645

3 555

Cash and cash equivalents at the start of the year

8 344

5 051

Cash flow from financing activities

Profit on shares from group companies

-5 355

-12 029

-10 727

-5 824

-8 004

27 750

70 074

Group contributions received Group contributions paid Provisions to allocation reserve Total appropriations Profit before tax Tax on the year’s profit PROFIT FOR THE YEAR

Exchange rate difference in cash and cash equivalents Cash and cash equivalents at the end of the year

28 – ANNUAL REPORT 2018

-5 372

-5 666

Appropriations

Changes to long-term liabilities

Available cash and cash equivalents at the end of the year

-6 363

Profit on financial investments:

Net investments in intangible fixed assets

Unused overdraft facilities

6,8

334

-262

7 033

8 344

22 995

20 803

30 028

29 147

-885

5 866

7 435

28 296

72 655

-136

-584

28 160

72 071

ANNUAL REPORT 2018 – 29

BRA INVEST – BETTER BUSINESS

Balance Sheet for the Parent Company BALANCE SHEET as of 31 December

Balance Sheet for the Parent Company Not

2018

2017

BALANCE SHEET as of 31 December

2018

2017

Share capital - 1,000 shares

100

Total restricted equity

100

119 399

53 750

ASSETS

EQUITY AND LIABILITIES

Fixed assets

Equity

Tangible fixed assets Shares in group companies

112 777

89 365

Other long-term receivables

4 821

5 084

117 598

94 449

117 598

94 449

Total fixed assets

Short-term receivables Changes in group companies Other receivables 25

302 458

212 673

387

448

175

303 293

212 848

10 510

Total current assets

303 293

223 385

TOTAL ASSETS

420 891

317 834

Short-term placements Short-term securities

Cash at bank and in hand

Restricted equity

Unrestricted equity Retained earnings Profit for the year

Current assets

Prepaid costs and accrued income

Not

28 160

72 071

Total unrestricted equity

147 559

125 821

Total equity

147 659

125 921

885

24 500

4 083

24 500

4 083

Untaxed reserves Long-term liabilities

Liabilities to credit institutions

Total long-term liabilities Short-term liabilities Overdraft facilities

181 095

134 335

Other liabilities to credit institutions

19 083

16 334

Accounts payable Liabilities to group companies Current tax liabilities Other liabilities Accrued costs and prepaid income

662

430

37 888

9 209

400

7 712

24 868

1 399

1 369

Total short-term liabilities

247 847

186 945

TOTAL EQUITY AND LIABILITIES

420 891

317 834

Changes in Equity for the Parent Company Amount at the start of the year, 01/01/2018

Share capital

Balanced profit

Profit for the year

Total equity

100

53 750

72 071

125 921

64 571

-72 071

-7 500

28 160

147 659

Appropriation of profits according to the Annual General Meeting Dividends to shareholders Fusion subsidiaries

1 078

Profit for the year Amount at the end of the year, 31/12/2018

30 – ANNUAL REPORT 2018

100

119 399

1 078

ANNUAL REPORT 2018 – 31

BRA INVEST – BETTER BUSINESS

Additional Information

Cash Flow Statement for the Parent Company CASH FLOW STATEMENT for

Not

2018

2017

Operating activities Operating profit

-5 824

-8 004

Interest received

8 415

7 932

Interest paid

-7 911

-4 782

-461

-8

Adjustments for items that do not affect cash flow

Tax for the year Cash flow from operating activities before changes to operating capital

-5 781

-4 862

Changes to operating receivables

-77 336

35 185

Changes to operating liabilities

11 785

5 392

Cash flow from operating activities

-71 332

35 715

Investments/group contributions to subsidiaries

-30 047

-10 376

Dividends/group contributions from subsidiaries

38 663

49 684

43 322

Investment activities

Sales of subsidiaries Changes to long-term receivables

263

-5 084

8 879

77 546

Changes in liabilities to credit institutions

23 166

-16 333

Changes to overdrafts

46 760

-21 901

Paid dividend

-7 500

-75 000

62 426

-113 234

-27

Cash flow from investment activities Financing activities

Cash flow from financing activities CASH FLOW FOR THE YEAR Cash and cash equivalents at the start of the year

Cash and cash equivalents at the end of the year

Unused overdraft facilities Available cash and cash equivalents at the end of the year

18 905

20 665

18 905

20 692

Note 1 Accounting and valuation principles The Swedish Annual Accounts Act and the Swedish Accounting Standards Board’s general guidelines BFNAR 2012:1 (K3) are applied in the preparation of the financial statements.

Amended accounting principle Unfinished contract work is recorded in the year’s balance sheet as a net asset or liability, with information about the tranches in the note. The comparative figures for the previous years have been adjusted in accordance with the new principle.

Reporting currency The Annual Report is presented in Swedish kronor and amounts are stated in thousands of SEK, unless otherwise stated.

