Annual Report 2007 by Nederman Holding

Nederman Annual Report 2007

Contents 1

2007 in summary

Our business concept

5 6

8 10

11 12 13 14 15 16 17

19 20 22 23

24 25

Solutions for a cleaner environment and a more effective production References

Market forces

Sustainable development

Internal environmental work

Personnel, ethics and training Product development

Manufacturing and logistics

SEK m MSEK 1200

1041

1000 800

808

800

References

Objectives Shares 2007

Consolidated balance sheet

Summary concerning changes in the consolidated equity

2005

2006

100 80

64% 44%

32%

2005

2006

2005

100

88 71

500

511

Balance sheet – Parent company

Important events during the year

Cash flow statement – Parent company

• Acquisition of LEDA, the Belgian installation and service company.

34 35 36 69 70 71 73

74 76 77

Changes to shareholders’ equity Parent company Notes

Proposed appropriation of profits Auditors’ report

Corporate governance Articles of association Board of directors Senior executives

Notification to attend the Annual General Meeting Financial definitions

568

200

20 0

528

300

Consolidated cash flow statement

Income statement – Parent company

2007

400

31 32

2006

Average number of employees 600

MSEK SEK m

2007

Operational cash flow

2007

Net debt/equity ratio

114

100

2007

175

135

123

MSEK

Nederman Aftermarket

Consolidated income statement

2006

SEK m

Geographic markets

Directors’ report

2005

120

Financial information in summary

684

200

Operating profit (EBIT)

Business Area Hose & Cable Reels

866

743

400

Total solutions

Business Area Extraction & Filter Systems

Hose & Cable Reels

600

Sales channels

Extraction & Filter Systems

SEK m

1000

878

Sales (by business area)

Sales

Customer segments

Financial 28

2007 in summary*

CEO Sven Kristensson

100 2005

2006

2007

2005

2006

2007

• Nederman is listed on the OMX Nordic Exchange Stockholm (May 2007).

• Nederman gains base in South America through the acquisition of AtSource Exaustao Localizada, Brazil.

• EQT sells its shareholding and Latour acquires a major block of Nederman shares.

• Acquisition of Fumex Installations Ltd. *) Excl. IPO costs

One of the world’s leading environmental technology companies Nederman develops, produces and markets proprietary products and systems for the extraction and filtration of dust, smoke, vehicle exhaust gases, as well as equipment for industrial cleaning. All these products and systems are based on vacuum technology that covers the entire spectrum of high, mid and low vacuum systems. The company also produce and sell an extensive range of hose- and cable reels for water, air, oil and other media. Nederman’s systems help in many ways to create a clean working environment while providing efficient, safe workstations around the world. We supply our customers with comprehensive solutions featuring everything from pre-studies and project work to installation, start-up and service.

• Nederman was founded in 1944

• Manufacturing is ISO 9001 and ISO 14000 certified

• Production and assembly facilities in Sweden, Norway, Canada and China • Own sales organisations in 24 countries

• Agents and distributors in around 30 countries

• The Group had around 600 employees by the end of the year

Key figures Group*) SEK m Net sales

Gross profit

Gross margin %

2007

2006

1 041 359

877 794

49.5

49.1

515 572

431 265

2005

807 539

390 651

48.4

EBITDA*)

131 864

104 384

82 082

Operating profit*)

114 071

85 376

63 099

Profit before tax*)

105 338

75 609

51 134

6.42

4.73

4.25

EBITDA margin %*) Operating margin Profit after tax*)

Earnings per share*) **)

Dividend per share, SEK***) Operating cash flow*)

Return on shareholders’ equity % Return on operating capital % *) Net debt

Net debt/equity ratio %

Net debt/EBITDA, multiple *)

EBITDA/net financial items, multiple *) Average no. of employees

12.7 11.0

75 186

2.50

11.9 9.7

54 953

88 496

70 891

20.0

15.9

18.2

15.7

10.2 7.8

48 897

58 237

16,6

12.2

-145 625

-163 893

-207 661

1.1

1.6

2.5

32.2

15.1

568

43.5

10.7

528

63.8

6.9

511

*) Excl. IPO costs 6694 **) Before dilution ***) Board’s proposal to the Annual General Meeting

WORDS FROM THE PRESIDENT AND CEO

When EQT, which became Nederman’s main owner about seven years ago, decided to list our company on the OMX Nordic Exchange Stockholm, it was the beginning of a new phase in Nederman’s history. It’s been almost a year since Nederman became NMAN on the Nordic Exchange. This first year has been very intensive and has meant new, more detailed demands on reporting and information to investors, shareholders, authorities and other interested parties. Both smaller and larger investors followed Nederman’s listing with interest and shares was 10 times over-subscribed.

“I can without exaggerating say that 2007 has been one of the most interesting and exciting years in Nederman’s history.” When EQT became the main owner the situation at Nederman was different than it is today. The product range was out of control. Manufacturing and distribution needed rationalising and streamlining and sales channels needed renewing. Profitability wasn’t reaching its set goals either. The company therefore introduced a project of change, divided into two steps. The first was a comprehensive restructuring of the business and the second dealt with securing the company’s continued growth. When we were ready with the first step the number of manufacturing units had dropped, stocks had been centralised and the number of suppliers drastically reduced. Nederman now has a modern, effective purchasing and logistics department. By outsourcing component manufacturing to a select few manufacturers in Western Europe and in low cost countries in Eastern Europe and Asia, we have also been able to cut the total manufacturing costs. Nederman invests in and owns the production tools that the contracted manufacturers use. In parallel, our own production is now aligned to mainly include assembly of end products and systems, meaning greater flexibility.

Increased awareness of environmental issues Nederman is an environmental technology company, which since it started in 1944, has developed environmental solutions. It began with fans to improve ventilation in workshops and industries. Today Nederman provides a wide range of products and systems for capturing and filtering polluted air and harmful particles. The philosophy of the company has always been to create a clean, safe and effective working environment. In the 1990s, Nederman added, “Improving your workspace”, to its logo to highlight this philosophy. Since the beginning interest in personal working environments and environmental issues has increased dramatically. These are now important issues for countries, authorities, companies and individuals – on a global perspective. We are becoming more aware of the importance of a clean, healthy environment and we have the chance to impact on developments. In many countries this has meant the introduction of new laws and stricter regulations. This is a development that we can expect to see continuing.

Nederman’s focus By 2003 we had come so far in restructuring the business that we could start step two of the changes – securing the company’s continued growth. According to the strategy developed by the management and board at the time, Nederman was going to prioritise: • Expanding into new customer segments • Expanding the value chain through increased sales of systems directly to the end user and an increased share of aftermarket sales • Geographic expansion, mainly on growth markets Increased investment in complete solutions and system From previously concentrating on product sales the focus has moved over to systems supplied from our own sales companies. We now have our own sales units in 24 countries that are fully competent at selling systems directly to end-users. The share of direct sales in 2007 was around 44 per cent of total sales.

WORDS FROM THE PRESIDENT AND CEO

Increased product range in the segment Our years of experience from different customers’ businesses has laid the foundation for developing complete solutions for different customer segments, such as, welding workshops, automotive workshops, composite manufacturing industries etc. While we have accumulated our skills within various customer segments, we simultaneously continue to expand our product range to these segments in line with our strategy. New segments are increasing in significance A relatively new segment for Nederman is the composite manufacturing industry. More products are being made from these materials, such as cars, boats, aircraft, trains, wind turbine blades, cisterns etc. Composite materials have many different qualities and examples of materials include laminates, armoured plastics, carbon and fibreglass. The materials are easy to work with but the dust created when machining them can be harmful to health. Using our extensive experience of dealing with filtering dust and particles we have produced a capture and filtration system specially designed for the composite manufacturing industry. Greater use of composite materials Expansion in the composite manufacturing industry is growing at the same rate as the GDP on all continents. It’s mainly the wind power energy sector, with annual growth of 6 per cent, that’s pushing this forward. Asia is showing the highest rate of growth in this segment, while Europe and North America remain at stable levels. Other areas like the automotive sector, pipe and cistern industry are showing signs of increased growth. Nederman received a number of orders from wind power manufacturing industries in the US, Europe and

countries in Asia, such as India and China in 2007. A number of the world’s largest manufacturers of wind generators are located in India and China. To meet the greater demand from Asia Nederman established an assembly and logistics unit in the Shanghai area at the beginning of 2008.

Increased sales on Nederman’s aftermarket

New markets growing fastest

Nederman also provides complete service packages including different levels of service. We acquired a major Belgian installation company, LEDA, at the beginning of 2007.

Western Europe is traditionally Nederman’s largest and most important market but it’s on new markets that we’re growing fastest. At the end of the 1990s many Western European companies moved their manufacturing units to former Eastern European countries and Asia. By establishing sales companies in these markets we can continue providing services globally to these traditionally large companies. This strategy has proven very successful. We are continuing to establish on these new markets. We have started very well in India and China, two markets where we expect to realise huge potential. During 2006/2007 we opened our own sales companies in Brazil and Australia. Markets outside Europe and North America are currently responsible for around eight per cent of total sales. Development of customer segments with specific requirements Parallel with this expansion onto new markets we have also met changes by aligning ourselves to new customer segments with specific requirements. When one of Nederman’s core segments, the metal engineering industry, moved from the traditional markets, we developed a series of products that met the strict demands of hygiene and explosive safety. These products allow Nederman to provide the food, chemical and pharmaceutical industries with better and safer working environments.

We increased our aftermarket share from around three per cent of net sales to around 18 per cent between 2000 and 2007. Many of our markets have their own service teams but we also work very closely with externally authorised service companies.

In late autumn 2007 we acquired Fumex Installations Ltd, one of the UK’s leading extraction and filtration installation and service companies. The Nederman Maintenance Contract, a customer-specific contract for regular service and maintenance of facilities, was introduced in Sweden during 2007. We will continue to strengthen our position on the aftermarket through both attractive acquisitions and a greater range of services.

Finally I would like to once again highlight that 2007 was an interesting, positive and a developing year for everyone at Nederman. We saw good growth and are pleased that the continued profit trend is above the stated target. Organic growth accounted for the main part of the total growth of 20 per cent. As we will continue to work according to our set platform the situation looks positive in years to come. Sven Kristensson President and CEO

Our business concept

“To help customers meet the demands of cleaner working environments and safer production”

Nederman has conducted extensive studies of oil mist in engineering workshops and in the food industry. These activities have led to the development of the Nederman Oil Mist (NOM) filter.

Clean air is essential for health and the environment. Air pollution such as welding smoke and exhaust fumes, dust particles from grinding and polishing as well as oil mist from cutting fluids are harmful. Dust, smoke and particles are not just harmful to humans and the environment but also negatively affect the quality of the end product and increase wear and tear on machinery and equipment. Similarly, particles and oil mist can penetrate and damage sensitive electronics controlling machinery and processes, causing unnecessary operational problems.

Complete solutions

Nederman has developed a comprehensive range of products, systems and services, which combined with our application expertise, means we can help our customers achieve a cleaner working environment and safer production. The Extraction & Filter Systems business area meets customer requirements for solutions for extraction and filtration of gas, smoke, aerosol, dust and larger particles. The Hose & Cable Reels business area develops and manufactures hose- and cable reels. These products complement Nederman’s other products and are used in

Exposure to these pollutants can cause allergies, asthma and chronic illnesses and diseases such as cancer. Uncontrolled emissions damage the environment both over the short and long term.

many industrial applications – from automotive lubrication to high-pressure water hoses in food preparation.

composite materials are being more widely used in manufacturing automotives, aircraft, boats, wind turbine blades, etc

Extensive experience and global expertise

Aftermarket Services

Nederman has more than 60 years’ experience of solutions within many industries including the engineering, automotive, food manufacturing and processing, pharmaceutical, chemical and composite manufacturing industries. The global organisation gives a good insight into international and local environmental and health-related legislation. A sharp focus on product development means the company can more than meet the market’s new demands and needs. Nederman has on average spent approx. 2-3 per cent of its overall sales every year in developing new products and systems. ATEX* is another area in which Nederman is active. Nederman has also recently focussed on methods of dealing with dust and particles that occur when working with composite materials. This industry is undergoing rapid expansion because

In order to safeguard the function of the equipment and systems provided by Nederman the company also provides a comprehensive aftermarket service and maintenance package. This activity is undergoing rapid expansion. Nederman carried out corporate acquisitions in this sector in 2006 and 2007, including LEDA in Belgium and Fumex in the UK. Fumex is one of the UK’s biggest installation firms within Nederman’s business area and mainly concentrates on the car repair workshop sector. The acquisition of LEDA and Fumex is part of Nederman’s strategy of getting closer to the end-customer, focusing more on direct sales and taking advantage of the opportunities available on the aftermarket. * ATEX comes from the French “Atmosphere Explosible”, meaning explosive atmosphere, and is an EU directive concerning safety when using equipment in explosive environments. The directive consists partly of a product directive (94/9/EC) and partly a user directive (1999/92/EC).

Solutions for cleaner working environments and more effective production

Extraction and filtration at source – effective and energy-efficient

Nederman’s basic concept is to capture dust, smoke, exhaust fumes and other particles at source. Extraction and filtration using low vacuum systems is facilitated by a low negative pressure and lots of air close to the source. Close proximity to the source of the emission stops air pollution spreading to the surroundings. The air is filtered and the harmful particles collected. This technique is very effective and reduces energy consumption compared to central ventilation systems. Nederman’s control and regulation system with its patented automatic draught regulator also adapts extraction at the individual workstation with respect to the requirement for other workstations.

Safe and effective work

Loosely lying hoses and cables are a safety risk because people can trip over them. Hoses and cables also become damaged by vehicles driving over them. Over the past 30 years Nederman has developed and manufactured guide hoses and cable reels that make workplaces in various industries safer and more effective. Hoses for different media, such as electrical cables, are made easily accessible when needed while also being out of the way when not in use. Nederman introduced a new series of reels in 2007 for air, water and electricity.

Nederman also develops and markets high vacuum systems. This involves high-speed extraction with a high negative pressure very close to or directly at source. Typical applications include point extraction with integrated hand-held tools for grinding, cutting, blasting or welding. Nederman’s high vacuum system is also used for keeping machinery, floors and work surfaces clear of swarf and other coarse particles.

Nederman’s products and systems add value for customers by creating: • a clean and safe working environment

• improved quality of the finished product with fewer operational stoppages

• more effective production

Nederman ServiceGate, launched in 2006, is an example of how Nederman makes service work on heavy goods vehicles safer and more efficient. Hose reels for air, water, oils, coolants and other liquids are collected together for ease of access. The floor is kept free of cables and hoses that people could easily fall over and vehicles would damage if they drove over them. Nederman ServiceGate can be equipped with various hose reels, for oil filling for example, that include analogue or digital readouts and an automatic refill function of pre-set volumes.

• improved energy utilisation

India

Oil mist is a health and safety risk. Nederman’s NOM filters make it possible to meet new oil mist regulations and directives.

At this plant in India Nederman`s systems for capturing and filtering oil mist creates a more clean and more safe working area.

Koenigsegg, Sweden

Composite materials are becoming more common when manufacturing cars, boats and aircraft components. Koenigsegg, the manufacturer of the world’s fastest super sports car, sets extreme demands on quality and finish. Nederman’s extraction system, with its integrated tools, ensures that the air is free from fibres, particles and dust produced when tooling the composite materials.

Tools with high vacuum extraction are also used when working with wood, car spray painting workshops and when working with metal etc.

Volkswagen, Brazil

Volkswagen is Brazilâ&#x20AC;&#x2122;s biggest automotive manufacturer with 22,000 employees and five factories. This factory installed a high vacuum system in 2007 for extracting welding smoke.

Madrid Municipal Transport Company, Spain

The Madrid Municipal Transport Company has built a service and maintenance facility for its 300 or so buses. The facility is equipped with many of Nedermanâ&#x20AC;&#x2122;s systems. These include a central high vacuum system for cleaning the vehicles, track-based systems for extracting exhaust gases, point extraction for tools, and systems for extracting welding and exhaust gases.

Market forces

Nederman is active on an expanding market driven by heightened environmental awareness, energy use and productivity. Interest in sound, safe working environments is a strong driving force, which is causing more countries to introduce stricter regulations concerning working environments. Nederman is well-equipped to grow on this globally enlarging market. Increased awareness concerning the environment and health

The cost of dust, gases, particles and other pollutants in the workplace has increased in recent years and is expected to continue. Awareness is highest in Northern Europe and the northern US states, and lower in Southern and Eastern Europe, the southern US states and Asia. Nederman is seeing increased demand in Asia. In China and India, where industrial development is rapid, companies often invest immediately in the latest environmental technology instead of investing gradually through many technical generations. It’s becoming an increasing trend around the world that companies and industries with inhumane working environments and unethical practices become the subject of scrutiny and sanctions. Consumers and environmental organisations on an increasingly more global market are becoming important driving forces.

Stricter directives and laws

As awareness grows about the environment and health risks, laws and regulations are expected to become more stringent while also becoming more co-ordinated over greater geographical areas. Legislation harmonisation in the EU is increasing, even though local laws and regulations are still influential. Stricter laws and regulations are positive for Nederman’s development, even if the introduction rate for new regulations and the extent to which they are observed differ between countries and regions. Nederman expects the Nordic region and Western Europe to lead the way in this area.

Increased focus on production efficiency

Growing demands are being placed on increased efficiency, which benefits Nederman’s development. A dusty, dirty and polluted indoor environment is tough on employees and wears down machinery and tools. Equipment that runs processes and operations can become damaged, causing unplanned, expensive stoppages.

Sharper focus on energy savings

Nederman expects rising energy prices to increase demand among manufacturers for energy-efficient air treatment. This will mean that extraction equipment will need to be energy-efficient and not waste heated/cooled air. This is a clear trend in areas with cold climates, but also in warmer countries where people depend on air-conditioning.

• increased awareness concerning the environment and health • increased focus on effective production • stricter regulations on environment and health risks

Increased awareness leads to stricter restrictions and regulations

Environments with risk of explosion

lungs and enter the body. Depending on the chemical content, this exposure can

Exhaust gases in emergency callout stations

dry materials (i.e. metal particles, flour,

related illnesses and other internal

world is being tightened is for handling

Dust explosions can occur when handling sugar and wood dust) within the food and pharmaceutical industries, for example.

Various kinds of gas, such as those used

in the chemicals industry, can also cause

lead to skin or eye irritation, pulmonary

injury. Oil mist can also damage sensitive electronic equipment that controls the

machinery. Oil mist is also a serious safety risk when it settles as a thin film on floors,

explosions. Since mid 2006 a law has

tools and equipment. Regulations and

and components (both new and existing)

limitation of oil mist have therefore existed

been in place stating that all equipment

in explosive environments must be approved according to the ATEX directive*) issued by the EU.

directives concerning the spread and in the EU and US for some years.

*)ATEX comes from the French â&#x20AC;&#x153;At-

Working with composite materials

atmosphere.

common when manufacturing boats,

mosphere Explosibleâ&#x20AC;? meaning explosive

Welding in stainless materials Exposure to welding smoke, especially when welding stainless steel, involves

potential health risks. Welding smoke contains manganese and hexavalent chrome, Cr (VI), which is very harmful. Measures are now being implemented in many

countries in order to cut the permitted

limits for exposure to chrome and man-

ganese. Stricter limits were introduced in

the US and Sweden in 2007 for exposure to welding smoke containing hexavalent chrome and manganese.

Composite materials are becoming more aircraft parts, car parts, sports equipment, tanks, cisterns and a wide range of other products such as wind turbine blades. Dust, particles and fibres that appear

when working can cause skin irritation

and damage air passages. Working environment organisations in many countries have highlighted the risks. Regulations and directives have therefore been

introduced that require grinding and cut-

Another area where legislation around the exhaust gas from all kinds of vehicles

â&#x20AC;&#x201C; from cars to heavy military vehicles.

Very strict demands are placed on clean, healthy environments especially in fire

stations where personnel work, live and sleep for long periods. Diesel exhaust

gases from vehicles are a huge health

risk because they contain lots of different

carcinogenics.

Exposure to and risk from these substances are greatest during callouts when

the vehicles start their engines. Indirect,

passive exposure to diesel exhaust gases can also damage and irritate skin, eyes and mucous membranes.

The problem was highlighted a few years ago in the US and personnel organisations have actively campaigned for the introduction of stricter regulations for a safer, improved working environment.

Many other countries have followed suit and introduced similar regulations.

ting machines to be fitted with extraction

devices to keep pollution within regulated levels

Oil mist from machining

Oil mist is made up of small airborne

droplets that are produced when coolant fluids are used during machining. The

droplets hang in the air and are then ea-

sily inhaled. Toxic chemical compounds in the coolant fluids will be absorbed by the

Sustainable development

The blades of wind turbines are made from composite materials. The use of composite materials is increasing strongly. Unprotected machining involves the risk of harming lungs and air passages similar to the damage caused when handling asbestos. Nederman has developed solutions that minimise these risks.

For more than 60 years Nederman’s business concept has been to protect people’s working environment and their surrounding environment. Sustainable development has always therefore been of central significance. Over the years Nederman has developed products and solutions that make it possible to protect people from harmful particles, fibres, dust, gas, smoke and oil mist etc., while reducing the burden on the environment. Many of these products and solutions have been groundbreaking in their field.

systems from a lifecycle perspective. This means that all environmental consequences throughout the entire life of the product are taken into consideration, from manufacturing, distribution and use, through to distruction. The aim is to minimise all negative environmental side-effects.

The need for environmentally protective solutions has increased in line with the rapid industrial expansion in developing countries. For the same reasons, the stricter laws and ordinances in areas concerning health and the environment in the western world are causing an increased need for environmental efforts. Nederman is contributing to this in a very real sense towards sustainable development.

Environmental policy

Lifecycle perspective

Nederman develops its products and

Nederman’s external environmental impact shall continuously be reduced, relative to supplied volumes. This also covers Nederman’s business with suppliers and retailers, who must also make continuous improvements according to the same environmental demands and criteria that Nederman sets for its business. The environmental consequences shall always be considered for new business and processes. Nederman continuously monitors observance

of its environmental policy. The company works continuously to make improvements that go beyond current environmental demands. All employees are involved in environmental work and they are authorised to report nonconformance. Environmental surveys are carried out when necessary or in connection with the audit of control schedules every three years by external auditors authorised under the Environmental Protection Act.

Nederman is certified according to the SS-EN ISO 9001 quality assurance standard and the SS-EN ISO 14001 standard for environmental management systems.

Nederman’s internal work for a sustainable development

Developing new products

A careful environmental analysis of materials is carried out when developing new products. Nederman’s aim is to only use materials that are recyclable according to a list of priorities. The materials in recently developed products, with a few exceptions, are completely recyclable. The few per cent that aren’t recyclable are used for energy recovery. To facilitate recycling we strictly demand that dismantling of our pro ducts shall not take more than twice the assembly time.

