Annual Report 2008 by Nederman Holding

Annual Report 2008

Contents Cover pages Page 1

Notification to attend the Annual General Meeting Key figures Important events in 2008

Profitability and growth objectives

2 4 5

Business concept

Words from the president and CEO Global forces behind improved working environments

Expansion throughout the value chain creates growth

6-7

The unbroken chain

Customer-oriented total solutions

8-9 11 12 13 14 15

Expansion on new and traditional markets Extraction & Filter Systems business area Hose & Cable Reels business area

Care for the environment and employees Shares 2008

Financial information in brief

Financial

16-18 Directors’ report 2008 19

Consolidated income statements

Consolidated statements of changes in equity

20 22 23 23 24 25

Consolidated balance sheets

Consolidated cash flow statements

Income statements for the parent company

Cash flow statements for the parent company Balance sheets for the parent company

Statements of changes in shareholders’ equity

26-51 Notes 52

Proposed appropriation of profits Auditors’ report

54-56 Corporate governance report 57

Articles of association

Senior executives

58 60

Board of directors

Financial definitions

Notification to attend the Annual General Meeting (AGM) The Annual General Meeting of Nederman Holding AB (publ) will be held at Jacob Hansens Hus, Norra Storgatan 21, 252 20 Helsingborg, Sweden, on Tuesday, 28 April 2009. Schedule: 3 p.m. Registration starts 3.30 p.m. Meeting room opens 4 p.m. Meeting starts Coffee and refreshments will be served before the meeting. Right to participate at the meeting Shareholders wishing to participate at the meeting must be recorded in the shareholders’ register kept by VPC AB by Thursday 23 April 2009 and must notify the company of their intention to attend the meeting no later than Thursday 23 April. Shareholders whose shares are registered in the name of a trustee must have their shares temporarily registered in their own name in the VPC shareholders’ register in order to take part in the meeting. This registration, known as voting right registration, must take place by Thursday 23 April 2009, meaning that the shareholder should give notice of his/her intention of taking part at the meeting in plenty of time before that date. Notification 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 Notification 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 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. Dividend The board and CEO propose a dividend for the 2008 financial year of SEK 2.50 per share. The record day for dividends is proposed as 5 May 2009. If the Annual General Meeting decides in accordance with the proposal, dividends are expected to be issued from VPC AB on 8 May 2009. Reports Q1 report – January - March 2009 Q2 report – January - June 2009 Q3 report – January - September 2009

28 April 2009 14 August 2009 22 October 2009

Key figures Sales

Sales by business area

SEK m 1,400 1400

1272

1,200 1200

SEK m

800 800

600

600 600

400

400 400

200

2007

Operational cash flow

114

120 100 80

199

175

135

2008

1073

743

200 200

2006

141

140

866

800

Hose & Cable Reels

1000 1,000

878

SEK m 160

Extraction & Filter Systems

1200 1,200

1041

1000 1,000

Operating profit (EBIT)

2006

2007

2008

Net debt/equity ratio

40 20 20

2006

2007

2008

Average number of employees 800

SEK m 120

100

300

44%

32%

27%

2006

2007

Key figures, Group Net sales

Gross profit

Gross margin, %

2006

2008

2007*

1,272,3

1,041,4

617,8

48,6

502,5

48,3

2007

2006 877,8 423,8

49,1

EBITDA

158,7

131,9

104,4

Operating profit

140,8

114,1

85,4

Profit before tax

125,6

105,3

75,7

7,90

6,42

4,73

EBITDA margin

Operating margin Profit for the year

Earnings per share** 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

12,5

11,1

92,6

113,9

18,9

22,2

144,1

27,2

0,9

10,4 710

*) Excluding IPO costs of SEK 6,694,000 before tax **) Before dilution; there is no dilution effect for 2007

200 100

2008

568

400

528

500

600

100

711

700

114

12,7 11,0

75,2

88,5

18,2

20,0

145,6

32,2

1,1

15,1 568

11,9 9,7

55,0

70,9

15,7

15,9

163,9

43,5

1,6

10,7 528

2008

2006

2007

2008

• Nederman was founded in 1944 • The company was introduced onto the OMX Nordic Exchange Stockholm*, Small Cap, in 2007 • Nederman is an environmental technology company that develops, produces and markets proprietary products and systems • Production and assembly facilities in Sweden, Norway, Canada and China • Own sales organisations in 25 countries • Agents and distributors in around 30 countries • The Group has around 760 employees * today under the name Nasdaq OMX Stockholm AB

Important events in 2008

The opening of Nederman’s assembly and logistics facility in Shanghai in June 2008

Complementary acquisitions The year started with Nederman’s acquisition of Töredal Verkstad AB in Jung, Sweden, which produces products for high vacuum systems. The company has been an important partner of Nederman’s for many years. The Arboga Group, Sweden, was acquired in March 2008. The company develops, produces and markets solutions for environmental management, transport and recycling of metal waste and cutting fluids, mainly for the metal working industry. One of Nederman’s growth strategy objectives is to extend the application areas in various industrial industries through acquisitions. The acquisition of the Arboga-Darenth is part of this strategy. Nederman’s high and low vacuum applications for extraction and filtration of air have been used for many years by the metal working industry. These applications have, together with Arboga-Darenth’s solutions, laid the foundation for Nederman’s new application area, Machining, introduced to the market in 2008. Nederman acquired the automotive division of Assalub in Åtvidaberg, Sweden, in March 2008. The acquisition is part of Nederman’s continued investment in systems for rational vehicle repair shops. Orders from wind power industries Nederman received a number of significant orders for solutions during the year from the composite machining industry. The use of composite materials in manufacturing is on the increase for cars, boats, aircraft, rotor blades for wind turbines, train carriages, cisterns, etc. Machining of composite materials creates harmful dust, particles and fibres. Extracting these substances immediately minimises the health risks and safeguards quality. Dust and particles from machining are likewise stopped from entering machines and electronic equipment, which minimises interference in production. Nederman Denmark received an order in January 2008 worth SEK 7 million from one of the world’s leading manufacturers Press releases 2008 January 7 Nederman acquires Töredal Verkstad AB January 25 Nederman receives major orders from the wind power industry March 6 Significant order from motor vehicle test stations in Turkey March 12 Nederman acquires Arboga-Darenth March 25 New acquisition strengthens Nederman’s market presence in the automotive workshop segment March 27 Noteification to attend the Annual General Meeting of Nederman Holding AB (publ) April 16 Nederman signs contract with Suzlon April 29 Q1 report January – March 2008

of wind turbines. Nederman India signed a three-year contract in April with an internationally active company in wind power. Another significant order was received in July in the same area. Opening of Nederman Shanghai The opening of Nederman’s assembly and logistics facility in Shanghai in June safeguards the company’s continued expansion on a prioritised growth market. Nederman Shanghai* will be able to provide customers in the Asia-Pacific region with shorter lead times, improved service levels and access to the company’s system solutions. The facility has a floor area of around 3,400 sqm with all the assembly of a range adapted especially to the market. The facility is also the logistics centre for Asia, Australia and New Zealand and the local and regional sales organisation is located in the same building. Sweden’s consulate general in Shanghai, Lars Andreasson and representatives from the local Chinese authorities were present at the opening ceremony. Significant orders from Turkey and the US Nederman received two major orders for exhaust extraction applications during the year. An order worth SEK 10 million was signed in March for 188 motor vehicle test stations in around 80 of Turkey’s cities. All applications were put into operation in mid 2008 and are the same applications used by the Swedish Motor Vehicle Inspection organisation. Turkey’s investment in working environment-friendly systems for exhaust extraction is a result of the country’s adapting environmental legislation to current EU regulations. Nederman signed a five-year contract in July worth around SEK 25 million with the New York City Fire Department. The contract includes the repair, maintenance and upgrade of the exhaust extraction units at around 250 of New York’s fire stations. * Legal name: Nederman Air Clean (Shanghai) Co., Ltd. April 30 June 12 July 2 July 9 July 10 July 24 October 30 November13

Nederman’s Annual General Meeting 2008 Nederman opens a new facility in China Nederman acquires AB Norclean in Varberg Nederman signs contract with New York City Fire Department Nederman receives major order from the Danish wind power industry Q2 report January - June 2008 Q3 report January - September 2008 Nederman France receives order for exhasut system at RATP worth around SEK 10 million

The releases are available at www.nederman.com

Business concept

ÅTERVINNINGSBARA MATERIAL

Through products, systems and application expertise to provide solutions that safeguard a clean working environment, efficient and safe production and eco-friendly reuse Nederman is one of the world’s leading environmental technology companies and develops, produces and markets proprietary products and systems for the extraction and filtration of particles, welding smoke and vehicle exhaust fumes. The company’s extensive range of hose and cable reels also make work more efficient by providing easy access at the workplace to oil, air, water, gas and electricity while improving the ergonomics of the workstation and minimising the risk of injury. Nederman’s vision is to provide the global market with products, systems and solutions under the Nederman brand based upon the motto “Improving your workspace”. Nederman is a world-leading player in the working environment area, both in terms of technology and market success. Using its strong global market position, the company’s objective is to continue driving development towards healthier working and production environments. Nederman focused objectives for growth are: • Expanding into new application areas. • 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. • Developing products and concepts.

In 2008 the company introduced solutions for the eco-friendly, cost-effective treatment and reuse of cutting fluids and the profitable management and refining of cuttings. Through its comprehensive range of products, systems and services, combined with extensive expertise, Nederman is able to provide total system solutions in traditional and new application areas. Strong brand Nederman holds a strong market position in a fragmented industry, where competition is mainly local or regional. The company is almost twice as big as its closest rivals on many markets. The brand is well known and globally established. Nederman is also a leading system supplier with a global distribution network, which provides significant benefits of scale. Nederman is well equipped for continued growth. Nederman’s solutions create: • Cleaner, safer working environments with reduced impact on indoor and outdoor environments • More effective production with fewer operational disturbances • Improved use of energy

• Profitable and eco-friendly recycling of waste products • Improved quality of end-products

• Improved environmental image and increased competitive strength

Words from the President and CEO

A year of forging ahead Nederman reported stable growth in 2008 and it was also a year where we made further advances to our positions. Net sales for the year amounted to SEK 1,272 million, an increase of 22 per cent compared to last year. The increase was 21 per cent in local currency. 10 per cent of the increase relates to acquisitions and 11 per cent relates to organic growth. We managed to safeguard an improved operating margin despite the dramatic slowdown to the global economy in the second half of 2008. The operating profit was SEK 141 million, which is a rise of 23 per cent. Expansion in new application areas A number of markets saw good organic growth. In parallel, and in line with our strategy to grow in new application areas, we acquired ArbogaDarenth in the spring 2008. This laid the foundation for the new Nederman Machining application concept where Nederman’s products and systems are combined with Arboga-Darenth’s solutions for swarf management, cutting fluid treatment, leaked oil separation and oil mist separation. Nederman has held a well-established position in welding applications for the past 60 years. Nederman Machining now allows us to offer the metal working industries total system solutions, which further strengthens our position, while new industries are opened up and existing customer cooperation is enhanced. 2

Strengthened position via acquisitions We acquired the automotive division of Assalub in Åtvidaberg in March. The acquisition provides greater opportunities to reach the automotive industry’s aftermarket, which is in line with our strategy of expansion in the value chain. Systems for lubricant management have been marketed for some years on a number of markets and will be introduced on new markets in the future. AB Norclean in Varberg was acquired in Quarter 3 2008. The company provides products and services in the area of environmental technology with the focus on managing and collecting harmful substances when sandblasting and fluid handling. The company has sold Nederman Norclean products on the Swedish market since 1968. Outlook for 2009 Conditions are very insecure as we go into 2009 and the near future is very difficult to predict. Some of our markets will be affected more than others. Our global presence allows us to balance this out to a certain degree through various initiatives. Nederman is continuing its general inhouse efficiency initiatives in all areas. As mentioned previously the company expects weaker market demand in 2009 and has therefore prepared specific rationalization schemes to meet downturn in sales.

These will be introduced in relation to the developing demand. A significant overall factor that will benefit us is that an increasing number of countries are placing greater demands on sound, safe and effective working environments. The need for our services for service and maintenance will probably increase. This is where Nederman can offer a significant program of service and maintenance initiatives. As investments in new vehicles fall, companies in the automotive sector will probably in future face a greater need for aftermarket service. This is where Nederman can offer a wideranging program of various solutions, which make working in automotive workshops more effective and profitable. We will continue working in 2009 with boosting sales of our systems. Our system solutions that we’ve developed for the composite working industry have been very successful. As wind power becomes more popular there will be significant market potential in it for us. With the strategy that Nederman has successfully worked with and will continue with, we are expecting to make headway even on a weaker market. Sven Kristensson President and CEO

Profitability and growth objectives Sales growth

Nederman has an economic responsibility to create growth and profitability for all interested parties. The objective over time is to increase the value of the company and thereby safeguard a stable development and long-term yield for shareholders. Because our products and systems create a clean, safe environment we contribute to positive social development.

SEKMSEK m

1272,3 1,272

11%

10% 1,041 1041,4

Operational objectives The main operational objectives governing Nederman’s growth are: • identifying new application areas and geographic markets with significant growth potential • establishing Nederman as a brand and as system supplier to chosen industries and markets

17% 1%

878 877,8

2006

2007

The global wind power industry is an example of a growth industry with huge potential where Nederman has established a leading market position.

2008

Financial objectives Nederman will create value for shareholders by achieving set financial objectives and constantly working towards improved profitability.

Through acquisitions

Förvärv Organic growth

tillväxt SalesOrganisk of the previous year Tidigare års försäljning

Operating result EBIT

SEK 160 m

141

140

114

120 100 80

Operatingmargin %

11,1% 11,0%

9,7%

60 40

• Annual sales growth of 8-10 per cent over a business cycle, of which at least half will be organic growth • An EBITA margin of at least 10 per cent over a business cycle • A net debt/equity ratio of between 0.5 and 1.0 • A dividend policy of 30-50 per cent of net profits after tax being paid to shareholders Nederman is constantly working to improve profitability. The focus of this initiative is the continued reduction of operational costs, improved efficiency in product supply, purchasing and sales, and a constant screening of profitability on all the markets where Nederman operates.

20 0

2006

2007

2008

Net debt/equity ratio

% 100 80 60 40

44% 32%

27%

20 0

2006

2007

2008

Composite materials are becoming more common when manufacturing aircraft parts, car parts, boats and wind turbine blades etc., due to the reduced weight providing more energy-efficient designs. The composite machining industry is therefore a growth industry with huge potential where Nederman has established a leading market position.

Dividend policy Result per 10 share SEK

7,90

8 6

6,42

New laws and regulations when machining composite materials

4,73

4 1,93 - 3,21

2 0

2,37 - 3,95

1,42 - 2,37

2006

2007

2008 2008

Dividend policy Dividend 2,50

Dust, particles and fibres that arise when machining composite materials (sawing, grinding and polishing) can cause skin irritation and respiratory damage. Working environment organisations in many countries have highlighted the risks and introduced regulations and directives requiring grinding and cutting machines to be fitted with extraction devices to keep pollution levels under set limits.