Consolidated Financial Statements

The Consolidated Financial Statements include the Parent Company and the subsidiaries in which the Parent Company directly or indirectly holds more than 50% of votes or otherwise has a controlling influence. The Group applies the acquisition method of accounting for its financial statements which means that equity in the subsidiaries on the acquisition date is completely eliminated. This means that the Group’s equity only includes that part of the subsidiaries’ equity that has arisen after the acquisition. Year-end appropriations and untaxed reserves are divided between equity and deferred tax liabilities. Deferred tax attributable to the year-end appropriations for the year is included in profit for the year. The deferred tax liability is recognised as a provision, while the remaining amount has been recognised in Group equity. Deferred tax in untaxed reserves has been calculated at the announced tax rate. If the consolidated cost of the shares exceeds the book value of the company’s net assets in the acquisition analysis, the difference is reported as goodwill in the consolidated statement. The Group writes off this value over a 5 to 10 year period. The rate of depreciation is based on the long-term strategic importance of the acquisitions to the Group. Internal profits within the Group are eliminated fully. The current exchange rate method is used to translate the accounts of foreign subsidiaries. This means that each balance sheet is recalculated to the balance date rate and that the income statements are translated at the average exchange rates for the period. The translation differences that arise are carried directly to Group equity.

Holdings without controlling influence

The Group treats transactions with holdings without controlling influence as transactions with Group equity owners. The share of assets and liabilities, including goodwill which belongs to holdings without controlling influence, is measured at cost on the date of the business acquisition by the Group. For acquisitions from holdings without controlling influence, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary company is recorded in equity. Gains or losses on disposals to holdings without controlling influence are also recorded in equity. When the Group ceases to have control or significant influence, any retained interest in the entity is re-measured to its fair value, with the change in carrying amount recognised in the Group’s income statement. The fair value is used as the initial carrying amount and forms the basis for subsequent accounting.

Shares in group companies

For the Parent Company, shares in Group companies are recognised initially at cost value, including any transaction fees which are directly attributable to the acquisition of the holdings. Issue payments and shareholder contributions are recognised at costs value. If the fair value was to be lower than the recognised value, the shares are written down to the fair value if the decline in value is assumed to be long-term.

Cash Flow Statement

Valuation principles, etc.

Assets, provisions and liabilities have been measured at cost unless otherwise stated below.

Revenue recognition

The Group recognises revenue with regard to sales of goods when the significant risks and rewards of ownership of the goods have been transferred to the buyer and when the revenue amount can be calculated in a reliable manner. Profit on services rendered at fixed rates is recognised as the work is carried out. This means that the revenue is recognised on the basis of the degree of completion. The degree of completion is determined on the basis of contract costs incurred for the work carried out as a ratio of the calculated overall costs for completing the contract. For commissions for which the outcome cannot be calculated in a reliable manner, revenue equivalent to the actual costs is recognised. Expected losses are carried to cost as soon as they are known. Profit on services carried out on a T&M basis is recognised as the work is carried out.

Recognition of construction contracts and similar commissions

Revenue arising from subcontracted assignments at fixed rates is recognised by the Group as the work is carried out. This means that revenue is recognised on the basis of the degree of completion. The degree of completion is determined on the basis of the actual project costs as a ratio of the calculated project costs of the entire contract. For commissions for which the outcome cannot be calculated in a reliable manner, revenue equivalent to the actual costs is recognised. Expected losses are carried to cost as soon as they are known. Profit on subcontracted assignments carried out on a T&M basis is recognised as the work is carried out. Unfinished contract work consists in part of projects that have a higher earned income than what has been invoiced (Asset; Earned but non-invoiced income) and partly of projects that have invoiced more than the income earned (Liability; Invoiced but non-earned income). As an asset or liability, the net figure is recorded in the balance sheet as an item called “Unfinished contract work – net”, with information about the tranches in the note.

Income Taxes

Recognised income tax includes current tax, adjustments concerning current tax in previous years, and changes in deferred tax. All current tax payable/receivable is valued at nominal amounts and in accordance with the tax rules and tax rates adopted or that have been announced and are very likely to be adopted. Tax effects related to items that are recognised in the income statement are also recognised in the income statement. Tax is recognised directly in equity if the tax is attributable to items that are recognised directly in equity. Deferred tax is calculated according to the balance sheet liability method on all significant temporary differences between recognised and taxable values of assets and liabilities. The temporary differences arise mainly via untaxed reserves. Deferred tax assets concerning loss carry-forwards or future tax deductions are recognised only to the extent that it is probable that the deductions can be settled against future taxable profit. No deferred tax is recognised on temporary differences in property if these are expected to be divested in such a way that does not trigger taxation. Due to the relationship between recognition and taxation, the Parent Company recognises the deferred tax liability on untaxed reserves as part of the untaxed reserves.

Leases

Leases are classified either as finance leases or as operating leases. Leases are classified as finance leases when the financial risks and rewards of ownership have been substantially transferred to the lessee. All other leases are classified as operating leases. The Group has no significant finance leases so all leases are recognised as operating leases, which means the lease charge is divided lineally over the term of the lease.