Existing products

Material in existing products is continuously analysed and the chemical make-up is checked. Nederman fully observes EU directives including regulations concerning chemical substances such as flame retardants and chrome (VI). Our existing products also follow our demands for maximum dismantling and disassembly times.

Manufacturing

Nederman has no manufacturing in the traditional sense, but instead outsources manufacturing to selected suppliers. Nederman is responsible for assembly that doesn’t generate any emissions. The suppliers are carefully chosen and Nederman continually checks that suppliers meet demands and follow relevant regulations.

Waste management

Nederman’s manufacturing generates very little waste material. Packaging is sorted for recycling or energy recovery with no material going to landfill sites.

Transport

ÅTERVINNINGSBARA MATERIAL

Nederman’s aim is for 99 per cent of all outward transport to be handled by environmentally certified companies. This aim was met in 2007 for 99.3 per cent of transport. The aim for inward transport is set at 70 per cent. Nederman tries to persuade suppliers, as much as possible, to use environmentally certified companies.

Environmental organisations

Nederman is a member of the “Network for environmentally adapted product development”, run by the IVF (Institute for engineering research). Nederman is also involved in the environmental network managed by Helsingborg Municipality. Nederman regularly holds training and information meetings for production and product personnel on environmental issues. All new employees are informed about the company’s environment scheme.

Employee consideration

Nederman cares about its employees’ working environment and health. Nederman also respects personal integrity as explained in the Code of Conduct. Nederman provides a corporate healthcare plan including emergency healthcare, preventative medicine and rehabilitation. A keep-fit scheme is paid for in part by Nederman.

Accident prevention measures

Nederman continually educates its employees about the risks involved in production and assembly. Risk is assessed through regular safety and fire rounds and measures are implemented to eliminate the risk of accidents. Very few incidents have been reported and no serious accidents have occurred.

Personnel, ethics and training Division of employees Nordic region Norden 50% 50% United Kingdom 11% Storbritannien 11% Övriga Rest ofEuropa Europe27% 27% Nordamerika 11% North America 11% Övriga 1% 1% Rest ofländer the World

Division by gender Women 20% Kvinnor Men 80% Män

Code of Conduct Nederman is active through its own sales organisations in 24 countries and through agents and distributors in a further 30 countries. Against a background of cultural and ethnic diversity, shared values and guidelines are required for human

interaction. Nederman formulated its Code of Conduct in 2007, which is now observed throughout the organisation.

The Code of Conduct is linked to the UN’s declaration on human rights and the OECD’s guidelines for multinational companies

Nederman Training Center Courses and training for employees, service technicians and distributors

The refurbished Nederman Training Center was reopened in the autumn at the head office in Helsingborg. Here, the company arranges courses and training for sales employees, service technicians and distributors, and new employees receive an introduction. Next to the training centre is a hall featuring Nederman systems and solutions for demonstrations and practical training. The Nederman Training Center also has access to reference facilities from various industries including the fire service, composite material manufacturing, welding and mechanical engineering. There are also training centres for employees and customers in the UK and Canada.

Nederman Training Center in Helsingborg

Product development Nederman is an internationally strong brand that can compete using other values than price. This is largely the result of consistent investment in product development over several years. An average of 2 – 3 per cent of net sales is set aside for product development every year. Most of the Nederman’s products are developed in-house. Thirty or so specialists work on product development, technical support and product welfare.

Nederman’s new arm series, developed in 2006, brings together modern design with good function.

Nederman developed a completely new range of extraction arms in 2006, mainly for laboratories and the electronics industry

The work concentrates on developing new solutions that reduce health risks and environmental impacts. Design, function and modularisation are central concepts. Nederman develops and owns all moulds and tools, thereby minimising the risk for copyright theft.

Development projects in recent years include: • New series of capture arms for workshops and laboratories • Filter unit for capturing/separating oil mist • Stationary and mobile units for capturing/filtering welding smoke, dust and particles • Stationary vacuum system for capturing/filtering larger particles • A new series of stainless reels for applications requiring high levels of hygiene • A new rail system for extracting vehicle exhaust gases while they’re moving • A new system for extracting exhaust gases from emergency vehicles • A new series of cable reels for water, air and electricity

Nederman’s new reel series for electricity, water and compressed air was launched in 2007.

Nederman PTS, which was developed in 2007, is an extraction system for emergency vehicles.

Development of the proportion of newly developed products

% 100

60 72%

2001

19% 2002

New products

38%

2003

48%

2004

58%

2005

68%

2006

2007

Existing products

72 per cent of the products sold in 2007 have been developed since 2001.

Manufacturing and logistics

The Asian market is expanding strongly. Nederman opened an assembly and logistics unit in Shanghai at the beginning of 2008.

Modules and platform concepts Nederman’s in-house production concentrates mainly on assembly of end products and systems. Component manufacture is outsourced to producers in Western Europe and low-cost countries in Eastern Europe and Asia. Nederman owns and invests in many production tools that are used by the contracted manufacturers at their sites. Nederman uses a modular platform concept, which reduces the complexity and cost of production. A number

Komponenter Components

Moduler Modules

Produkter/System Products/System

of different products and systems can be created with specific functions and performance using the basic models as a template. The company’s biggest assembly facility is situated in Helsingborg. There is a smaller assembly facility in Mississauga, Canada, where products for the North American market are assembled. Nederman Norclean Line is developed and assembled in Sandefjord, Norway.

To meet the growing Asian demand, Nederman has built an assembly and logistics unit in Shanghai.

Centralised warehousing Effective logistics are one of Nederman’s success factors. Nederman works continuously to make stock control and logistics more effective with products and systems distributed more often straight from the central stores to the end user. For the past few years warehousing has been concentrated at two sites, Helsingborg and Mississauga.

Jung* Sandefjord

Jung*

Helsingborg

Sandefjord Helsingborg Mississauga Shanghai

Nederman has operated a warehousing facility of its products in Shanghai since the beginning of 2008, which increases accessibility in South East Asia. There are also warehousing facilities in Australia.

* Nederman aquired Töredal Verkstad AB at the beginning of 2008

Customer segments

Nederman concentrates its marketing activities on three primary customer segments: Metal fabrication, Automotive service and Other industries. Metal fabrication accounts for an estimated 40 per cent of sales. Automotive service accounts for around 32 per cent and Other industries for 28 per cent. The Metal fabrication and Automotive service segments are relatively mature in Western Europe, while the growth potential in Eastern Europe, the US and Asia in particular, are considered good. Growth potential in the Other industry segment is favourable with many different industries undergoing strong growth, including the composite material manufacturing and fabrication industries. Composite materials are used in the manufacture of

Engineering workshops Metal fabrication industry

Automotive service

Welding workshops

boats, aircraft, cars and wind turbine blades. Nederman received many major orders from the international wind power industry in 2007 and the future demand continues to look positive. Total solutions Nederman has extensive experience of solutions that reduce the impact on the environment and health in various industries. Nederman provides products and systems and takes overall responsibility for project management. Nederman’s services can include everything from planning and design to installation, preventative maintenance and service.

Estimated breakdown of net sales per customer category in 20071)

Manufacture of light and heavy vehicles Light and heavy vehicle workshops Emergency stations MOT testing centres Composite manufacturing industries Chemicals industry

Other industry

Pharmaceutical industry Oil and Offshore industry Laboratories Food manufacturing industry

Metal fabrication industry 40%

Metallbearbetning 40%

Automative service 32%

Fordonsservice 32%

Other industry 28%

Övrig Industri 28%

1) Because around half of sales are indirect, Nederman has estimated the 1) I och med att omkring hälften av bolagets breakdown per customer segment. försäljning sker indirekt är nedbrytningen per The estimate includes an assessment of how the indirect sales finally divide kundsegment en uppskattning av Nederman. between the customer segments. Uppskattningen inkluderar en bedömning av hur den indirekta försäljningen i slutänden fördelar sig mellan kundsegmenten.

Indirect

NEDERMAN

Wholesalers/ Retailers

55%

End customers

Direct

Sales channels Own sales companies

45%

End customers

Nederman operates via direct and indirect sales. Direct sales are made to end customers through Nedermanâ&#x20AC;&#x2122;s sales organisation. The business mainly includes systems and solutions, often with total overall responsibility. Indirect sales mainly include product sales and occur via wholesalers, retailers, installers and other external intermediaries. By working with a mixture of different sales channels, Nederman reaches customers that have different purchasing routines.

In recent years Nederman has increased the amount of direct sales via its own sales companies. Parallel to this, Nederman has also aimed at boosting direct sales via wholesalers and retailers through a range of activities. This has resulted in both increased volumes and improved profitability.

Brand-building at every juncture

Nedermanâ&#x20AC;&#x2122;s new generation H20/30 and C20/30 reels for electricity, air and water were launched in autumn 2007. Modern product design, profiled packaging and comprehensive advertising and SP material contributed towards a successful introduction. This example shows how Nederman works through indirect sales, while also profiling the Nedermanâ&#x20AC;&#x2122;s brand all the way to the end customer.

39%

44%

10%

2000

2006

2007

Direct sales have increased from about 10 per cent of net sales in 2000 to 44 per cent in 2007

Total solutions

Selling total environmental technology solutions requires expertise. Nederman has developed solutions in close cooperation with customers from many different industries over the years, which now gives them this expertise. Nederman’s commitments can include every step from the design of the facilities, products and systems to installation, preventative maintenance and service.

NedQuote – Nederman software Nederman has developed its own software, NedQuote, to help plan, build and cost projects. NedQuote provides customers with a complete background for a facility including systems and units. These are presented as detailed printed plans or as a 3D computer program.

Central high vacuum systems • Including filters and hose systems

Service workshops • Systems for extracting exhaust gases • Reels for electric cables, compressed air, water etc. • PowerBox electricity, compressed air and vacuum terminals • Mobile and stationary systems for extracting welding smoke • Complete service units for handling oils and liquids

Systems for handling oils and liquids • Complete systems for handling, registration and administration

Sheet metal workshops • Mobile and stationary systems for extracting welding smoke • PowerBox central outlet for com‑ pressed air, vacuum and electricity • High vacuum system for cleaning and extracting larger particles

Break-testing • Systems for extracting exhaust gases Car wash • Reels for various kinds of media • High vacuum systems for both extracting larger particles and cleaning General workshops • PowerBox central outlet for compressed air, vacuum and electricity • Mobile and stationary systems for extracting welding smoke

This plant is an example of how Nederman´s solutions can create clean, safe and effective workshops

Extraction & Filter Systems

The business area, Extraction & Filter Systems, provides a complete range of products for extraction and filtration. This allows the company to meet customers’ entire needs for extraction of gas, aerosol gases, dust and large particles. Using various vacuum technologies the business area divides its products and systems into three product areas: High vacuum, Low vacuum and Exhaust systems.

High vacuum

High vacuum involves the extraction and filtration using high speeds and high negative pressure very close to or directly at source. The technology is used for large particles (compared to low vacuum), for example in connection with extraction of sanding and grinding dust, cleaning machinery and workplaces, extraction of swarf, etc: Nederman provides a range of high vacuum products that include everything from large stationary installations to smaller portable units. This range also includes solutions for extraction integrated for use with a range of grinding and polishing tools and other hand-held tools. Extraction & Filter Systems

Low vacuum

Low vacuum involves extraction and filtration using low negative pressure and large air volumes close to the source. Low vacuum products and systems are used where the air is polluted by small, slow-moving particles such as weld smoke or flour dust. Extraction is carried out with the help of extraction arms, vacuum hose attachments, casings and housings located close to the source of pollution. Low vacuum is used in for example welding and the recycling of oil mist, and in pharmaceutical processes and food manufacturing that use ingredients or chemicals in powder form. Nederman has also developed a range of extraction arms for laboratories, research institutes and schools. BenchTop arms are also used in small-scale or smaller industrial applications like soldering and gluing or when working with solvents.

Exhaust systems

A specific low vacuum application would be for exhaust gas extraction for various

2007

2006

866

743

684

16.5%

8.5%

9.6%

EBIT, SEK m

EBIT margin

11.1%

9.6%

7.9%

Net sales, SEK m Growth

2005

kinds of vehicles. These systems are designed for service workshops, vehicle inspection centres, emergency services vehicles and automotive manufacturers. This application also includes a special range of products for emergency services vehicles where the vehicles need to be on 24-hour standby, while needing to prevent emissions of harmful exhaust fumes in the fire and ambulance stations. The Extraction & Filter Systems business area´s net sales 2007 rose to SEK 866 million (743), an increase of 17 per cent compared to the previous year. The operating profit rose to SEK 96 (71), an operating margin of 11.1 per cent (9.6).

Hose & Cable Reels Workshops and factories need effective, reliable supplies of media such as oil, air, water, gas and electricity. The Hose & Cable Reels business area meets these needs by providing a wide range of hose- and cable reels. Nederman’s reels make work more efficient by ergonomically providing quick and easy access to different media. The workplace is made safer by reducing the risk of accidents caused by tripping over cables. Tidying up and cleaning become easier and you avoid mechanical damages and unnecessary wear and tear on hoses and cables. The business area’s products are used in many different industries – from lubricating vehicles to high-pressure water hoses in food preparation. Some models are made from stainless materials, such as stainless steel to withstand extremely exposed environments. Nederman has also developed a range of EX-approved reels for environments with the risk of explosion. The Hose & Cable Reels business area´s net sales 2007 amounted to SEK 175 million (135), an increase of 30 per cent compared to the previous year. The acquisition of the Belgian installation and service company LEDA was responsible for 11 per cent of this climb. The operating profit amounted to SEK 18 million (14), an operating margin of 10.4 percent (10.3).

Hose & Cable Reels

2007

2006

175

135

123

30.4%

9.8%

0.5%

EBIT, SEK m

EBIT margin

10.4%

10.3%

7.4%

Net sales, SEK m Growth

2005

Geographic markets

Nordenregion 23% 24% Nordic United Kingdom 12% 11% Storbritannien Rest of Europe Övriga Europa44% 42% North America 13% Nordamerika 17%

Rest of the World6% 8% Övriga världen

Geographic division of net sales 2007

Nederman is one of the largest players on the market with its own sales organisation in 24 countries plus agents and distributors in around a further 30. Nederman’s investments in new markets have resulted in good growth over the year. Sales in Other Markets (markets outside Europe and North America) soared by around 125 per cent compared to the same period last year. Of this increase, start-up operations in India and China accounted for 35-40 per cent. Australia and Brazil accounted for a third and Japan also accounted for a third. The Nordic and Other European markets both rose by around 20 per cent. Sales in North America fell by around six per cent, which was completely due to the weak US dollar. In local currencies sales remained unchanged compared with last year. In recent years Nederman has altered its concentration on Western European countries in terms of sales and marketing. After previously being highly dependent on the metal fabrication industry and operating with a low number of direct sales, the company refocused a few years ago on a select

few core segments and industries. As a result, overall sales have climbed and the proportion of direct sales has risen.

Nordic Region

Nederman’s domestic market is the Nordic region where it holds a marketleading position.

Nederman’s international expansion began at the end of the 1970s in the UK. Nederman now has a lead position on this market. Nederman UK acquired one of the UK’s biggest installation companies in Nederman’s business area in autumn 2007: Fumex Installations Limited. The acquisition was part of Nederman’s strategy of getting closer to the end customer with more direct sales and greater activity on the aftermarket.

Rest of Europe

Market growth in Eastern Europe is good as a result of the industry’s rapid expansion. Many Western European companies are promoting this development by investing in the region. Nederman’s expansion into eastern Europe began with the start-up of a sales company in Poland. Expansion continued with the start-up of business in Romania, Hungary, the Czech Republic, Slovakia and Russia.

North America

Nederman has been active in North America (US and Canada) for several years, and the company’s systems for extracting exhaust gases at emergency callout stations (fire, ambulance) are well established. The demand for minimising environmental and health risks has however been lower in North America than in Europe. Federal authorities, insurance companies and high medical bills are now pushing this development, which is rapidly approach-

ing European standards. Initiatives include the introduction in 2006 of stricter limits for the exposure of weld smoke containing hexavalent chrome and manganese, which has boosted interest in extraction at source. Sales in North America have increased about 2 per cent annually since 2004 (adjusted for exchange rates). North America accounts for 13 per cent of Group sales. A new regional manager was appointed for North America in 2007.

Rest of the world

Industrial development in India and China is progressing rapidly and companies often invest immediately in the latest environmental technology instead of gradually progressing through various technology generations. China Nederman opened independently in China in 2005. The company has now built up a network of twenty or so retailers in the main industrial centres. The Chinese market is undergoing an expansive phase and Nederman received significant orders during the year for solutions that deal with harm-

ful particles when fabricating composite materials. Composite materials are used here for manufacturing wind turbine blades, a product that’s in great demand the world over. A new assembly and logistics unit was opened in Shanghai at the beginning of 2008 to meet this increasing demand from customers in Asia. India The company began operations in India in 2005. Many large domestic and foreign automotive manufacturers have established in India including Tata Motors Ltd, Fiat and Volvo, and the world’s largest motorcycle factory Hero Honda. Nederman has received significant orders from these companies. Nederman became a preferred supplier to Indian Railway at the end of 2007 and received the first significant order for extraction/filtering of weld smoke. Japan Nederman has been represented in Japan since the end of 1980´s. In Japan the focus has primarily been on marketing systems for exhaust gas extraction in the automotive manu-

facturing industries. The introduction of Nederman’s high vacuum systems, mainly for welding applications, began in 2006. Japanese companies’ investments in environmental technologies have increased, giving Nederman excellent potential for expansion on this market. South America Nederman has been represented in Brazil since 1996 by ESAB S/A. In June 2007 Nederman do Brasil was established. Brazil is the most expansive market in South America. More than 60 per cent of production in the region is located in Brazil, which is home to a dozen or so leading car and truck manufacturers. Australia Nederman acquired a business from a former distributor in Australia in autumn 2006, and now operates under Nederman Pty Ltd with offices and warehousing facilities in Melbourne. In June 2007 Nederman do Brasil was established.

Nederman Aftermarket

Nederman has a broad range of equipment and systems installed at customer sites around the world and the company is seeing increased demand for preventative maintenance and regular service, not least of all for service agreements. Nederman Service has developed various service packages covering installation and start-up of systems and facilities. Components (spare parts and expendable materials), preventative maintenance and service are also included. Nederman Maintenance Contract is a customer-specific contract for regular maintenance and inspection of facilities’ systems. To safeguard the supply of spare parts at the right time, Nederman has identified many critical spare parts and wearing parts for the most important customer segments.

Nederman’s service organisation is made up of its own teams as well as external, authorised installation and service companies. To further strengthen its position, Nederman is now building up its onhouse service organisation around the world. LEDA, a Belgian service and installation company that mainly concentrates on the automotive service segment, was acquired at the beginning of 2007. In late autumn 2007 Fumex Installations Ltd was acquired.

Nederman stocks a vast number of critical spare parts and wearing parts for immediate delivery.

18% 15%

Nederman Service

3% 2000

2006

2007

Nederman’s share of service business has increased from around 3 per cent of net sales in 2000 to 18 per cent in 2007.

Windpower, Europe, USA, Asia

There is a global increase in the number of wind farms. Germany, Spain and the US were the three main countries in terms of installed turbines in 2006. India and China were fourth and sixth place respectively. This increase is pushing the demand for components like blades made from composite materials. Working environment organisations have highlighted the risks of machining composite materials and have introduced demands for solutions that safeguard exposure to harmful particles are kept under the stipulated values.

Grinding, polishing and cutting machines with integrated extraction and filter systems reduce health risks when machining composite materials.

Santa Maria, Sweden

Handling powder and dry ingredients in the food industry is a health risk. The dust can also explode. NedermanÂ´s arms are designed to meet the highest demands on hygiene and are EX approved for use in explosive environments.

Equipment and components in explosive environments must meet the EUâ&#x20AC;&#x2122;s demands set out in 2006 and be approved according to the ATEX directive.

Objectives Financial objectives

• Sales growth of 8-10 per cent each year over a business cycle, of which at least half organic growth • EBIT margin: minimum of 10 per cent over a business cycle • Net debt/equity ratio between 0.5 – 1.0

Success factors

• Market leader on important key markets • International presence • Strong brand • Technology leader • From products to complete solutions

Strategies

• Geographic expansion • Expansion into new customer segments • Expansion in the value chain

Profitability

• Focus on operating costs • Increased efficiency in product supply • More effective purchasing • More effective sales • Transparency of profitability on each market

Shares 2007 Dividend policy

30–50 per cent of the year’s net profit after tax, taking into account the capital structure and acquisition plans. Nederman’s shares have been listed on the OMX Nordic Exchange Stockholm since 16 May 2007 as “NMAN”. At year-end the share capital was SEK 1,171,534 divided between 11,715,340 shares.