Global forces behind improved working environments

Nederman is well equipped for continued expansion on a growing global market as more and more countries understand the importance of safe and sensible working environments. The driving forces are stricter working environment regulations and norms, and increased Increased social responsibility Increased social responsibility has a great influence on global working environments. Multinational companies whose products are manufactured in low-income countries are becoming more involved than before in their suppliers’ working environments, partly because trends in society demand it and partly because more companies are intro ducing policy guidelines concerning ethical and social responsibility. Good citizen Codes of Conduct are extending into the area of working environment. The driving forces include employee interest in how and under what working conditions the products are manufactured, the activities of environmental organisations and media coverage. International cooperation International collaboration in the field of working environments has increased as the manufacturing industry is moving production between countries to become more cost-effective. International demands and norms are an increasingly important driving force. The working environment was not a prioritized area in many countries a few years ago. Working environment issues are now a priority thanks to companies that uphold good working environments seeing this as a competitive advantage. Demands for uninterrupted, clean production Dirty, tough industrial environments with no ergonomic solutions cause unnecessary strain on employees, tools and production systems. Operational interference and stoppages when production systems are exposed to dust and other contamination have a negative impact on the company’s finances and competitive strength. This drives the demand for clean environments and solutions that safeguard performance and quality. Effectively removing dust and other particles is crucial in order to get the required finish for the end-products,

expertise about work-related injuries and the medical consequences of poor working environments. Meanwhile, systems and products must meet stricter demands for uninterrupted, energy-efficient production. but also to remove harmful particles, organic substances and gases that arise when machining. Extra interest for reduced environmental impact The growing global commitment to reduce the environmental impact from industries has meant an increased demand for products and systems for extraction and filtration and the management of waste products. Nederman’s systems are designed to capture and filter particles, fibers, welding fumes and exhaust gases and as they arise in order to prevent them spreading to the surroundings. The technology is very effective and requires a lot less energy compared to central ventilation systems. Nederman also constantly develops solutions that reduce energy use in the systems. One example is our automatic valve that adjusts extraction at each workstation according to requirements. Workstations that aren’t in use are shut down.

Stricter rules concerning exposure to welding smoke Around 35,000 professionals in Sweden work with welding and cutting. However, more people use welding equipment daily as part of their profession, meaning that the number of users is considerably higher. The European figure for welders is 730,000 and 5.5 million welding-related jobs. Welding smoke consists of small particles that if inhaled are absorbed by the pulmonary alveolar and then transported out into the various organs of the body where they are stored. Welding smoke in general is considered as a carcinogen and causes bronchial irritation, bronchitis and in some cases even Metal Fume Fever. Chrome and manganese especially affect the central nervous system and hexavalent chrome Cr(VI) is a recognised carcinogen. Many countries have therefore introduced (or will introduce) restrictions to cut the limit for welding smoke exposure. The US* and Sweden** introduced stricter limits for the exposure of welding smoke containing hexavelent chrome and manganese in 2007. Nederman has held a well-established position in welding applications for 60 years and supplies systems and complete solutions for welding and mechanical industries (see page 10). *) OSHA. Occupational Safety & Health Administration, U.S. Department of Labor **) Swedish Work Environment Authority regulations: www.av.se

Expansion throughout the value chain creates growth PRE-STUDIES

PLANNING

SYSTEM DESIGN

INSTALLATION

COMMISSIONING

TRAINING

MAINTENANCE

Nederman’s growth strategy includes expansion throughout the value chain by providing customer-specific solutions. These are built on proprietary products, extensive experience in the field of working environments and global operations with a strong link to local markets.

One of the objectives of Nederman’s growth strategy is to expand throughout the value chain through an increased level of system and aftermarket sales, while expanding in new application areas. Completed corporate acquisitions in 2008 have added products, technologies and system expertise

that further boost Nederman’s ability to provide total system solutions. The strategy strengthens the company’s already market-leading position while new industries open up and existing customer collaboration is improved.

Profitable solutions for the machining industry The global machining industry has been an important industry for Nederman’s Extraction & Filter business area for many years. The working environment solutions provided have included systems for extracting and filtering welding smoke and equipment for keeping machinery and premises clean. Developments towards a greater degree of automation and manufacturing places new environmental, production and cost demands on managing waste products for example. Waste metal shavings and cutting fluids have traditionally been dealt with manually with a negative impact on the indoor and outdoor environments. New technology makes it possible to deal with waste material profitably, environmentally and automatically.

there are environmental benefits in the form of less transport of used and waste products.

Launch of Nederman Machining Following the acquisition of Arboga-Darenth in 2008, Nederman launched the new Nederman Machining application concept. The concept allows Nederman’s products and systems to be combined with Arboga-Darenth’s solutions for dealing with metal shavings, cutting fluids, leaked oil separation and oil mist separation. These solutions allow the amount of cutting fluids to be cut dramatically through cleaning and reuse in production. As the cost of dealing with metal shavings and used cutting fluids drops

Expansion towards vehicle workshop applications Corporate acquisitions during the year have also meant increased opportunities for Nederman’s Hose & Cable Reels business area to provide a wider range of total solutions on selected local markets. Expansion towards vehicle workshops took place in 2007 through the acquisition of the Belgian installation company LEDA. The acquisition means extra resources towards the aftermarket in Belgium, while LEDA provided Nederman with expertise and solutions for lubricant management. In the same way the acquisition of Assalub Automotive in March 2008 has given Nederman a broader base for providing Swedish vehicle workshops with rational, eco-friendly solutions for lubricant management. Aftermarket sales strengthen the value chain The trend towards an increased demand for preventative maintenance and regular service including service contracts continued in 2008. Aftermarket sales and Nederman’s direct sales make up an important part of the total value chain. Quick supplies through stocking critical spare parts, an extensive service organisation, customer-specific service contracts (Nederman Maintenance Contract) and flexible service packages are the cornerstones of increased aftermarket sales.

Aftermarket sales

• Expansion towards new application areas

• Expansion in the value chain through increased sales of systems and customer-specific solutions plus increased aftermarket sales

In 2008 aftermarket sales accounted to 17 per cent of the net sales compared to 3 per cent in 2000.

2000

2008

The unbroken chain

Construction/Development FI

M A N U FA C

Application solutions

QUALITY AND KNOW-HOW SINCE 1944 01

& ISO

Continuous product development strengthens the brand The company’s long-term product development strategy is an important part of the initiative towards further strengthening Nederman as a globally leading player in the working environment area. The market should associate Nederman, and the products launched, with innovation, consistent design, user-friendly function and high operational reliability. Development of new application areas Nederman runs technical development in many areas. The development initiatives are managed by Nederman’s own specialists in close dialogue with the company’s customers and sales companies who provide information about trends, needs and development requirements. The proximity to the market makes it possible to quickly develop products and solutions that are adapted to new industrial industries. One example is solutions for the composite material manufacturing industry. Other examples include products that cater for the food, chemical and pharmaceutical industries’ need for hygienic and explosive-proof working environments.

The new assembly and logistic centre in Shanghai, China, provides customers in Asia, Australia and New Zealand increased access to the company’s products and systems 6

Assembly

Manufacture and assembly Nederman’s in-house production focuses on the assembly of endproducts and systems, while component manufacturing takes place at a selected number of manufacturers in Western and Eastern Europe and Asia. This production split has reduced manufacturing costs, while Nederman’s focus on final assembly provides increased flexibility. The company’s modular platform concept simplifies assembly and makes it more efficient, while allowing cost-effective adaptation of applications to the individual customer. Manufacture at contracted subcontractors takes place with tools and dies owned by Nederman, which cuts the risk of product counterfeit. The same environmental demands that apply to the company’s own production units are placed on the subcontractors. Nederman’s Swedish production and assembly units are in Helsingborg, Arboga and Jung. Assembly units abroad are located in Mississauga in Canada, Sandefjord in Norway and Shanghai in China. The assembly and logistics facility in China, which opened in 2008, now provides customers in Asia, Australia and New Zealand with increased access to the company’s products and systems.

Logistics

Effective sales channels Nederman has indirect and direct sales. Nederman has always prided itself on having a good balance between these sales channels in order to reach customers with different purchasing patterns and needs. Indirect sales mainly include product sales and have traditionally been important to Nederman. Indirect sales take place via importers and distributors on markets where Nederman isn’t represented by its own sales organisation. In countries with own sales organisations this can be complemented with various industry-specific retailers. Ahlsell and Luna in Sweden, IDE, Nortwest and Trost in Germany and Arco and Buck Hickman in the UK are examples of some retail chains that Nederman cooperates with. Nederman’s aim is to increase the cooperation with leading local

Aftermarket

distributors through various local campaigns, market activities and via a comprehensive specialist catalogue. An important phase of this initiative is to build up and strengthen Nederman’s brand towards end customers. Direct sales take place directly with end customers through Nederman’s own sales organisation. The business mainly includes systems and solutions where Nederman’s experience makes it possible to meet customers’ needs for specific applications, such as the composite material machining industry, vehicle workshops etc. Nederman’s undertaking can cover everything from planning and project work to regular maintenance. Nederman continued to increase the share of direct sales in 2008 to end customers via own sales units in 25 countries – from 44 per cent of net sales in 2007 to 50 per cent in 2008.

Direct sales %

50%

44%

45 40

39%

35 30 25 20 15 10 5

2006

2007

2008

Direct sales increased from 39 per cent in 2006 to 50 per cent in 2008

Expansion on new and traditional markets Geographic division of net sales 2008

Nordic Nordenregion 29% 29%

United Kingdom 11% Storbritannien 11% Rest of Europa Europe 42% 42% Övriga North America9% 9% Nordamerika

Rest of världen the World Övriga 9%9%

Nederman’s growth strategy focuses on continued geographic expansion into growth markets. This expansion is taking place by establishing the Nederman brand on new markets and by strengthening the sales and distribution organisation on existing markets.

Subsidiaries in 25 countries Nederman is the market leader on an expanding global market. Demands for cleaner, safer working environments are leading to more countries introducing stricter regulations on working environments. Developments are also being driven forward by an increasing general interest and commitment to environmental improvements. Nederman is well equipped for this development and is continuing to expand mainly on growth markets. The rate of establishing the company in more regions has increased in recent years on a number of rapidly expanding markets. Examples of countries where Nederman established its own sales organisations between 2005 and 2007 include Rumania, Hungary, Slovakia, Russia, China and India. Nederman established its own sales company in Turkey in December 2008. Nederman currently has subsidiaries in 25 countries plus agents and distri butors in another 30 or so countries. Geographic expansion in Asia was strengthened in 2008 by establishing an assembly and logistics facility in China. Nederman’s investment in new markets has followed the industrial developments in different countries and regions. Comprehensive applications Industries on growth markets often go straight for comprehensive, modern working environment applications rather than gradually going through various technology generations. Nederman has a well-established organisation in countries investing in systems with the latest working environment technologies and has the expertise and capacity to meet the demand for adapted applications and system solutions.

Invoicing in the Nordic region rose by 44 per cent in 2008 compared to the same period in 2007, of which around 21 per cent was via acquisitions, 21 per cent via organic growth and around 2 per cent via positive currency effects. The Danish market performed well, partly as a result of the successes of Nederman’s application solutions for manufacturers of wind turbines. Invoicing in the UK rose in 2008 by 39 per cent in local currency, of which 29 per cent via acquisitions and 10 per cent via organic growth. Negative currency effects of 10 per cent negatively impacted the increase by 29 per cent when converted to Swedish currency. Invoicing in the rest of Europe rose in 2008 by 12 per cent in local currencies. Positive currency effects of 5 per cent gave an increase of 17 per cent in Swedish currency. Invoicing in North America fell in 2008 by 10 per cent in local currencies. A negative currency effect of 2 per cent was equivalent to a drop of 12 per cent for the year when converted to Swedish currency. Because of a drop in federal support for investing in fire stations, sales fell over the first nine months of the year. Sales did however develop positively in quarter 4 2008 compared to the same quarter last year (calculated in local currencies). Invoicing rose in other countries (outside North America and Europe) in 2008 by 27 per cent (in local currencies), of which 8 per cent via acquisitions and by 19 per cent organically.

Arboga

Sandefjord Helsingborg

Jung

Mississauga Shanghai

Assembly and logistics centres Own sales companies Agents and distributors

Strong global market position Nederman has a strong global market position. Global competition in working environment technology is strongly fragmented. Competitors are mainly local/regional and concentrate on low and high vacuum solutions or hose and cable reels. Nederman is able to provide the market with solutions in many areas.

• Nederman has a broad international distribution structure while most of its competitors mainly provide products and services to one country or one region, thus making it more difficult to be prioritised suppliers for major clients at an international level. • Nederman is one of a few players in the industry that can control the entire chain from product development to the aftermarket. The company has developed solutions in close collaboration with customers in various industries for many years and is now an expert in its field. This provides our customers with the confidence and security that’s being increasingly prioritised. • Nederman can meet customers’ varying needs for vacuum solutions. Nederman also offers a comprehensive range of hose and cable reels, systems for managing lubricants and equipment for cleaning and recycling cutting fluids and the processing of metal shavings.

Nederman’s most important success factors include a high degree of innovation and a prominent position as technology leader and as system supplier to take responsibility for the entire process from design to operable application solutions. Nederman is a traditionally well-established brand with a global distribution network.

Factors driving market developments • Increased general awareness about the relationship between working environment and adverse health effects • New and future EU countries’ ambition to adapt working environments to EU legislation • Companies moving production to low salary countries are increasingly demanding that their suppliers provide a good working environment • Rapid growth in expansive industrial industries, i.e. in Asia • Many countries introducing new laws and ordinances for working environments • Increased interest from companies to invest in production technologies and equipment that improve productivity with reduced energy consumption

Customer-oriented total solutions Nederman concentrates on three customer segments: Metal fabrication industry, Automotive industry and Other industry. The metal fabrication industry consists of the welding and machining application areas.

The Nederman organisation comprises two business areas: Extraction & Filter Systems and Hose & Cable Reels. The business areas’ task is to develop and provide the solutions the market needs in order to meet the demands of clean, safe working environments plus uninterrupted and safe production.

The automotive industry includes the automotive workshops, motor vehicle inspection and emergency stations. Other industry includes the composite material machining industry, chemicals, food and pharmaceutical industries offshore and laboratories.

Metal fabrication, welding

• Extraction/filtration of welding smoke • Reels for water, compressed air, electricity etc. • Extraction/filtration of particles when cutting, grinding etc. • Cleaning systems for premises

Machining

Vehicle workshops, vehicle inspection and emergency stations • Extraction and exhaust systems • Reels for water, compressed air, electricity etc. • Systems for distributing oil, grease and other fluids

• Management, transport/delivery of metal shavings • Filtration/cleaning of cutting fluids • Crushing and briquetting of metal shavings • Filtration/cleaning of oil mist • Machine cleaning and general cleaning • Extraction/filtration of welding smoke • Reels for water, compressed air, electricity etc. 10

• Cleaning systems for vehicles and premises • Extraction/filtration of welding smoke

Composite material industry

• Extraction/filtration of grinding dust • Extraction/filtration of fumes and solvents • Cleaning systems for premises • Reels for water, compressed air, electricity etc.

Extraction & Filter Systems business area

Nederman Machining provides the machining industry with complete solutions for managing metal shavings, cutting fluids, oil mist separation etc.