The cash flow statement is prepared using the indirect method, which makes adjustments for transactions for non-cash items. Besides cash on hand and demand deposits, cash and cash equivalents comprise current financial investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

32 – ANNUAL REPORT 2018

ANNUAL REPORT 2018 – 33

BRA INVEST – BETTER BUSINESS

Information for the one-off posts Group

Financial instruments

Financial assets and liabilities are recognised using the cost value method. Financial assets in the form of securities are recognised at cost value, including any transaction fees which are directly attributable to the acquisition of the asset. Long-term securities and ownership interests in other companies in which the actual value is lower than the recognised value are written down to the actual value if the drop in value is considered to be long-lasting. Short-term placements are measured at the lower of the cost price and the net sale sales value. Long-term receivables and long-term liabilities are recognised at accrued cost value, which is equivalent to the current value of future payments discounting the effective interest rate, which is calculated at the point of acquisition. Short-term receivables are recognised at the lower of the cost price and the net sales value. Shortterm receivables, which are expected to be regulated within 12 months, are recognised at a nominal amount.

Depreciation

Investment properties

The fair values of the investment properties have mainly been derived using a valuation carried out by an external, independent valuer.

Employee benefits - pensions

The Group’s pension plans for remuneration after end of employment includes both contribution-defined and benefit-defined pension plans. In defined contribution plans, the company pays fixed fees to a separate legal unit. Once the fee is paid, the company has no further responsibilities. For defined plans, the debt and fee are calculated with consideration of, for example, assessed future salary increases and inflation. All pension plans are recognised as defined plans, which means that paid premiums are recognised as the pension is earned.

Definition of key figures

If there is an indication that an asset may be depreciated, the Group estimates the asset’s recoverable amount. If the carrying amount of an asset exceeds its recoverable value, the asset is written down to this value. The recoverable amount is the higher of an asset’s fair value less costs to sell and its value-in-use. The value-in-use is the expected future cash flows generated by the asset. Depreciation losses are recognised in the income statement.

Profit margin

Inventories

Return on equity

Inventories are measured at the lower of cost and net realisable value. Deductions are made for obsolescence.

Receivables

Receivables are recognised at the amount that is estimated to be paid, based on an individual assessment.

Receivables and liabilities in foreign currencies Receivables and liabilities in foreign currencies are stated at the rates of exchange on the balance sheet date. If hedging transactions are used, such as forward foreign exchange contracts, the forward exchange rate is used.

Provisions

Provisions are recognised when the Group has, or can be considered to have, an obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation. A condition is that it must be possible to make a reliable estimate of the amount to be paid.

Tangible and intangible fixed assets

Tangible and intangible fixed assets are recognised at acquisition cost less scheduled depreciation and amortisation based on estimates of the useful lives of the assets. The Parent Company and the Group companies use the following depreciation/amortisation periods. Balanced fees for development 3 years Brands 5 years Goodwill 5-10 years

Pre-tax loss/profit as % of net sales.

2018

2017

Parent Company 2018

2017

Note 3 Purchase and sale between Group companies The Parent Company’s sales are all internal within the Group. The Parent Company’s purchases from companies in the Group amount to SEK 517,000 (SEK 507,000).

Note 4 Net revenue Net revenue by business segment Manufacturing of plastic components

909 482

788 490

Construction operations

891 873

729 638

Trade of items for pets

348 573

307 595

Production of plastic products Planing mill Real estate management Total

76 835

80 471

40 295

7 101

3 878

2 233 864

1 950 367

1 863 054

1 588 416

Interest coverage ratio Profit after financial items increased by interest costs divided by interest costs.

Net profit as a percentage of average equity.

Equity ratio

Net revenue by geographical market

Nordic region Other countries Total

6 200

2 700

370 810

361 951

2 233 864

1 950 367

6 200

2 700

Adjusted equity as a percentage of total assets.

Note 2 Estimates and judgements

The company management makes estimates and assumptions about the future. These estimates seldom match the actual results. The estimates and assumptions which may involve a risk of significant adjustments in the carrying values of assets and liabilities are primarily valuations of inventories and properties. Each year, the Group considers whether there is any indication that the value of an asset is lower than its carrying amount. If there is any such information, the recoverable value of the asset is calculated as the higher of the utility value and the net selling price.

Note 5 Other operating income Wage subsidies

956

1 406

Other operating income

1 803

714

Total

2 759

2 120

37 167

25 025

735

517

Within one year

39 327

28 435

397

517

Later than one year but within five years

81 026

83 052

1 587

2 068

Note 6 Leasing fees Operational leasing, including rental of premises Leasing fees, cost for the year Outstanding leasing fees fall due as follows:

Later than five years Total

91 375

94 756

11 349

14 779

211 728

206 243

13 333

17 364

7 101

4 464

7 159

4 542 16 780

The most substantial rental agreements comprise rental of premises.

Note 7 Leasing income Operational leasing income, including rental from premises Leasing income, earnings for the year Outstanding leasing income falls due as follows:

Buildings 33-50 years

Within one year

Land facilities 20 years

Later than one year but within five years

17 311

Machines 5-10 years

Later than five years

16 415

3 100

Equipment 4-10 years

Total

40 885

24 422

The most substantial rental agreements comprise rental of premises.