Shareholders 31 December 2007 No. of shares

Share %

Latour

Shareholders

2 713 934

23.2

IF Skadeförsäkringar

1 125 300

9.6

Ernström Finans

890 500

7.6

Management and Board

837 907

7.2

Explora Smallcap Fund, IR

657 650

5.6

SHB

502 807

4.3

Carnegie Fond Småbolag

380 000

3.2

BP/Henderson Pan European , FR

354 350

3.0

Nordea Bank Finland, FI

334 700

2.9

Clearstream Banking, LUX

291 295

2.5

Other shareholders

3 626 897

30.9

Total no. of shares

11 715 340

100

Price performance

OMX Nordic EUR PI Nederman Holding

Financial information in brief* Consolidated SEK m Operating income and profit/loss Net sales

Operating profit before depreciation (EBITDA) Operating profit (EBIT)

Profit after net financial items

Net profit Cash flow from operations

2007

2006

2005

2004

1 041.4

877.8

807.5

747.0

114.1

85.4

63.1

51.6

131.9

105.3

75.2

104.4

75.6

55.0

82.1

51.1

48.9

69.5

35.2

29.2

Operating profit (EBIT)

114.1

85.4

63.1

51.6

Change in working capital

-30.4

-14.3

-0.7

-10.4

88.5

70.9

Items not affecting cash flow

Investeringar (netto)

Operating cash flow Balance Sheet Fixed assets

Other current assets

Cash and current investments

Equity

21.5

-16.7

-17.6

448.9

421.3

425.8

412.8

76.4

50.2

55.0

384.5

30.2

265.0

235.9

182.5

175.4

172.8

214.1 773.2

262.7 763.3

271.0 708.8

12.7

11.9

10.2

9.3

17.0

15.7

16.6

11.6

1.8

1.6

1.5

11.0

Return on operating capital (annual average)

20.0

Capital structure and capital structure-related key figures Net debt

265.8

325.2

EBIT margin

Capital turnover rate, times

282.5

38.6

376.6

909.8

Return on equity (annual average)

301.7

58.2

451.8

Total assets

EBITDA margin

15.0

-19.2

222.1

Profitability and profitability-related key figures

15.0

-14.7

Interest bearing liabilities

Non-interest bearing liabilities

14.5

9.7

15.9

7.8

12.2

6.9

10.4

145.6

163.9

207.7

240.8

Equity/assets ratio

49.7

48.7

42.6

37.4

Operating capital

597.4

Net debt/equity ratio, %

Interest coverage ratio, times Operating capital (annual average) % Share data and share-related key figures Number of shares per year

Weighted average number of ordinary shares during the year, before dillution

Weighted average number of ordinary shares during the year, after dillution

Equity per share (annual average before full dilution), SEK Equity per share (annual average after full dilution), SEK

Earnings per share (annual average before full dilution), SEK

Earnings per share (annual average after full dilution), SEK Employees

Average number of employees

32.2

10.3

77.6

11 715 340

43.5

8.2

540.5 83.0

11 715 340

11 613 010

63.8 4.7

532.9 92.3

11 512 340

90.9 2.8

505.8

74.9

11 512 340

11 502 580

11 715 340

11 786 420

11 715 340

11 711 010

35.35

29.77

25.19

21.49

35.35 6.42

6.42

568

30.22 4.73

4.67

528

25.63 4.25

4.18

511

21.88 2.50

2.46

482

* Excl. IPO costs 6694 2007

Directors’ report 2007 The Board and the CEO of Nederman Holding AB (publ) Co. Reg. No. 556576-4205, hereby submit their annual report for the 2007 financial year Business A global leader in environmental technology, Nederman develops, produces and markets products and systems for the extraction of dust, smoke, automobile exhaust fumes, and equipment for industrial cleaning. Nederman’s products are based on vacuum technology that covers the entire range from high vacuum to middle and low vacuum. Nederman also produces and sells an extensive range of self-retractable hose and cable reels for water, air, oil, and other media. Nederman’s systems contribute to creating clean, efficient and safe workplaces all over the world. The company supplies a comprehensive range of services, from preliminary studies and project planning to installation, operational start-up and servicing. Manufacturing is certified according to ISO 9001 and ISO 14000. Units for production and assembly are located in Sweden, Norway and Canada and also in Shanghai from Q1 2008. Nederman’s products and systems are marketed by our own sales organisations in 24 countries and via agents and distributors in around 30 countries. The Group had around 600 employees at year-end. Group structure Nederman Holding AB (publ) is the parent company of the Group with directly or indirectly wholly-owned subsidiaries as stated in note 30. Products and logistics are supplied by AB Ph. Nederman & Co, Helsingborg, Nederman Logistics North America Ltd., Mississauga, Canada and Nederman Norclean A/S in Sandefjord, Norway. Furthermore, there is a product and supply unit under construction in Shanghai, China. This is expected to be in operation in Q1, 2008. Product development is run by AB Ph Nederman & Co in Helsingborg. Business in the other operational subsidiaries consists of sales, installation and service. Stock Market listing The most significant event during the year was Nederman’s listing and the first trading day was 16 May. The introduction was succesful and oversubscribed 10 times. The introduction price was SEK 87 per share. Nederman, listed under the NMAN ticker on the OMX Nordic Exchange’s Small Cap list, today has around 5,000 shareholders. Acquisitions during the year Nederman acquired LEDA, a Belgian installation and service company in February 2007. The acquisition was done through Nederman N.V., which is Nederman’s Belgian sales company. Nederman acquired the Brazilian company AtSource Exaustao Localizada in June. The company is well-established on the Brazilian market and the employees are very aware of Nederman’s products and applications. The company now operates under the name Nederman do Brazil. The English installation and service company Fumex Installations Ltd was acquired in November together with the service company Lev Coshh Testing Limited. Fumex is one of 26

the major installation companies in Nederman’s business area, mainly concentrating on sales to the automotive workshop industry. Further information about the acquisitions can be found in note 4. Sales and profits The Group performed well in 2007 and the market for the company’s products was good. Net sales climbed to SEK 1,041 million in 2007 compared to SEK 878 million in 2006, equivalent to a 19 per cent growth. Adjusted for currency effects, sales climbed 20 per cent. The operating profit (EBIT) was SEK 114 million in 2007 (before IPO cost) compared to SEK 85 million in 2006, equivalent to an operating margin of 11.0 per cent compared to 9.7 per cent in 2006. The main reasons for the increased profit were the extra volumes, more competitive product mix and a more dynamic pricing and discount structure in the indirect sales channels. The Extraction & Filter Systems business area’s net sales rose to SEK 866 million in 2007 compared to SEK 743 million in 2006, equivalent to a 17 per cent rise. Acquisitions had a negligible affect on sales increases. The operating profit rose to SEK 96 million compared to SEK 71 in 2006, equivalent to an operating margin of 11.1 per cent in 2007 compared to 9.6 per cent in 2006. The positive development of the operating margin is explained by the sales increase mainly being on products with high margins. The Hose & Cable Reels business area’s net sales amounted to SEK 175 million in 2007 compared to SEK 135 million in 2006, equivalent to a 30 per cent rise. The acquisition of the Belgian installation and service company Leda was responsible for 11 per cent of this climb. The operating profit rose to SEK 18.2 million compared to SEK 14.0 in 2006, equivalent to an operating margin of 10.4 per cent in 2007 compared to 10.3 per cent in 2006. Greater volumes positively impacted margins of products manufactured by the company, but the volume increase has partly arisen via additional products with somewhat lower margins in the segment and higher installation revenues that generate lower margins than the Group’s own products. This is why the operating margin has remained generally the same. Sales on all geographic markets developed well except North America and the UK. Sales in North America fell by six per cent in SEK but remained unchanged in local currencies. A growth of around four per cent has been recorded in local currency in the UK via acquisitions. Sales in Other markets soared by 125 per cent compared to the same period last year. Of this increase, start-up operations in India and China accounted for 35-40 per cent. Australia and Brazil accounted for a third and Japan also accounted for a third of this increase.

The Nordic and Other European markets both increased by around 20 per cent. For further information regarding the business areas and geographic markets, please see note 3. Financing and liquidity The Group’s equity/assets ratio at year-end was 49.7 (48.7) per cent. The Group’s cash and cash equivalents as of 31 December amounted to SEK 76 million (50) and unutilized overdraft facilities stood at SEK 36 million (43). The parent company has a financing agreement with Nordea Bank, drawn up as a five-year framework agreement of SEK 400 million. The agreement expires in November 2012. In the event of an ownership change, where one or more of the owners acquire shares corresponding to over 50% of the voting rights in the company, the bank has the right to cancel the agreement prematurely. The shares There are 11,715,340 shares in the company, all of which are the same class and offer the same voting entitlement. There are no restrictions on transfer rights for shares in the articles of association or through other agreement. The Board proposes that the dividend for the 2007 financial year be SEK 2.50 per share. Ownership On 31 December 2007 Investment AB Latour owned 23.17% of the company’s shares, making it the largest shareholder. Since the start of 2008 Ernström Finans AB has signalled that its shareholding is 10.0%. No other shareholders have a holding higher than 10%. In addition to what is reported above, there is nothing to be reported concerning any public takeover bid. Risks and uncertainties The Nederman Group is exposed to a number of risks mainly arising due to purchasing and selling products in foreign currencies. Currency risks and interest rates affect the Group’s profits and cash flow. The Nederman Group is also exposed to refinancing and liquidity risks, credit risks and counterparty risks. The company’s finance policy was set by the board and contains guidelines for handling financial risks in the Group. The purpose of the finance policy is to set up guidelines for managing financial risk exposure of different kinds. The Group’s central finance department is responsible for identifying and effectively limiting the Group’s financial risks. For more information, see note 26. Environment The subsidiary AB Ph. Nederman & Co is licensed according to the environmental protection act. The license is for a manufacturing area of no more than 7,000 m2. The license is applicable until further notice. As the environmental code currently stands the present business is liable by law to declare the floor area of the business. Current activities consist of assembly only and do not result in any emissions to air or water. The company has held ISO 14001 environmental certification for many years.

The Group’s investments in tangible assets for the year amounted to SEK 15.4 million (10.8). Depreciation of tangible assets for the year was SEK 11.8 million (13.1). Employees The average number of employees during the year was 568 (528). Employees’ gender division and their salaries can be found in note 7. Remuneration to the Board and senior executives The 2007 AGM adopted a policy regarding remuneration and employment terms for 2007. The following key principles are applied: a fixed salary is paid for full-time work. In addition a variable compensation may be earned that is linked to the company’s tied-up capital and earnings. This variable compensation can be a maximum of 30-50% of annual salary depending on the individual’s position within the company. The CEO’s pension plan is premium-based and the annual premium corresponds to 35% of annual salary. Pension payments for other senior executives follow the ITP collective agreement, except for one executive for whom pension payments amount to 10 times the basic index amount per year. The CEO must give six months’ notice of his intention to resign. If dismissed by the company, the CEO has the right to receive an amount corresponding to 18-24 months’ salary (the final six months are dependent on new employment). For other executives, notification is 12 months for the company and six months for the individual. There are no agreements between Board members or senior executives and Nederman or any of its subsidiaries concerning benefits after the end of their employment. At present there are no share or share pricerelated incentive schemes involving Board members or senior executives. Nederman’s senior executive team comprises eight individuals (including the CEO). The board has proposed that the principles concerning remuneration and terms of employment should remain unchanged for 2008. See note 22 for further information. Events after the end of the financial year Töredal Verkstad AB was acquired in January 2008. The company has worked closely with Nederman for many years and has provided services for Nederman’s High Vacuum product area. Outlook The company expects demand in 2008 to remain good in Europe and the rest of the world. The North American market is expected to show a weaker development.

Investments and depreciation The Group’s investments in intangible assets for the year amounted to SEK 7.3 million (7.4). Depreciation of intangible assets for the year was SEK 6.0 million (5.9). 27

Consolidated income statement SEK 000 Net sales

Costs of goods sold

Notes 2, 3

Gross profit/loss

Other operating income

Selling expenses

Other operating expenses Operating profit/loss Financial income

Financial expenses

Net financial income/expenses Profit/loss before taxes Taxes

Net profit/loss

3, 7, 8, 9 22, 27

The parent companyâ&#x20AC;&#x2122;s shareholders Minority shareholding

-525 787

3 177

2006

877 794

-446 529 431 265

7 886

2005 807 539

-416 888

390 651 2 385

-315 295

-275 757

-241 141

-15 146

-14 356

-14 288

107 377

85 376

-66 829

Attributable to:

Earnings per share before dilution (SEK) after dilution (SEK)

1 041 359 515 572

Administrative expenses

Research and development expenses

1 January â&#x20AC;&#x201C; 31 December

2007

-14 102

2 559

-11 292 -8 733

98 644

-58 967 -4 695

794

-10 561

-63 477 -11 031

63 099 1 720

-13 685

-9 767

-11 965

75 609

51 134

-28 278

-20 656 54 953

48 897

70 366

54 953

48 897

70 366

54 953

48 897

6.01 6.01

4.73 4.67

4.25 4.18

70 366

-2 237

Consolidated balance sheet SEK 000 Notes

Assets

Intangible fixed assets Tangible fixed assets

Long-term receivables

Income taxes receivables

Total fixed assets Inventories

Prepaid tax

Accounts receivable

4, 28

368 504

497

772

16 12

Total assets

Share capital

2005

370 895

Cash and cash equivalents

Shareholders’ equity

2006

394 533

Total current assets

On 31 December

Prepaid expenses and accrued income Other receivables

2007

40 987

12 924

Other contributed capital

Reserves

2 111

13 413

421 328

425 803

121 600

89 776

87 087

234 844

187 815

175 368

11 240

13 972

460 863

351 907

3 568

13 172 76 439

1 172

3 011

7 098

50 235

773 235

1 172

2 991

8 583 8 494

55 038

337 561

763 364

1 151

345 931

340 065

99 407

29 041

-25 912

5 254

Retained earnings, including of this year’s net profit/loss

12 210

41 775

448 941

909 804

37 451

443

9 942

Shareholders’ equity attributable to the parent company’s shareholders

451 764

376 587

325 246

Total shareholders’ equity

451 764

376 587

325 246

158 111

146 264

195 996

28 389

27 291

187 911

236 261

39 475

39 412

Minority shareholding

Liabilities

Long-term interest bearing liabilities Other long-term liabilities Provision for pensions

Deferred tax liabilities

Total long-term liabilities Short-term interest bearing liabilities

Accounts payable

Tax liabilities

Other liabilities

Accrued expenses and prepaid income

Provisions

Total short-term liabilities

4, 28

20, 26 24 22

20, 26 12 24

Total liabilities

Total shareholders’ equity and liabilities

566

30 207

13 089

201 973

33 746

13 258

104 847

84 160

49 045

27 807

19 680

8 922

12 974

83 092 5 030

20 787

44 000

46 194

256 067

208 737

201 857

909 804

773 235

763 364

4 749

458 040

2 179

396 648

51 678

1 858

438 118

For information on the Group’s pledged assets and contingent liabilities, see note 28.

Summary concerning changes in the consolidated equity SEK 000

Opening shareholders’ equity 1 January 2005

Shareholders’ equity attributable to the parent company’s shareholders

Share capital

Other capital contributed

Translation reserves

1 151

340 110

-1 499

Change in translation reserves

Profit/loss brought forward, inclusive of this year’s profit/loss -74 809

11 441

Net profit/loss for the year

Minority holdings

Total shareholders’ equity

264 953

11 441 48 897

New share issue

Total

-45

48 897

11 441 0

-45

48 897 -45

Closing shareholders’ equity 31 December 2005

1 151

340 065

9 942

-25 912

325 246

Opening shareholders equity 1 January 2006

1 151

340 065

9 942

-25 912

325 246

Change in translation reserves

-9 499

Net profit/loss for the year Conversion of loans

-9 499 54 953

54 953

-9 499 0

5 866

Closing shareholders’ equity 31 December 2006

1 172

345 931

443

29 041

376 587

Opening shareholders equity 1 January 2007

1 172

345 931

443

29 041

376 587

Change in translation reserves for the year

5 887

54 953

4 811

Net profit/loss for the year

Closing shareholders’ equity 31 December 2007

1 172

345 931

5 254

5 887

4 811

70 366

99 407

451 764

Consolidated cash flow statement SEK 000

Current operations Operating profit/loss

Adjustment for depreciation of fixed assets

Notes

Other adjustments

1 January – 31 December 2007

107 377

85 376

17 793

19 008

3 496

763

3 737

Interest received

2006

-4 550

2005

63 099

18 983 -3 948

1 720

Interest paid

-12 101

-10 071

-11 746

Income tax paid Cash flow from current operations before changes in operating capital

-21 441

-15 201

-9 376

98 861

75 334

58 433

-3 345

-2 046

14 047

-3 111

Other financial gain/loss

Cash flow from changes in operating capital Increase (–)/Decrease(+) inventories

-27 276

Increase (–)/Decrease(+) of operating receivables Increase (+)/Decrease (–) of operating liabilities

Investment activities

Acquisition of tangible fixed assets Sale of tangible fixed assets

Acquisition of other intangible fixed assets

Acquisition of business enterprises, net impact on liquidity Acquisition of financial assets Sale of financial assets

Cash flow from investment activities

-24 961

68 469

61 075

57 720

-10 055

-8 220

-10 107

-4 080

-5 470

-7 211

-31 149

-4 708

-2 137

667

Investments in capitalized research and development costs 4

-299

-32 839

29 723

Cash flow from current operations

-3 245

389

-1 960

577

-47 862

-19 392

150 000

8 616

4 444

180

-2 046 -51

-21 372

Financial activities

Expenses for new share issue New loans

Instalment payments on loans

Cash flow from financing activities Cash flow for the year

Cash and cash equivalents at the beginning of the year

Foreign exchange gains/losses in cash and cash equivalents Cash and cash equivalents at the end of the year

-146 155

-53 571

-45 -13 780

3 845

-44 955

-13 825

50 235

55 038

30 165

76 439

50 235

24 452

1 752

-3 272

-1 531

22 523 2 350

55 038

Income statement for the parent company SEK 000 Other operating income

Administrative expenses

Other operating expenses Operating profit/loss

Gains/losses from investments in subsidiaries

Interest income and similar profit/loss items

Interest expenses and similar profit/loss items Profit/loss after financial items

Appropriations

Net profit/loss Tax

Net profit/loss

Notes 5 6

7, 8, 22 29

11 12

1 January â&#x20AC;&#x201C; 31 December 2007

8 949

2006 8 225

2005 8 756

-22 927

-20 344

-20 063

-20 672

-12 235

-11 307

5 932

18 947

12 547

-8 053

-7 460

-8 930

-5 473

2 181

-6 694

8 980

-13 813

-116

9 010

806

8 262

-6 884

-19 286

10 443

-6 788

-10 435

15 164

-1 490

8 851

4 721

5 298

Balance sheet for the parent company SEK 000

On 31 December

2007

2006

2005

1 541

1 753

2 014

Shares in subsidiaries

518 783

523 039

522 981

Receivables from subsidiaries

Other receivables

Assets

Fixed assets

Intangible fixed assets

Total fixed assets

Prepaid tax

Prepaid expenses and deferred income Total current assets

Notes

343

472

520 407

525 135

525 467

59 981

19 653

24 139

331

Cash on hand and bank deposits

2 676

Total assets

2 029

554

1 504

62 693

22 078

26 197

67 863

22 078

26 197

5 170

Total current assets

588 270

547 213

551 664

Shareholdresâ&#x20AC;&#x2122; equity Restricted equity Share capital

1 172

Statutory reserve

292 524

Non-restricted equity

Share premium reserve

5 867

Profit brought forward

33 896

21 541

373 468

348 623

313 726

6 489

1 016

3 197

150 000

140 000

190 000

150 000

140 000

190 000

20, 26

29 973

30 000

14 238

20 999

533

993

447

-10 435

Total shareholdersâ&#x20AC;&#x2122; equity Untaxed reserves

Debts to credit institutions

Debts to Group companies

31 21, 26

Total long-term liabilities Short-term liabilities Convertible loans

Liabilities to credit institutions

Accounts payable

Liabilities to subsidiaries

Current tax liabilities

Accrued expenses and prepaid income

Other liabilities

Total short-term liabilities

Total shareholdersâ&#x20AC;&#x2122; equity och liabilities

2 691

4 720 5 698

58 313

588 270

Pledged securities and contingent liabilities, parent company

SEK 000

Pledged securities Contingent liabilities

5 867

1 151

292 524

84 340

Net profit/loss

Long-term liabilities

1 172

292 524

Notes 28

2007

15 164

1 381 0

4 747

57 574

547 213

On 31 December

2006

-1 490

6 613

1 507 0

1 168

4 920

44 741

551 664

2005

229 692

60 806

45 609

44 535

Summary concerning changes in the parent companyâ&#x20AC;&#x2122;s equity SEK 000

Opening equity 1 January 2005

Share capital

Statutory reserve

Share premium reserve

Retained earnings, including the profit for the year

Total shareholdersâ&#x20AC;&#x2122; equity

1 151

292 569

7 918

301 638

18 923

-5 298

-1 490 -2

-1 490 -47

Group contributions received Tax attributable to items which are reported directly against equity Net profit/loss for the year

-45

New share issue Transformation of share premium reserve to statutory reserve

292 524

-292 524

Closing equity 31 December 2005

1 151

292 524

20 051

313 726

Opening equity 1 January 2006

1 151

292 524

20 051

313 726

19 230

-5 385

15 164

15 164 5 887

Group contributions received Tax attributable to items which are reported directly against equity Net profit/loss for the year Conversion of loans

5 867

Closing equity 31 December 2006

1 172

292 524

5 867

49 060

348 623

Opening equity 1 January 2007

1 172

292 524

5 867

49 060

348 623

Group contributions received Tax attributable to items which are reported directly against equity Net profit/loss for the year

Closing equity 31 December 2007

1 172

292 524

5 867

49 000

-13 720

-10 435 73 905

-10 435 373 468

Cash flow statement for the parent company SEK 000

Note(s)

1 January – 31 December 2007

2006

2005

-20 672

-12 235

-11 307

829

771

589

Dividends received

5 932

18 947

12 547

Interest received and other financial items

1 766

806

-7 650

-7 355

-14 623

-84

-174

237

-19 879

-43

-11 751

11 257

Current operations Operating profit/loss Adjustments for items which are not included in the cash flow

Interest paid and other financial items Income tax paid Cash flow from current operations before changes in operating capital Cash flow from changes in operating capital

Increase (–)/Decrease(+) of operating receivables

6 400

12 373

Increase (+)/Decrease (–) of operating liabilities

-11 906

38 835

8 547

Cash flow from current operations

-25 385

51 165

8 053

Investment activities

Acquisition of tangible fixed assets Acquisition of intangible fixed assets

-14

-124

-130

-343

-257

-1 068

Acquisition of subsidiaries/reduction of share capital

4 256

-58

Cash flow from investment activities

3 899

-439

-1 198

Financing activities

Expenses for new share issue New loans Instalment payments on loans/changes in interest bearing liabilities Cash flow from financing activities

-45 150 000 -123 344 26 656

-50 726 -50 726

-6 814 -6 859

Cash flow for the year

5 170

-4

Cash and cash equivalents at the end of the year

5 170

Cash and cash equivalents at the beginning of the year

Notes

Note 1 Accounting principles Nederman Holding AB (publ) has its registered office in Helsingborg, Sweden.

Compliance with laws and accepted practices The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and the interpretation statements from the International Financial Reporting Interpretations Committee (IFRIC) as approved by the EU commission for application in the EU. In addition, the Swedish Financial Accounting Standards Council’s (Redovisningsrådet) Recommendation RR 30:06 Supplementary Accounting Rules for Groups has been applied. The parent company utilizes the same accounting principles as for the consolidated reporting except for those cases stated below under the section the Parent company’s accounting principles. The differences between the parent company’s and the consolidated principles are due to restrictions in the possibilities to apply IFRS in the parent company as a result of the Swedish Annual Accounts Act (Årsredovisningslagen) and the Pension Obligations Vesting Act (Tryggandelagen), as well as in particular cases due to tax reasons. Valuation principles applied with the preparation of the parent company’s and the consolidated financial reports Assets and liabilities are reported at their historical acquisition value, apart from derivative instruments, which are stated at their actual current value. Functional currency and reporting currency Items included in the Group’s financial reports for its various units are valued in the currency used in the financial environment where the respective companies generally operate (functional currency). The consolidated accounts use SEK, which is the parent company’s functional currency and presentation currency. All amounts, unless otherwise stated, are rounded off to the nearest thousand. Estimations and assessments in financial reports The company management and board of directors make assessments and estimations, and make assumptions that affect the reported assets, liabilities, income and expenses and other information reported, including contingent liabilities. These assessments are based on historical experience and assumptions that are considered reasonable. The actual results might deviate from these estimates and assessments. Estimations and assumptions are reviewed regularly. Assessments that have a significant impact on the Group’s profit/loss and financial position are described in Note 34. New IFRS and interpretations for 2007 IFRS 7 “Financial instruments: Information” and interrelated changes in IAS 1 “Configuration of financial reports” state the need for more information concerning capital and financial instruments plus risks. New IFRS and interpretations not yet applied IAS 1 (under review) Presentation of Financial Statements IFRS 2 – Share-based Payment IAS 23 – Borrowing costs IFRS 3 – Business Combinations IAS 27 – Consolidated and Separate Financial Statements (under review) The above IFRS and interpretations are not expected to have any significant effect on the consolidated results and financial position. Other changes that are not expected to have any effect include: IFRIC 14, IFRC11, IFRIC 12 and IFRIC 13.