The Extraction & Filter Systems business area covers four product areas: High vacuum, Low vacuum, Exhaust systems and Machining, which was added after the acquisition of Arboga-Darenth in 2008. The business area provides solutions for the extraction and filtration of welding smoke, exhaust gases, oil mist and solutions for managing metal shavings, cutting fluid cleaning, leaked oil separation and cleaning of machinery and premises High vacuum product area High vacuum involves the extraction and filtration of large particles using high speeds and high negative pressure very close to, or directly at, source. Examples of applications include extraction of grinding or cutting dust, extraction of metal shavings and cleaning machinery and workplaces. Nederman’s high vacuum applications include everything from large stationary installations to portable units and extraction solutions integrated for use with a range of handheld tools.

Exhaust system product area A specific low vacuum application area is exhaust gas extraction and filtration for cars, buses and other types of vehicle. Customers include vehicle workshops, motor vehicle inspection centres, emergency services vehicles and the automotive manufacturing industry. A specific range has been developed for emergency services vehicle centres where special demands are set on absolutely clean environments because personnel spend so much time working and sleeping in these buildings.

Low vacuum product area Low vacuum involves extraction and filtration using low negative pressure and large air volumes close to the source. The products are used where the air is polluted by small, slow-moving particles. Common application areas include welding, oil mist filtering and managing ingredients in powder form during pharmaceutical and food manufacturing processes. Extraction is carried out with the help of extraction arms, vacuum hose attachments, casings and housings. Nederman has also developed a range of products for laboratories, schools and environments where there is a risk of explosion.

Machining product area Arboga-Darenth’s and Nederman’s combined range allows the machining industry to be provided with complete solutions for managing metal shavings, cutting fluid cleaning, leaked oil separation, oil mist separation and products and systems for cleaning machinery and premises.

Extraction & Filter Systems

2008

2007

Net sales, SEK m

1,073

866

2006 743

Growth

23.9%

16.5%

8.5%

EBIT, SEK m

124

EBIT margin

11.6%

11.4%

9.6%

Extraction & Filter Systems business area 2008 The business area’s net sales for the year rose by 23.9 per cent to SEK 1,073 million compared to the previous year and the profit for the year was SEK 124 million (SEK 99 million). The acquisition of Arboga-Darenth is important for continued expansion, meaning that the business area now covers a larger application area in the metal fabrication industry.

Hose & Cable Reels business area

Nederman’s acquisition of the Belgian company LEDA in 2007 and the acquisition of Assalub’s Automotive division in 2008 strengthen Nederman’s position for solutions for rational lubricant management.

The Hose & Cable Reels business area provides workshops and industrial companies with effective, ergonomic and safe access to different media through a broad range of hose and cable reels and solutions for managing lubricants and service fluids. Hose & Cable Reel products improve efficiency by providing easy access at the workplace to media such as oil, compressed air, gas and electricity. This reduces the risk of tripping over cables plus wear and tear and makes the job of cleaning much easier. The business area’s products are used for many types of applications, from lubricating vehicles to high-pressure water hoses in food preparation. Parts of the product range are made from stainless steel for specifically demanding industrial environments. Nederman has also developed a range of cable reels that are approved for use in environments with the risk of explosion.

Hose & Cable Reels Net sales, SEK m Growth

2008

2007

2006

199

175

135

13.7%

29.6%

9.8%

EBIT, SEK m

EBIT marginal

8.5%

8.6%

10.4%

Nederman’s acquisition of the Belgian company LEDA in 2007 was a step towards developing Nederman’s applications and solutions for vehicle workshops. Nederman acquired the Automotive division of Assalub in Åtvidaberg in March 2008, which is yet another step towards Nederman’s continued investment in systems for rational lubrication management. These systems have been introduced in Belgium, Sweden and Spain and will be introduced at a later date onto a number of new markets. Hose & Cable Reels business area 2008 The business area’s net sales for the year rose by 13.7 per cent to SEK 199 million compared to the previous year The profit for the year was SEK 17 million (SEK 15 million).

Care for the environment and employees

Division of employees by region

Nordic region 52% United Kingdom 12% Rest of Europe 23% North America 9% Rest of the World 4%

Division by gender 2008

Lifecycle perspective Nederman is certified according to the ISO 14001 standard for environmental management systems and applies a comprehensive lifecycle perspective, covering product development, manufacturing, distribution, customer use through to destruction. The objective of the environmental work, formulated in Nederman’s Environmental Policy, is to minimise the company’s external environmental impact. Meanwhile Nederman’s personnel are committed to the environmental work and are authorised and responsible for reporting non-conformance. New recruits to the company are informed of the current environmental scheme and policies. Training and information activities are carried out on an ongoing basis for the various personnel categories. Environmental requirements

Nederman places demands on suppliers and retailers to live up to the company’s environmental policy. The selection of new suppliers is preceded with careful analyses. Nederman checks continuously that the suppliers comply with the demands and regulations. When new functions and processes are introduced the impact on the environment is thoroughly analysed.

Kvinnor 21% Women 21% Män 79% Men

Part of the lifecycle perspective also includes cutting the environmental impact from incoming and outgoing transport. Environmentally certified companies are used as much as possible. The aim of 99 per cent for external transport was achieved in 2007.

The focus in 2008 has been to increase the number of certified companies responsible for incoming transport.

Environmental analyses Detailed environmental analyses are conducted for all product development so that, to the greatest extent, material is used that minimises the company’s negative environmental impact. The material in new developed products are, with a few exceptions, completely recyclable. The remaining parts goes to energy recovery. Common basic values The internal personnel initiatives cover many areas – from training activities to company healthcare. Training on issues of importance for our own working environment is held on an ongoing basis at the Nederman Training Centre in Helsingborg and at the local sales units around the world. Nederman is a multi-cultural company with around 760 employees in 25 countries. The acquisitions that took place in 2008 and the establishing of an assembly and logistics facility in China have meant that Nederman’s headcount has been boosted by around 100. The cultural and ethnic diversity is a success factor in local marketing on many geographic markets. Common basic values with guidelines have been compiled in the company’s “Code of Conduct”. This document is cemented in the organisation and has been drawn up according to the OECD guidelines for multinational companies.

Shares 2008 Dividend policy The Board and CEO proposes the Annual General Meeting a dividend of SEK 2.50 per share for finacial period 2008, amounting in total to SEK 29.3 m.

30–50 per cent of the year’s net profit after tax, taking into account the capital structure and acquisition plans.

Price performance Nederman Holding AB

Number of shares Omsatt antal aktier traded 1000−tal thousands per mounth

The AktienShare OMX Stockholm Small Small Cap PI Cap PI OMX Stockholm

100 100

2 500 2500

90 90 80 80

2 000 2000

70 70

1500 1 500

60 60 50 50

1000 1 000

40 40

30 30

500 500

MAJ MAY 2007 2007

JUL JUL

SEP SEP

NOV NOV

JAN JAN 2008 2008

MAR MAR

MAJ MAY

JUL JUL

SEP SEP

NOV NOV

Nederman’s shares have been listed on the Nasdaq OMX Stockholm AB since 16 May 2007 as “NMAN”. At year-end the share holders’ equity was SEK 410.4 m.

OMX Nordic EUR PI – Nederman Holding

Shareholders 31 December 2008

Number of shares

Investment AB Latour

3,100,000

Ernströmgruppen AB

IF Skadeförsäkringar

Lannebo Microcap

Aktia Sparbank

United Nation Staff Pension Fund

BP2/Henderson Pan European

Handelsbankens fonder

Robur småbolagsfonder Clearstream Banking

10 largest, total

Other shareholders

Total number of shares

Percentage foreign ownership

26.5%

1,172,000

10.0%

878,000

7.5%

1,160,400

Share %

400,000

339,605

328,950

310,681

9.9%

3.4%

2.9%

2.8%

2.7%

297,650

2.5%

8,276,990

70.7%

11,715,340

100.0%

289,704

3,438,350

2.5%

29.3%

21.6%

Financial information in brief* SEK m Operating income and result Net sales

Operating profit before depreciation (EBITDA) Operating profit (EBIT) Profit before tax Net profit

Cash flow from operations

2008

2007

2006

2005

2004

1,272.3

1,041.4

877.8

807.5

747.0

140.8

114.1

85.4

63.1

51.6

158.7

125.6

92.6

131.9

105.3

104.4

75.6

82.1

51.1

69.5

35.2

75.2

55.0

48.9

29.2

Operating profit (EBIT)

140.8

114.1

85.4

63.1

51.6

Change in working capital

-30.3

-30.4

-14.3

-0.7

-10.4

113.9

88.5

70.9

58.2

38.6

Items not affecting cash flow Capital expenditures (net) Operating cash flow

Assets, equity and liabilities Fixed assets

Current assets

Cash and cash equivalents

24.1

-20.7

21.5

-16.7

14.5

15.0

-14.7

-19.2

483.9

448.9

421.3

425.8

90.8

76.4

50.2

55.0

483.1

384.5

301.7

282.5

Equity

529.1

451.8

376.6

325.2

Non-interest bearing liabilities

293.8

235.9

182.5

175.4

Interest bearing liabilities Total assets

234.9

222.1

214.1

262.7

15.0

-17.6

412.8

265.8

30.2

265.0

271.0

172.8

1,057.8

909.8

773.2

763.3

708.8

EBITDA margin

12.5

12.7

11.9

10.2

9.3

Return on shareholders’ equity

18.9

18.2

15.7

16.6

11.6

1.8

1.6

1.5

Profitability EBIT margin

Return on operating capital Capital turnover rate, times Capital structure Net debt

Net debt/equity ratio, %

Net debt/EBITDA, muliple

EBITDA/net financial items, multiple

11.1

22.2

2.0

11.0

20.0

9.7

15.9

7.8

12.2

6.9

10.4

144.1

145.6

163.9

207.7

240.8

0.9

1.1

1.6

2.5

3.5

27.2

32.2

43.5

63.8

10.4

15.1

10.7

673.2

597.4

540.5

532.9

505.8

Number of shares per year

11,715,340

11,512,340

Aerage number of ordinary shares during the year, after dillution

11,715,340

11,786,420

11,715,340

11,711,010

Equity/assets ratio Operating capital

Operating cash flow/EBIT % Share data

Aerage number of ordinary shares during the year, before dillution Shareholders’ equity per share before dilution, SEK Shareholders’ equity per share after dilution, SEK Earnings per share before dilution, SEK Earnings per share after dilution, SEK Employees

Average number of employees

50.0

80.9

11,715,340

45.16

7.90

710

49.7

77.6

11,715,340

35.35

6.42

568

48.7

83.0

11,613,010

30.22

29.77

4.73

4.67

528

6.9

90.9

42.6

92.3

11,512,340

25.63

25.19

4.25

4.18

511

4.3

37.4

74.9

11,502,580

21.88

21.49

2.50

2.46

482

* Excl. IPO costs SEK 6.7 m 2007

Directors’ report 2008 The Board and the CEO of Nederman Holding AB (publ) Co. Reg. No. 556576-4205, hereby submit their annual report for the 2008 financial year

Business Nederman is a world-leading business that supplies products and systems for the extraction of dust, smoke, particles and automobile exhaust fumes, and equipment for industrial cleaning and recycling. Nederman’s products are based on vacuum technology that covers the entire range from high vacuum to 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 China from first quarter 2008. Nederman’s products and systems are marketed by our own sales organizations in 25 countries and via agents and distributors in around 30 countries. The Group had around 760 employees at yearend. 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 Air Clean (Shanghai Co.,Ltd) Co., Ltd, Shanghai, China. Production is also carried out at Nederman Norclean A/S in Sandefjord, Norway, Töredal Verkstad AB, Jung, Sweden and Arboga Darenth AB, Arboga, Sweden. 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 company’s shares are listed under the “NMAN” ticker at Nasdaq OMX Stockholm AB. As of 31 December 2008 there were around 4,000 shareholders. Acquisitions during the year In January 2008 Nederman acquired Töredal Verkstad AB, a Swedish company that has been a supplier of high vacuum products to Nederman since the 1980s. The purpose of the acquisition is to safeguard capacity and competence within the Group in connection with a generation shift in the acquired company. In March Nederman acquired the Arboga Darenth Group, which has three operating companies in Sweden, the UK and France. Arboga’s products complement the Nederman range in the area of working environment and recycling in the metal processing sector. The French activities are now fully integrated in Nederman’s French sales company, while the UK sales organisation has been integrated in Nederman Ltd in the UK. The UK factory has been closed down and production has been relocated to Arboga’s factory in Sweden. In April Nederman acquired part of Assalub in Åtvidaberg. The acquired organisation has been integrated in Nederman’s Swedish sales organisation. This was another stage of Nederman’s strategy to integrate forward along the car workshop market segment. In July Nederman acquired AB Norclean of Varberg. This company has been a distributor for Nederman Norclean in Sandefjord since the 1970s. The purpose of the acquisition is to co-ordinate sales 16

efforts on the Swedish market and utilise the acquired company’s specialist competence in certain applications in Nederman’s other sales organisations throughout the world. Further information about the acquisitions can be found in note 4. Sales and orders The Group performed well in 2008 and the market for the company’s products was good. Net sales climbed to SEK 1,272 million in 2008 compared to SEK 1,041 million in 2007, equivalent to a 22 per cent growth. Adjusted for currency effects, sales climbed 21 per cent. 11 per cent of the increase relates to acquisitions and 10 per cent is organic growth. Orders received, which grew significantly during the first three quarters of the year, weakened considerably during December, which meant a decline of around 5 per cent in local currency compared with the final quarter of 2007. The downturn was most notable in the UK and in the regions defined as “the rest of the world” (see note 3). A modest rise in orders received was noted in North America. Earnings The operating profit (EBIT) climbed to SEK 141 million in 2008 compared to SEK 114 million in 2007 (excluding IPO costs), equivalent to an operating margin of 11.1 per cent compared to 11.0 per cent in 2007. The Group’s net financial items amounted to SEK -15 million (-9 m), which corresponds to 10.5 per cent of average net debt. Profit before tax was SEK 126 million (99 m). The tax cost for the year was SEK 33 million (28 m). Paid tax during the year was SEK 33 million, corresponding to 25.9 per cent of earnings before tax. The Group’s profit after tax was SEK 93 million (70 m), corresponding to earnings per share of SEK 7.90 (6.01). Business areas The Extraction & Filter Systems business area’s net sales rose to SEK 1,073 million in 2008 compared to SEK 866 million in 2007, a rise of 24 per cent. 10 per cent of the increase was due to acquisitions. The operating profit rose to SEK 124 million compared to SEK 99 in 2007, equivalent to an operating margin of 11.6 per cent in 2008 compared to 11.4 per cent in 2007. The Hose & Cable Reels business area’s net sales increased to SEK 199 million in 2008 compared to SEK 175 million in 2007, a rise of 13 per cent. The operating profit was SEK 17 million compared to SEK 15 in 2007, equivalent to an operating margin of 8.5 per cent (8.6 per cent in 2007). Markets During the year the Nordic markets increased invoicing by 44 per cent compared with 2007, of which 21 per cent was due to acquisitions, 21 per cent to organic growth and around 2 per cent to positive currency effects. The Danish market developed well partly because of the success Nederman achieved with application solutions for producers of windpower plants. The UK market grew by 39 per cent in local currency during the year, of which 29 per cent was due to acquisitions and 10 per cent was organic growth. A 10 per cent negative currency effect reduced the increase in SEK to 29 per cent.