34 – ANNUAL REPORT 2018

ANNUAL REPORT 2018 – 35

BRA INVEST – BETTER BUSINESS

Group 2018

Parent Company 2017

2018

Group 2017

Note 8 Remuneration for the auditor

Note 11 Interest income

Fees and expenses

Interest income, group companies

Mazars SET Revisionsbyrå AB

Interest income, other

Auditing Other services

1 649

1 012

1 191

315

579

Total

3 867

5 548

8 415

8 326

-13 143

- 9 509

-7 911

- 5 170

-6 929

-6 042

-6

-20 069

-15 551

-7 911

-5 176

-20 033

-21 308

-136

-584

2 858

-2 746

-17 175

-24 054

-136

-584

Reported profit before tax

80 914

127 877

28 296

72 654

Tax in accordance with current tax rate, 22%

-17 801

-28 133

-6 225

-15 984

139 1 028

Auditing

Other services

Total

Other auditors:

Auditing refers to the auditor’s work on the statutory audit. Auditors fees with regards to accounts carried out by Mazars SET Revisionsbyrå AB are charged in full to the Parent Company, BrA Invest CKS AB.

Note 12 Interest costs Consolidated interest costs Interest income, other Foreign exchange losses Total

Note 13 Tax on profit for the year

2017 Of which men Number of employees

Of which men

Parent Company Sweden

7 811

394

271

Number of employees

0 798

289

1 462

Average number of employees

7 353

0 528

4750

182

2018

2017

3 339

1 194

wages and other remuneration

2018

Foreign exchange gains

364

Note 9 Average number of employees,

Parent Company 2017

889

2 013

Total

2018

Current tax Deferred tax Total

Sweden

731

569

685

533

Norway

Finland

Denmark

Effect of foreign tax rate

3 122

1 789

Non-deductible expenses

-3 269

-2 900

-16

-369

Subsidiaries

Mexico China

211

193

Slovakia

196

Lithuania

151

130

Total subsidiaries Group total Corporate management

1 328 1 332

793 797

1 044

674

1 048

678

Women

Men

Women

Men

Board of Directors

CEO and other corporate management

Employee costs

Group companies

Anticipated dividend

-1 455

-1 409

712

Effect of changed future tax rate Effect of utilised previously unrecognised loss carry-forwards Total

500

-17 175

-24 054

-136

-584

Note 14 Capitalised expenses Opening acquisition value

583

486

Procurement

104

Exchange rate difference

-7

Closing acquisition value

592

583

2 400

1 020

Opening amortisation

-428

-361

(266)

Amortisation for the year

-89

-67

-3

-520

-428

155

5 231

(275) 921

872

1 070

627

(384) 356 058

133 088

(160) 300 286

115 903

(21 918) 359 679

135 083

(19 348) 303 756

117 550

(22 577)

Group 2018

(19 774)

Parent Company 2017

2018

2017 31 751

Profit or loss on divestments

39 923

Depreciation

-1 600

27 750

70 074

36 – ANNUAL REPORT 2018

Unrecognised loss carry-forwards

1 123

27 750

Total

2 700

(of which pension costs)

Note 10 Profit on shares in

15 769

Social security costs

(of which pension costs) Group total

6 105

-1 905

Wages and remunerations

(of which pension costs) Subsidiaries

8 003

-3 006

Social security costs

(of which pension costs) Other employees

4 522

Depreciation of consolidated goodwill

Wages and remunerations

Parent Company Board and CEO

Non-taxable income

Translation difference Closing amortisation Book value

Note 15 Trademarks Opening acquisition value Closing acquisition value

5 231

Opening amortisation

-5 231

Closing amortisation

-5 231

Book value

ANNUAL REPORT 2018 – 37

BRA INVEST – BETTER BUSINESS

Group 2018

Parent Company 2017

Note 16 Goodwill

2018

Group 2017

Parent Company

2018

2017

84 544

69 020

Opening acquisition value

354 987

368 708

Acquisition of subsidiaries

64 825

16 513

Procurement

51 170

38 297

Sales/retirement of assets

-4 601

Takeover after acquisition

71 797

9 695

Exchange rate difference

758

-989

Sales/retirement of assets

-18 221

-53 164

Closing acquisition value

18 610

-7 870

145 526

84 544

Reclassifications

Opening amortisation

-61 941

-55 615

Exchange rate difference

4 454

-679

Amortisation for the year

-13 651

-6 876

Closing acquisition value

482 797

354 987

Opening amortisation

-228 359

-249 141 -21 032

4 601

-253

550

Amortisation for the year

-29 216

Closing amortisation

-71 244

-61 941

Takeover after acquisition

-36 606

-4 074

Book value

74 282

22 603

Sales/retirement of assets

18 083

40 312

-117

5 787

Exchange rate difference

Reclassifications

Note 17 Discontinued costs in other property

Exchange rate difference

Opening acquisition value

8 189

Takeover after acquisition

480

Procurement

256

475

Reclassifications

3 816

3 941

310

-135

Closing accumulated acquisition value

9 235

8 189

Opening amortisation

-3 622

-668

Translation difference for the year

Takeover after acquisition

-1 588

-211

Closing amortisation

-277 803

-228 359

Book value

204 994

126 628

193 555

165 083

Note 20 Fixtures and fittings Opening acquisition value Acquisition subsidiaries Procurement