The Group has chosen not to apply new standards or interpretations in advance when producing its reports. Reporting by segments The Group’s business is controlled and reported on primarily by business area and then by geographic unit. The segments are consolidated according to the same principles as the Group as a whole. IntraGroup sales take place under strictly businesslike conditions. A description of the different segments can be found in note 3. Primary segments The Group is divided into the Extraction, Filter Systems (EFS) and Hose and CableReels (HCR) business areas.The business areas supply products that between them face various risks and opportunities. Secondary segments Products and services are provided to geographic markets that face risks and opportunities that vary between the different markets. The secondary segment are divided into the following geographic areas: Nordic region, UK, Rest of Europe, North America and Rest of the World. Classifications etc. Fixed assets and long-term liabilities consist essentially of amounts expected to be recovered or paid back later than twelve months from the balance sheet date. The current assets and short-term liabilities consist essentially only of amounts which are expected to be regained or paid out within twelve months, calculated from the close of the reporting period. Assets and liabilities have been valued at their acquisition value unless otherwise stated. Consolidation principles

The scope of the Group The consolidated accounts cover the parent company and all subsidiaries. Subsidiaries Subsidiaries are companies where Nederman Holding AB has a direct or indirect right to determine the company’s financial and operative strategies. Subsidiaries are consolidated according to the acquisition method. The actual value of acquired identifiable assets, liabilities and contingent liabilities, irrespective of possible minority interest is fixed at the time of acquisition. The difference between the acquisition value and the actual value of the Group’s share of identifiable acquired net assets is reported as goodwill. If the difference is negative this amount is reported directly in the income statement. The acquisition value is made up of the actual value of assets paid as remuneration and arisen or assumed liabilities on the transfer date plus expenses directly attributable to the acquisition. Subsidiaries’ financial reports are taken up in the consolidated accounts from the acquisition date when the controlling interest ceases. Transactions eliminated during consolidation Intra-Group receivables and liabilities, income or expenses and unrealized profits or losses arising from intra-Group transactions between Group companies, are entirely eliminated when preparing the consolidated financial statements. Foreign currency transactions Foreign currency transactions are translated to the functional currency at the exchange rate on the transaction date. Monetary assets and liabilities in foreign currencies are translated to the functional currency at the exchange rate on the balance sheet date. Exchange rate fluctuations reported in translation are reported in the income statement. Non-monetary assets and liabilities are reported at their historical acquisition value. Non-monetary assets and liabilities reported at their actual value are translated at the prevailing rate at the time when their actual value is calculated.

Foreign business enterprises’ financial reports Assets and liabilities in foreign business enterprises (of which none have high inflation currencies), including goodwill and other Group-related surplus value or undervaluation, are translated from the foreign business enterprises’ functional currency to the Group’s reporting currency, at the prevailing exchange rate on the balance sheet date. Income and expenses in foreign business enterprises are translated to SEK at an average exchange rate for the respective year. Assets, shareholders’ equity and liabilities are translated to the exchange day rate. Translation differences arising when translating currencies are reported directly against shareholders’ equity as a translation reserve. The company has elected to state the accumulated translation differences attributable to foreign business enterprises to zero with the transition to IFRS. When a foreign business enterprise is sold the attributable accumulated translation differences, previously reported directly against shareholders’ equity are realized in the consolidated income statement during the same period as the profit or loss of the divestment. Income Income from the sale of goods and services is reported in the income statement when significant risks and benefits associated with the ownership of the goods have been transferred to the buyer. Income from installations is reported in the income statement based on the degree of completion on the balance sheet date. The degree of completion is established by an assessment of the work performed on the basis of inspections carried out. Income is not reported if it’s probable that the financial advantages won’t go to the Group. Assumed losses are written off immediately. If there is any significant doubt concerning payment, related expenses or risk of returns, no booking of the income will occur. Amounts are reported excluding VAT and discounts and after eliminations of intra-Group sales. Leasing costs Operational leasing agreements Expenses relating to operational leasing agreements are reported in the income statement linearly over the leasing period. Benefits received in connection with signing of a lease are reported as part of the total leasing costs in the income statement linearly over the term of the leasing agreement. Variable charges are written off in the period in which they arise. Financial leasing agreements Minimum lease payments are distributed between interest expenses and amortization of the outstanding debt. The interest costs are distributed over the term of the lease so that every reporting period will be debited with an amount corresponding to a fixed interest rate for the debt during the respective period in which the liability is reported. Variable charges are treated as an expense in the period in which they arise.

Financial income and expenses Financial income and expenses consist of interest income on bank deposits and receivables, interest expenses on loans, dividends received, exchange rate fluctuations on interest-bearing financial assets and liabilities profits/losses on derivative instruments used in the financial operations. Interest income on interest-bearing financial receivables and interest expenses on financial interest-bearing debts are calculated with the application of the effective interest rate method. The effective interest rate is the interest rate which results from the present value of all estimated future receipts and payments during the expected fixed interest rate period being equal to the reported value of the receivable or the liability. Interest income and interest costs include accrued transaction costs and any discounts, bonuses and other differences between the original reported value of the receivable or liability, and the projected future payments received or paid out during the term of

the agreement. The interest component in financial lease payments is reported in the income statement via the application of the effective interest rate method. Income from dividends received is reported when the right to receive the payment has been established. The Group and the parent company do not capitalize interest paid in the assets’ acquisition value.

Financial instruments Financial instruments reported in the balance sheet include, on the assets side, cash and cash equivalents, receivables from customers, shares, loans extended and derivative instruments. Included among liabilities and equity, are accounts payable to suppliers, borrowings, and derivative instruments. A financial asset or financial liability is included in the balance sheet when the company becomes a party according to the terms and conditions in the document. Customer account receivables are included in the balance sheet when the invoice has been sent out. Liabilities are included when the other party has performed and a contractual obligation to pay exists, even if invoice has not yet been received. Accounts payable to suppliers are included when the invoice has been received. A financial asset is removed from the balance sheet when the rights in the agreement have been sold, lapsed, or the company loses control over them. The same applies for any financial asset. A financial liability is removed from the balance sheet when the obligation in the agreement has been fulfilled or in another way has been satisfied. The same applies for a part of any financial liability. A financial asset and a financial liability are offset against each other and reported with a net amount in the balance sheet only when there exists a legal right to offset the amount and that the intention exists to settle the items with a net amount or to sell the asset and to pay off the debt at the same time. Acquisitions and sales of financial assets are reported on the transaction date, which is the day when the company undertakes to acquire or sell the asset. Financial instruments which are not derivatives are initially reported at acquisition value corresponding to the instrument’s market value with the addition of transaction costs for all financial instruments apart from those which belong to the category financial assets which are reported at market value via the profit and loss statement, which are reported to market value exclusive of transaction costs. A financial instrument is classified using the aim of the acquisition as its starting point.

Calculating actual value Actual values of listed financial instruments are based on actual market listings on the balance sheet date. For unlisted financial instruments or if the market is inactive, then the value is set by the application of valuation techniques, whereby the Group makes assumptions based on the market conditions on the balance sheet date. Market interest rates will be the basis of actual values for long-term loans. Actual values are considered to be the same as reported values for other financial instruments where market values are not given. Financial assets valued at market value via the income statement Assets in this category are continually valued at their actual value with changes in value reported presented in the income statement. This category consists of two subgroups: financial assets, which are held for trade and other financial assets that the company has initially elected to place in this category. A financial asset is classified as being held for trade if it is acquired with the intention of selling it in the near future. Independent derivatives and embedded derivatives are classified as holdings for trade except when they are used for hedge accounting.

Investments being held until maturity Investments being held until maturity are financial assets, which are not derivatives, with fixed or fixable payments and fixed term that the Group has an explicit intention and ability to hold until maturity. The Group has no assets in this category.

tively the decrease in value, of the derivative is reported as income or expense respectively within the operating profit/loss or within the net financial income/expense based on the intention with the use of the derivative instrument. Hedge accounting is not utilized at the present time.

Financial assets that may be sold The “Financial assets that can be sold” category includes financial assets not classified in any other category or financial assets that the company initially elected to classify in this category. The Group has no assets in this category.

Receivables and liabilities in foreign currencies For hedging of assets or liabilities against exchange rate risks, foreign currency forward contracts are used. For these hedges, no hedge accounting is needed as both the hedged item and the hedging instrument are valued at the current value with changes in value allocated to the income statement concerning exchange rate fluctuations.The Group thereby achieves much the same matching profit as with hedge accounting. Changes in value concerning business-related receivables and liabilities are reported in the operating profit/loss, while changes in value concerning financial receivables and liabilities are reported in the net financial income/expense.

Loans receivable and accounts receivable Loans receivable and accounts receivable are financial assets which are not derivatives, which have fixed payments or payments which are able to be determined, and which are not listed on an active market. These assets are valued at their accrued acquisition value. The accrued acquisition value is determined on the basis of the effective interest rate calculated at the time of the acquisition. Accounts receivable are reported at the amount expected to be received, i.e. after deductions for doubtful receivables. Depreciation and accounts receivable are reported in operating expenses. Cash and cash equivalents Cash and cash equivalents consist of cash, cash in bank and other financial institutions. Cash and cash equivalents also includes current investments with a term of less than three months from the date of acquisition and which have only an insignificant risk of exposure to fluctuations in value. Financial liabilities assessed at fair value via the income statement This category includes financial liabilities held for trading and derivatives with a negative fair value not used for hedge accounting. In this category the Group reports derivatives with negative fair value not used for hedge accounting. Changes in fair value are reported in the income statement. Other financial liabilities Financial liabilities not held for trading, such as accounts payable and loans, are assessed at accrued acquisition value. Accounts payable have short expected maturities and are assessed without discount at a nominal amount. Loans and other financial liabilities are reported initially as the amount received after deductions for transaction costs. Subsequent to the acquisition date, the loans are valued at the accrued acquisition value according to the effective interest rate method. Long-term liabilities have an expected term of more than 1 year, while current liabilities have a term of less than 1 year. Issued convertible debt instruments Convertible debt instruments can be converted to shares by the counterparty utilizing their option of converting the debt’s rights to shares. The convertible debt instruments are reported as a complex financial instrument composed of a debt part and a shareholders’ equity part. The liability’s actual value is calculated by the future payment flows being discounted with the current market interest rate for similar debts, without the right of conversion. The value of the shareholders’ equity instrument is calculated as the difference between issue payment when the convertible debt instrument was issued and the actual value of the financial debt on the issue date. Transaction costs in connection with the issue of complex financial instruments will be distributed between the debt part and the shareholders’ equity part proportionally to how the issue payment is distributed. The interest expense is reported in the income statement and is calculated using the effective interest rate method. Derivatives and hedge accounting Derivative instruments consist of forward contracts which are utilized to cover foreign currency exchange rate and interest rate swap risks. The changes in value of the derivative is reported on the same line in the profit and loss statement as the hedged item. Even though hedge accounting is not utilized, the increase in value, and respec38

Intangible assets Goodwill Goodwill represents the difference between acquisition value for the business acquisition and the actual value of the acquired identifiable assets, assumed debts and contingent liabilities. Regarding goodwill in acquisitions that occurred prior to 1 January 2004, the Group has with transition to IFRS not applied IFRS retroactively, but rather from that day the reported value constitutes the Group’s acquisition value, after a review for write-downs; see note 13. No indication of any need for write-downs existed at this point in time. Goodwill is valued at its acquisition value less any accumulated write-downs. Goodwill is distributed to the cash-generating units and is no longer written off but reviewed annually for the need of any write-down. Write-downs are not cancelled. Profits or losses when selling a unit includes the remaining reported value of the goodwill concerning the sold unit. With the acquisition of business enterprises where the acquisition cost is below the net value of the identifiable acquired assets, assumed debts and contingent liabilities, the difference is reported directly in the income statement. Development Development expenses, where the research results or other knowledge is applied in order to produce new or improved products or processes, are reported as an asset in the balance sheet, if the product or the process is technically and commercially viable and the company has sufficient resources in order to proceed with development and thereafter use or sell the intangible asset. The reported value includes expenditures for materials and other immediate expenses attributable to the asset in a reasonable and consistent manner. Other expenditures for development are reported in the income statement as an expense as they arise. In the balance sheet, development costs reported are reported at their acquisition value less accumulated depreciation and any write-downs. Other intangible assets Other intangible assets acquired by the Group are reported at their acquisition value less accumulated amortization/depreciation and write-downs. Accrued expenses for internally generated goodwill and internally generated brands are reported in the income statement as they arise. Subsequent expenses Subsequent expenses for capitalized intangible assets are reported as an asset in the balance sheet only when they increase the future economic benefits for the specific assets to which they are related. All other expenses are written off as they arise.

Amortization Amortization is reported in the income statement linearly over the intangible assets’ expected useful life, as long as such usage periods are not indeterminable. Goodwill and intangible assets with an indeterminate useful life are reviewed for the need for write-downs annually or as soon as indications appear showing that an asset in question has decreased in value. The expected useful life is: – Capitalized development expenditures – Computer software programs

5 years 3–4 years

Tangible fixed assets Owned assets Tangible fixed assets are reported in the consolidated statements at their acquisition value after deductions for accumulated depreciation and any write-downs. In the acquisition value, the purchase price and costs directly attributable to the asset are included in order to move it into place and in the proper condition in order for it to be used in accordance with the purpose of the acquisition. Loan costs are not included in the acquisition value for self-produced fixed assets. The acquisition value for self-produced fixed assets includes expenditures for materials, expenditures for salaries and other remuneration to employees, and if applicable other production costs considered to be directly attributable to the fixed asset. Tangible fixed assets consisting of different parts with a different estimated useful life are treated as separate components of the tangible fixed assets. The reported value of a tangible fixed asset is removed from the balance sheet with its scrapping or sale or when no future financial benefits are expected from its use, or scrapping/selling the asset. A profit or loss arising from the sale or scrapping of an asset consists of the difference between selling price and the asset’s reported value with deductions for the directly attributable selling costs. Any profit or loss is reported as other operating revenue/expense. Leased assets Leasing is classified in the consolidated financial statements either as financial or operational leasing. Financial leasing occurs when the financial risks and benefits associated with the ownership are substantially transferred to the lessee; if this has not occurred, then it is classed as operational leasing. Assets rented via financial leasing have been reported as an asset in the consolidated balance sheet. The obligation to pay future leasing charges has been reported as long-term and current liabilities. The leased assets are depreciated according to plan, while the leasing payments are reported as interest and amortization of the liabilities. Leasing charges for operational leasing is written off as operational expenses linearly over the leasing period. Additional expenses Additional expenses are added to the acquisition value only if it is likely that the company will receive future financial benefits associated with the asset and the acquisition value can be calculated reliably. All other additional expenses are reported as an expense in the period they arise. Crucial for the assessment when an additional expense is added to the acquisition value is if the expense concerns the exchange of identified components, or parts thereof, whereupon such expenses are capitalized. Even in cases when new components are constructed the expenditure is added to the acquisition value. Any remaining non-depreciated reported values of exchanged components, or parts of components, is scrapped and written off in connection with the exchange. Repairs written off as they arise. Depreciation Depreciation occurs linearly over the asset’s anticipated useful life. The Group applies component depreciation, meaning that the components’ estimated useful life forms the basis for the depreciation. The estimated useful life is: – buildings, real estate used in business operations: 25 years

– inventories, tools and equipment: 3–10 years – land is not written off The deprecation methods used the residual value of assets and their useful life are reviewed at the end of every year.

Write-downs Write-downs burden the income statement. The write-down of tangible and intangible fixed assets affect the operating profit/loss while the write-down of financial assets affects the net financial items. Previously reported write-downs are cancelled if reasons for the former write-down no longer exist. Cancellation will not be by a sum higher than its future booked value had the write-down not being reported in the previous year. There is no write-down of goodwill. Review of the need for a write-down of tangible and intangible assets, and for shares in subsidiaries The review of the need for a write-down exists if any event occurs or if circumstances change indicating that the reported value might have fallen. The review is carried out at the cash-generating unit that the asset belongs to. For goodwill, other intangible assets with an indeterminable useful life, and intangible assets not yet ready for use, the recoverable value is calculated annually. A write-down is reported when an asset’s or cash-generating unit’s reported value exceeds the recoverable value. The recoverable value is the highest of the actual value less sales costs and utilization value. With the calculation of the utilization value, future cash flows are discounted with a discounting factor, taking into account risk-free interest and the risk associated with the specific asset. Review of the need for a write-down of financial assets A write-down of a financial asset should only happen if objective evidence shows that one or more events have had a negative impact on the assets’ estimated future cash flows. A write-down of a financial asset valued at the accrued acquisition value is estimated as the difference between its reported value and present value of the estimated future cash flows and discounted by the original effective interest rate.

Inventories Stock is valued at the lower of the acquisition value and the net sales value. The acquisition value is calculated by applying the First In First Out method (FIFO), including expenses arising with the acquisition of the stock and their transportation to their current place and condition. Manufactured goods and work in progress, includes the acquisition value and a reasonable proportion of overhead costs based on normal capacity. The net sales value is made up of an estimated sales price with deductions for applicable adjustable sales costs. Deductions are made in the consolidated financial statements for internal profits arising with deliveries between Group companies. Dividends Dividends are reported as a liability after the Annual General Meeting has approved the dividend. Earnings per share The calculation of earnings per share is based on the year’s profit (or loss) in the Group assignable to the parent company’s shareholders and on the weighted average number of shares outstanding during the year. With the calculation of earnings per share after dilution, the average number of shares is adjusted in order to take into consideration the effects of diluting potential ordinary shares, which during the reported periods stem from convertible bonds and options which have been purchased by senior executives. With a corresponding calculation, the profit (loss) is adjusted by that the interest costs on convertible bonds (after tax) is returned. Dilution from options arises only when the redemption price rate is lower than the period’s average market price on the stock exchange, and is greater the larger the difference is the between redemption price and the market price. 39

Remuneration to employees Short-term remuneration Short-term remuneration to employees is calculated without discounting and is reported as an expense when the related services are received. A provision is reported for planned bonus payments when the Group has an obligation to make such payments as a result of that the corresponding services have been received or other contractual conditions have been fulfilled. Contribution pension plans Contribution pension plans are plans where the company’s obligation is limited to the charges the company has undertaken to pay. The company obligations concerning payments to contribution pension plans are reported as an expense in the profit and loss statement as they are earned. Defined-benefit pension plans The Group’s net obligation concerning defined-benefit pension plans are calculated separately for each plan by estimating the future remuneration which each employee has earned via their employment in both the current and previous periods. The obligations are then valued at the present value of expected future payments. With the discounting to present value, a discount rate corresponding to the interest rate on high-grade corporate bonds or government bonds with a remaining term approximately corresponding to the actual current obligations is used. For funded plans, the actual value of the financial asset reduces the future obligation. This actuarial calculation is carried out by a registered actuary using the Projected Unit Credit Method. The method divides the cost over the employee’s length of service. Changes to the actuarial estimates and unexpected changes to the actual value of planned assets give rise to actuarial profits and losses. When reporting these profits or losses the corridor rule should be applied. The corridor rule means that that part of the accumulated actuarial profits and losses that exceed 10% of the larger of the obligations’ present value and the actual value of the planned assets reported in the income statement over the expected average remaining period of employment. Profits or losses before 1 January 2004 have been reported as direct shareholders’ equity. Planned assets are valued at their actual value. When there exists a difference between how the pension expenses are established in legal entity and the Group, a provision or debt is reported concerning special salary tax based on this difference. The provision or debt is not calculated at present value.

Provisions A provision is reported in the balance sheet when the Group has an existing legal or informal obligation as a result of an event that has occurred, and it is likely that an outflow of financial resources will be required in order to meet the obligation and a reliable estimate of the amount can be made. Provisions for guarantees A provision for a product guarantee is reported when the underlying products or services are sold. Provisions are based on historical data about the guarantees and a total appraisal of possible outcomes in relation to the probability that the outcome is associated with. Provisions for restructuring and redundancy payments A provision for restructuring is reported when the Group has decided on a complete and formal restructuring plan, and the restructuring has either started or become public knowledge. Provisions for restructuring often include redundancy payments, where the redundancy is either voluntary or involuntary. Redundancy payments are reported according to the same principles as provisions for restructuring, except in cases where there are requirements to work out a period of notice, because costs are spread over the period of notice. No provisions are made for future operating costs. 40

Taxes Income taxes consist of current taxes and deferred taxes. Income taxes are reported in the profit and loss statement except when the underlying transaction is reported directly against equity whereupon associated tax effect is reported in equity. Current taxes are taxes which will be paid or are to be received concerning the current year, with the application of the tax rates which have been determined or in reality have been determined as of the close of the reporting period, included here are also adjustments of current tax attributable to earlier periods. Deferred tax is calculated according to the balance sheet method based on the temporary difference between the reported and the taxrelated values on assets and liabilities. Temporary differences arise mainly through the depreciation of fixed assets, pension provisions and other measures like loss carry-forwards. Temporary differences arise during business acquisitions between the Group-related values of assets and liabilities and their tax-related values. Temporary differences arising the first time an asset or liability is reported and that refer to business acquisitions and do not affect the reported or fiscal profit or loss do not cause any deferred tax asset or tax liability. Deferred tax is calculated at a nominal amount with the application of the tax rates and tax regulations decided upon or in practice decided on the balance sheet date. Deferred tax assets concerning tax-deductible temporary differences and retained losses are reported only to the extent it is likely that these will be able to be utilized. The value of deferred tax assets is reduced when it is judged no longer likely that it can be utilized. Any additional income tax arising when dividends are paid is reported at the same time as when the dividend is reported as a liability in the company issuing the dividend.

Contingent liabilities A contingent liability is reported when possible commitments arising from events that have occurred that is not reported as a liability or provision due to the unlikelihood that an outflow of resources will be required. The parent company’s accounting principles The parent company has prepared its annual report according to the Swedish Annual Accounts Act (Årsredovisningslagen 1995:1554) and Swedish Financial Accounting Standards Council’s Recommendation RR 32:06, Financial Reporting for Legal Entities. RR 32:06 states that the parent company’s financial reports must apply all EU approved IFRS and statements to the extent that it is possible within the framework of the Swedish Annual Accounts Act and with regard to the connection between the accounting and taxation. Subsidiaries Shares in subsidiaries are reported in the parent company according to the acquisition value method. Only dividends received are reported as income under the precondition that these stem from profits earned after the acquisition. Dividends exceeding these earned profits are regarded as repayments on the investment and reduce the reported value of the shares. Income The parent company’s income consists of intra-Group management fees. The income statement reports this as other operating income Leased assets All of the parent company’s leasing agreements are reported according to operational leasing rules. Taxes Untaxed reserves reported in the parent company includes deferred tax liabilities. In the consolidated financial statements, on the other hand, untaxed reserves are allocated between the deferred tax liability and shareholders’ equity.