Other European markets increased by 12 per cent in local currency during the year. Positive currency effects of 5 per cent meant an increase of 17 per cent in SEK. North American markets declined by 12 per cent during the year, of which 10 per cent was in local currency and 2 per cent was negative currency effects. During the first nine months of the year sales declined due to a fall in federal support to fire station investment. In the final quarter sales in the US developed positively in local currency compared with the final quarter of the previous year. Other markets outside North America and Europe climbed by 27 per cent in local currency during the year, of which 8 per cent was due to acquisitions and 19 per cent was organic growth. For further information regarding the business areas and geographic markets, please see note 3. Product development The Group’s expenditures for development of the existing product range and new products amounted to SEK 22 million (18). Of this amount, SEK 7 million (6) was capitalised in the balance sheet. Capital expenditures and depreciation The Group’s capital expenditures in tangible assets for the year amounted to SEK 9 million (7). Depreciation of intangible assets for the year was SEK 4 million (6). The Group’s capital expenditures in tangible assets for the year amounted to SEK 14 million (15). Depreciation of tangible assets for the year was SEK 14 million (12). Cash flow The Group’s operating cash flow was SEK 114 million (89), corresponding to 80.9 per cent (77.6) of operating profit. Acquisitions amounted to SEK 42 million (31). Cash flow for the year before the dividend to parent company shareholders was SEK 40 million (25). After the dividend total cash flow for the year was SEK 11 million. Liquidity and financial position As of 31 December 2008 the Group’s liquid funds were SEK 91 million (76). Unutilised credit was SEK 68 million (36). The net debt was SEK 144 million (146). Shareholders’ equity was SEK 592 million (452), which meant an equity/assets ratio of 50.0 per cent (49.7) and a debt/equity ratio of 27.2 per cent (32.2). Employees The average number of employees during the year was 710 (568). Employees’ gender division and their salaries can be found in note 7. The parent company The activities of the parent company comprise Group functions. The parent company shall own and manage shares in the subsidiaries and manage financing for the Group. 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 2008 financial year be SEK 2.50 per share, which is the same as the previous year. Ownership 31 December 2008 Investment AB Latour owned 26.5 per cent of the company’s shares, making it the largest shareholder. Ernströmgruppen AB had 10.0 per cent. No other shareholders have a holding higher than 10 per cent.

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 is 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 and 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. Remuneration to the Board and senior executives The 2008 AGM adopted a policy regarding remuneration and employment terms for 2008. The following key principles are applied: a fixed salary is paid for full-time work. In addition a variable bonus may be earned that is linked to the company’s tied-up capital and earnings. This variable remuneration can be a maximum of 30-50 per cent 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 30 per cent 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 price-related incentive schemes involving Board members or senior executives. Nederman’s senior executive team comprises eight individuals (including the CEO). See note 22 for further information. Work of the Board After the Annual General Meting (AGM), the Board of Directors is the highest decision-making body in the company. The overall assignment of the Board is to take decisions regarding the business direction of the company, its resources, capital structure, organisation and the management of urgent matters. Other general assignments include continuous assessment of the company’s economic situation and approving business plans. The Board decides on general matters such as strategy, acquisitions, larger investments, company divestments, publication of the annual report and six mounth reports, appointment of the CEO, etc. The Board follows written procedures adopted once a year at the first Board meeting convened after the AGM. The procedures state how assignments shall be divided between Board members, how often the Board shall meet and to what extent deputies shall participate in the work of the Board and attend meetings. The procedures also state Board members’ commitments, decision-making powers and the division of responsibility between the Board and the CEO, etc. The Board meets according to an annual timetable. Extra meetings may be called to address unexpected events. In addition to regular

meetings, the chairman and CEO maintain a continuous dialogue concerning the management of the company. The division of activities between the Board and the CEO is regulated by the working procedures of the Board and in the instructions to the CEO. The CEO is responsible for implementation of the business plan and the daily activities of the company. This means that the CEO has the right to make decisions on matters that fall within the framework of the ongoing management of the company. The CEO shall also take action without prior approval from the Board, with consideration to the scope and type of company activity, which is of unusual urgency or of great significance and which cannot await a decision by the Board without seriously compromising the company’s business. The CEO’s instructions also regulate the CEO’s responsibility for reporting to the Board. In the most recent business year the Board made decisions concerning several matters of strategic importance. In 2008 there was a special focus on the continued expansion of the Group, including company acquisitions, the financial framework and objectives. In 2008 the Board held eight minuted meetings. To date, one minuted meeting has been held in 2009. Nederman’s Board comprises seven ordinary members elected by the 2008 AGM, including the CEO and two employee representatives chosen by the trade unions. The CFO is not a member of the Board but regular makes presentations at Board meetings. The chairman of the Board does not take part in the operational management of the company.

Committees As announced in a press release dated 30 October, shareholders representing more than 51 per cent of the shares have agreed that the nominations committee shall comprise Jan Svensson (chairman), Eric Hielte and Peter Rönström. Instructions for the nominations committee will be adopted by the AGM held on 28 April 2009. Matters concerning salary and benefits for the CEO and senior executives are handled and decided by the remunerations committee. This committee comprises Jan Svensson and Eric Hielte. The chairman is Jan Svensson. The company’s auditors report to the Board on their findings, and the Board therefore does not have an audit committee. The principles for remuneration to the company’s auditors are decided by the AGM. The leading shareholders meet once a year prior to the AGM to agree on proposals for the election of Board Members at the AGM. Outlook The economic situation is uncertain and a forecast is therefore hard to make. The company expects to see weaker market demand in 2009. The company has made plans for savings to meet a decline in sales. These plans will be implemented as market conditions prescribe.

Consolidated income statements SEK m Net sales

Costs of goods sold *)

Notes

2008

2. 3

1,272.3

1,041.4

617.8

502.5

Gross profit

Other operating income

Selling expenses *)

Administrative expenses

Operating profit Financial income

Financial expenses

Net financial income/expenses Profit before taxes Taxes

Net profit

3, 7, 8, 9,

22, 27

Attributable to:

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

Earnings per share

before dilution (SEK)

-654.5

7.1

after dilution (SEK)

*) Expenses due to service and installation have been re-classified from selling expenses to costs of goods sold. Historical data has been changed for comparison

2007

-538.9

2.1

2006 877.8

-454.0

423.8 7.6

-365.2

-302.2

-268.2

-17.2

-15.1

-14.4

-93.1

Research and development expenses Other operating expenses

1 January - 31 December

-8.6

140.8 2.1

-17.3

-15.2 125.6

-66.8 -13.1

107.4 2.6

-11.3

-8.7

98.7

-59.0 -4.4

85.4 0.8

-10.5

-9.7

75.7

-33.0

-28.3

-20.7

92.6

70.4

55.0

92.6

70.4

55.0

7.90

6.01

4.73

19.9

13.1

7.5

92.6

7.90

70.4

6.01

55.0

4.66

Consolidated balance sheets

SEK m

Notes

Assets

4, 28

Intangible fixed assets Tangible fixed assets

Long-term receivables Deferred tax assets Total fixed assets Inventories

Current tax receivables Accounts receivable

370.9

0.2

0.5

Total assets

Share capital

2006

394.5

Cash and cash equivalents

Equity

2007

425.4

Total current assets

December 31

Prepaid expenses and accrued income Other receivables

2008

36.8 21.5

12.9

37.5 0.7

12.2

483.9

448.9

421.3

170.9

121.6

89.8

270.0

234.8

187.8

16.9

11.3

14.0

460.9

351.9

4.5

20.8

90.8

573.9

1,057.8 18

41.0

1.2

3.6

13.2

76.4

909.8

1.2

3.0 7.1

50.2

773.2

1.2

Other capital contribution

345.9

Profit brought forward, including net result Shareholdersâ&#x20AC;&#x2122; equity attributable to the parent companyâ&#x20AC;&#x2122;s shareholders

162.7

99.4

29.0

529.1

451.8

376.6

529.1

451.8

376.6

20, 26

176.2

158.1

146.3

31.7

30.2

28.3

Reserves

19.3

Minority interests Total equity Liabilities

Long-term interest bearing liabilities Other long-term liabilities

Provision for pensions Other provisons

Deferred tax liabilities

Total long-term liabilities Current interest bearing liabilities Accounts payable Tax liabilities Other liabilities Accrued expenses and prepaid income Provisions

Total current liabilities

4, 28

24 23

20, 26 12 24 25 23

Total liabilities

Total equity and liabilities

For information on the Groupâ&#x20AC;&#x2122;s pledged assets and contingent liabilities, see note 28.

0.1 0.3

12.7

5.3

0.6

13.1

0.5

13.3

221.0

202.0

187.9

27.0 120.8 29.1 73.3 53.5

33.7 104.8 19.7 49.0 44.1

39.5 84.2 8.9 27.8 46.1

307.7

256.0

208.7

1,057.8

909.8

773.2

4.0

528.7

4.7

458.0

2.2

396.6

Consolidated statements of changes in equity Equity attributable to the parent companyâ&#x20AC;&#x2122;s shareholders SEK m

Opening balance January 1, 2006

Share capital

Other capital contributed

1.2

340.1

Change in translation reserve

Translation reserve 9.9

-26.0

-9.4

Net profit for the year

55.0

Conversion of loans

0.0

5.8

Closing balance December 31, 2006

1.2

345.9

0.5

Closing balance December 31, 2007

1.2

345.9

0.5

Change in translation reserve

Closing balance December 31, 2007

1.2

345.9

Opening balance January 1, 2008

1.2

345.9

Change in translation reserve

Total equity

325.2

-9.4

55.0

55.0 5.8

376.6

29.0

376.6

4.8

70.4

5.3

99.4

451.8

5.3

99.4

451.8

14.0

Net profit for the year Dividend 345.9

Minority

29.0

14.0

1.2

Total

5.8

4.8

Net profit for the year

Closing balance December 31, 2008

Profit/lossbrought forward

19.3

92.6

-29.3

162.7

529.1

Consolidated cash flow statements SEK m Operating activities Operating profit Adjustment for depreciation of fixed assets: Other adjustments Interest received and other financial items Interest paid and other financial items Income tax paid

Notes 32

Cash flow from operating activities before changes in working capital Cash flow from changes in working capital Increase (–)/Decrease(+) inventories Increase (–)/Decrease(+) of operating receivables Increase (+)/Decrease (–) of operating liabilities Cash flow from operating activities Investing activities Capital expenditure for tangible fixed assets Sale of tangible fixed assets Capital expenditure for capitalized research and development costs Capital expenditure for other intangible fixed assets Acquired units, net of cash Sale of financial assets Cash flow from investing activities Financial activities New loans Repayment of loans/Change in interest-bearing liabilities Dividend paid to parent company shareholders Cash flow from financing activities Cash flow for the year Cash and cash equivalents at the beginning of the year Translation differences Cash and cash equivalents at the end of the year

1 January - 31 December 2008 2007

2006

140.8 16.5 7.6 2.1 -17.6 -32.5 116.9

107.4 17.8 3.7 3.5 -12.1 -21.4 98.9

85.4 19.0 -4.6 0.8 -10.1 -15.2 75.3

-23.9 -15.2 8.8 86.6

-27.3 -32.8 29.7 68.5

-3.3 -24.9 14.0 61.1

-12.5 0.7 -3.8 -5.1 -42.1

-10.1 0.7 -4.1 -3.2 -31.1 0.0 -47.8

-8.2 0.3 -5.4 -2.0 -4.7 0.6 -19.4

66.2 -49.8 -29.3 -12.9

150.0 -146.2

8.6 -53.6

3.8

-45.0

10.9 76.4 3.5 90.8

24.5 50.2 1.7 76.4

-3.3 55.0 -1.5 50.2

-62.8

Income statements for the parent company SEK m Other operating income

Administrative expenses

Other operating expenses Operating result

Result from investments in subsidiaries

Interest income and similar financial items

Interest expenses and similar financial items

Notes 5 6

7, 8, 22 29

1 January - 31 December

2008 9.8

8.2

-22.9

-20.3

-21.1

-20.7

-12.2

5.9

18.9

-8.0

-7.4

29.4

12.0

-11.5

Appropriations

-12.0

Tax

12.2

Net result

8.9

2006

-30.9

Result after financial items

Result before tax

2007

8.8

-3.2

9.0

-6.7

9.0

-13.8

-5.5

-19.3

8.9

-10.4

-0.1

9.0

8.3 2.2

10.5

4.7

15.2

Cash flow statements for the parent company SEK m

Notes

Operating activities Operating result

Adjustments for items not included in the cash flow

Dividends received

Interest received and other financial items

Interest paid and other financial items

Income tax paid Cash flow from operating activities before changes in working capital

Cash flow from changes in working capital

1 January – 31 December

2008

2007

2006

-21.1

-20.7

-12.2

29.4

5.9

19.0

-11.2

-7.6

-7.4

-3.5

-19.9

0.0

6.4

12.4

-25.4

51.2

0.0

-0.1

0.5

0.1

-1.2

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

-1.4

Cash flow from operating activities

-8.3

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

Investing activities

Capital expenditure for tangible fixed assets

Capital expenditure for intangible fixed assets

Acquisition of subsidiaries/reduction of share capital

Cash flow from investing activities Financing activities New loans

Repayment of loans / Changes in interest-bearing liabilities

-3.4

0.0

0.8

1.8

-0.1

-11.9

-1.1

-0.4

-29.3

3.9

-28.2

55.0

4.3

150.0

0.8

0.0

-0.2

38.8

-0.2 -0.1

-0.4

0.0

25.2

-123.3

-50.8

50.9

26.7

-50.8

Cash flow for the year

13.3

5.2

0.0

Cash and cash equivalents at the end of the year

18.5

5.2

0.0

Dividend paid to shareholders

Cash flow from financing activities

Cash and cash equivalents at the beginning of the year

-29.3

5.2

0.0

Balance sheets for the parent company SEK m Assets

Fixed assets

Notes 13

Intangible fixed assets

Shares in subsidiaries

Receivables from subsidiaries

Other receivables

Long-term receivables group companies

Total fixed assets

Current tax receivables

Prepaid expenses and accrued income

Cash and cash equivalents

2008

31 December

2007

2.1

1.5

2006 1.8

0.0

0.1

0.3

550.3

518.8

523.0

0.2

552.6

520.4

525.1

73.3

60.0

19.7

0.4

0.0

0.3

Total current assets

Total assets

0.0

0.1

2.3

2.7

2.0

94.5

67.9

22.1

18.5

647.1

5.2

588.3

0.0

547.2

ShareholdersÂ´ equity Restricted equity Share capital

1.2

Statutory reserve

292.5

Non-restricted equity

Share premium reserve

5.9

1.2

292.5 5.9

5.9

Profit brought forward

101.8

Total shareholdersâ&#x20AC;&#x2122; equity

410.4

373.5

348.6

18.5

6.5

1.0

Net result

Untaxed reserves Liabilities

9.0

Long-term liabilities to credit insitutions

21, 26

Current liabilities to credit institutions

20, 26

Total long-term liabilities Accounts payable

Liabilities to group companies

175.0

30.0

14.0

14.2

21.0

4.9

1.0

Accrued expenses and prepaid income

6.4

Total current liabilities

43.2

647.1

Pledged assets and contingent liabilities, parent company SEK m

Notes

Pledged assets

Contingent liabilities

140.0

30.0

4.3

13.6

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

150.0

15.2

140.0

12 24

-10.4

33.8

150.0

Current tax liabilities Other liabilities

84.3

1.2

292.5

2008

2.7

4.7

5.7

58.3

588.3

1.4

0.4

4.8

57.6

547.2

December 31 2007

2006 229.7

45.1

60.8

45.6

Statements of changes in shareholdersÂ´ equity SEK m

Opening balance January 1, 2006

Group contributions received Tax attributable to items reported directly against equity Net result for the year Conversion of loans

Share capital

Statutory reserve

1.2

292.5

0.0

Share premium reserve 0.0

Profit brought forwards 20.0

Total shareholdersâ&#x20AC;&#x2122; equity 313.7

-5.4 15.2

19.2

5.9

Closing balance December 31, 2006

1.2

292.5

5.9

49.0

348.6

Opening balance January 1, 2007

1.2

292.5

5.9

49.0

348.6

-13.7 -10.4

Group contributions received Tax attributable to items reported directly against equity Net result for the year

49.0

Closing balance December 31, 2007

1.2

292.5

5.9

73.9

373.5

Opening balance January 1, 2008

1.2

292.5

5.9

73.9

373.5

-22.2 -29.3

Group contributions received Tax attributable to items reported directly against equity Dividend Net result for the year

Closing balance December 31, 2008

1.2

292.5

5.9

79.4

9.0

110.8

410.4

Notes Note 1 Accounting principles

Nederman Holding AB (publ) has its registered office  in Helsingborg, Sweden.