7 760

4 326

12 144

19 940

-7 873

-2 794

7 410

-130

-4

-866

-2 352

-2 093

-131

Exchange rate difference

802

-410

Closing accumulated amortisation

-6 235

-3 622

Closing acquisition value

206 413

193 555

Book value

3 000

4 567

Opening amortisation

-164 228

-148 119

Acquisition subsidiaries

-6 549

-3 495

Amortisation for the year

-10 776

-9 687

Reclassifications Amortisation for the year Translation difference for the year

Note 18 Buildings and land Opening acquisition value

243 491

258 966

Procurement

105 335

11 968

Acquisition value

769

Reclassifications

4 567

108

-24 393

Via sale of subsidiary

-3 158

Translation difference

354 199

243 491

-44 274

-49 060

Sales/retirement of assets

Closing accumulated acquisition value Opening amortisation Amortisation for the year

-6 005

-5 789

Sales/retirement of assets

10 575

Translation difference

-1

Sales/retirement of assets Reclassifications

Sales/retirement of assets Reclassifications Exchange rate difference Closing amortisation Book value

2 739

-42

-5 919

-438

253

-176 598

-164 228

29 815

29 327

Opening acquisition value

90 833

53 934

Net changes

-11 794

144 825

-50 280

-44 274

Via sale of subsidiary

Opening revaluations

79 344

83 830

Translation difference for the year

-3 293

-3 294

-1 192

Via sale of subsidiary

5 435

Note 21 New construction in progress and prepayments for tangible assets

Closing accumulated amortisation Annual amortisation of revalued amount

2017

Note 19 Machinery

Opening acquisition value

Sales/retirement of assets

2018

Book value

-105 842

2 130

-2 084

81 169

90 833

Closing accumulated revaluations

76 051

79 344

Opening depreciation

-2 592

Note 22 Shares in Group companies

Closing accumulated depreciation

-2 592

Opening acquisition value

117 668

120 305

377 378

275 969

Shareholder contributions

25 000

762

-3 399

Book value of management properties

106 372

57 053

Fusion

Actual value of management properties

108 700

62 700

Closing acquisition value

Book value

Divestments

The above amounts include:

Opening depreciation Depreciation for the year Fusion Closing depreciation Book value 38 – ANNUAL REPORT 2018

-22 048

120 620

117 668

-28 303

-26 703

-1 600

20 460 -7 843

-28 303

112 777

89 365

ANNUAL REPORT 2018 – 39

BRA INVEST – BETTER BUSINESS

Group

Note 22 Shares in Group companies cont. Information about subsidiaries Company name and head office BAB bygg AB, Åstorp BAB anläggning AB, Laholm Fastighets AB 3Hus, Åstorp Draken i Reftele AB, Gislaved Dogman AB, Åstorp Djurriket i Helsingborg AB, Svalöv Dogman Butiker AB, Åstorp Dogman Lager AB, Åstorp Huveröds Hund & Kattmat, Göteborg Shopet AB, Åstorp Dogman AS, Hagan, Norge Hundepoter AS Shopet AS Midtun Zoo Åsane AS, Norge Midtun Zoo Senter AS, Norge Dogman Butikker AS, Norge Dogman Aps, Bröndby, Danmark Dogman OY, Åbo, Finland KB Components AB, Örkelljunga KB System AB, Örkelljunga KB Components UAB, Kaunas, Litauen Lunktetec de Mexico SA de CV, Pueblo, Mexico KB Components Plastic Technology Co, Ltd, Wuxi, Kina KB Components Plastunion AB, Anderstorp KB DKI Plast, Zelina, Slovakien Fastighets AB Västra vägen, Åstorp Örkelljungahus Ejdern 14, Åstorp Örkelljungahus Ejdern 16, Åstorp Gajadfastigheten i Åstorp AB, Åstorp Mässhallen i Åstorp AB, Åstorp

CRN 556608-9669 556771-2707 556739-8010 556476-2093 556493-9519 556290-0240 559132-0469 559165-1525 556436-6986 559004-8699 986 467 025 994 994 018 917 220 107 994 036 181 983 906 478 919 026 421 29 41 44 91 2366900-6 556081-6653 556306-9581 300 066 964 LME090403331 556181-5209 35 855 282 556825-8650 559084-3271 559084-3289 556826-1944 556838-8622

Capital/ Vote share 100% 90,1% 100% 100% 90% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 91,25% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

Number of shares

Book value

1 500 901 1 000 4 000 27 001 10 000 50 50 1 000 500 100 100 30 500 400 100 125 000 100 511 000 1 000 10 10 850 000