Group contributions and shareholder’s contributions for legal entities Shareholders’ contributions are added to the value of shares and sections of the balance sheet, whereby they then undergo an assessment for write-downs. Group contributions are paid to minimise the Group’s tax cost. This means that the Group contribution is reported directly against shareholders equity after an adjustment for actual tax. Financial guarantees The parent company’s financial guarantee agreements mainly consist of guarantees benefitting subsidiaries. Financial guarantees mean that the company has an undertaking to remunerate the holder of a debt instrument for losses accrued because a specific debtor hasn’t completed payment on the due date according to the terms of the agreement. When reporting financial guarantee agreements the parent company applies the relief regulation permitted by the Swedish Financial Accounting Standards Council. The parent company reports financial guarantee agreements as a provision in the balance sheet when the company has a commitment for which payment is likely to be required to regulate the commitment.

Note 2 Classification of income SEK 000

1 January – 31 December

2007

2006

2005

Consolidated 1 041 359 877 794 807 539 Net sales 1 041 359 877 794 807 539 Net sales of goods In the selling of goods replacement for installationwork is included.

Note 3 Reports by segment

Segment reporting was established for the Group’s industry segments and geographic regions. The Group’s internal reporting systems are built up on the basis of follow-up of the profits on the Group’s products and services which is why the industry segments form the primary basis for the subdivision. Prices between the Group’s different segments are established based on the principle of “arm length transactions”, i.e. between

the parties who are independent of each other, well-informed and with an interest of that the transactions are implemented. The Group develops, produces and sells products and systems for a better personal work environment within different types of manufacturing industries.

Industry segments The company is a leading supplier of products and systems for the capturing and filtering of i.e. dust, gas, smoke, exhaust fumes and other particles. The product sectors which work with these areas have been organized in a joint industry segment which is called Extraction and Filter Systems (EFS), as they have a common technology in product development and product marketing. Nederman develops, manufactures and sells efficient and ergonomic hose and cable reels. This business activity constitutes its own industry segment which is called Hose and Cable Reels (HCR). The Group’s internal reporting systems are built up in such a way so that one can follow the industry segment’s sales, gross profits and separable costs. Operating separable costs are allocated to the respective industry segment based on an appropriate basis for their allocation. The operating capital is reported separately to the extent it is separately identifiable, while other operating capital is allocated with an appropriate distribution. Internal sales between the industry segments do not occur. In the segments’ results, assets and liabilities include directly related items and items which can be distributed between the segments in a reasonable and reliable way. Items which are not distributed consist of financial income and expenses, tax incurred and general administrative overhead. Assets and liabilities which have not been distributed between the segments are tax receivables and tax liabilities (current and deferred), financial investments and financial liabilities, including pension obligations. In the segments’ investments in tangible and intangible fixed assets, all investments apart from investments in temporary inventories and inventories of minimal value are included.

Geographic regions The Group’s segments are divided up into the following five geographic regions: The Nordic region, UK, Other Europe, North America and the Rest of world.

Industry segments Consolidated

2005

SEK 000 Net sales Net sales Operating profit/loss by industry segment Operating profit/loss Financial net gain/loss Tax expenses Net profit/loss for the year

EFS 684 414 684 414 53 989 53 989

9 110

Operating assets Other assets Total assets

587 367

99 536

587 367

99 536

126 001

22 667

126 001 18 636 15 589

Operating liabilities Other liabilities Total liabilities Investments Depreciation

HCR 123 125 123 125 9 110

Unassigned

Total 807 539 807 539 63 099 63 099 -11 965 -2 237 48 897

2 846 73 615 76 461

689 749 73 615 763 364

22 667

6 608 282 842 289 450

155 276 282 842 438 118

3 353 2 805

1 198 589

23 187 18 983 41

Cont. Note 3 Geographic areas constitute the Group’s secondary segments. The information which is presented concerning the income for each segment concerns the geographic region grouped according to where the customers are based. The information concerning the

Consolidated

segments’ assets and the investments in tangible and intangible fixed assets for the reporting period is based on geographic regions grouped according to where the assets are located.

2006

SEK 000 Net sales Net sales Operating profit/loss by industry segment Operating profit/loss Financial net gain/loss Tax expenses Net profit/loss for the year

EFS 742 598 742 598 71 416 71 416

13 960

Operating assets Other assets Total assets

598 628

104 409

598 628

104 409

130 082

23 683

130 082 15 097 15 428

Operating liabilities Other liabilities Total liabilities Investments Depreciation

2007

HCR 135 196 135 196 13 960

Unassigned

85 376 -9 767 -20 656 54 953 3 576 66 622 70 198

706 613 66 622 773 235

23 683

5 747 237 136 242 883

159 512 237 136 396 648

2 748 2 809

381 771

18 226 19 008

HCR 175 416 175 416 18 211

Unassigned

Total 1 041 359 1 041 359 114 071

-6 694 -6 694

-6 694 107 377 -8 733 -28 278 70 366

3 720 94 044 97 764

815 760 94 044 909 804 202 273 255 767 458 040 22 690 17 793

SEK 000 Net sales Net sales Operating profit/loss by industry segment Kostnader för börsintroduktion Operating profit/loss Financial net gain/loss Tax expenses Net profit/loss for the year

EFS 865 943 865 943 95 860 95 860

18 211

Operating assets Other assets Total assets

673 993

138 047

673 993

138 047

160 876

32 950

160 876

32 950

8 447 255 767 264 214

18 536 14 080

3 797 2 884

357 829

Operating liabilities Other liabilities Total liabilities Investments Depreciation Geographic regions Consolidated SEK 000

The Nordic region

External sales Operating assets Investments

185 565 248 392 18 792

101 550 32 927 709

Other Europe 2005 336 179 97 046 2 722

External sales Operating assets Investments

202 587 225 430 13 317

105 975 31 840 495

External sales Operativa assets Investments

253 931 340 700 19 551

109 507 49 459 404

Total 877 794 877 794 85 376

NorthAmerica

Rest of the world

145 307 67 084 909

38 938

2006 371 520 105 073 3 385

145 271 54 248 445

52 441 5 913 584

2007 453 534 141 213 1 671

135 909 50 051 213

88 478 11 108 494

Un‑ assigned/

Total

244 300

807 539 689 749 23 132

284 109

877 794 706 613 18 226

223 229 357

1 041 359 815 760 22 690

Note 4 Acquisition of business enterprises Acquisitions 2005 On 1 June 2005, an acquisition of assets and liabilities was made in Ireland, by the UK company, in the amount of EUR 217,000 which was paid for in cash. The information on the net profit/loss after the acquisition is difficult to assess, as the business operations have been integrated in the Groups own business operations. The effects of the acquisition The acquisition had the following effects on the consolidated assets and liabilities. The acquired Company’s net assets at the time of the acquisition: SEK 000

Reported value before acquisition

Fair value reported by Group 2 137 178 1 959

55 123 178

Acquisition price, including direct acquisition costs Fair value of acquired net assets Goodwill Acquired net assets and liabilities: Tangible fixed assets Inventories Net indentifiable assets and liabilities

Included in the value of goodwill is the value of being established in the market with a well functioning organisation.

Acquisitions 2006 On 1 September 2006, an acquisition of assets and liabilities was made in Australia in the amount of AUD 851,000 which was paid for in cash. The information on the net profit/loss after the acquisition is difficult to assess, as the business operations have been integrated in the Groups own business operations. The effects of the acquisition The acquisition had the following effects on the consolidated assets and liabilities. The acquired Company’s net assets at the time of the acquisition: SEK 000

Reported value before acquisition

Acquisition price, including direct acquisition costs Fair value of acquired net assets Goodwill Acquired net assets and liabilities: Tangible fixed assets Inventories Customer receivables and other receivables Net indentifiable assets and liabilities

Fair value reported by Group 4 708 3 379 1 329

8 3 100 271 3 379

Included in the value of goodwill is the value of being established in the market with a well functioning organisation.

8 3 100 271 3 379

Acquisitions 2007 In February 2007 Nederman’s Belgian sales company acquired installation and service company LEDA b.v.b.a for EUR 975,000, which was paid in cash. In June 2007 Nederman acquired the Brazilian company AtSource Exaustao Localizada Ltda for EUR 450,000, which was paid in cash. In November 2007 Nederman UK acquired UK installation company Fumex Installation Ltd for GBP 1,230,000. In November 2007 Nederman UK acquired UK company Lev Coshh Testing Ltd for GBP 20,000. The effects of the acquisition The acquisition had the following effects on the consolidated assets and liabilities: see next page.

Cont. Note 4 LEDA

SEK 000 Acquisition price, including direct acquisition costs Purchase price not paid Total Fair value of acquired net assets Goodwill Acquired assets and liabilities Tangible fixed assets Inventories Customer receivables and other receivables Deferred tax claim Liquid funds Accounts payable and other operating liabilities Deferred tax liability Assets Of which liquid funds in acquired units Fair value of acquired net assets

Reported value before acquisition

Fair value reported by Group

AtSource Exaustao Localizada Ltda

Reported value before acquisition

Total

Fair value reported by Group

9 652

5 318

18 201 -2 022

-2 022

9 652

5 318

16 179

31 149

3 015

1 387

7 044

11 446

6 637

3 931

11 157

21 725

681 746

1 626 3 481

861 446

861 2 412

6 880

4 7

-2 188

-815

8 600

-671 9 895

819

2 601

Fair value reported by Group

Fumex Installation Ltd/ Lev Coshh Testing Ltd

2 601

-6 880 3 015

84 323

1 216

84 323

2 087

681 746

33 171

11 346

197

4 7 084

-815

-5 729

-8 732

-296 1 394

7 241

-967 18 530

7 044

11 446

4 7

-7

1 387

-197

16 034

-7 084

Goodwill includes the value of being established on the market with a functioning market organisation. Net profit/loss during ownership period Net sales Jan-Dec for acquired units Net profit/loss JanDec for acquired units

3 748

857

-283

4 322

16 017

11 489

37 060

64 566

4 025

1 693

2 251

7 969

Note 5 Other operating income SEK 000 Consolidated Grants Damages Changes in market value on foreign exchange derivatives Recovered bad debt losses Foreign exchange gains on receivables/debts relating to operations Other Parent company Management charges, imposed on subsidiaries Other

1 January - 31 December 2007 2006 334

70 1 806 4 582

1 079

304

1 764 3 177

1 124 7 886

1 328 2 385

8 520 429 8 949

7 557 668 8 225

8 756

Note 6 Other operating expenses SEK 000 Consolidated Changes in market value on foreign exchange derivatives Bad debt losses Foreign exchange losses on receivables/debts relating to operations Cost for IPO Other Parent company Foreign exchange losses on receivables/debts relating to operations Cost for IPO

2007

1 January - 31 December 2006

982

8 756

2005

-2 480 -1 257 -2 098

-3 440

-4 667 -124 -5 803

-6 694 -1 573 -14 102

-1 255 -4 695

-437 -11 031

-116

-6 694 -6 694

-116

Note 7 Employees and personnel expenses Expenses for remuneration to employees SEK 000 Consolidated Wages, salaries and other remuneration Pensions expenses, defined-benefit pension plans (see also note 22) Pensions expenses, contribution pension plans Social insurance contributions

2005

2007

1 January - 31 December 2006

2005

231 928 762

207 436 612

185 699 311

13 049 52 967 298 706

12 105 44 462 264 615

11 153 43 716 240 879

Cont. Note 7 Average number of employees

2007

2005

Women

Men

Total

Women

Men

Total

Women

Men

Total

5 5

6 6

11 11

4 4

6 6

10 10

4 4

6 6

10 10

42 3 8 5 2 15 4 15 1 2 3 2 1 6 1 0 6 0 1 117

156 12 46 18 4 28 10 47 3 18 18 14 2 22 3 3 26 5 5 440

198 15 54 23 6 43 14 62 4 20 21 16 3 28 4 3 32 5 6 557

31 4 6 3 2 10 4 12 1 2 5 4 1 5

161 12 43 11 4 34 11 46 2 17 12 10 2 20

192 16 49 14 6 44 15 58 3 19 17 14 3 25

33 5 6 3 2 15 3 13 1 2 3 4 1 6

160 5 43 11 4 35 11 45 2 12 11 12 2 19

193 10 49 14 6 50 14 58 3 14 14 16 3 25

7 0 1 98

25 5 5 420

32 5 6 518

5 0 0 102

27 0 0 399

32 0 0 501

Parent company Sweden

Total parent company Subsidiaries Sweden Denmark Norway Belgium The Netherlands Germany France UK Austria Czech Republic Poland Spain Portugal USA Brazil Romania Canada Hungary Australia Total in subsidiaries Consolidated total

2006

122

446

568

102

Distribution according to gender in senior management Parent company Board of Directors Senior executives Consolidated Board of Directors Senior executives

426

528

106

405

511

2007-12-31 Percentage women 0% 0%

2006-12-31 Percentage women 0% 0%

2005-12-31 Percentage women 0% 0%

0% 14%

0% 13%

0% 10%

Wages/salaries, other compensation, and social insurance contributions SEK 000 2007 2006 2005 Parent company Wages, salaries and other compensation 10 483 8 962 8 744 Social insurance contributions 4 987 4 312 4 739 (of which, pension costs) (1 133) 1) (765) 1) (1 119) 1) 1) Of the parent company’s pensions expenses, 728 (626, 648) concern the Board of Directors and CEO for the Group. There are no outstanding pension obligations to the Group’s Board of Directors or CEO. Wages/salaries and other compensation, allocated between members of the board of directors and other employees 2005 Board, CEO and Senior executives Other employees. Parent company (of which variable compensation and the like) Consolidated (of which variable compensation and the like) Parent company (of which variable compensation and the like) Consolidated (of which variable compensation and the like) Parent company (of which variable compensation and the like) Consolidated (of which variable compensation and the like)

Total sick leave, parent company

2006

2007

4 845 (1003) 24 301 (2 823)

3 899 (0) 161 398

4 794 (1 032) 27 794 (3 173)

4 168 (0) 179 642

5 589 (1 299) 33 321 (4 319)

4 894 (0) 198 607

Total sick leave as a share of ordinary working hours. Share of total sick leave attributable to consecutive period of sick leave of 60 days or more (share of long-term sick leave, all hours of sick leave of more than 60 days, in relation to total sick leave) 46

0.4 % 0.0 %

Note 8 Auditor’s fees and compensation for expenses

SEK 000 2007 2006 Consolidated KPMG Audit assignment 2 358 1 905 Other assignment 3 456 877 Other auditors Audit assignment 406 Parent company KPMG Audit assignment 521 616 Other assignment 3 171 621 Other assignments for KPMG primarily refer to consultancy in association with the company’s stock market launch.

2005 1 827 875

324 424

Note 9 Cost of operations distributed on cost type Consolidated SEK 000 Cost of material Cost of personnel Other external costs Depreciation Other costs of operations

2007 -452 245 -298 706 -154 313 -17 793 -14 102 -937 159

2006 -363 778 -264 615 -148 208 -19 008 -4 695 -800 304

2005 -331 934 -240 879 -143 998 -18 983 -11 031 -746 825

2005 1 720

-1 021

2006 748 37 9 794 -9 046 -104 -1 411

-11 292

-10 561

2007 5 932 5 932

2006 18 947 18 947

14 6 737 2 229 8 980

3 9 007

Note 10 Net financial income/expenses Consolidated SEK 000 Interest income bank deposits Other interest income Net changes in foreign exchange rates Financial income Interest expenses, credit institutions Interest expenses, convertible debt instruments Interest expenses, other Net changes in foreign exchange rates Financial expenses Net financial income/expenses

Parent company SEK 000 Dividends Result from shares in Group companies Interest income, group companies Interest income, other Other financial income, group companies Currency changes Interest income and similar profit items Interest expenses, group companies Interest expenses, other Other Interest costs and similar profit/loss items

2007 1 003 80 1 476 2 559 -10 271

-8 733

-8 053 -8 053

-9 767

9 010 -7 196 -264 -7 460

1 720 -11 702 -142 -1 542 -299 -13 685 -11 965

2005 12 547 12 547 187 619 806 -1 053 -7 641 -236 -8 930

Note 11â&#x20AC;&#x201A; Transfers to/from untaxed reserves Parent company SEK 000 Difference between reported depreciation and depreciation according to plan: Equipment, tools, and fixtures

Tax allocation reserve, provision for the year Tax allocation reserve, reversal for the year Total

2007

2006

2005

227

201

-5 700 -5 473

-789 2 769 2 181

2007

2006

2005

-29 950 128 -29 822

-19 398 -295 -19 693

-11 572 3 705 -7 867

1 544

220

-136 724

-2 068

-3 255

-1 688

2 068

2 072

6 730

1 544

-963

5 630

Note 12 Taxes

Reported in the profit and loss statement Consolidated SEK 000 Actual tax expense Tax expense for the reporting period Adjustment of tax relating to previous years Deferred tax expense (â&#x20AC;&#x201C;) /tax income (+) Deferred tax concerning temporary differences Deferred tax income during the year for the tax amounts in loss carry forwards set up as an asset Deferred tax expense as a consequence of the utilization of tax amounts previously set up as an asset in loss carry forwards Deferred tax at revaluation of accounted value of tax receivables Total consolidated tax expenses

-28 278

-20 656

-2 237

Reconciliation of effective tax

Consolidated SEK 000 Profit/loss before tax Tax according to the applicable tax rate for the parent company Effect of other tax rates for foreign subsidiaries Non-deductible expenses Non-taxable income Increase of loss carry forward without corresponding capitalization of deferred tax Utilization of previously nonactivated loss carry forwards Tax relating to the previous year Effect of changes in tax rates/ and tax rules Revaluation of deferred tax Standardized interest on tax allocation reserves Other

Effective tax

2007 (%) 28.0%

2007 98 644 -27 620

1.5%

2006 (%) 28.0%

2006 75 609 -21 171

2005 (%) 28.0%

2005 51 134 -14 318

-1 440

2.3%

-1 775

3.2%

-1 635

1.6% -0.6%

-1 585 576

1.0% -0.8%

-775 600

1.1% -2.1%

-539 1 084

0.3%

-265

0.1%

-74

0.0%

-1.3%

1 011

-5.7%

2 927

-0.1%

128

0.4% 0.0%

-295 -8

-7.2% 0.0%

3 705

-2.1% 0.1%

2 068 -120

-2.7% 0.2%

2 072 -142

-13.2% 0.3%

6 730 -147

0.0%

28.7%

-20

-28 278

0.1%

27.3%

-99

-20 656

0.1%

4.4%

-44

-2 237

Cont. Note 12 Reported in the balance sheet

Deferred tax receivables and deferred liabilities relate to the: Consolidated Tangible fixed assets Intangible assets Inventories Accounts receivable Provisions for pensions Tax allocation reserves Loss carry forward Other Tax receivables/liabilities net

Consolidated Tangible fixed assets Intangible assets Inventories Accounts receivable Provisions for pensions Tax allocation reserves Loss carry forward Other Tax receivables/liabilities net

Consolidated Tangible fixed assets Intangible assets Inventories Accounts receivable Provisions for pensions Allocations Tax allocation reserves Loss carry forward

Other Tax receivables/liabilities net

Deferred tax 2005 Receivables 126 4 240 604 145 7 509 789 13 413

Deferred tax 2006

Receivables 1 615 3 610 406 121 6 062 396 12 210

Deferred tax 2007

Receivables 4 463 610 383 246 6 344 878 12 924

Liabilities 5 391 679 86 29 751 5 785 253 12 974

Liabilities 5 380 1 076 95 29 193 6 066 419 13 258

Liabilities 3 945 1 076 144 7 924

Net -5 265 -679 4 154 575 -606 -5 785 7 509 536 439

Net -3 765 -1 076 3 515 377 -72 -6 066 6 062 -23 -1 048

Net -3 945 -1 076 4 463 610 239 246 -7 924 6 344

13 089

878 -165

2006 48 097

2005 57 716

Not reported tax receivables Deductible temporary differences and tax related loss carry forwards for which deferred tax receivables have not been reported in the profit and loss statement and the balance sheet. Consolidated SEK 000 Tax-related loss carry forwards

2007 41 102

Tax-related loss carry forwards that have not been accounted for regards part of loss carry forwards in Germany which it is not probable that the Group will be able to use for settlement of future taxable gains.