Compliance with laws and accounting policies 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, RFR 1.1 Supplementary Accounting Principles for Groups, issued by the Swedish Counsel for Financial Reporting, has been applied. The parent company applies the same accounting principles as the Group except in the instances stated below under the section the Parent company’s accounting principles. The differences between the parent company’s and the consolidated policies are due to restrictions 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. The Board of Directors approved the consolidated financial statements for publication on February 16, 2009 The income statement and balance sheet, and the consolidated income statement and consolidated balance sheet are subject to adoption at the Annual General Meeting on April 28, 2009. Valuation principles applied with the preparation of the parent company’s and the consolidated financial statements Assets and liabilities are prepared on cost basis, apart from derivative instruments, which are stated at fair value. Functional currency and presentation currency Items included in the financial statements of the various entities of the Group are valued in the currency used in the financial environment of the companies (functional currency). The consolidated accounts use SEK, which is the parent company’s functional currency and presentation currency. All amounts, unless otherwise stated, are stated in SEK m. Critical accounting estimates and judgements The company management and board of directors make assessments and estimations, and assumptions that affect the recorded 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 earnings and financial position are described in Notee 34. New IFRS and interpretations for 2008, not applicable for the Nederman Group IAS 39 and IFRS 7, amendment – Reclassification of Financial Assets: IFRIC 11, IFRS 2 – Group and Treasury Share Transactions IFRIC 12 – Service Concession Arrangements IFRIC 14, IAS 19 The limit on a defined benefit asset, minimum funding requirements and their interaction

Reporting by segments The Group’s business is managed and recorded primarily by business area and then by geographical segment. The segments are consolidated in accordance with the same principles as the Group. Intra-Group 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 two business areas: Extraction and Filter Systems (EFS) and Hose and Cable Reels (HCR). The business areas supply products that between them face various risks and opportunities. Secondary segments Products and services are provided to geographical markets that face risks and opportunities that vary between the different markets. The secondary segments are divided into the following geographical 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 current liabilities consist essentially 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 are measured at cost unless otherwise stated. Consolidation principles

The Group The consolidated accounts include the parent company and all subsidiaries. Subsidiaries Subsidiaries are companies in which Nederman Holding AB has a direct or indirect right to determine the company’s financial and operative strategies. Subsidiaries are consolidated according to the purchase method. The acquired identifiable assets, liabilities and contingent liabilities, irrespective of the extent of any minority interest are valued at fair value at the date of acquisition. The difference between the acquisition value and the fair value of the Group’s acquired identifiable net assets is recorded as goodwill. If the difference is negative the amount is recognized directly in the income statement. The acquisition value is made up of the fair value of assets paid as remuneration and arisen or assumed liabilities on the transfer date plus expenses directly attributable to the acquisition. The subsidiaries’ financial reports are included in the consolidated accounts from the date when the control was transferred to the group. The subsidiaries divested during the financial year are recognized in the consolidated accounts up to and including the date when control ceased. Transactions eliminated during consolidation Intra-Group receivables and liabilities, income or expenses and unrealized profits or losses arising from intra-Group transactions, 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 gains and losses resulting from settlement of such transactions and from the translation of monetary assets and liabilities are recognized in the income statement. Gains and losses on operating receivables and liabilities are recorded within operating profit. Gains and losses on borrowing and financial investments are recorded within financial items. Non-monetary assets and liabilities are measured at historical cost at the exchange rate prevailing on the transaction date. Translation of foreign group companies Assets and liabilities in foreign group companies (of which none have high inflation currencies), including goodwill and fair value adjustments arising at the acquisition of the foreign operations are translated from the functional currencies of the foreign group companies to the Group’s presentation currency, at the prevailing exchange rate on the balance sheet date. Income and expenses are translated to SEK at an average exchange rate for the applicable year. Assets, shareholders’ equity and liabilities are translated to the exchange day rate. Translation differences arising from translation are reported directly against shareholders’ equity as a translation reserve. The company has elected to state the accumulated translation differences attributable to foreign group companies to zero with the transition to IFRS. When a foreign group company is sold the attributable accumulated translation differences, previously recognized directly against shareholders’ equity are realized in the consolidated income statement during the same period as the gain or loss of the divestment. Revenue recognition Revenue from sale of goods and services is recognized in the income statement when significant risks and benefits associated with the ownership of the goods have been transferred to the buyer. Revenue from installations is recognized in the income statement using the percentage-of-completion method. The degree of completion is established by an assessment of the work performed on the basis of inspections carried out. Revenue is not reported if it is not probable that the company will obtain the financial benefits and a reliable calculation can be made. Anticipated losses are expensed immediately. If there is any significant doubt concerning payment, related expenses or risk of returns, no recognition of the revenue 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 recognized in the income statement on a straight-line basis over the leasing period. Benefits received in connection with signing of a lease are recorded as part of the total leasing costs in the income statement straight-line over the term of the leasing agreement. Variable charges are expensed in the period in which they arise. Financial leasing agreements Financial leases are initially recorded at an amount equal to minimum lease payments during the lease term. Lease payments are split into 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 charged with an amount corresponding to a fixed interest rate for the debt during each period in which the liability is reported. Variable charges are treated as an expense in the period in which they arise. Financial leases are depreciated consistent with the useful lives for owned assets. 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 and gain/loss 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 in the present value of all estimated future receipts and payments during the expected fixed interest term 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 initial recognized value of the receivable or liability, and the calculated future payments received or paid 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 recorded when the right to receive the payment has been established. The Group and the parent company do not capitalize interest paid in the assets’ accumulated cost. Financial instruments Financial instruments recorded in the balance sheet assets include cash and cash equivalents, receivables from customers, shares, loans and derivative instruments. Included among liabilities and equity, are accounts payable to suppliers, borrowings, and derivative instruments. A financial asset, or financial liability, is initially recorded in the balance sheet when the company becomes a party to the contractual conditions of the instrument. Account receivables are included in the balance sheet when the invoice has been distributed. 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 are recognized when invoice has been received. A financial asset, or part of a financial asset, or financial liability, or part of financial liability, is derecognized from the balance sheet when the risk and the right to receive cash flows from the instrument have ceased or been transferred to another counterparty. A financial liability is derecognized from the balance sheet when the company has met its commitments or the liability has been otherwise extinguished. A financial asset and a financial liability are offset against each other and recorded with a net value in the balance sheet only when there exists a legal right to offset the amount and the intention is to settle the items with a net amount or to sell the asset and to pay off the debt at the same time. Investments and sale of financial assets are recorded on the transaction date, which is the day when the company undertakes to purchase or sell the asset. Classification and valuation The classification of a financial asset is determined on the initial recording of the instrument. The classification depends on the purpose for which the instrument was acquired and is then reassessed on each subsequent reporting. Financial instruments which are not derivatives are initially measured at cost corresponding to the instrument’s fair value with the addition of transaction costs apart from those financial instruments which are categorized as financial assets at fair value through profit or loss. Such instruments are measured at fair value exclusive transaction costs. A financial instrument is classified due to the purpose for which the instrument was acquired. The classification is determined on the initial recording of the instrument.

Calculation of fair value The fair value of listed financial instruments is based on the appropriate market quotation on the balance sheet date. For unlisted financial instruments or if the market is inactive, the value is determined by applying 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 calculating the fair values for long-term loans. Fair values are considered to be the same as carrying amount for other financial instruments with no specific market value. Financial assets at fair value through profit or loss Assets in this category are measured at fair value both initially and subsequent to the date of acquisition. Gains and losses attributable to changes in fair value are recognized in the income statement. This category consists of financial assets, which are held for trade and other financial assets designated into 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. Derivatives are used to cover the risk for exchange-rate fluctuations and changes in interest rates. Derivatives with positive values (unrealized gains) are recorded as other long-term or current receivables. 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 measured at amortized cost. The 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. Any deduction affects the operating profit. 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 maturity 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 at fair value through profit or loss 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 recognized in the income statement. Other financial liabilities Financial liabilities not held for trading, such as accounts payable and other liabilities are recognized initially at fair value, net after transaction costs, and subsequently at amortized cost 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. Accounts payable have short expected maturities and are assessed without discount at a nominal amount. Receivables and liabilities in foreign currencies For hedging of assets or liabilities against exchange rate risks, foreign currency forward contracts are used. 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 effect as with hedge accounting. Changes in value concerning businessrelated receivables and liabilities are reported net in the operating result, while changes in value concerning financial receivables and liabilities are reported net in the financial items.

Intangible assets Goodwill Goodwill is the amount by which the cost of an acquisition exceeds the fair value of the acquired identifiable assets, assumed debts and contingent liabilities. Goodwill due to acquisitions occurred prior to 1 January 2004, has not been retroactively accounted for in accordance with IFRS, but the value at this date constitutes the Group’s acquisition value, after testing of impairment need, see note 13. No indication of any need for write-downs existed at this point in time. Goodwill is valued at cost less any accumulated write-downs. Goodwill is allocated to its cash-generating units and is no longer written off but is tested annually with regard to any impairment losses. Impairment losses on goodwill are not reversed. Gains or losses when selling a unit includes the remaining value of the goodwill. At acquisitions 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 Expenditures for development, 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 direct 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 is reported at cost less accumulated amortization and any write-downs. Other intangible assets Other intangible assets are reported at cost less accumulated amortization and write-downs. Accrued expenses for internally generated goodwill and internally generated brands are expenses as they arise. Subsequent expenditures Subsequent expenditures 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 expenditures are expensed as they arise. Amortization Amortization is reported in the income statement linearly over the intangible assets’ expected useful life, if the useful life is not indefinite. Goodwill and intangible assets with an indefinite useful life are reviewed for the need of impairment annually or as soon as indications appear that the asset 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 measured at cost less accumulated depreciation and any write-downs. Cost includes the purchase price and costs directly attributable to the asset in order to move it into place and in the proper condition to be used in accordance with the purpose of the acquisition. Loan costs are not included. The cost 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. A gain 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 gain 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 expensed linearly over the leasing period. Subsequent expenditures Subsequent expenditures are added to the carrying amount only if it is likely that the company will receive future financial benefits associated with the asset and the cost of the assets can be calculated reliably. All other subsequent expenditures are expensed in the period they arise. Crucial for the assessment when a subsequent expenditure is added to the carrying amount is if it concerns exchange of components, or parts thereof, whereupon such expenditures are capitalized. Even in cases when new components are constructed the expenditure is added to the carrying amount. Any remaining carrying amount of exchanged components, or parts of components, is expensed. Repairs are expensed 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: – equipment, tools and fixtures: – land:

25 years 3–10 years Not depreciated

The deprecation methods used and the residual value of assets and their useful life are reviewed annually.

Write-downs and reversal of write-downs Write-downs are charged to the income statement. The write-down of tangible and intangible fixed assets affect the operating result, while the write-down of financial assets affects the net financial items. Previously recorded write-downs are reversed if reasons for the former write-down no longer exist. The increased carrying amount attributable to a reversal of a write-down (except for goodwill) shall not exceed the carrying amount that would have determined if no write-down had been recorded. Test of need for a write-down of tangible and  intangible assets, and for shares in subsidiaries The test of need for a write-down exists if any event occurs or if circumstances change indicating that the recorded value might have is above recoverable value. The test is carried out at the cashgenerating unit that the asset belongs to. For goodwill, other intangible assets with an indefinite useful life, and intangible assets not yet ready for use, the recoverable value is calculated annually. A write-down is recorded when an asset’s or cash-generating unit’s carrying amount exceeds the recoverable value. The recoverable value is the highest of the fair value less sales costs and estimated value in use. When calculating the estimated value in use, the future cash flows are discounted at a rate considering risk-free interest rate and market risk premium associated with the specific asset. A writedown of assets belonging to a cash-generating unit is primarily allocated to goodwill. Then other assets are written down on a proportional basis. Test of the need for a write-down of financial assets A write-down of a financial asset should 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 cost is estimated as the difference between its carrying amount and net present value of the estimated future cash flows, discounted by the original effective interest rate. Previous write-downs shall be reversed, if reasons for the former write-down no more exist. Inventories Inventories are measured at the lower of cost and net realizable value. The cost is calculated by applying the First In First Out method (FIFO), including expenses arising with the purchase of the inventory and the transportation to the current place and condition. Manufactured goods and work in progress, includes the purchase price and a reasonable proportion of indirect costs based on normal capacity. The net realizable value is calculated as the estimated selling price less applicable variable sales expenses. Deductions are made in the consolidated financial statements for internal profits generated through intra-group sales. 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 net profit in the Group attributable 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 is adjusted by the interest costs on convertible bonds (after tax). 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. 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 based on services received or other contractual conditions fulfilled. Defined-contribution pension plans Defined-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 definedcontribution pension plans are reported as an expense in the income 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 and are calculated using a discount rate corresponding to the interest on first-class corporate bonds or government bonds with a remaining maturity that corresponds to the actual current obligations. For funded plans, the fair value of the plan assets reduces the future pension obligation. The actuarial calculation is carried out by a registered actuary using the Projected Unit Credit Method. The method allocates the cost over the employee’s length of services. Changes to the actuarial estimates and unexpected changes of the fair value of planned assets cause actuarial gains and losses. If the accumulated actuarial gains and losses exceed 10 percent of the pension obligations or the fair value of the plan assets, the exceeding amount is recognized over the expected average remaining working life of the employees, participating in the plan. Plan assets are valued at fair value. Net assets are reported as long-term financial assets. When there is 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 the difference. The provision or debt is not calculated at present value.