42 853 100 2 500 30 151

Total

2018

2017

10 562

448

175

5 053

3 704

20 454

14 267

448

175

649

Prepaid costs and accrued income Prepaid costs Accrued income Total

71 761

68 286

458

Accrued customer bonuses

3 144

2 519

Other accrued costs

7 023

3 367

941

720

Prepaid income Total

34 923

2 567

1 189

84 495

75 360

1 399

1 369

Note 26 Equity One share in BrA Invest CKS AB has a nominal value of 100 Swedish kronor. The number of shares is 1,000 and the share capital is tSEK 100

2 050 50 50 50 50

Parent Company 2017

15 401

Note 25 Accruals and deferrals

Note 27 Deferred tax assets/Provision for taxes Opening book value

-42 234

-39 600

Acquisition of subsidiaries

-304

Sales of subsidiaries

262

2 858

-2 746

Annual deferred tax Translation difference for the year

2018

Accrued employee costs

112 777

Group

2017

Accrued costs and prepaid income

30 000 500 50 50 500 500

Parent Company

2018

Book value

-246

154

-39 622

-42 234

2017 The temporary differences have resulted in deferred tax liabilities and receivables relating to the following:

Note 23 Other long-term receivables

Untaxed reserves

-22 483

-20 740

Opening acquisition value

7 363

2 309

5 084

Fixed assets

-19 377

-22 912

Acquisition of subsidiaries

5 084

Other assets

-105

230

-180

-14

-263

5 084

2 025

870

-16

7 212

7 363

4 821

5 084

Change for the year Translation difference for the year Book value

Income accrued on unfinished contracts

695 648

604 975

Invoicing on unfinished contracts

-613 526

-507 136

82 122

97 839

565 941

233 510

-629 802

-270 568

Total

-63 861

-37 058

Net unfinished contract work

18 261

60 781

Invoiced but not earned income Invoicing on unfinished contracts

Total

Opening book value

Earned but not invoiced income

Income accrued on unfinished contracts

Deficit

318

-39 622

-42 234

3 622

3 800

Note 28 Other provisions

Note 24 Ongoing work

Total

Provisions

Acquisition value

123

Change for the year

-275

-150

Translation difference for the year Book value

-28

3 526

3 622

239 474

156 968

34 500

167 188

99 213

Other provisions relate to pension provisions

Note 29 Credit limits Overdraft facilities Authorised limit

200 000

155 000

Construction loans Authorised limit

Note 30 Long-term liabilities Loans that fall due after 5 years

40 – ANNUAL REPORT 2018

ANNUAL REPORT 2018 – 41

BRA INVEST – BETTER BUSINESS

Group

Parent Company

2018

2017

2018

2017

Company mortgages

205 800

181 600

Property mortgages

236 900

210 000

1 778

Note 31 Pledged securities Endowment insurance Other pledged assets

66 805

42 833

511 283

436 211

Long-term parts

240 092

128 347

24 500

4 083

Short-term parts

29 007

33 718

19 083

16 334

269 099

162 065

43 583

20 417

Total pledges

Note 32 Liabilities to credit institutions

Total

Åstorp 02/04/2019

Note 33 Items that do not affect cash flow Amortisation

65 840

48 360

Provisions

-275

-150

Capital gains

628

-9 182

-7 711

2 800

58 482

41 828

Currency adjustment of internal differences Total

Stefan Andersson

Kenneth Andersson

Chief Executive Officer

Chairman

Christer Andersson

My auditor’s report has been submitted on 2 April 2019.

Other information

Bo Matson Authorised public accountant

Note 34 Any obligations Guarantees for subsidiaries

215 183

163 685

Other guarantees

2 790

Total

2 790

215 183

166 475

Note 35 Appropriation Retained earnings Profit for the year Total

119 399 871 28 160 133 147 560 004

The Board of Directors proposes the following distribution of profit: Dividend to shareholders

15 000 000

Carried forward

132 560 004

Total

147 560 004

42 – ANNUAL REPORT 2018

ANNUAL REPORT 2018 – 43

BRA INVEST – BETTER BUSINESS

Auditor’s Report To the Annual General Meeting of BrA Invest CKS AB Corporate ID no. 556753-2501 Report on the Annual Report and the Consolidated Financial Statements Statements I have audited the Annual Report and Consolidated Financial Statements of BrA Invest CKS AB for the year 2018, which is included on pages 19-43 of this document. In my opinion, the Annual Report and Consolidated Financial Statement have been prepared as required by the Swedish Annual Accounts Act and, in all material respects, present a true and fair view of the financial position of the Parent Company and the Group as of 31 December 2018 and of their financial performance and cash flows for the year as required by the Swedish Annual Accounts Act. The Management Review is consistent with the other sections of the Annual Report and Consolidated Financial Statements. I therefore recommend that the Annual General Meeting approves the income statement and balance sheet for the Parent Company and the Group Basis for statements I have conducted my audit in accordance with the International Standards on Auditing (ISA) and generally accepted auditing standards in Sweden. My responsibilities in accordance with these standards is described in more detail in the section on Auditor’s Responsibilities. I am independent of the Parent Company and the Group according to generally accepted auditing standards in Sweden and have otherwise completed my professional duties in accordance with this requirement.