Cont. Note 12 Changes in deferred tax due to temporary differences and loss carry forwards Consolidated SEK 000

Tangible fixed assets Intangible assets Inventories Accounts receivable Provisions for pensions Tax allocation reserves Loss carry forward Other

SEK 000 Tangible fixed assets Intangible assets Inventories Accounts receivable Provisions for pensions Tax allocation reserves Loss carry forward Other

SEK 000 Tangible fixed assets Intangible assets Inventories Accounts receivable Provisions for pensions Allocations Tax allocation reserves Loss carry forward Other

Balance on Reported to the 1 Jan 2005 profit/loss statement -5 174 -97 -304 -375 3 849 155 714 -244 -973 424 -5 168 -617 1 743 5 766 -347 618 -5 660 5 630 Balance on Reported to the 1 Jan 2006 profit/loss statement -5 265 1 503 -679 -397 4 154 -579 575 -69 -606 522 -5 785 -281 7 509 -1 183 536 -479 439 -963 Balance on 1 Jan 2007 -3 765 -1 076 3 515 377 -72 0 -6 066 6 062 -23 -1 048

Exchange rate differences 6 150 105 -57 265 469 Exchange rate differences -3

-264 -80 -524

Reported to the Exchange rate profit/loss statement differences -175 -5 1 619 233 311 246 -1 858 1 168 1 544

Reconciliation of effective tax SEK 000 Profit/loss before tax Tax according to current tax rate for parent company Non-deductible costs Non-taxable income Standard interest on tax allocation reserve Reported effective tax

2007 (%) 28.0% -0.5%

Balance on 31 Dec 2005 -3 765 -1 076 3 515 377 -72 -6 066 6 062 -23 -1 048

-60 -129 12

Acquiring activities

-30

-641

282 55 302

-322 -963

Current tax receivables amounted to SEK 3,568,000 (3,011,000 and 2,991,000 respectively) and represent the recoverable amount of current tax on the profit/loss for the year. Parent company Reported in income statement SEK 000 Current tax cost (-)[ tax income (+)] Periodâ&#x20AC;&#x2122;s tax cost [ tax income] Total reported tax cost

Balance on 31 Dec 2005 -5 265 -679 4 154 575 -606 -5 785 7 509 536 439

Balance on 31 Dec 2005 -3 945 -1 076 4 463 610 239 246 -7 924 6 344 878 -165

2007

2006

2005

8 851 8 851

4 721 4 721

5 298 5 298

2007 -19 286 5 400 -91

2006 (%) 28.0% 1.6%

2006 10 443 -2 924 -164

2005 (%) 28.0% -1.4%

2005 -6 788 1 901 -94

18.4% 0.0%

3 548 -6

-74.9% 0.2%

7 827 -18

51.8% -0.3%

3 513 -22

45.9%

8 851

-45.2%

4 721

78.0%

5 298

SEK 000 Current tax on received/paid Group contribution

2007 -13 720

2006 -5 384

2005 -5 298

Current tax receivables amount to SEK 0 (65,000 and 554,000 respectively) and represent the recoverable amount of current tax on the yearâ&#x20AC;&#x2122;s profit. 50

Note 13â&#x20AC;&#x201A; Intangible fixed assets Consolidated SEK 000

Accumulated acquisition value Opening balance 2005-01-01 Acquisitions of business enterprises Internally developed assets Other investments Foreign currency gains/losses for the year Closing balance 2005-12-31 Accumulated depreciation and write downs Opening balance 2005 01-01 Depreciation for the year Foreign currency gains/losses for the year Closing balance 2005-12-31 Book value On 2005-01-01 On 2005-12-31 Accumulated acquisition value Opening balance 2006-01-01 Acquisitions of business enterprises Internally developed assets Other investments Sales and disposed of as scrap Reclassification Foreign currency gains/losses for the year Closing balance 2006-12-31 Accumulated depreciation and write downs Opening balance 01-01-2006 Sales and disposed of as scrap Reclassification Depreciation for the year Foreign currency gains/losses for the year Closing balance 2006-12-31 Book value On 2006-01-01 On 2006-12-31 Accumulated acquisition value

Opening balance 2007-01-01 Acquisitions of business enterprises Internally developed assets Other investments Sales and disposed of as scrap Foreign currency gains/losses for the year Closing balance 2007-12-31

Internally developed intangible assets

Acquired intangible assets

Research and development costs

Other technology/ contractual assets

Goodwill

Total

17 441

21 668

344 624 1 959

383 733 1 959 7 211 2 046 1 109 396 058

7 211 24 652 -4 114 -3 488

2 046 748 24 462

361 346 944

-7 602

-17 697 -1 810 -445 -19 952

-21 811 -5 298 -445 -27 554

13 327 17 050

3 971 4 510

344 624 346 944

361 922 368 504

24 652

24 462

346 944 1 329

396 058 1 329 5 470 1 960 -9 -1 891 -616 402 301

5 470

30 122 -7 602

1 960 -9 -1 891 -353 24 169

-263 348 010

-11 652

-19 952 9 1 735 -1 826 280 -19 754

-27 554 9 1 735 -5 876 280 -31 406

17 050 18 470

4 510 4 415

346 944 348 010

368 504 370 895

30 122

24 169

348 010 21 725

-4 050

36 237

1 210 -308 19 25 090

601 370 336

402 301 21 725 4 080 3 245 -308 620 431 663

-11 652

-19 754

-31 406

308 -6 022 -10 -37 130

348 010 370 336

370 895 394 533

4 080 2 035

Accumulated depreciation and write downs Opening balance 2007-01-01 Sales and disposed of as scrap Accumulated depreciation and write downs Depreciation for the year Foreign currency gains/losses for the year Closing balance 2007-12-31

-15 809

308 -1 865 -10 -21 321

Book value On 2007-01-01 On 2007-12-31

18 470 20 428

4 415 3 769

-4 157

Other technology and contractual assets includes computer software programs. Depreciation is taken on all intangible assets, with the exception of goodwill. For information on depreciation, see the accounting principles in note 1. 51

Cont. Note13 Parent Company SEK 000 Accumulated acquisition value Opening balance 2005-01-01 Investments Closing balance 2005-01-01

Acquired intangible assets Other technology/contractual assets

Total

1 361 1 068 2 429

-50 -365 -415

1 311 2 014

2 429 257 2 686

-415 -518 -933

2 014 1 753

2 686

Accumulated depreciation and write-downs Opening balance 2005-01-01 Depreciation for the year Closing balance 2005-12-31 Book value On 2005-01-01 On 2005-12-31 Accumulated acquisition value

Opening balance 2006-01-01 Investments Closing balance 2006-12-31

Accumulated depreciation and write-downs Opening balance 2006-01-01 Depriciation for the year Closing balance 2006-12-31 Book value On 2006-01-01 On 2006-12-31 Accumulated acquisition value Opening balance 2007-01-01

Investments Closing balance 2007-12-31 Accumulated depreciation and write-downs Opening balance 2007-01-01 Depriciation for the year Closing balance 2007-12-31 Book value On 2007-01-01 On 2007-12-31 Depreciation and write downs Depreciation is included in the following lines in the profit and loss statement Consolidated SEK 000 2007 2006 Cost of goods sold -1 032 -1 842 Selling expenses -1 734 -1 065 Administrative expenses -2 224 -1 549 Research and development expenses -1 032 -1 420 -6 022

-5 876

2005 -1 595 -1 242 -1 231 -1 230

-5 298

343 3 029

-933 -555 -1 488

1 753 1 541

Parent company 2007 2006

2005

-555

-518

-365

-555

-518

-365

The Groupâ&#x20AC;&#x2122;s goodwill amount comprises strategic business value that arises from acquisitions of companies, assets and liabilities. Goodwill is related to the primary segments of Extraction & Filter Systems and Hose & Cable Reels, SEK m 313 and SEK m 57 respectively.

Write-down assessment for cash-generating units containing goodwill The recovery value of cash-generating units was based on their utilisation value. When assessing utilisation value a discount factor of 9.0% after tax was used for both units. The assumptions used to assess utilisation value were based on the cash flow forecasts over five years made by senior executives. Cash flow for later years was calculated using the assumption of annual growth of 2% for both primary segments. Growth for the Nederman Group is the same for both cash-generating units and is based on historical growth, estimated market growth and expected price developments. The companyâ&#x20AC;&#x2122;s management considers that no reasonable changes in key assumptions behind the writedown assessment for these cash-generating units would mean that the recovery value would be less than the reported value. 52

Note 14â&#x20AC;&#x201A; Tangible assets Consolidated SEK 000

Accumulated acquisition value

Opening balance 2005-01-01 Acquisitions of business enterprises Investments made during the year Sales and disposed of as scrap Foreign currency gains/losses for the year Closing balance 2005-12-31 Accumulated depreciation and write downs Opening balance 2005-01-01 Depreciation of the year Sales and disposed of as scrap Foreign currency gains/losses for the year Closing balance 2005-12-31 Book value On 2005-01-01 On 2005-12-31 Accumulated acquisition value

Opening balance 2006-01-01 Acquisitions of business enterprises Investments made during the year Sales and disposed of as scrap Reclassifications Foreign currency gains/losses for the year Closing balance 2006-12-31 Accumulated depreciation and write downs Opening balance 2006-01-01 Depreciation of the year Sales and disposed of as scrap Reclassifications Foreign currency gains/losses for the year Closing balance 2006-12-31 Book value On 2006-01-01 On 2006-12-31 Accumulated acquisition value

Opening balance 2007-01-01 Acquisitions of business enterprises Investments made during the year Sales and disposed of as scrap Foreign currency gains/losses for the year Closing balance 2007-12-31 Accumulated depreciation and write downs Opening balance 2007-01-01 Acquisitions of business enterprises Investments made during the year Sales and disposed of as scrap Foreign currency gains/losses for the year Closing balance 2007-12-31 Book value On 2007-01-01 On 2007-12-31

Buildings and land

Equipment, tools, and fixtures

Total

34 176

210 377 55 13 875 -1 849 3 232 225 690

244 553 55 13 875 -1 849 3 232 259 866

-27 604

-176 150 -12 747 687 -2 277 -190 487

-202 816 -13 685 687 -2 277 -218 091

7 510 6 572

34 227 35 203

41 737 41 775

34 176

225 690 8 10 646 -3 605 1 891 -2 361 232 269

259 866 8 10 796 -3 605 1 891 -2 361 266 595

-28 511

-190 487 -12 225 1 939 -1 735 1 875 -200 633

-218 091 -13 132 1 939 -1 735 1 875 -229 144

6 572 5 815

35 203 31 636

41 775 37 451

34 326

232 269 6 557 15 365 -16 600 2 195 239 786

266 595 6 557 15 365 -16 600 2 195 274 112

-29 419

-200 633 -4 931 -10 863 14 430 -1 709 -203 706

-229 144 -4 931 -11 771 14 430 -1 709 -233 125

5 815 4 907

31 636 36 080

37 451 40 987

34 176 -26 666 -938

150

34 326 -27 604 -907

34 326 -28 511 -908

Cont. Note 14 Financial leasing Consolidated Booked value for assets under finacial leasing contracts SEK 000 Equipment , tools, and fixtures Book value on 2005-12-31 8 181 Book value on 2006-12-31 7 629 Book value on 2007-12-31 11 451 The Group leases cars and computer equipment under a number of different financial leasing agreements. The leased assets are security for the leasing liabilities. See also note 28.

Assessed values for tax purposes Consolidated SEK 000 Assessed value, buildings (in Sweden) Assessed value, land (in Sweden)

2007-12-31 24 286 2 582

2006-12-31 17 063 3 320

Total 8 181 7 629 11 451

2005-12-31 17 063 3 320

Cont. Note 14 Parent company SEK 000 Accumulated acquisition value Opening balance 2005-01-01 Investments made during the year Closing balance 2005-12-31

Equipment , tools, and fixtures

Total

571 130 701

-5 -224 -229

566 472

701 124 825

-229 -253 -482

Book value On 2006-01-01 On 2006-12-31

472 343

Accumulated acquisition value Opening balance 2007-01-01 Investments made during the year Closing balance 2007-12-31

825 14 839

-482 -274 -756

343 83

Accumulated depriciation Opening balance 2005-01-01 Depreciation for the year Closing balance 2005-12-31 Book value On 2005-01-01 On 2005-12-31 Accumulated acquisition value

Opening balance 2006-01-01 Investments made during the year Closing balance 2006-12-31 Accumulated depriciation Opening balance 2006-01-01 Depreciation for the year Closing balance 2006-12-31

Accumulated depriciation Opening balance 2007-01-01 Depreciation for the year Closing balance 2007-12-31 Book value On 2007-01-01 On 2007-12-31

Depreciation and write-downs Depreciation is included in the following lines in the profit and loss statement SEK 000 Consolidated 2007 2006 2005 Cost of goods sold -2 954 -2 324 -2 671 Selling expenses -3 442 -4 814 -5 780 Administrative expenses -3 306 -4 134 -3196 Research and development expenses -2 069 -1 860 -2 038 -11 771 -13 132 -13 685

Parent Company 2007 2006

2005

-274

-253

-224

-274

-253

-224

Note 15â&#x20AC;&#x201A; Long-term receivables and other obligations Consolidated SEK 000 Long term receivables which are fixed assets Investment assets for pension, net Special salary tax on pensions Other Other receivables which are current assets VAT receivables Receivables concerning damages Market value of foreign exchange derivatives Other receivables

Parent company SEK 000 Other receivables which are current assets VAT receivables Other receivables

2007-12-31

2006-12-31

2005-12-31

88 245 164 497

264 245 263 772

1 029 253 829 2 111

4 644

5 361

6 596 11 240

2 294 1 806 2 563 7 309 13 972

3 133 8 494

2007-12-31

2006-12-31

2005-12-31

36 36

117 214 331

Note 16â&#x20AC;&#x201A; Inventories

Consolidated SEK 000 Products in the manufacturing process Finished products and products held for sale

2007-12-31 47 482 74 118 121 600

2006-12-31 28 862 60 914 89 776

2005-12-31 22 121 64 966 87 087

13 022

16 057

14 874

2007-12-31

2006-12-31

2005-12-31

1 981 1 900 1 174

3 448 872 152

616 7 501 13 172

1 448 647 554 22 880 3 547 7 098

647 1 165 616 248 2 676

647 105 880 397 2 029

Write-downs of the inventories have been reported in the amount of

Note 17 Prepaid expenses and accrued income SEK 000 Consolidated Rent/leases Computer software license payments Insurance Interest Bank charges Other

Parent Company Computer software license payments Insurance Bank charges Other

1 144 2 967 8 583

1 144 360 1 504

Note 18 Shareholders’ equity

Consolidated Share capital and number of shares Number of shares 2007 Issued on 1 January*) 11 715 340 Conversion of loan Issued on 31 December – paid 11 715 340 *) Adjusted for change in ratio value according to decision by AGM on 10 April 2007 Registered share capital Share ratio value after the change is SEK 0.10

1 171 534

2006 11 512 340 203 000 11 715 340

2005 11 512 340 11 512 340

1 171 534

1 151 234

Dividend The Board proposes a dividend of SEK 2.50 per share, amounting in total to SEK 29,288,000. The dividend amount will be adopted by the AGM on 29 April 2008. No dividend was paid for 2005 and 2006. Capital management The Group’s capital is the same as the total amount of shareholders’ equity, SEK 451,764,000. According to the Board’s policy, the Group’s financial objective is to achieve a good capital structure and financial stability in order to maintain the trust of investors, creditors and the market, and to form a good base for continued development of the business. The target for debt/equity ratio is 0.5 – 1.0. The Group’s dividend policy is to pay out 30-50% of the year’s net profit after tax with consideration to the capital structure and acquisition plans.

Note 19 Earnings per share Earnings per share SEK Earnings per share Earnings per share after dilution

2007 6.01 6.01

The year’s profit/loss assignable to the parent company’s ordinary shareholders, before dilution SEK 000 2007

The year’s profit/loss assignable to the parent company’s shareholders

2006 4.73 4.67

2006

2005 4.25 4.18

2005

70 366

54 953

48 897

Weighted average number of outstanding ordinary shares, before dilution Number of shares 2007 Total number of ordinary shares, January 1 11 715 340 Effect of conversion of debt instruments in July 2006 Weighted average number of ordinary shares during the year, 11 715 340 before dilution

2006 11 512 340 100 670 11 613 010

2005 11 512 340 11 512 340

Profit/loss assignable to the parent company‘s ordinary shareholders, after dilute SEK 000 2007 Profit/loss assignable to the parent company’s ordinary shareholders 70 366 Effect of interest on convertible debt instrument (after tax) Profit/loss assignable to the parent company‘s ordinary sharehol70 366 ders, after dilution

2006 54 953 74 55 027

2005 48 897 102 48 999

2006

2005

11 613 010

11 512 340

102 330 71 080 11 786 420

203 000

70 366

Weighted average number of outstanding ordinary shares, after dilution Number of shares 2007 Weighted average number of ordinary shares during the year, before 11 715 340 dilution Effect of convertible debt instrument Effect of options Weighted average number of outstanding ordinary shares, 11 715 340 after dilution

54 953

48 897

11 715 340

When calculating the dilution effects of options, the average price of the shares during the periods the options were outstanding has been used. 57

Note 20 Interest bearing liabilities

For more information about the companyâ&#x20AC;&#x2122;s exposure to interest rate risks and currency risks, refer to note 26

Consolidated

SEK 000 Long-term liabilities Bank loans Financial leasing liabilities Short-term liabilities Bank overdraft Short-term part of bank loans Short-term part of convertible debt instruments Short-term part of financial leasing liabilities

2007

2006

2005

150 000 8 111 158 111

140 000 6 264 146 264

190 000 5 996 195 996

29 973 370

7 876 30 000

3 403 33 746

1 599 39 475

404 30 000 6 613 2 395 39 412

Terms and repayments For terms and repaymentsdue dates see the table below. No security for the bank loans have been provided. 2007 SEK 000 Currency Nom. interest rate Due date Nominal value Bank loans SEK Stibor + 0,3 12-10-31 150 000 Bank loans EUR 26 Bank loans BRL 2008-04/05 34 Bank overdraft SEK 4.69% 08-12-31 29 973 Financial leasing liabilities Total interest bearing liabilities

Bank loans Bank loans Bank loans Bank overdraft Bank overdraft Convertible debt instruments Financial leasing liabilities Total interest bearing liabilities

Currency SEK SEK SEK SEK USD SEK

2006 Nom. interest rate 150 000 20 000 5 047 413

Due date 150 000 20 000 5 047

2005 Nominal value 200 000 20 000

2 829

51 6 613

7 863 185 739

Book value 150 000 246 124 29 973 11 514 191 857 Book value 200 000 20 000 404 6 613 8 391 235 408

Financial leasing liabilities Financial leasing liabilities are due for payment according to the following: Consolidated SEK 000 Within one year Between one and five years Later than five years

Minimum lease payments 2 627 6 111 8 738

SEK 000 Within one year Between one and five years Later than five years

1 756 6 368

SEK 000 Within one year Between one and five years Later than five years

3 716 8 449

2005

Capital amount

232 115

2 395 5 996 0 8 391

347 2006

8 124

12 165

Interest

157 104 261

2007

313 338 651

1 599 6 264 0 7 863 3 403 8 111 0 11 514

Note 21 Obligations Parent company SEK 000 Long-term liabilities Bank loans

2007

2006

2005

150 000 150 000

140 000 140 000

190 000 190 000

Note 22â&#x20AC;&#x201A; Pensions, share-related compensation, benefits to senior executives Defined-benefit pension plans Consolidated SEK 000 Present value of unfunded obligations Present value of entirely or partially funded obligations Total present value of obligations Market value of investment assets Present value of net obligations

2007 35 059 8 030 43 089 -6 822 36 267

2006 32 903 7 423 40 326 -7 075 33 251

2005 32 132 6 737 38 869 -6 804 32 065

-6 148

-5 126

-5 803

30 119 30 119

28 125 28 125

26 262 26 262

The net amount is reported in the following items on the balance sheet: Long-term receivables 88 Provisions for pensions 30 207 Net amount in the balance sheet 30 119

264 28 389 28 125

1 029 27 291 26 262

Unrecorded actuarial profits (+) and losses (â&#x20AC;&#x201C;) Unrecognised costs concerning work during previous periods Effect of limitation rules for net assets Net reported concerning defined benefit plans (see below) Net obligations, compensation to employees

Overview defined-benefit plans The Group has defined-benefit plans in Sweden and Norway. The bulk of them are PRI obligations where no additional benefits are earned. Changes of the obligations for defined-benefit plans reported in the balance sheet Consolidated SEK 000 2007 Obligations for defined-benefit plans, as of January 1 40 326 Compensation paid out -426 Adjustments Expenses for employees during the current period and 2 666 interest expenses (see below) Actuarial profit or loss -52 Exchange rate gains/losses 575 Obligations for defined-benefit plans, 43 089 as of December 31

Changes in the investment assets Consolidated SEK 000 Market value of investment assets, January 1 Compensation paid out Anticipated returns Difference between anticipated returns and actual returns (actuarial gain or loss) Exchange rate gains/losses Market value of investment assets, 31 December

2006 38 869 -354 2 334

2005 34 056 -293 -289 2 142

-46 -477 40 326

2 879 374 38 869

2007 7 075 -36 358

2006 6 804 -36 308

2005 6 218 -35 322

-1 105

457

-150

518 6 810

-458 7 075

448 6 803

Cont. Note 22 Expenses reported in the profit and loss statement Consolidated SEK 000 Expenses for employees during the current period Interest expense on the obligations Anticipated returns on financial assets Reported actuarial gains (–) and losses (+)

Total net expenses in the profit and loss statement

Of which amount that charged the results of operating activities Of which amount that charged financial costs Total net cost

2007 1 052 1 612 -368 78

2006 797 1 537 -308 123

2 374

2 149

1 820

762 1 612 2 374

612 1 537 2 149

311 1 509 1 820

-737

765

172

Actual returns on financial assets

Assumptions for defined-benefit plan obligations The most important actuarial assumptions as of the close of the reporting period (expressed as weighted averages) Consolidated SEK 000 2007 2006 Discount rate, on December 31 4.5% 4.0% Anticipated returns on financial assets, as of 31 December 5.8%*) 5.3%*) Future salary increases 4.5%*) 4.8%*) Future increases in pensions 2.0% 2.0% *) Relates to Norway

Historical information Consolidated SEK 000 Present value of defined-benefit plan obligations Market value of financial assets Deficit in the plan

Expected payments in 2008 Expected payments in 2008 for defined-benefit pension plans amount to SEK 578,000. Obligations for old-age pensions and family pensions for employees in Sweden are safeguarded via insurance in Alecta. According to a statement from the Swedish Financial Accounting Standards Council’s Emerging Issues Task Force, URA 42, this is a defined-benefit plan that covers multiple employers. For the financial year 2007, the company has not had access to such information which makes it possible to report this plan as a defined-benefit plan. The pension plan according to ITP which is safeguarded via insurance in Alecta is therefore reported as a contribution pension plan. The annual charges for retirement annuities which are covered by Alecta amounts to SEK 3, 893,000 (3,483,000 and resp.2,890,000). Alecta’s -surplus can be distributed to the holders of the insurance policies and/or the ensured

Expenses for contribution plans SEK 000 Consolidated Parent company

2005 633 1 509 -322

2007 43 089 -6 810 36 279

2006 40 326 -7 075 33 251

2005 4.0% 5.1%*) 3.0%*) 2.0%

2005 38 869 -6 803 32 066

parties. At the end of 2007, Alecta’s surpluses in the form of the collective consolidation level amounted to 152 per cent (143.1 resp. 128.5 per cent). The collective consolidation level consists of the market value of Alecta’s assets as a percentage of the insurance obligations calculated according to Alecta’s actuarial assumptions for the calculation, which are not in accordance with IAS 19. Expenses for contribution plans IIn Sweden, there are contribution plans which are fully paid by the subsidiary. Outside of Sweden, there are contribution plans which are paid for in part by the subsidiary and in part being covered by deductions (charges) which the employee pays. The payment to these plans occurred on an on-going basis according to the provisions of the respective plans..

2007 13 049 1 133

2006 10 568 765

2005 9 644 1 119

Cont. Note 22 Benefits to the senior executives

Principles for compensation to the Board of Directors Directors’ fees are paid to the Chairman of the board of directors and other members according to the decision of the Annual General Meeting. Employee representatives in the board of directors do not receive director’s fees. The Annual General Meeting 2007 decided that fees to the board of directors for the work during 2007 would be paid in the amount of SEK 150,000 to the Chairman of the board of directors, and SEK 75,000 each to Hans Stråberg, Jan Erik Larson, Gunnar Gremlin and Peter Möller. No director’s fees for board of directors work is paid to those persons who represent EQT on the board of directors. Principles for compensation to the CEO and Group President Compensation Compensation is paid to the CEO and Group President in the form of a base salary, pensions and variable compensation. During 2007, the base salary was SEK 2,400,000. The variable compensation can amount to at most 50 per cent of the base salary. Any variable compensation is established on the basis of the Nederman Group’s profits and tied-up capital. During 2007, compensation to the CEO and Group President was SEK 3,304,000 of which SEK 974,000 consisted of a variable compensation for the 2007 financial year. Notice period for termination of employment and severance pay For a notice of resignation from the CEO, an advance notice of 6 months is required. With notice of termination of employment on the part of the company, the CEO has the right to a payment corresponding to 18–24 monthly salaries. The six last months with a provision regarding new employment. Pension payments The CEO and Group President is entitled to retire with a pension at age 65 old. The pension plan is premium-based pension plan and the annual premium corresponds to 35 per cent of the annual base salary. The company’s obligation is limited to the payment of the annual premium. During 2007 the premium expenses were SEK 728,000 for the CEO and Group President.