Provisions A provision is recognized 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 recorded 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 of the outcome. Provisions for restructuring and redundancy payments A provision for restructuring is recorded when the Group has decided on a detailed and formal restructuring plan, and the plan has been established and become public. 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. In cases there are requirements to work out a period of notice, the costs are charged over the period of notice. No provisions are made for future operating costs. Taxes Income taxes consist of current taxes and deferred taxes. Income taxes are reported in the income statement except when the underlying transaction is reported directly against equity whereupon related tax effect is reported in equity. Current taxes are taxes, which will be paid or are to be received for the current year, with the application of the tax rates which have been determined or announced 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 liability method based on the temporary difference between the carrying amounts and the tax-related values on assets and liabilities. Temporary differences arise mainly through the depreciation of fixed assets, pension provisions and other measures. Temporary differences arise at business acquisitions on the differences between the consolidated value of assets and liabilities and their tax bases. Temporary differences that arise on initial recognition of an asset or liability and are not attributable to business acquisitions and have not affected accounted or taxable earnings, do not entail a deferred tax asset or liability in the balance sheet. Deferred tax is valued at the nominal amount with the application of the tax rates and tax regulations decided upon or announced on the balance sheet date. Deferred tax assets concerning tax-deductible temporary differences and retained losses are recorded only to the extent it is probable that tax surpluses will be available in the future, against which temporary differences can be utilized. Deferred tax assets are derecognized from the balance sheet when they probably cannot be utilized. Temporary differences are not recognized in investments in subsidiaries, since the Group can control the date when these temporary differences are reversed and it is unlikely that they will be reversed in the foreseeable future. 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 recorded when there is commitments arising from events that have occurred and the liability is not reported in the balance sheet, due to the unlikelihood that an outflow of resources will be required.

Taxes Untaxed reserves recorded in the parent company include deferred tax liabilities. In the consolidated financial statements untaxed reserves are allocated between deferred tax liability and shareholders’ equity.

The parent company’s accounting policies The parent company has prepared its financial statements according to the Swedish Annual Accounts Act (Årsredovisningslagen 1995:1554) and RFR 2.1. Financial Reporting for Legal Entities. This means 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.

Group contributions and shareholder’s contributions for legal entities Shareholders’ contributions are added to the value of shares in subsidiaries in the balance sheet and are then tested for impairment. 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.

Subsidiaries Shares in subsidiaries are reported in the parent company according to the purchase 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 recorded value of the shares. Income The parent company’s income consists of intra-Group management charges. The income statement reports this income as other operating income

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

Business areas Consolidated 2006

Consolidated SEK m Net sales Net sales of goods

2008 1,272.3

1,272.3

2007

2006

1,041.4

877.8

1,041.4

Net sales of goods include payment for installation work

877.8

SEK m

Net sales

Operating result by business area

Financial items

Segment reporting is prepared for the Group’s business areas and geographic regions. The Group’s internal reporting systems are built up on the basis of follow-up of the result on the Group’s products and services. The primary segments consist of the business areas. Prices between the Group’s different segments are 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 carried out. The Group develops, produces and sells products and systems for an improves personal work environment within different types of manufacturing industries. Business areas 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 areas which work with these areas have been organized in a business area 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 business area, called Hose and Cable Reels (HCR). The Group’s internal reporting systems are designed to make it possible to follow-up the business areas´ sales, gross profits and separable costs. Operating separable costs are allocated to the business areas 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 business areas do not occur. In the segments’ results, assets and liabilities are included directly related items and items which can be allocated between the segments in a reasonable and reliable way. Items not allocated consist of financial income and expenses, tax expenses. Also general administrative expenses have been allocated, which differ from last year. For comparison previous year´s general administrative expenses have been allocated. The IPO expenses have not been allocated. Assets and liabilities which have not been allocated between the segments are tax receivables and tax liabilities (current and deferred), financial investments and financial liabilities, including pension obligations. The segments’ capital expenditures in tangible and intangible fixed assets, include all capital expenditures except expendable equipment and equipment of minor value. Geographic regions The Group’s segments are divided into the following five geographic regions: The Nordic region, UK, Other Europe, North America and the Rest of world. The geographic regions constitute the Group’s secondary segments. The information which is presented concerning the income for each segment concerns the geographic regions, where the customers are located. The information concerning the segments’ assets and the capital expenditures in tangible and intangible fixed assets is based on geographic regions, where the assets are located.

Not allocated

14.0

-9.8

-20.7 55.0

Operating assets

598.6

104.4

Total assets

598.6

104.4

Operating liabilities

130.1

23.7

Total liabilities

130.1

23.7

15.1

2.7

0.4

Not allocated

Other liabilities

Capital expenditures Depreciation

2007

15.4

2.8

SEK m

EFS

HCR

Net sales

866.0

175.4

98.9

15.2

Operating result by business area

IPO expenses Operating result Financial items

Total

877.8 85.4

Net result for the year

98.9

3.6

706.6

70.2

773.2

5.7

159.5

242.8

396.6

66.6

237.1

0.8

66.6

237.1

18.2 19.0

Total 1,041.4

15.2

114.1

-6.7 -6.7

Tax expenses

-6.7 107.4 -8.7

-28.3

Net result for the year

70.4

Operating assets

674.0

138.0

Total assets

674.0

138.0

Operating liabilities

160.9

33.0

Total liabilities

160.9

32.9

18.5

3.8

0.4

22.7

EFS

HCR

Not allocated

Total

Other assets

Other liabilities

Capital expenditures Depreciation

2008

SEK m Net sales

Operating result by business area

Financial items

14.1

1,073.4 124.0

2.9

3.9

815.8

97.9

909.8

8.5

202.3

264.2

458.0

94.0

255.7

0.8

198.9

-15.2 92.6

786.2

149.8

Total assets

786.2

149.8

Operating liabilities

198.6

37.8

Total assets

198.6

37.8

Capital expenditures

17.8

-33.0

Operating assets

Other liabilities

255.7

140.8

Net result for the year Other assets

94.0

1,272.3

16.8

Tax expenses

Depreciation

71.4

HCR

135.2

Tax expenses

Other assets

Note 3 Segment reporting

EFS

742.6

18.2

14.6

3.5

2.8

4.8

117.0

940.8 117.0

121.7 1,057.8 14.6

251.0

292.3

528.7

277.7 1.0

0.5

277.7 22.7

17.9

cont. note 3 Note 4 Acquisition of business enterprises

Geographic regions Consolidated

SEK m 2006 External sales Operating assets Capital expenditures 2007 External sales Operating assets Capital expenditures 2008 External sales Operating assets Capital expenditures

Nordic region

Rest Not Other North- of the allocaUK Europe America World ted

202.6 106.0

371.5

145.3

52.4

225.4 31.8

105.1

54.2

5.9

3.4

0.4

0.6

13.3

0.5

Acquisitions 2006 Total

877.8 284.2

706.6

On 1 September 2006, an acquisition of assets and liabilities was made in Australia in the amount of AUD 0.9 m, which was paid for in cash. The information on the net result 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:

18.2

Reported Fair value value before reported by acquisition Group

SEK m 254.0 109.5

453.5

135.9

88.5

340.7 49.5

141.2

50.1

11.1

223.2

815.8

1.7

0.2

0.5

0.3

22.7

19.6

0.4

1,041.4

Acquisition price, including direct acquisition costs

Acquired net assets and liabilities:

531.2

120.2

114.4

283.5 54.1

143.8

45.5

56.9

357.0

940.8

2.0

0.6

3.2

0.7

22.7

14.8

1.4

1,272.3

3.4 1.3

Tangible fixed assets

0.0

Customer receivables and other receivables Fair value of acquired net assets

0.3 3.4

Inventories

365.5 141.0

4.7

Fair value of acquired net assets Goodwill

3.1

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

Acquisitions 2007 In February 2007 Nedermanâ&#x20AC;&#x2122;s Belgian sales company acquired LEDA b.v.b., an installation and service company. The acquisition price was EUR 1.0 m, which was paid in cash. In June 2007 Nederman acquired the Brazilian company AtSource Exaustao Localizada Ltda. The acquisition price was EUR 0.5 m, paid in cash.

In November 2007 Nederman UK acquired UK installation company Fumex Installation Ltd for GBP 1.2 m. In November 2007 Nederman UK acquired UK company Lev Coshh Testing Ltd for GBP 0.02 m.

The effects of the acquisition The acquisition had the following effects on the consolidated assets and liabilities:

SEK m

Reported value before acquisition

Acquisition price. including direct acquisition costs Fair value of acquired net assets Goodwill

AtSource Exaustao Fumex Installation Ltd/Lev LEDA Localizada Ltda Coshh Testing Ltd Fair value Reported value Fair value Fair value Reported value before reported by before reported by reported by Group acquisition Group acquisition Group 9.6

5.3

18.2

33.1

3.0 6.6

1.4 3.9

7.0 11.2

11.4 21.7

2.0

Purchase price not paid Acquired assets and liabilities Tangible fixed assets

Inventories Customer receivables and other receivables Deferred tax asset Liquid funds Accounts payable and other operating liabilities Deferred tax liability Net assets Of which liquid funds in acquired units Fair value of acquired net assets Net result during ownership period Net sales January-December for acquired units Net result January-December for acquired units

0.9

Total Fair value reported by Group

0.9

0.4 2.6

2.4 2.6

6.9 -2.2

8.6

-0.7 9.9 -6.9

0.1

0.3 1.2 0.0 0.0 -0.8

0.3 2.1 0.0 0.0 -0.8

0.8

-0.3 1.4 0.0

0.7

1.7

0.7 11.3

0.2 -5.7

3.4 16.0 0.0 7.1 -8.7

7.2

7.2 -0.2

-1.0 18.5 -7.1

3.0

1.4

7.0

11.4

2.5 16.0 4.0

0.3 11.5 1.7

-0.3 37.1 2.3

2.5 64.6 8.0

Goodwill includes the value of being established on the market with a functioning market organisation.

cont. note 4

Acquisitions 2008 January 1, 2008 Nederman acquired Töredal AB at an acqusition price of SEK 11.5 m. Töredal AB manufactures products for high vacuum systems. The acquisition secures continuity and production of a number of high vacuum products. In March 2008 Nederman acquired the Arboga-Darenth Group at an acquisition price of SEK 11 m. The companies are located in Sweden, UK and France. Arboga-Darenth develops, manufactures and markets products and systems that economically and in an eco-friendly way handle, transport and recycle metal waste and cutting fluids in the metal-processing industry. The company has production units in Sweden and UK and sales offices in Sweden, UK and France,

In March 2008 Nederman acquired Assalub´s Swedish sales and after marketing organization within the effective handling of lubricants and service fluids segments for vehicle workshops. In July 2008 AB Norclean was acquired at a price of SEK 13.3 m. AB Norclean´s product range includes products and systems within the area of environment technology with focus on handling and collection of harmful materials within shot blasting and handling of fluids.

The effects of the acquisition The acquisition had the following effects on the consolidated assets and liabilities:

SEK m

Arboga AB/Arboga Ltd/ Töredal Arboga Sarl Norclean AB Other Reported Fair value Reported Fair value Reported Fair value Reported Fair value value before reported value before reported value before reported value before reported acquisition by Group acquisition by Group acquisition by Group acquisition by Group

Acquisition price, including direct acquisition costs Fair value of acquired net assets Goodwill

11.5

11.0

13.3

9.6

45.4

4.1 7.4

5.2 5.8

4.2 9.1

2.1 7.5

15.6 29.8

Purchase price not paid Acquired assets and liabilities Intangible fixed assets

Tangible fixed assets Financial fixed assets Inventories Customer receivables and other receivables Liquid funds Interest bearing liabilities Accounts payable and oother operating liabilities Current tax liabilities Deferred tax liability Net assets Of which liquid funds in acquired units Fair value of acquired net assets

Net result during ownership period Net sales January-December for acquired units Net result January-December for acquired units

3.3

0.5 0.0 4.5 3.1

-3.4

-0.3 -0.3 9.0

4.9

-4.9 4.1 1.0 6.9 1.0

0.1

2.3 0.2 8.0 15.5

4.9 -1.6 -19.3

10.1

0.1

2.3 0.2 8.0 15.5

4.9 -1.6 -19.3

10.1

-4.9 5.2

-6.4 54.3 -6.6

Goodwill includes the value of being established on the market with a functioning market organisation.

Total Fair value reported by Group

3.3 0.1

0.7

0.1

3.8 3.2

4.1 3.2

2.5 0.0

-3.2

-0.5

11.6 -1.6 -26.4

-0.5

-0.5 -0.1 6.0

2.1

-0.8 -0.4 27.2

1.8

5.8

1.8

-1.8 4.2

0.7 28.4 2.0

2.1

2.1 0.0

3.6 0.2 19.1 21.8

-11.6 15.6 -4.7 89.6 -3.6

Note 5 Other operating income

Note 6 Other operating expenses

Consolidated

SEK m

2008

2007

2006

Grants

0.7

0.3

0.1

Damages

0.2

Changes in fair value on foreign exchange derivatives Recovered bad debt losses

1.8 4.6

2.9

Foreign exchange gains on operating receivables/liabilities Other

1.4 1.9

1.8

1.1

7.1

2.1

7.6

Management charges, subsidiaries

9.4

8.5

7.6

Other

0.4

0.6

Parent company

9.8

8.9

8.2

SEK m

2008

Changes in fair value on foreign exchange derivatives Bad debt losses Foreign exchange losses on operating receivables/liabilities Cost for IPO

-4.6

Close-down costs

-1.2

Severance costs

-1.8

Other

-1.0 -8.6

Expenses for remuneration to employees

Parent company Sweden

Total parent company Subsidiaries Sweden Denmark Norway Belgium UK

France The Netherlands Poland Portugal Romania

Spain Czech Republic Germany

Hungary Austria Canada USA Brazil China Australia Total in subsidiaries Consolidated total Of which senior executives

2008

2007

2006

287.7

231.9

207.4

0.8

0.6

13.5 68.9

13.0 53.0

12.1 44.5

370.9

Average number of employees Women 5

-2.5 -1.3 -1.0 -6.7

-3.1

-1.6

-1.3

0.0 -6.7

-0.1

-13.1

-4.4

Foreign exchange losses on operating receivables/liabilities Cost for IPO

-6.7

-0.1

Parent company

Consolidated

Wages, salaries and other remuneration Pensions expenses, defined-benefit pension plans (see also note 22) Pensions expenses, defined contribution pension plans Social security expenses

2006

Parent company

Note 7 Employees and employee benefits

SEK m

2007

298.7

2008 Men 10

264.6

Total 15

Wages, salaries, other renumerations and social security expenses SEK m

Wages, salaries and other compensation Social security expenses (of which, pension costs)

2008

2007

2006

13.6 6.4

10.5 5.0

9.0 4.3

(1.3)¹⁾

(1.1)¹⁾

(0.8) ¹⁾

1) Of the parent company’s pension costs SEK 0.7 (0.7 ; 0.6) concern the Board of Directors and CEO for the Group. There are no outstanding pension obligations to the Group’s Board of Directors , CEO and senior executives.

Women 5

2007 Men 6

Total 11

Women 4

2006 Men

Total

61 2 7 5 19 4 2 3 0 1 3 2 10 0 1 9 6 1 4 1 141

220 15 50 17 69 12 4 24 3 4 14 18 26 5 3 25 23 7 10 5 554

281 17 57 22 88 16 6 27 3 5 17 20 36 5 4 34 29 8 14 6 695

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

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

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

31 4 6 3 12 4 2 5 1

161 12 43 11 46 11 4 12 2

192 16 49 14 58 15 6 17 3

4 2 10 0 1 7 5

10 17 34 5 2 25 20

14 19 44 5 3 32 25

1 117

5 440

6 557

1 98

5 420

6 518

146

564

710

122

446

568

102

426

528

cont. note 7 Note 8 Auditorâ&#x20AC;&#x2122;s fees and compensation

Wages, salaries and other renumerations, allocated between the board of directors and other employees SEK m

2008

2007

2006

SEK m

Consolidated Board of Directors, CEO and Senior executives (of which variable compensation)

Other employees

Total

36.8 (4.8)

33.3 (4.3)

250.9

198.6

287.7

27.8 (3.2)

179.6

231.9

207.4

2008

2007

2006

Board of Directors, CEO and Senior executives (of which variable compensation)

6.5 (1.8)

5.6 (1.3)

4.8 (1.0)

Total

13.6

10.5

9.0

SEK m Parent company

Other employees

7.1

4.9

4.2

2008

Board of Directors Senior executives

Consolidated

Board of Directors Senior executives

Percentage women 0% 0% 0%

17%

2007

KPMG Audit assignment

Other assignment Other auditors

Audit assignment

2008 2.8

2007

2006

2.4

1.9

0.9

3.5*

0.1

0.4

0.9

Parent company SEK m KPMG

Audit assignment

Other assignment

2008 1.0

0.4

2007

2006

0.5

0.6

3.2*

0.6

*Other assignments for KPMG primarily refer to consultancy in association with the companyâ&#x20AC;&#x2122;s IPO.