BRA INVEST – BETTER BUSINESS

and for ensuring they give an accurate picture in accordance with the Swedish Annual Accounts Act. The Board of Directors and the CEO are also responsible for the internal checks that they consider to be necessary to establish that the Annual Report and Consolidated Financial Statements do not contain any significant errors, either due to irregularities or mistakes. The Board of Directors and the CEO are responsible, when drawing up the Annual Report and Consolidated Financial Statements, for assessing the company and the Group’s ability to continue operating. They should inform, if appropriate, about any conditions that could affect the ability to continue operating and the use of the assumption of continued operation. Responsibility of the auditor My aim is to attain a sufficient grade of certainty about whether the Annual Report and Consolidated Financial Statements as a whole contain any significant errors, either due to irregularities or mistakes, and to provide the auditor’s report which contains my statements. Sufficient certainty is a high degree of certainty, but is no guarantee that an audit which is carried out according to ISA and according to generally accepted auditing standards in Sweden will always uncover a significant error if there is any such error. Errors can arise due to irregularities or mistakes and are considered to be significant if they, individual or altogether, can reasonably be expected to affect the financial decisions that users make based on the Annual Report and Consolidated Financial Statements. As part of the audit in accordance with ISA I use professional judgement and retain a professionally sceptical attitude throughout the audit. Furthermore: •

I consider the audit evidence I have obtained to be sufficient and appropriate to provide a basis for my opinion. Information other than the Annual Report and the Consolidated Financial Statements This document also contains information other than the Annual Report and Consolidated Financial Statements, which can be found on pages 1-18. It is the Board and the CEO who have responsibility for the other information. My statement regarding the Annual Report does not include this information and I make no statement confirming the other information. As part of my audit of the Annual Report and the Consolidated Financial Statements, it is my responsibility to read the information that has been identified above and consider whether the information is to a significant extent incompatible with the Annual Report. In this review I take into account also the knowledge I have gathered during the audit, and assess whether the information otherwise seems to contain any errors. If I, based on the work which has been carried out with regards to this information, reach the conclusion that the other information contains a significant error, I have an obligation to report this. I have nothing to report in this regard. The responsibility of the Board of Directors and the CEO The Board of Directors and the CEO are responsible for drawing up the Annual Report and Consolidated Financial Statements 44 – ANNUAL REPORT 2018

I identify and assess the risks of significant errors in the Annual Report and the Consolidated Financial Statements, either due to irregularities or errors, design and implement audit procedures including on the basis of these risks and obtain audit evidence which is sufficient and appropriate for providing a basis for my statements. The risk of not discovering a significant error as a result of irregularities is higher than for an error due to mistakes, as irregularities can include acting in collusion, falsifying, deliberate exclusion, false information or infringements of internal checks.

•

I gain an understanding of the part of the company’s internal checks that is relevant for my audit in order to design audit measures which are appropriate for the circumstances, but not to pass judgement on the efficiency of the internal checks.

•

I evaluate the suitability of the auditing principles used and the suitability of the Board of Directors and CEO’s calculations in the accounts and the accompanying information.

•

I come to a conclusion about the Board of Directors and the CEO using the assumption of continued operation when the Annual Report and the Consolidated Financial Statements are prepared. I also draw a conclusion, based on the evidence collected during the audit, about whether there are any significant factors of uncertainty which concern such events or conditions that could result in extensive doubt about the company and the Group’s ability to continue operating. If I come to the conclusion that there is a significant factor of uncertainty, I must, in the auditor’s report, draw attention to the information in the Annual Report and the Consolidated Financial Statements about the significant factor of uncertainty or, if such information

is lacking, modify the statement about the Annual Report and the Consolidated Financial Statements. My conclusion is based on the audit evidence collected up until the date of the auditor’s report. However future events or conditions can mean that a company and a group is no longer able to continue operating.

secure fashion. The CEO should take care of the ongoing management according to the guidelines of the Board of Directors and their direction and, for example, take the actions necessary for the company’s accounts to be complete in accordance with law and so that the management of assets is carried out in a secure fashion.

•

I evaluate the overall presentation, structure and content of the Annual Report and Consolidated Financial Statements, including information, and whether the Annual Report reflects the underlying transactions and events in a way that gives a true and fair view.

Responsibility of the auditor My aim with regards to the audit of the management, and therefore my statement on liability discharge, is to gather audit evidence to be able, to a reasonable degree of certainty to assess whether any member of the Board or CEO to any significant extent:

•

I gather sufficient and appropriate audit evidence with regards to the financial information for the units or the business activities within the Group in order to make a statement on the Consolidated Financial Statements. I am responsible for managing, monitoring and executing the Consolidated Audit. I alone am responsible for my statements.

•

has taken any action or been guilty of any omission, which could give rise to any claims against the Company, or

•

in any other way breaches the Companies Act, the Swedish Annual Accounts Act or the Articles of Association.