Principles for compensation to CEOs at subsidiaries CEOs at subsidiaries have termination of employment contracts with 1 - 2 years’ salary Principles for remuneration to the other senior executives

Remunerations Those members in the Group management who are employed by companies other than the parent company, receive their remuneration from the respective company. The remuneration is determined by the CEO with the assistance of the Chairman of the board and consists of base salary, pension contribution, variable compensation and other benefits. For other members in the group management the variable compensation may amount to no more than 30 per cent of the base salary. Any variable compensation and the size of it is determined by the CEO in consultation with the Chairman of the board on the basis of the profits and tied-up capital in the Nederman Group. During 2007, remuneration to other members of the group management amounted to SEK 7,807,000 of which SEK 1,417,000 consisted of variable compensations for the financial year 2007.

Notice period for termination of employment and severance pay Other members in the group management have a twelve month notice period for termination of employment if it is initiated on the part of the company, and six months if they give notice. During the period of notice, other members in the group management are entitled to full salary and other employment benefits. None of the other members of the group management are entitled to severance pay. Pension payments Other members of the group management are entitled to retire with a pension at age 65. The pension contributions follow the contractual ITP plan with exception for a member where the pension contribution occurs with 10 price base amounts per year. The companies’ obligations are limited to the annual premiums. The pension-based salary consists of the fixed annual salary plus the average variable compensations during the previous three years.

Compensation and other benefits during the year SEK 000 Chairman of the board Member of the board Hans Stråberg Member of the board Jan Erik Larson Member of the board Gunnar Gremlin Member of the board Peter Möller CEO

Base salary, director’s fees 150 75 75 75 75 2 330

Variable remuneration

Other benefits

Pension expenses

Total

974

106

728

150 75 75 75 75 4 138

Other senior executives (7 individuals)

6 390

1 417

737

1 657

10 201

Total of which subsidaries (6 individuals)

9 170 5 046

2 391 1 092

843 625

2 385 1 277

14 789 8 040

Note 23â&#x20AC;&#x201A; Provisions

Consolidated SEK 000 Provisions which are short-term liabilities Severance pay, redundancy payments Warranty exposure Loss contract Total SEK 000 Severance pay, redundancy payments Book value at the start of the period Provisions made during the period Amount used during the period Unutilized amount which has been regained during the period Translation gains/losses Book value as of 31 December Warranty exposure Book value at the start of the period Provisions made during the period Amount used during the period Book value as of 31 December Loss contract Book value at the start of the period Provisions made during the period Amount used during the period Book value as of 31 December Total consolidated provisions Book value at the start of the period Provisions made during the period Amount used during the period Unutilized amount which has been regained during the period Translation gains/losses Book value as of 31 December

2007-12-31

2006-12-31

2005-12-31

1 960 2 565 224 4 749

713 1 466

198 1 660

2 179

1 858

2007-12-31

2006-12-31

2005-12-31

713 2 036 -789

198 713 -194

1 960

-4 713

2 685 195 -658 -2 112 88 198

1 466 2 565 -1 466 2 565

1 660 1 466 -1 660 1 466

1 728 1 660 -1 728 1 660

2 179 4 825 -2 255

1 858 2 179 -1 854

4 413 1 855 -2 386 -2 112

4 749

-4 2 179

88 1 858

2007-12-31

2006-12-31

2005-12-31

566

12 098 13 041 750 10 091 13 065 49 045

4 582 9 844

1 901 5 156 2 019 5 869 5 842 20 787

224 224

Warranties Provision for product warranties are based on a calculation made on historical data.

Note 24â&#x20AC;&#x201A; Other liabilities Consolidated SEK 000 Other long-term liabilities Other liabilities

Other short-term liabilities Personnel-related liabilities VAT payable Market value of foreign exchange derivatives Advance payments from customers Other liabilities Parent company SEK 000 Personnel-related liabilities VAT payable Other liabilities

7 083 6 298 27 807

2007-12-31 868 125

2006-12-31 447

993

447

2005-12-31 443 57 668 1 168

Note 25 Accrued expenses and deferred income Consolidated SEK 000 Personnel-related expenses Interest expenses Auditing fees Selling expenses Shipping costs and customs charges Other

2007-12-31 31 648 934 1 758 2 865 98 6 697

2006-12-31 33 235 828 1 635 2 017 1 541 6 938

2005-12-31 33 961 2 139 979 3 337 371 10 891

2007-12-31 3 705 934 173 886 5 698

2006-12-31 3 347 828 175 397 4 747

2005-12-31 3 222 987 575 136 4 920

44 000

Parent company SEK 000 Personnel-related expenses Interest expenses Auditing fees Other

46 194

51 678

Note 26 Financial risks and financial policies

Risks and uncertainfactors – finance policy The Nederman Group is exposed to a number of risks which arise primarily in connection with that the Group buys and sells products in foreign currency. Exchange rates and interest rates influence the Group’s profits and cash flows. The Nederman Group is also exposed to refinancing and liquidity risk, and credit and second-party risk. It is the Board of Directors which establishes policies for the management of risk. The Nederman Group has a centralized finance function which has the responsibility to identify and in an effective way limit the Group’s financial risks. The finance function reports via CEO to the board.

Interest rate risks The Nederman Group is via its net debt exposed to interest rate risk. The Group’s interest-bearing assets and liabilities are subject to variable interest rates or with a maximum term or interest rate commitment of three months, according to financing agreements with the Group’s lenders. A change in interest costs of 1% would have affected net financial items in 2007 by SEK m 1.9, based on the average of capital tied-up during the year.

Credit risks Credit risks in customer accounts receivable The risk that the Group’s customers may not pay their trade debts constitutes a customer credit risk. In order to limit this, the Nederman Group uses credit policies which limit the outstanding amounts and credit terms for different customers. For new customers and those new on the market, normally it is required a letter of credit or advance payment. For established customers the credit limit is set so that it is carefully monitored in order to limit the risks. The Group’s largest individual customer accounted for 2.8 per cent of sales. The five largest customers accounted for 8.8 per cent of sales. The allocation of risk may thus be considered to be very good. The Group’s bad debt losses have historically been very small and amounted to around SEK 1 million in 2007. Of the Group’s total accounts receivable of SEK 235 million, around four per cent is made up of receivables overdue by more than 90 days.

Effective interest rate and maturity structure Interest bearing financial liabilities

Provisions for credit losses are made after an individual assessment and in addition with a general assessment in relationship to an aging analysis. As of 31 December 2007, the provisions for credit losses amounted to SEK m 7.4 (SEK m 6.2 ) corresponding to 3.1 per cent of the net amount of all accounts receivable from customers.

In the Group’s agreements on bank loans there are net debt covenants where the key figure net debt/EBTDA may amount at the highest to no more than 3.5.

Other counterparties Credit exposure arises with the placement of cash on hand and trading in derivative instruments. The risk that the counterparty does not fulfill its obligations is limited via the choice of creditworthy counterparties. According to the Group’s finance policy, cash on hand will only be placed in reputable “first class banks.”

The table below presents the effective interest rate on the day of the close of the reporting period and the financial liabilities’ maturity structure/interest rate negotiations.

The interest on the loans is changed periodically, but normally is set every third month. According to the Group’s finance policy, the board of directors establishes from time to time whether interest rate swaps will be used in order to hedge the interest rates. Such interest hedges have existed until the middle of December 2005. At the present time, there are no interest rate hedges according to a board of directors’ decision. This decision will be reviewed in connection with a possible refinancing, with the financing of a possible acquisition, or similar events. The Group’s financial liabilities amounted at the end of the year to SEK m 192, of which SEK m 150 was for a revolving amortisation loan, SEK m12 for financial leasing costs and SEK m 30 for utilised credit. The Group had SEK m 76.4 in liquid funds and SEK m 36.4 in unutilised credit. On 31 December 2007 the disposable amount of liquid funds was SEK m 112.8.

Foreign currency risks The Nederman Group is via its international activity exposed to currency risks due to those changes in exchange rates influence the Group’s profit and loss statement and its balance sheet. The Group’s currency exposure encompasses both transaction exposure and translation exposure. In the Group´s profit and loss statement, exchange rate differences are SEK -3,499,000 (- 3,136,000) in the operating profit and loss with SEK 1,476 ,000 (9) in the net financial gain/loss. Transaction exposure Transaction exposure arises via that the Group makes purchases in one currency and sells in another currency. In order to limit the transaction exposure in the Nederman Group, the main rule is that the providing companies sell to the sales companies in the 63

Cont. Note 26 sales company’s local currency. The transaction exposure in this way thus becomes very small in the sales companies. The absolute largest service company is in Sweden and just over 50 per cent of the purchases are conducted in SEK. Other purchases are conducted primarily in EUR and to a lesser extent in USD. The invoicing in the group in 2007 was 44 per cent in EUR, 11 per cent in GBP, 9 per cent in SEK, 8 per cent in USD, 8 per cent in NOK and 20 per cent in other currencies.

Consolidated SEK 000

Interest Interest fixing rate period

According to the Group’s finance policy course, approx. 70 per cent of the expected currency flows in foreign currencies are hedged against currency risks eight months forward. Hedging occurs via forward contracts. Outstanding forward contracts are valued at market value and this amounted to SEK -750,000 on 31-122007. Hedge accounting is not applied, which is why the changes of market value as a whole influenced year’s profits. A change in exchange rates of +1/-1 per cent would affect operating profit by SEK m 2.0 concerning EUR, SEK m 0.5 concerning GBP, SEK m 0.5 concerning CAD and SEK m 0.4 concerning USD based on the Group’s net flows in these currencies and translation effects on the consolidated income statement.

Currency

Nominal amount in original currency

Total

Bank loan Bank loan Bank loan (revolving) Bank loan (revolving) Bank overdraft Convertible debt

Financial leasing liabilities

3.375% 2006-05 3.232% 2006-02 3.375% 2006-05 3.232% 2006-02 5.69% Variable 1 year 1.71% 2006-07 Variable

2005 SEK 100 000 SEK 80 000 SEK 30 000 SEK 10 000 USD 51 SEK 6 613 SEK

100 000 80 000 30 000 10 000 404 6 613 8 391

Bank loan Bank loan Bank loan (revolving) Bank overdraft Bank overdraft Financial leasing liabilities

3.815% 07-02-15 3.815% 07-02-15 3.815% 07-02-15 3.89% Variable 1 year 6.78% Variable 1 year Variable

2006 SEK 100 000 SEK 50 000 SEK 20 000 SEK 5 047 USD 413 SEK

100 000 50 000 20 000 5 047 2 829 7 863

Bank loan (revolving) Bank loan Bank loan Bank overdraft Financial leasing liabilities

4.873%

2007 SEK 150 000 EUR 26 BRL 34 SEK 29 973 11 514

150 000 246 124 29 973 11 514

08-02-15

4.69% Variable 1 year Variable

The following foreign exchange forward contracts have been entered: 2007-12-31 Amount to sell Amount to retain TEUR 10 700 SEK 000 99 212 TGBP 2 000 SEK 000 26 493 TNOK 9 800 SEK 000 11 440 TUSD 2 400 SEK 000 15 926 TCAD 800 SEK 000 5 133 TPLN 4 000 SEK 000 10 352

Between 1 and 5 years

5 years and longer

30 000

50 000 50 000

50 000

404 6 613 2 395

5 996

30 000 5 047 2 829 1 599

246 124 29 973 3 403

30 000 10 000

100 000 20 000 20 000 6 264 150 000

8 111

Book value SEK 000 -1 796 842 -124 531 -94 -108 -750

Translation exposure The net assets in the Group are distributed amongst the following currencies: SEK m 2007 2006 Currency Amount % Amount % SEK 274.0 60% 235.5 63% EUR 59.6 13% 44.1 11% GBP 37.0 8% 27.9 7% USD 21.1 5% 21.8 6% CAD 17.6 4% 18.6 5% NOK 17.5 4% 11.0 3% PLN 12.1 3% 11.0 3% Other 12.8 3% 6.7 2% 451.7 100% 376.6 100% The Group has a policy not to hedge translation exposures in foreign currency.

Within 1 year

Market value SEK 000 -1 796 842 -124 531 -94 -108 -750

2005 Amount 193.3 43.4 23.9 20.0 14.9 16.1 8.9 5.4 325.9

% 59% 13% 7% 6% 5% 5% 3% 2% 100%

Cont. Note 26 Market value The market value substantially corresponds to the book value in the balance sheet. In other respect, the Accounting principles – financial instruments above is referred to regarding principles for the valuation of financial assets and liabilities to market value. Risk management and insurance The objective with risk management is to minimize the total cost for the Group’s risk of damages. This occurs in part via continuously developing measures to prevent damages and losses, and the work to limiting damages in the workplace, and in part via insurance policies taken out by the Group.

Liquidity risk Liquidity in the Group is not exposed to seasonal variations. The parent company has a financing agreement with Nordea Bank formulated as a 5-year framework agreement amounting to SEK m 400. The agreement runs to November 2012. At the end of the year this had been utilised to the amount of SEK m 150 in revolving credit and SEK m 30 in utilised bank overdraft. In the event of a change of ownership where a party or parties acting together acquire shares corresponding to more than 50 per cent of the votes in the company, the bank has the right to cancel the agreement in advance.

Note 27 Operational leasing

Leasing contracts where the company is the lessee. Future payments for non-cancellable leasing contract amounts to: Consolidated SEK 000 Within one year Between one and five years Longer than five years

2007-12-31 2006-12-31 2005-12-31 23 835 24 934 18 999 47 135 41 346 31 742 2 839 4 119 2 237 73 809 70 399 52 978 Of the Group’s operational leasing contracts, the bulk of these concern rental agreements for real property and the premises where the business operations are conducted. Parent company 2007-12-31 2006-12-31 2005-12-31 SEK 000 Within one year Between one and five years Longer than five years

Expenses for operational leasing contracts amount to: Consolidated SEK 000 Total leasing expenses Parent company SEK 000 Total leasing expenses

240 158 0 398

281 148

175 103

429

278

2007 29 249

2006 24 727

2005 26 977

2007 280

2006 224

2005 194

Note 28 Pledged assets, contingent liabilities and contingent assets Consolidated SEK 000 2007-12-31 Pledged assets In the form of pledged assets for debts and provisions Net assets in subsidiaries None Real estate mortgages None Chattel mortgages None Assets with ownership reservation 11 451 Total pledged assets 11 451 Contingent liabilities Guarantee commitments, FPG/PRI Others Total contingent liabilities

598 378 976

Parent company SEK 000 2007-12-31 Pledged assets In the form of pledged assets for debts and provisions Shares subsidiaries None Total pledged assets None Contingent liabilities Guarantee commitments, FPG/PRI Securities provided for the benefit of subsidiaries Total contingent liabilities

598 60 208 60 806

2006-12-31

2005-12-31

304 496 25 000 35 000 7 629 372 125

267 685 25 000 35 000 8 181 335 866

575

555

575

555

2006-12-31

2005-12-31

229 692 229 692

575 45 034 45 609

555 43 980 44 535 65

Note 29 Closely related parties

Closely related relationships The parent company has a closely related relationship with its subsidiaries, see note 30. No member of the Board of Directors or senior executive has or has had any direct or indirect participation in any business transactions between themselves and Group companies which are or was exceptional in its character with respect to the terms, which occurred during the current or previous financial year. Nor has any Group company provided any loan, given any guarantees or entered into any surity relationships for any of the members of the Board of Directors or senior executives. Summary of transactions between closely related parties Parent company SEK 000 Closely related party

Year

Other operating income

Dividends received

Subsidiaries Subsidiaries Subsidiaries

2005 2006 2007

8 756 7 557 8 520

12 547 18 947 5 932

Financial Receivables income and from closely reexpenses lated parties, on 31 December -866 24 139 9 007 19 653 6 737 59 981

Liabilities to closely related parties, on 31 December 533 20 999 14 238

Transactions with key individual in leading positions Regarding the salaries and other remuneration, costs and commitments regarding pensions and similar benefits, and severance payment agreements, for Board members, the CEO and other senior executives, see note 22.

Note 30 Group companies Shareholdings in subsidiaries

The subsidiary’s domicile, country AB Ph. Nederman & Co Nederman S.A.S. Tedak AB

Nederman Nordic AB AB Letrostatic

Air Care System AB

Nederman Polska Sp zo.o. Nederman Ibérica

Nederman & Co S.R.L.

Nederman Log. Nth. Am. Ltd Nederman Pty Ltd

Nederman Danmark Aps

Nederman Magyarorszag Kft Centair Luftfiltrering AB Nederman A/S

Nederman Norclean A/S

Nederman Norclean Nederland B.V. Nederman Norclean GmbH Nederman N.V. LEDA bvba

Nederman Holding GmbH Nederman GmbH

Nederman GmbH (Austria)

Nederman Ltd

Fumex Installations Ltd Lev Coshh Testing Ltd

Ph Nederman & Co Ges.m.b.H. Nederman CR s.r.o. Nederman Inc.

Nederman Canada Ltd

Nederman do Brasil Comércio de Produtos de Exaustao Ltda 66

Helsingborg, Sweden Paris, France

Eskilstuna, Sweden

Eskilstuna, Sweden Skara, Sweden

Helsingborg, Sweden Katowice, Poland Madrid, Spain

Bucharest, Romania

Mississauga, Canada Hallam, Australia

Fredrikssund, Denmark Budapest, Hungary Lidköping, Sweden Oslo, Norway

Sandefjord, Norway

Vlaardingen, The Netherlands Kamp-Lintfort, Germany Brussels, Belgium

Schoten Antwerp, Belgium Frankfurt a M, Germany Nürtingen, Germany Vienna, Austria Preston, UK

Sheffield, UK

Vienna, Austria

2007 Participating interest 100.0% 100.0%

100.0%

100.0% 100.0% 100.0% 100.0%

100.0% 100.0%

100.0%

2006 Participating interest 100.0% 100.0%

100.0%

100.0% 100.0%

2005 Participating interest 100.0% 100.0%

100.0%

100.0% -

100.0%

100.0% 100.0% 100.0%

100.0%

100.0% 100.0% 100.0%

100.0%

100.0% -

100.0%

Prague, Czech Republic

100.0%

Mississauga, Canada

100.0%

Detroit, USA

São Paolo, Brazil

100.0%

Cont. Note 30 Parent company SEK 000 Accumulated acquisition value Book value as of 31 December Acquisition Reduction of capital Book value as of 31 December

2007-12-31

2006-12-31

2005-12-31

523 039 6 123 -10 379 518 783

522 981 58

522 981

523 039

522 981

Breakdown of the parent company’s direct holdings of shares in subsidiaries 2007-12-31 2006-12-31 2005-12-31 Subsidiary / Organisation Number Percentage Book Book Book number / Domicile of of shares value value value shares AB Ph. Nederman & Co, 556089-2951, Helsingborg 550 000 100 229 692 229 692 229 692 Nederman Magyarorszag Kft, 01-09-874950, Budapest 0 100 162 105 Centair Luftfiltrering AB, 556426-7358, Lidköping 2 000 100 6 608 6 608 6 655 Nederman A/S, 858741882, Oslo 2 200 100 31 553 31 553 31 553 Nederman Norclean A/S, 933202054, Sandefjord 200 100 33 047 33 047 33 047 Nederman Norclean Nederland B.V., 24218849, Vlaardingen 50 100 0 0 0 Nederman Norclean GmbH, DE 120336521, KampLintfort 0 100 0 0 0 Nederman N.V. 428727 Brussels 4 000 100 30 376 30 376 30 376 Nederman Holding GmbH, HRB 48292, Frankfurt am Main 0 100 0 0 0 Nederman GmbH HRB 43352 Nürtingen 0 100 73 891 73 891 73 891 Nederman CR s.r.o., 25634364, Prague 1 100 0 0 0 Nederman Ltd, 1393492, Preston 10 000 100 49 349 49 349 49 349 Nederman Inc. 465-416 Detroit 1 680 100 25 908 25 908 25 908 Nederman Canada Ltd, 856 876, Mississauga 1 100 32 131 42 510 42 510 Nederman do Brasil Comércio de Produtos de Exaustao Ltda, 05.880.850/0001-45, Sao Paulo

3 365

100

6 066 518 783

523 039

522 981

Note 31 Untaxed reserves Parent company SEK 000 Accumulated accelerated depreciation Not 31 Obeskattade reserver Machinery and equipment Opening balance 1 January Depreciation in addition to schedule Closing balance 31 December

2007-12-31

2006-12-31

2005-12-31

227 -227 0

428 -201 227

524 -96 428

Tax allocation reserves Provision with the assessment of taxes, 2001 Provision with the assessment of taxes, 2007 Provision with the assessment of taxes, 2008 Closing balance 31 December

789 5 700 6 489

789 789

2 769

Total untaxed reserves

6 489

1 016

3 197

2 769

Note 32 Cash flow analysis

Adjustments for items not included in cash flow Consolidated SEK 000 Unrealised rate differences Change in value of financial instruments Allocations Other items

2007 -413 2 480 1 809 -139 3 737

2006 -768 -4 582 -81 881 -4 550

2005 -6 084 4 667 -3 823 1 292 -3 948

2007 829 829

2006 771 771

2005 589 589

2007 5 277 1 644

2006 2 576 1 081 5 887

2005 3 768

2007

2006 5 887

2005

2007

2006

2005

36 394 5 027

42 861 20 000

32 586

Parent company SEK 000 Depreciation

Transactions which do not result in payments Consolidated SEK 000 Acquisition of assets via financial leasing Sales of assets which were under a financial lease Conversion of debt to shareholders’ equity Parent company SEK 000 Conversion of debt to shareholders’ equity Unutilized credit SEK 000 Unutilized credit amounts to Consolidated Parent company

Note 33 Events after the close of the reporting period

All the shares in Töredal Verkstad AB were acquired on 3 January 2008 by AB Ph Nederman & Co. The acquisition price was SEK m 11. An acquisition analysis is being made and will be presented in the Q1 2008 report.

Note 34 Significant estimations and -assessments

Certain assumptions about the future and certain estimations and assessments as of the close of the reporting period have special importance for value of the assets and liabilities in the balance sheet. Discussed below are those areas where the risk for significant changes in value, during the subsequent year, is of significance and because of that the assumptions or estimations may need to be changed.

Examination for write-downs of goodwill The value of the book value of goodwill is reviewed least once a year with respect to the possible need for write-downs. The review requires an assessment of the usage value to the cash-generating unit, or group of cash-generating units, to which the goodwill value relates to. This requires that several assumptions about the future situation and estimates of parameters have been made. A report of these are found in note 13. As described in note 13 a change during 2008 in the conditions for these assumptions and estimations might have an effect on the value of the goodwill. The senior executives is of the opinion however that no reasonable changes in important assumptions with the assessment write downs of the cash-generating units will result in that the recovery value becomes lower than the book value.