Distribution according to gender in senior management

Parent company

Consolidated

2006

Percentage Percentage women women 0% 0% 0%

14%

0% 0% 0%

13%

Note 9 Cost of operations allocated on cost type Consolidated

Sick leave parent company 2008 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)

0.3%

2007

SEK m

0.4%

Cost of material Cost of personnel

Depreciation

Other costs of operations 0.0%

0.0%

No allocation on category, gender and age is stated due to the small size of the categories.

Other external costs

2008 -535.2 -370.9

2007

2006

-452.2 -298.7

-363.8 -264.6

-206.0

-154.3

-148.2

-8.6 -1,138.6

-13.1 -936.1

-4.4 -800.0

-17.9

-17.8

-19.0

Note 10 Finacial income and expenses Parent company

Consolidated

SEK m

2008

0.0 0.8

Dividends Result from shares in Group companies

2.1

1.5 2.6

0.8 0.0

-14.4

-10.3

-8.9

Interest income, other Other financial income, group companies Exchange rate gains, net

-1.0

-0.1 -1.5

SEK m

2008

Interest income bank deposits Other interest income

1.8 0.3

Exchange rate gains, net Financial income

Interest expenses, credit institutions Interest expenses, convertible debt instruments Interest expenses, other Exchange rate losses, net Financial expenses

Net financial income/expenses

-1.2 -1.7

-17.3 -15.2

2007

2006

1.0 0.1

-11.3 -8.7

-10.5

-9.7

2007

2006

29.4

5.9

18.9

29.4

5.9

18.9

0.0

6.8 2.2

9.0

Interest income and similar income

11.8 0.2 12.0

9.0

Interest expenses, other

-11.5

-8.0

-7.2

Interest costs and similar costs

-11.5

-8.0

-7.4

Other

-0.2

Note 11 Appropriations Parent company SEK m

2008

Excess depriciation: equipment, tools, and fixtures Tax allocation reserve, provision for the year Tax allocation reserve, reversal for the year Total

2007

2006

-12.0

0.2 -5.7

0.2 -0.8

-12.0

-5.5

2.8 2.2

2008

2007

2006

-39.4

-29.9

-19.4

Note 12â&#x20AC;&#x201A; Taxes Reported in Income statements SEK m Current tax expense (-)

Tax expense for the period

Adjustment of tax relating to previous years

-1.2 -40.6

Deferred tax expense (â&#x20AC;&#x201C;) /tax income (+)

Deferred tax concerning temporary differences

0.1 -29.8

7.6

-0.3 -19.7

1.5

0.2

Utilization of loss carryforwards

-3.3

-2.1

-3.3

Total consolidated tax expenses

-33.0

-28.3

-20.7

Revaluation of loss carryforwards

3.3 7.6

2.1 1.5

2.1 -1.0

Reconciliation of effective tax The swedish tax rate is 28 per cent. The main reasons for the deviation between swedish tax rate and the consolidated effective tax rat, based on profit before tax are presented below: SEK m Profit before tax

Tax according to the applicable tax rate for the Parent company Effect of other tax rates for foreign subsidiaries Non-tax deductible expenses

2008 (%)

2007 (%)

2007

-35.2

28.0

1.8

-2.2 1.2

1.6

-0.6

0.2

-0.3

28.0 -0.1

Non-taxable income Increase of loss carryforwards without corresponding capitalization of deferred tax Utilization of loss carryforwards not recognized as deferred tax asset/temporary differences Tax relating to the previous year

-1.0

0.0 0.9

Revaluation of deferred tax

-2.6

Other

-0.8

Effect of changes in tax rates/ and tax rules

Standardized interest on tax allocation reserves Effective tax

-0.3

2008 125.6 0.1

1.5

2006 (%)

2006

-27.6

28.0

-21.2

-1.6

1.0

-0.8

98.7 -1.5

2.3

75.7 -1.8

0.6

-0.8

0.3

-0.3

0.1

-0.1

0.0 -1.1

-0.1

0.1

-1.3 0.4

1.0 -0.3

3.3

-2.1

2.1

-2.7

2.1

1.0

0.0

0.1

0.4

0.2

-0.2

26.3

-33.0

0.1

-0.1

28.7

-28.3

0.6

0.0

0.2

-0.1

27.3

-20.7

-0.1

Current tax receivables amount to SEK 4.5 m (3.6 resp 3.0) and represents the recoverable amount of current tax on the result for the year

cont. note 12 Reported in the balance sheets

Deferred tax assets and deferred tax liabilities

Deferred tax assets and deferred tax liabilities relate to: SEK m Tangible fixed assets Intangible assets Inventories Accounts receivable Provisions for pensions Provisions Tax allocation reserves Loss carryforwards Other Tax receivables/liabilities Netting Deferred tax assets/liabilities according to the balance sheets

Assets

2008 Liabilities

0.2

5.0

6.1 2.6 0.3 0.4

0.1

Net -4.8 0.0 6.0 2.6 -0.2 0.4 -9.6 13.6 0.8 8.8

0.5 9.6

13.6 0.8 24.0 -2.5

15.2 -2.5

21.5

12.7

Assets

4.5 0.6 0.4 0.2 0.0 6.3 0.9 12.9

2007 Liabilities 3.9 1.1 0.0 0.2 7.9 0.0 13.1

Net

Assets

-3.9 -1.1 4.5 0.6 0.2 0.2 -7.9 6.3 0.9 -0.2

1.6

2006 Liabilities

Net

5.4 1.1 0.1 0.0 0.2

3.6 0.4 0.1

-3,8 -1,1 3,5 0,4 -0,1 0,0 -6,1 6,0 0,0 -1,1

6.1

6.0 0.4 12.2

0.4 13.3

8.8

Recognized loss carryforwards are not time limited except for China, corresponding to SEK 1.5 m, valid until year 2013. Not recognized loss carryforwards Deductible temporary differences and loss carryforwards for which deferred tax assets have not been reported in the income statement and the balance sheet. SEK m Loss carryforwards

2008

2007

2006

35.7

41.1

48.1

Loss carryforwards not recognized in the balance sheet are due to loss carryforwards in Germany, which probably not will be used for settlement of future taxable gains. Changes in deferred tax due to temporary differences and loss carryforwards SEK m Tangible fixed assets Intangible assets Inventories

Accounts receivable

Provisions for pensions Tax allocation reserves Loss carryforwards

Other

SEK m Tangible fixed assets

Balance 1 Jan 2006 -5.3

Recorded via income statement

Translation difference

Balance 31 Dec 2006

1.5

0.0

-3.8

-0.6

-0.1

-0.7

-0.4

0.6

-0.1

-0.4 -1.0

-0.1 -0.5

4.2

-0.6 -5.8 7.5 0.5 0.4

Balance 1 Jan 2007

0.5 -0.3 -1.2

Recorded via income statement

Translation difference 0.0

3.5

1.6

0.0

Provisions for pensions

-0.1

0.3

Tax allocation reserves

-6.1

Inventories

Accounts receivable Provisions, other

Loss carryforwards Other

SEK m Tangible fixed assets Intangible assets

Inventories

Accounts receivable

Provisions for pensions Provisions, other

Tax allocation reserves Loss carryforwards Other

0.4 0.0

6.0 0.0

-1.1 Balance 1 Jan 2008

0.2

-1.8 1.2

1.5

Recorded via income statement

0.3 0.0

0.3

Translation difference

4.5

1.5

0.1

0.2

-0.3

-0.1

-7.9

-1.4

-0.2

7.6

6.3 0.9

1.1 1.9

0.1

5.6 0.0

Balance 31 Dec 2007 -3.9

-0.6

-1.1

4.5 0.6 0.2

0.0

0.2

Acquired

0.2

-0.9

0.6

0.0 -1.1

0.2

-3.9

-1.1

-0.1 -6.1 6.0

-0.3

-0.2

-1.1

3.5

0.4

0.0

-3.8

Intangible assets

-1.1

0.1

1.7 -0.1

1.8

-7.9 -0.3

6.3 0.9

-0.9

-0.2

Acquired

Balance 31 Dec 2008 -4.8

-0.1

0.0

6.0

2.6

-0.2 -0.3

-0.4

0.4

-9.6

13.6 0.8

8.8

cont. note 12 Parent company Reported in income statement SEK m

2008

2007

2006

12.2 12.2

8.9 8.9

4.7 4.7

2008

2007

2006

-3.2 0.9 -0.2 11.4 0.1 12.2

-19.3 5.4 -0.1 3.6 0.0 8.9

10.4 -2.9 -0.2 7.8 0.0 4.7

SEK m

2008

2007

2006

Current tax on received Group contribution

-22.2

-13.7

-5.4

Current tax tax income (+)

Current tax income (+) Total tax

Reconciliation of effective tax SEK m Result before tax Tax according to current tax rate Non-tax deductible expenses Non-taxable income Standard interest on tax allocation reserve Reported effective tax

Current tax receivables amount to SEK 0.0 m (0.0 and 0.1 respectively) and represent the recoverable amount of current tax on the yearâ&#x20AC;&#x2122;s profit.

Note 13 Intangible fixed assets Consolidated 2008

SEK m Accumulated cost Opening balance January 1 Acquisitions

Internally developed assets Other capital expenditures

Sold and scrapped

Reclassifications

Translation differences

Closing balance December 31

Development expenIT ditures Goodwill program 36.2 3.8 3.3

370.3 29.8

-0.1

-1.7

43.2

396.6

-1.8

Accumulated depreciation and write downs Opening balance January 1 -15.8 Acquisitions

Sold and scrapped

Reclassifications

Depreciation for the year

Translation differences

Closing balance December 31 Book value January 1

December 31

0.0

-2.2 0.5

0.2

3.8 5.1

-4.0

4.1 2.0

0.5

-1.6

-21.3

-37.1

-11.7

-21.4

370.3

402.3 21.7

30.1

36.2

-1.7

396.6

431.6 29.9

465.3

-0.1

3.8

4.1

2006

Total

25.5

2.2

-18.5

20.4

1.8

-0.5

-2.7

24.7

25.1 0.1

2007

Development expenIT Total ditures Goodwill program 348.0 21.7

1.2

-0.3 0.6

370.3

2.2

-0.5

24.2

0.0

4.1 3.2

Development expenIT ditures Goodwill program Total 24.7 5.4

0.6

0.0

25.1

431.6

30.1

-19.7

-31.4

-7.6

0.3

-1.9

-6.0

-4.1

-39.9

-15.8

-21.3

-37.1

-11.7

394.5

425.4

18.4

20.4

348.0

370.3

4.5

3.8

0.0

370.9

394.5

-0.3

348.0

-1.9

-0.4

17.1

18.4

5.4 2.0

0.0

-1.9

-0.6

24.2 402.3

-20.0 -27.6 0.0

-4.1

0.0

24.5 396.1 1.3 2.0

-0.3

-4.4

-0.1

346.9 1.3

1.7

-1.8 0.4

0.0

1.7

-5.9 0.4

-19.7 -31.4

346.9

348.0

4.5 368.5

4.5 370.9

cont. note 13 Parent company SEK m

2008

IT program

Accumulated cost Opening balance January 1

3.0

Capital expenditures Closing balance December 31

1.1 4.1

Accumulated depreciation and write downs Opening balance January 1,

-1.5

Depreciation for the year

-0.5

Total

2007

IT program

3.0

2.7

1.1 4.1

0.3 3.0

-1.5

-0.9

-0.5

-0.6

2006

Total

IT program

2.7

Total

2.4

0.3 3.0

2.4

0.3 2.7

-0.9

-0.4

-0.6

-0.5

0.3 2.7

-0.4

-0.5

Closing balance December 31

-2.0

-1.5

-0.9

Book value January 1 December 31

1.5 2.1

1.8 1.5

2.0 1.8

Depreciation and write downs Depreciation is included in the following lines in the income statement SEK m Cost of goods sold

Selling expenses

Administrative expenses

Research and development expenses

2008 -0.7

-1.4

-1.6

-0.7 -4.4

Consolidated

2007 -1.1

-1.7

-2.2

-1.0 -6.0

2006

2008

Parent company

2007

2006

-0.5

-0.6

-0.5

-0.6

-0.5

-1.9

-1.1

-1.5

-1.4 -5.9

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 332.6 m and SEK 64.0 m respectively. Impairment tests for cash-generating units containing goodwill The recoverable value of cash-generating units was based on their estimated value in use. When calculating the value in use a discount factor of 8.4 per cent after tax was used for both units. The calculations were based on cash flow forecast five years made by senior executives Projected cash flows according to these assessment were calculated using the assumption of an annual growth of 2 per cent 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 for the cash-generating units would mean that the recovery value would be less than the recorded value.

Note 14 Tangible fixed assets Consolidated

SEK m Accumulated cost Opening balance January 1 Acquisitions Capital expenditures Sold and scrapped

2008 Equipment, Buildings tools, and and land fixtures 34.3 0.1

Reclassifications

Translation difference

Closing balance December 31

239.8

12.1 13.7

2007 Equipment, Buildings tools, and and land fixtures

Total 274.1

34.3

12.1 13.8

Total

232.3

2006 Equipment, Buildings tools, and and land fixtures

266.6

6.5 15.4

-40.7

-16.6

3.2

2.2

34.2

Total

225.7

259.9

-3.6

0.0 10.7

0.1

0.0 10.8

1.9

-2.4

34.4

228.1

262.5

34.3

239.8

274.1

34.3

232.3

266.6

Accumulated depreciation and write downs Opening balance January 1 -29.4

-203.7

-233.1

-28.5

-200.6

-229.1

-27.6

-190.5

-218.1

-12.6

-13.5

-0.9

-10.9

-11.8

-0.9

-12.2

-13.1

-1.7

-200.6

-229.1

Acquisitions

Depreciation for the year Sold and scrapped

-0.9

Reclassifications

Translation differences

Closing balance December 31 Book value January 1

December 31

-30.3

4.9

4.1

-8.5

31.6 -2.2

-195.4

-8.5

31.6 -2.2

-225.7

36.1

-29.4

41.0

32.7

5.8

36.8

4.9

-4.9

14.4

-1.7

-203.7

-233.1

31.7

37.5

36.1

41.0

Financial leasing

Assessed values for tax purposes

Consolidated

Recognized value for assets under financial leasing contracts SEK m Equipment, tools and fixtures

2007

2006

1.8

11.5

7.6

The Group leases cars and computer equipment under a number of different financial leasing agreements. The leased assets are pledged assets for the leasing liabilities. See also notes 20 and 28.