I must inform the Board of Directors of, for example, the planned length and focus as well as the time schedule of the audit. I must also inform of any significant observations during the audit, including any significant failings in internal checks that I have identified.

Report on other requirements under laws and other regulations Statements In addition to my audit of the Annual Report and Consolidated Financial Statements, I have also audited the proposal for allocation of the company’s profit or loss, as well as the management of BrA Invest CKS AB for the year 2018 by the Board of Directors and CEO. It is my recommendation that the Annual General Meeting shall allocate the profit as proposed in the Management Review and grant the members of the Board of Directors and the CEO discharge from liability for the financial year. Basis for statements I have conducted my audit in compliance with generally accepted auditing standards in Sweden. My responsibilities in accordance with these standards are described in more detail in the section on Auditor’s Responsibilities. I am independent of the Parent Company and the Group according to generally accepted auditing standards in Sweden and have otherwise completed my professional duties in accordance with this requirement. I consider the audit evidence I have obtained to be sufficient and appropriate to provide a basis for my opinion. The responsibility of the Board of Directors and the CEO It is the Board of Directors which has responsibility for proposing allocation of the company’s profit or loss. In the case of a proposed dividend, this includes, among other things, an assessment of whether the dividend is justifiable taking into account the requirements that the Company and the Group’s type of business, scope and risks impose on the size of the Parent Company and the Group’s equity, consolidation needs, liquidity and other financial position.

My goal regarding the audit of the proposed appropriation of the profit or loss, and therefore my related statement, is that with a reasonable degree of certainty determine whether the proposal is consistent with the Companies Act. Reasonable certainty is a high degree of certainty, but no guarantee that an audit performed in accordance with generally accepted auditing standards in Sweden will always detect actions or omissions that can give rise to any claims against the Company or that a proposal for the appropriation of the profit or loss is compatible with the Companies Act. As part of an audit in accordance with generally accepted auditing standards in Sweden, I use professional judgement and have a professional sceptical attitude throughout the audit. The audit of the management and the proposed appropriation of the profit or loss is primarily based on the audit of the accounts. Any additional audit measures conducted are based on my professional judgement, based on risk and materiality. It means that I focus the audit on such measures, areas and conditions that are essential for operations where deviations and transgressions would have special significance for the company’s situation. I go through and examine decisions, basis for decisions, actions taken and other circumstances relevant for my statement on liability discharge. As a basis for my statement on the Board of Directors’ proposal for allocation of the company’s profit or loss, I have examined the Board of Directors’ motivation and a sample of data to determine whether the proposal is consistent with the Swedish Companies Act. Helsingborg 02/04/2019

Bo Matson Authorised public accountant

The Board of Directors is responsible for the company’s organisation and management of the company’s affairs. This entails, among other things, regularly assessing the Company and the Group’s financial situation and ensuring that the Company’s organisation is designed so that accounts, management of assets and the Company’s financial affairs are otherwise checked in a

ANNUAL REPORT 2018 – 45

BRA INVEST – BETTER BUSINESS

Board of Directors and auditors

Stefan Andersson, born 1964

Auditor

Member of the Board of Directors and CEO since 2008

Bo Matson, born 1952

Education and professional experience: MSc (Eng), Mechanical Engineering, Master of Business Administration, CEO and President of BrA Invest since 2008, CEO of Gunnebo Troax AB and member of Gunnebo’s Executive Management Board, 2002-2008, Division Manager, Atlas Copco Secoroc, 2000-2002, Division Manager, Trelleborg Protective Products, 1996-2000, other management positions in ABB Stal, 1988-1996 in such locations as Finspång, North Brunswick, NJ, USA and Nuremberg, Germany.

Authorised Public Accountant, Mazars SET Revisionsbyrå AB

Current Board positions: Chairman of Boards in the majority of BrA Invest subsidiaries. Member of the Board of Directors of Wellplast AB and of the Chamber of Commerce and Industry of Southern Sweden.

Alternative auditor

Kenneth Andersson, born 1966

Other audit responsibilities: Among others Hälsingborgs Byggmästareförening, Byggmästar’n i Skåne, Stenbocken, Heinz, Scandza

Rose-Marie Östberg, born 1963 Authorised Public Accountant, Mazars SET Revisionsbyrå AB Other audit responsibilities: Among others HSB Nordvästra Skåne, Hemlock AB, Sysav AB, Arval AB

Chairman Has experience in the construction, property and retail industries. Worked at external companies between 1986-2001 and in an executive position since 1997. Has served as a CEO in the BrA Group’s companies since 2001.

Christer Andersson, born 1968 Board Member Has a background in the construction and property industries. Has held executive positions since 1989 at external companies and within the BrA Group since 2001.

46 – ANNUAL REPORT 2018

ANNUAL REPORT 2018 – 47

T H O R N C R E AT I V E A G E N C Y

BrA Invest - Box 163 - 265 22 Ã&#x2026;storp - Tfn 042-509 60 - Fax 042-599 20 - Org.Nr: 556753-2501 - www.brainvest.se