Note 35 Information on the parent company

Nederman Holding AB (publ) is a Swedish registered limited company with its registered office in Helsingborg, Sweden. The address of the main office is BOX 602, SE-251 06 Helsingborg, Sweden. Visiting address is Sydhamnsgatan 2. The consolidated reporting for 2007 is comprised of the parent company and its subsidiaries, collectively referred to as the Group.

Proposed appropriation of profits The Board of directors and CEO propose, that the profits in Nederman Holding AB be appropriated as follows: Share premium reserve

5 866 700

Profits brought forward

84 340 622

Profit for the year

-10 435 117

Total, SEK

79 772 205

Allocated in such a way that: To Shareholders a dividend of SEK 2.50 per share

29 288 350

To the share premium reserve , transferred

5 866 700

To profits brought forward, transferred

44 617 155

Total, SEK

79 772 205

The consolidated accounts and the annual report have been drawn up in accordance with international accounting standards as prescribed in Regulation (EC) no. 1606/2002 of the European Parliament and of the Council dated 19 July 2002 concerning the application of international accounting standards and good accounting practice in Sweden, and they give a fair picture of the Group’s and parent company’s position and results. The Directors’ report for the Group and parent company provides a fair overview of the Group’s and parent company’s activities, position and results and they describe the main risks and uncertainties facing the parent company and Group companies. The annual report and consolidated accounts will be subject to adoption by the Annual General Meeting to be held on 29 April 2008. Helsingborg, Sweden, 28 February 2008

Anders Scharp Chairman

Hans Stråberg

Peter Möller

Gunnar Gremlin

Caspar Callerström

Jan Eric Larson

Bengt Olsson Employee Representative

Rolf Rånes

Sven Kristensson

Employee Representative

CEO

Our audit was issued on 3 March 2008 KPMG Bohlins AB

Alf Svensson Authorised Public Accountant

Auditor’s report To the annual general meeting of shareholders of Nederman Holding AB (publ) Corporate registration number 556576-4205 We have audited the annual accounts, the consolidated accounts, the accounting records and the administration of the board of directors and the CEO of Nederman Holding AB (publ) for the 2007 financial year. The annual accounts and the consolidated accounts of the company are included in the printed version of this document on pages 26-69. The board of directors and CEO are responsible for these accounts and the administration of the company as well as for the application of the Annual Accounts Act when preparing the annual accounts and the application of international financial reporting standards IFRS as adopted by the EU and the Annual Accounts Act when preparing the consolidated accounts. Our responsibility is to express our opinion on the annual accounts, the consolidated accounts and the administration based on our audit. We conducted our audit in accordance with generally accepted auditing standards in Sweden. Those standards require that we plan and perform the audit to obtain reasonable assurance that the annual accounts and the consolidated accounts are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the accounts. An audit also includes assessing the accounting principles used and their application by the board of directors and the CEO and significant estimates made by the board of directors and the CEO when preparing the annual accounts and consolidated accounts as well as evaluating the overall presentation of information in the annual accounts and the consolidated accounts. As a basis for our opinion concerning discharge from liability, we examined significant decisions, actions taken and circumstances of the company in order to be able to determine the liability, if any, to the company of any board member or the CEO. We also examined whether any board member or the CEO has, in any other way, acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association. We believe that our audit provides a reasonable basis for our opinion set out below. The annual accounts have been prepared in accordance with the Annual Accounts Act and give a true and fair view of the company’s financial position and results of operations in accordance with generally accepted accounting principles in Sweden. The consolidated accounts have been prepared in accordance with international financial reporting standards IFRS as adopted by the EU and the Annual Accounts Act, and give a true and fair view of the Group’s financial position and results of operations. The statutory administration report is consistent with the other parts of the annual accounts and the consolidated accounts. We recommend to the annual meeting of shareholders that the income statement and balance sheets of the parent company and Group be adopted, that the profit of the parent company be dealt with in accordance with the proposal in the statutory directors’ report and that the members of the board of directors and the CEO be discharged from liability for the financial year. Malmö, Sweden, 3 March 2008 KPMG Bohlins AB Alf Svensson

Authorised Public Accountant

Corporate governance Nederman Holding AB is a Swedish public limited company. Governance of the Nederman Group takes place via the General Meeting, the Board of directors and the Chief Executive Officer, as well as Nederman’s executive management team, in accordance with the Swedish Companies Act, the Articles of Association, and the rules of procedure for the board of directors, among other things. Considering Nederman’s group structure, the composition of the board of directors in operating subsidiaries, often with representatives from the executive management team, constitutes yet another share of governance for the Group. The Swedish Code of Corporate Governance shall be applied to all firms on the Stockholm Stock Exchange that have a market capitalisation exceeding SEK 3,000m. Nederman’s market capitalisation at the time of listing is estimated to be substantially less than SEK 3,000m and therefore the Company has chosen to hold off on applying the code. However, Nederman already uses several of the procedures that the code prescribes in order to benefit the shareholders’ opportunities for corporate governance, which are described below. Nederman also intends to follow the development of the code’s practical application with the purpose of regularly considering whether it should be applied in its entirety. Annual General Meeting and Extraordinary General Meeting

The General Meeting is the highest decision-making body in which shareholders can exercise their influence by voting on key issues, such as adoption of income statements and balance sheets, allocation of the Company’s profit, discharge from liability of board members and the Chief Executive Officer, election of board members and auditors, as well as remuneration to the board of directors and auditors. Board of directors The board of directors is the second highest decision-making body after the General Meeting. The chief task of the board of directors is to decide on the Company’s business focus, its resources and capital structure, as well as its organisation and management of affairs. The board’s general obligations also include continuously evaluating the Company’s financial situation and approving the Company’s business plan. In its general undertaking, the board addresses issues such as the Company’s strategy, acquisitions, major investments, divestments, board of directors and interim reports, as well as appointing the Chief Executive Officer, etc. The board of directors follows written rules of procedure that are established annually at the statutory board meeting. The rules of procedure indicate how the work shall be allocated, where appropriate, among the board members, how often the board meets, and to what extent the deputies shall take part in the board and are called to meetings. In addition, the rules of procedure regulate the board’s obligations, quorum, division of responsibilities between the board and the Chief Executive Officer, etc. The board meets according to an annual schedule that is decided in advance. In addition to these meetings, additional meetings may be arranged to deal with events of unusual importance. In addition to meetings, the Chairman of the board and the Chief Executive Officer conduct an ongoing dialogue with respect to administration of the Company. The distribution of work between the board of directors and the Chief Executive Officer is regulated in the rules of procedure for the board of directors and in the guidelines for the Chief Executive Officer. The Chief Executive Officer is re-

sponsible for implementation of the business plan as well as day-today management of the Company’s affairs and the daily operations of the Company. This means that the Chief Executive Officer makes decisions in those questions that can be considered to fall under the day-to-day management of the Company. The Chief Executive Officer may take action without the authorisation of the board, in matters which, considering the scope and nature of the Company’s business, are unusual or of great importance, if awaiting a decision from the Board would cause substantial trouble for the Company’s business. Instructions to the Chief Executive Officer also regulate responsibilities for reporting to the board of directors. The board receives a monthly written report containing information following up the Company’s sales, orders statistics, operating results and working capital developments. Moreover, the material contains comments from the Chief Executive Officer and the Chief Financial Office (e.g., brief comments on the different markets). During months when the board meets the monthly report is more extensive and also includes a balance sheet and cash flow statement, among other things. Every year the senior executives formulates a strategy proposal, which is discussed and adopted at the board meeting held about halfway through the year. The work with the business plan (including the budget for the coming year) is usually carried out ”bottomup” and based on the strategy adopted by the board of directors. The Chief Executive Officer and the Chief Financial Officer present the business plan proposal to the board of directors. After the board discusses the business plan, it is usually adopted at the last meeting during the autumn. Moreover, the Company usually issues an updated forecast at the end of each quarter in conjunction with the quarterly reports. Once a year the board evaluates the Management team in a systematic fashion. In this context, the Management team includes certain non-senior managers i.e. broader group of employees than what in other parts in this prospectus have been defined as included in the senior executives. During the past financial years the board of directors has had to address many issues of strategic significance. During 2007 special focus has been placed on the Group’s continued expansion, including acquisitions, the Group’s financial framework and targets, as well as work preparations for listing the Company’s shares on the Stockholm Stock Exchange. During 2007 the board of directors held ten minuted meetings and to date in 2008 the board has held one minuted meeting. The 2007 Annual General Meeting resolved that SEK 150,000 would be paid as directors’ fees to the Chairman of the board and SEK 75,000 to each regular member. No renumerations are paid to board members employed by EQT Partners AB. The Annual General Meeting elects board members annually for the time until the next Annual General Meeting is held. The board of directors shall consist of at least three and no more than eight ordinary members, as well as a maximum of three deputies. In addition, the board may also include employee representatives.

Main owners, board members and the Chief Executive Officer perform a yearly and detailed evaluation of the board. The evaluation regards among other things the board’s composition, board members and the board’s work and routines. Nederman’s board of directors consists of six members elected by the 2007 Annual General Meeting and two employee representatives. The Chief Executive Officer is not a member of the board of directors but participates at meetings by presenting information, as does the Chief Financial Officer as a rule. The Chairman of the board does not participate in the operating management of the Company. Board members are presented in greater detail in the section Board of directors, senior executives and auditors. Committees Questions about salary structuring and benefits for the Chief Executive Officer and the management are addressed and approved by a remuneration committee. This committee consists of Anders Scharp and Caspar Callerström. Anders Scharp is chairman of the committee. The 2007 Annual General Meeting resolved on principles for remuneration to the Chief Executive Officer and senior executives, which is presented in greater detail under the subheading Renumeration to the board of directors and senior executives below. The Company’s auditors inform the entire board about the results of their work by once a year participating at the board meeting to give an account of the year’s audit and their view on the Company’s control system without anyone from the management being present. Therefore Nederman complies with the demand on having an audit committee within the framework of the Swedish code for corporate governance. The principles for remuneration to the Company’s auditors are resolved by the Annual General Meeting. The Company has not appointed a formal nomination committee. The Chairman of the board convenes the major shareholders annually well in advance of the Annual General Meeting in order to gain support for proposals to the Annual General Meeting’s election of a new board of directors. Auditor The auditor audits the Company’s annual reports and accounting, as well as the management of the board of directors and the Chief Executive Officer. The auditor submits an audit report to the Annual General Meeting after each financial year. The Annual General Meeting appoints auditors for a period of four years. At the Annual General Meeting, 27 April 2007 KPMG Bohlins AB with auditor Alf Svensson as main responsible was elected for a period of four years. The Company’s auditor audits the annual accounts and accounting and the Company’s current operations and routines, to make an opinion on the accounting and the management of the board of directors and the Chief Executive Officer. The annual report and financial statements are reviewed during January and February. Along side of Nederman, Alf Svensson does not have any assignments in companies over which Nederman’s principle shareholders (prior to the distribution of ownership at the listing), board members or Chief Executive Officer have any material influence. Alf Svensson is an authorised public accountant and member of the Swedish Institute of Authorised Public Accountants. Remuneration to KPMG for assignments other than auditing amounted to SEK 3,456,000 in 2007 and related to tax issue studies, IFRS conversion and an audit study regarding Nedermans readiness to be listed.

Remuneration to the board of directors and senior executives The 2007 Annual General Meeting adopted a policy relating to remuneration and terms of employment for 2007, applying the following underlying principles: fixed salary is paid for satisfactory work. In addition there is a potential for variable compensation linked to the Company’s performance and tied up capital. Variable compensation may amount to a maximum of 30 to 50 per cent of the annual salary, depending on the individual’s position in the Company. The Chief Executive Officer’s pension plan is a defined contribution plan with an annual premium equivalent to 35 per cent of the annual base salary. For others in the administration, pension payments follow the contractual ITP plan, except for one member, whose pension payments are made with 10 official “price base amounts” per year. If the Chief Executive Officer gives notice of termination, the term of notice is six months. If the Company gives notice of termination, the CEO is entitled to monthly pay for the equivalent of 18 to 24 months (the last six months with reservations for new employment). For others in the management the term of notice is twelve months if the Company gives notice of dismissal, and six months if the employee resigns. There is no agreement between board members or senior executives and Nederman or any of its subsidiaries for benefits upon conclusion of their assignments. There are no shares or share pricerelated incentive programs at this time for the board of directors or senior executives. Nederman’s executive management team consists of eight persons (including the Chief Executive Officer).

Articles of association Articles of Association for Nederman Holding Aktiebolag (publ) (company reg. no 556576-4205) is presented below. 1 § Company name The name of the Company is Nederman Holding Aktiebolag. The Company is a public company (publ). 2 § Registered office The registered office of the board of directors is in Helsingborg municipality. 3 § Company’s operations The object of the Company’s operations is to directly or through subsidiaries produce and market products to improve the industrial workplace environment and to own and manage enterprises as well as real estate and personal property, and to engage in compatible operations. 4 § Share capital The Company’s share capital shall not be lower than seven hundred fifty thousand (SEK 750,000) Swedish kronor and shall not exceed three million (SEK 3,000,000) Swedish kronor. 5 § Number of shares The number of shares shall be no lower than ten million (10,000,000) and shall not exceed forty million (40,000,000). 6 § VPC-registered company The Company’s shares shall be registered in a CSD register in accordance with the Swedish Financial Instruments Accounts Act (1998:1479). 7 § Financial year The Company’s financial year shall be the calendar year. 8 § Board of directors The board of directors shall consist of at least three (3) and not more than eight (8) members with a maximum of three (3) deputies. Board members will be elected annually at the Annual General Meeting for the period extending until the close of the next Annual General Meeting. 9 § Auditor The firm shall have at least one (1) and no more than two (2) auditors, without or with no more than one (1) deputy auditor. An approved or authorised public accountant or a registered auditing firm shall be appointed auditor and, where appropriate, deputy auditor. 10 § Notice of Annual General Meeting Notice of the Annual General Meeting and of Extra General Meetings convened to address amendments to the Articles of Association, shall be issued not earlier than six weeks and not later than four weeks prior to the meeting. Notice of other Extraordinary General Meetings shall be issued not earlier than six weeks and not later than two weeks prior to the meeting. Notice of a General Meeting shall be made in the form of an advertisement in the Official Gazette (Post- och Inrikes Tidningar) and Svenska Dagbladet or, if publication of the

latter newspaper is canceled, Dagens Industri. 11 § Right to participate in a General Meeting Shareholders who wish to participate in proceedings at the General Meeting must be included in the transcript of the entire share register pertaining to the situation no later than five (5) weekdays before the general meeting, and they must register with the Company no later than 4 p.m. of the day specified in the notice of the general meeting. This day may not be a Sunday, other general holiday, Saturday, Midsummer Eve, Christmas Eve, or New Year’s Eve, nor may it fall earlier than the fifth weekday before the general meeting. Shareholders or representatives may be accompanied by a maximum of two assistants at a general meeting, but only if the shareholder has notified the Company of the number of assistants in accordance with the preceding paragraph. 12 § Location of General Meeting The Annual General Meeting may be held in Helsingborg or Stockholm. 13 § Annual General Meeting The Annual General Meeting shall address the following matters: 1. Election of the chairperson of the meeting; 2. Preparation and approval of the voting list; 3. Approval of the agenda; 4. Election of one or two persons to verify the minutes; 5. Determination of whether the meeting has been duly convened; 6. Presentation of the annual report and the auditors’ report, and where appropriate, the consolidated accounts and the auditors’ report on the consolidated accounts; 7. Resolution to adopt the income statement and balance sheet as well as the consolidated income statement and consolidated balance sheet; 8. Resolutions on appropriation of the Company’s profit or loss according to the adopted balance sheet; 9. Resolution to discharge members of the board of directors and the Chief Executive Officer from liability; 10. Determination of the number of board members and deputies, as well as, where appropriate, auditors and deputy auditors; 11. Establishment of remuneration to the board of directors and, where applicable, the auditors; 12. Election of board members and any deputies and, where appropriate, auditors and any deputy auditors; Other business to be addressed by the general meeting in accordance with the Swedish Companies Act or the Articles of Association.

Board of directors

From left, Sven Kristensson, Gunnar Gremlin, Anders Scharp, Caspar Callerström, Bengt Olsson, Jan Eric Larson, Rolf Rånes, Hans Stråberg, Peter Möller

Anders Scharp Born 1934. Chairman of The Board of Nederman. Mr Scharp is also chairman of the Board of Aktiebolaget SKF and Board member and Deputy chairman of Investor Aktiebolag. Mr Scharp owns 164,881 Nederman shares. Jan Eric Larson Born 1947. Board member of Nederman. Mr Larson is also Chairman of the board of Camfil Aktiebolag and Camfil International Aktiebolag. Mr Larson owns 17,260 Nederman shares. Peter Möller Born 1952. Board member of Nederman. Mr Möller is Chief Executive Officer of SAS Technical Services AB. Mr Möller owns 19,751 Nederman shares. Hans Stråberg Born 1957. Board member of Nederman. Mr Ståberg is Chief Executive Officer and a board member of AB Electrolux. Mr Stråberg owns 43,939 Nederman shares.

Caspar Callerström Born 1973. Board member of Nederman. Mr Callerström is a Partner in EQT Partners. Mr Callerström owns no Nederman shares. Gunnar Gremlin Born 1946. Board member of Nederman. Mr Gremlin is a board member of Dyckerhoff AG and Leybold Optics GmbH. Mr Gremlin owns 43,939 Nederman shares. Rolf Rånes Born 1960. Board member since 2001. Mr Rånes is Employee Representative and chairman, IF Metall. Mr Rånes owns no Nederman shares. Bengt Olsson Born 1960. Board member since 2003. Mr Olsson is Employee Representative and chairman, SIF. Mr Olsson owns 400 Nederman shares.

Senior executives Sven Kristensson CEO of Nederman since 2001 Born 1962 Mr. Kristensson owns 164,881 Nederman shares

Krister Johnson VP Sales North America since 2006 Employed in Nederman since 1992. Born 1966 Mr Johnson owns 43,399 Nederman shares

Anders Agering CFO of Nederman since 2002 Born 1951 Mr Agering owns 63,290 Nederman shares

Bo Jonsson VP Nederman New Markets since 2006 Employed in Nederman since 1987 Born 1956 Mr Jonsson owns 43,399 Nederman shares

Per-Ove Eriksson VP Operations since 2003 Born 1956 Mr Eriksson owns 43,399 Nederman shares

Mikael Brandsten Business Area Manager Hose & Cable Reels since 2004 Employed in Nederman since 1994 Born 1968 Mr Brandsten owns 41,306 Nederman shares

Jan Richardsson VP Sales Europe since 2005 Born 1960 Mr Richardsson owns 12,000 Nederman shares

Per Lind Business Area Manager since 2006 Born 1957 Mr Lind owns no Nederman shares

Notification to attend the Annual General Meeting The Annual General Meeting of Nederman Holding AB (publ) will be held at the Hotell Marina Plaza, Kungstorget 6, Helsingborg, Sweden on Tuesday, 29 April 2008.

Schedule

Right to participate at the meeting

Coffee and refreshments will be served before the meeting starts.

Shareholders wishing to participate at the meeting must be recorded in the shareholders’ register kept by VPC AB by Wednesday 23 April 2008 and must notify the company of their intention to attend the meeting before 4 p.m. on Wednesday 23 April 2008. Shareholders whose shares are registered in the name of a trustee must have their shares temporarily registered in their own name in the VPS shareholders’ register in order to take part in the meeting. This kind of registration, known as voting right registration, must take place by Wednesday 23 April 2008, meaning that the shareholder should give notice of his/her intention of taking part at the meeting in plenty of time before that date.

3 p.m. Registration starts 3.30 p.m. Meeting room opens 4 p.m. Meeting starts

Dividend

The board proposes a dividend for the 2007 financial year of SEK 2.50 per share. The record day for dividends is proposed for 5 May 2008. If the Annual General Meeting decides in accordance with the proposal dividends are expected to be issued from VPC AB on 8 May 2008.

Notification can be carried out in one of the following ways: - on Nederman’s website: www.nederman.com - by email: arsstamma@nederman.se - by telephone: +46 (0)42 18 87 00 - by letter to: Nederman Holding AB (publ), “Årsstämma” Box 602, 251 06 HELSINGBORG, SWEDEN. When notifying the company, this should include details of name, civic registration number /corporate identity number, address, telephone, registered shareholding and advisors, if any. The information is solely used for the requisite registration and drawing up of the voting list. Where representation is made by proxy the original of the proxy form must be sent to the company along with the notification to attend the meeting. Individuals representing a legal entity must have a copy of the registration form or equivalent documentation indicating the authorised signatory. The company will provide proxy forms for shareholders who so wish: The form is also available for downloading on Nederman’s website: www.nederman.com.

Reports in 2008

Q1 report - January – March 2008, Q2 report - January – June 2008, Q3 report - January – September 2008,

29 April 24 July 30 October

The total number of shares and voting rights in the company are 11,715,340.

Financial definitions Key figures are defined as follows: Return on equity Net profit for the period divided by average shareholders’ equity. Return on operating capital EBIT as a percentage of average operating capital. EBIT Operating profit after depreciation and amortisation.

Net debt/equity ratio Net debt divided by shareholders’ equity. Operating capital Shareholders’ equity plus net debt. Operating cash flow Cash flow from operating activities adjusted for net financial items and income tax paid, plus cash flow from investing activities, excluding acquisition of business enterprises.

EBIT margin EBIT as a percentage of net sales.

Interest coverage ratio Profit after net financial items plus financial expenses divided by financial expenses.

EBITDA Operating profit before depreciation and amortisation.

Equity/asset ratio Equity divided by total assets (balance sheet total).

EBITDA margin EBITDA as a percentage of net sales.

Earnings per share Net profit divided by average number of outstanding shares.

Equity per share Average shareholders’ equity divided by average number of outstanding shares.

Annual average Average of year-beginning and year-end balance.

Net debt Interest bearing liabilities (including pensions) minus cash and cash equivalents.

Nederman Holding AB (publ.) Sydhamnsgatan 2 SE-252 28, Helsingborg, Sweden Tel: +46 42 18 87 00, Fax: +46 42 14 79 71 E-mail: international@nederman.se www.nederman.com

Nederman Sales companies in: Australia, Austria, Belgium, Brazil, Canada, China, Czech Rep. Denmark, France, Germany, Hungary, India, Ireland, Northern Ireland, Norway, Poland, Portugal, Romania, Russia, Slovak Republic, Spain, Sweden, United Kingdom, USA Nederman Agents in: Bulgaria, Cyprus, Egypt, Estonia, Finland, Greece, Holland, Hongkong, Iceland, Iran, Ireland, Italy, Japan, Korea, Latvia, Lithuania, Malaysia, New Zealand, Philippines, Saudi Arabia, Serbia, Singapore, Slovenia, South Africa, Switzerland, Taiwan R.O.C, Thailand, Turkey, United Arab Emirates