SEK m Accumulated cost

Opening balance January 1

Capital expenditures Closing balance December 31 Accumulated depreciation and write downs Opening balance January 1

Depreciation for the year Closing balance December 31 Book value

January 1 December 31

1.9

-28.5

6.6

1.9

35.2

5.8

41.8

31.7

37.5

2008

2007

2006

24.3

17.1

2.6

3.3

Booked value for assets under financial leasing contracts

2008

Parent company

0.0

2008

Equipment , tools and fixtures 0.8

SEK m Assessed value, buildings (in Sweden) Assessed value, land (in Sweden)

2007

Total 0.8

0.0 0.8

-0.8

Equipment , tools and fixtures 0.8

0.0 0.8

-0.5

2006

Total 0.8

0.0 0.8

-0.5

Equipment , tools and fixtures

Total

0.7

0.1 0.8

-0.2

0.0 -0.8

-0.3 -0.8

-0.3 -0.5

0.1 0.0

0.3 0.1

0.5 0.3

cont. note 14 Depreciation and write-downs Depreciation is included in the following lines in the income statement SEK m

Consolidated

2008

Cost of goods sold

2007

-3.6

Selling expenses

-3.0

-6.2

Administration expenses

-4.8

-3.3

-2.0 -13.5

2008

Parent company

2007

2006

0.0

-0.3

0.0

-0.3

-2.3

-3.4

-1.7

Research and development expenses

2006

-4.1

-2.1 -11.8

-1.9 -13.1

Note 15 Long-term receivables and other obligations

Note 17 Prepaid expenses and accrued income

Consolidated

SEK m

2008

Long term receivables which are fixed assets Plan assets for pension, net Special salary tax on pensions Other

0.1

0.1 0.2

Other receivables which are current assets VAT receivables 13.7 Receivables concerning damages Fair value currency derivatives Other receivables

3.2

16.9

2007

2006

0.1 0.2 0.2

0.3 0.2 0.2

0.5

4.6

6.7

11.3

0.7

2.3 1.8 2.6 7.3

14.0

2008

Other receivables which are current assets VAT receivables 0.4 Other receivables

2008

Rent/leases

3.6

Computer software/license payments

2.1

0.0 0.4

2007

0.0

2007

2006

2.0

1.4

1.9

0.6

Insurance

1.4

1.2

0.6

Bank charges

0.4

0.6

0.9

Interests Other

13.3 20.8

0.0

7.5 13.2

3.6 7.1

Parent company Computer software/license payments

0.7

Insurance

0.8

Bank charges

0.4

Other

Parent company SEK m

SEK m

0.4 2.3

2006

0.7

0.6

1.2

0.1

0.6

0.9

0.2 2.7

0.4 2.0

0.1

0.2 0.3

Note 18 Equity Consolidated Share capital and number of shares Number of shares

Note 16 Inventories Consolidated SEK m Goods in progress Finished products and products held for sale

Write-down of obsolete inventory amounted to

2008

2007

2006

Issued on 1 January*)

11,715,340

11,512,340

Issued December 31

11,715,340

Conversion of loan 2008

2007

2006

52.7

47.5

28.9

118.2 170.9

74.1 121.6

60.9 89.8

*) Adjusted for change in ratio value according to decision by AGM on 10 April 2007 Registered share capital SEK

1,171,534

Share ratio value after the change is SEK 0.10 15.2

13.0

16.1

203,000

1,171,534

Dividend The Board proposes a dividend of SEK 2.50 per share, amounting in total to SEK 29,3 m. The dividend amount will be adopted by the AGM on 28 April 2008. Capital management The Group’s capital corresponds to the total amount of shareholders’ equity, SEK 529.1 m. 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

Note 20 Interest bearing liabilities

Earnings per share

For more information about the company’s exposure to interest rate risks and currency risks, see note 26.

SEK Earnings per share

Earnings per share after dilution

2008

2007

2006

7.90

6.01

4.73

7.90

6.01

4.66

SEK m

2008 92.6 92.6

2007

2006

70.4 70.4

55.0 55.0

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

2007

2006

11,715,340

11,512,340 100,670

11,715,340

11,613,010

Net result attributable to the parent company‘s ordinary shareholders, after dilution SEK m Net result, attributable to the parent company’s shareholders Effect of interest on convertible debt instrument (after tax) Net result attributable to the parent company’s shareholders, after dilution

2008

2007

2006

92.6

70.4

55.0 0.0

92.6

70.4

55.0

Weighted average number of outstanding shares, after dilution Number of shares Weighted average number of shares during the year, after dilution Effect of convertible debt instrument Effect of warrants Weighted average number of shares, after dilution

2008

2007

2006

11,715,340

11,613,010 102,330 71,080

11,715,340

Bank loans Financial leasing liabilities

11,786,420

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

2008

2007

2006

175.0 1.2

150.0 8.1

140.0 6.3

176.2

158.1

12.4

30.0

1.2 27.0

3.4 33.7

1.6 39.5

Currency

Nominal value

Book value

Bank loans Bank loans

SEK SEK

150.0 20.0

Bank overdraft

USD

0.4

2.9

Current liabilities Bank overdraft

Bank loans

2008

11,715,340

SEK m Long-term liabilities

Net result for the year attributable to the parent company’s shareholders, before dilution Net result for the year

Consolidated

Financial leasing liabilities

13.4

146.3

7.9

0.3

30.0

Terms and repayment due date For terms and repayments due dates see the table below. No security for the bank loans has been provided.

2006

SEK m

Bank loans

SEK

Financial leasing liabilities Total interest bearing lliabilities

2007 SEK m

Nom. Currency interest rate

5.0

Due date

Bank loans Bank loans

SEK EUR

Stibor + 0,3 2012-10-31

Bank overdraft

SEK

4,69% 2008-12-31

Bank loans

BRL

Financial leasing liabilities Total interest bearing lliabilities

2008 SEK m Bank loans Bank loans

7.9 185.8

Nominal value

Book value

150.0 0.0

150.0 0.2

30.0

0.0

0.1

11.5 191.8

Nom. Currency interest rate

Due date

Nominal value

Book value

SEK SEK

Stibor +0,3 2012-10-31 Stibor +0,3 2012-10-31

150.0 25.0

GBP

1,695% 2009-12-31

0.9

10.6

Bank loans

CNY

Bank overdraft

USD

Bank overdraft

2008-04-05

5.0

Financial leasing liabilities Total interest bearing lliabilities

5,04% 2009-06-20

0,300% 2009-12-31

12.0 0.2

13.4 1.8

2.4 203.2

cont. note 20 Note 22 Pension provisions - benefits to senior executives

Financial leasing liabilities

Financial leasing liabilities are due for payment according to the following:

Defined-benefit pension plans

Consolidated SEK m 2006 Within one year

Between one and five years Later than five years

Consolidated MinMinimum leasing payments 1.8 6.4

Interest

Capital amount

0.2

1.6

0.1 -

6.3 -

8.2

0.3

7.9

3.7

0.3

3.4

2007 Within one year

Between one and five years Later than five years

8.5

0.4 -

8.1 -

Between one and five years Later than five years

Present value of unfunded obligations Present value of entirely or partially funded obligations

8.6

8.0

7.4

36.3

33.2

Unrecorded actuarial gains (+) and losses (â&#x20AC;&#x201C;)

-6.2

-6.8

-9.9

-6.2

-7.1

-5.2

Defined-benefit pension plans, net

31.6

30.1

28.0

31.6

30.1

28.0

1.2

The net amount is reported in the following items on the balance sheet: Long-term receivables

2.4

32.9

41.5

Fair value of plan assets

0.1

0.2

35.1

Present value of net obligations

1.3

2.6

39.1

40.3

Net obligations

1.2

2006

43.1

11.5

0.1

2007

47.7

0.7

1.3

2008

Total present value of obligations

12.2 2008 Within one year

SEK m

Provisions for pensions

Net amount

0.1

31.7

31.6

0.1

30.2

30.1

0.3

28.3

28.0

Defined-benefit plans The Group has defined-benefit plans in Sweden and Norway. The main part are PRI obligations where no additional benefits are earned.

Note 21 Long-term liabilities to credit institutions

Changes in defined-benefit plans in the balance sheet SEK m

Parent company SEK m

2008

2007

2006

Long-term liabilities Bank loans

175.0

150.0 150.0

140.0 140.0

175.0

Defined-benefit plans, as of January 1 Benefit payments

Operating / interest expenses (see next page) Actuarial gain or loss Translation differences

Defined-benefit pension plans, December 31

2008

2007

2006

43.1 -0.6

40.3 -0.4

38.9 -0.4

2.9 2.9

2.7 -0.1

2.3 0.0

47.7

43.1

-0.6

0.6

-0.5

40.3

cont. note 22 Changes in plan assets SEK m

2008

2007

2006

Fair value of plan assets, January 1

6.8

7.1

6.8

Anticipated returns

0.5

0.3

Payment of pension benefits Actuarial gains or losses

Translation differences Fair value of plan assets, 31 December

0.0

-0.7

-1.1 0.5

-0.5

6.2

6.8

7.1

-0.4

0.5

Specification of pension costs in the income statement SEK m

2007

2006

Costs for services during the year

1.0

1.1

0.8

Anticipated returns on plan assets

-0.4

-0.3

Total cost of defined benefit plans

2.9

2.4

2.1

Actuarial gains or losses

Of which amount charged against operating result Of which amount charged against financial expenses Total net cost

Actual returns on plan assets

2.1 0.2

1.6

1.5

0.1

0.8

0.6

2.1 2.9

1.6 2.4

1.5 2.1

-0.7

0.8

Expected returns on plan assets 2009 amount to SEK 0.3 m. The calculations are made by independent actuary.

Assumptions for defined-benefit plan obligations The main actuarial assumptions (expressed as weighted averages) SEK m

2008

2007

2006

Discount rate at December 31 Anticipated returns on plan assets at 31 December Future salary increases

4.5%

4.0%

6.3%*) 4.5%*)

5.8%*) 4.5%*)

5.3%*) 4.8%*)

Future increases in pensions *) Relates to Norway

2.0%

Historical information SEK m Present value of defined-benefit plan obligations Fair value of plan assets Deficit in the plan

2008

2007

2006

47.7

43.1

40.3

-6.2 41.5

SEK m Consolidated

Parent company

2008

2007

2006

13.5

13.0

12.1

1.3

1.1

0.8

0.1

0.8

-0.5

Expenses for defined contribution plans In Sweden, there are defined-contribution plans, which are fully paid by the subsidiary. Outside of Sweden, there are defined-contribution plans, which are paid for partly by the subsidiaries, and partly by payment from the employees. The payment to these plans occurred on an on-going basis according to the conditions of the respective plans.

Expenses for defined-contribution plans

2008

Interest expense on the obligations

Alecta amounts to SEK 2,5 m (3.9 and 3.5 resp). Alecta’s surplus can be distributed to the holders of the insurance policies and/or the ensured parties. At the end of 2008, Alecta’s surpluses, in the form of the collective consolidation level, amounted to 111.0 per cent (152.0 resp. 143.1). The collective consolidation level consists of the fair value of Alecta’s assets as a percentage of the insurance obligations calculated according to Alecta’s actuarial assumptions, which are not in accordance with IAS 19.

-6.8 36.3

-7.1 33.2

Expected payments in 2009 Expected payments in 2009 for defined-benefit pension plans amount to SEK 0.8 m. 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 2008, the company has not had access to such information which makes it possible to report this plan as a definedbenefit plan. The pension plan according to ITP which is safeguarded via insurance in Alecta is therefore reported as a defined.contribution pension plan. The annual charges for retirement annuities which are covered by

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 2008 decided that fees to the board of directors for the work during 2008 would be paid in the amount of SEK 150,000 to the Chairman of the board of directors, and SEK 100,000 each to Per Borgvall, Eric Hielte, Jan Eric Larson, Gunnar Gremlin and Peter Möller. Principles for compensation to 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 2008, the base salary was SEK 2,437,000. 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 2008, compensation to the CEO and Group President was SEK 3,729,000, of which SEK 1,200,000 consisted of a variable compensation for the 2008 financial year and SEK 92,000 was adjustment for previous 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 reservation 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 30 per cent of the annual base salary. The company’s obligation is limited to the payment of the annual premium. During 2008 the premium expenses were SEK 714,000 for the CEO and Group President. Principles for compensation to managers at subsidiaries Managers at subsidiaries have termination of employment contracts with 1 - 2 years’ salary. Principles for remuneration to 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 its size is determined by the CEO in consultation with the Chairman of the board, based upon the result and tied-up capital in the Nederman Group. During 2008, remuneration to other members of the group management amounted to SEK 9,254,000, of which SEK 1,884,000 consisted of variable compensations for the financial year 2008.

cont. note 22 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 one 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 2008 SEK 000

Base salary, director’s fees

Variable remuneration

Other benefits

Pension expenses

Total

Chairman of the board

150

Member of the board Eric Hielte

100

Member of the board Per Borgvall

100

Member of the board Jan Eric Larson

100

Member of the board Gunnar Gremlin

100

Member of the board Peter Möller

100

President and CEO

Other senior executives (7 individuals)

2,437

1,292

143

10,457

3,176

853

7,370

Total

of which subsidaries (6 individuals)

1,884

5,952

1,408

100

714

4,586

710

1,728

11,692

587

1,353

9,300

2,442

16,928

Compensation and other benefits during 2007 SEK 000

Base salary, director’s fees

Chairman of the board

Member of the board Hans Stråberg

Variable remuneration

Other benefits

Pension expenses

Summa

150

Member of the board Jan Eric Larson

Member of the board Gunnar Gremlin

Member of the board Peter Möller

CEO

2,330

Total

9,170

Other senior executives (7 individuals) of which subsidaries (6 individuals)

974

106

2,391

843

6,390

1,417

5,046

1,092

728

4,138

737

1,657

10,201

625

1,277

8,040

2,385

14,789

Note 23 Provisions Consolidated SEK m Provisions, which are long-term liabilities Warranty exposure Total

Provisions which are current liabilities Severance pay, redundancy payments

Warranty exposure

Onerous contracts

Total

SEK m Severance pay, redundancy payments Book value, January 1

Provisions during the period

Amount used during the period Unutilized amount which has been regained during the period Translation differences

Book value, December 31 SEK m Warranty exposure

Book value, January 1

Provisions during the period

Amount used during the period

Translation differences

Book value, December 31

2008

2007

2006

Onerous contracts

0.3

Book value, January 1

0.3 1.2

Provisions during the period 1.9 2.6

0.7 1.5

4.0

4.7

2.2

2008

2007

2006

1.9

0.7

0.2

2.8

0.0

1.5

-2.3

0.2

2.0

-0.8

-0.3

0.4

1.2

2008 2.6

1.7

1.9 2007 1.5

2.6

0.7

-0.2 0.0 0.7

2008 0.2

Amount used during the period

-0.2

SEK m

2008

Book value, December 31

Total provisions

Book value, January 1

Provisions during the period

Amount used during the period Unutilized amount which has been regained during the period Translation differences

Book value, December 31

0.0

2007

1.7

1.5

-1.5

-1.7

3.1

2.6

1.5

2006

0.2 0.2

0.0

2007

2006

4.7

2.2

1.9

-3.8

-2.3

-1.9

3.2

4.8

-0.3 0.5 4.3

4.7

2006

-1.3 0.1

SEK m

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

2.2

0.0 2.2

Note 24 Other liabilities

Note 25 Accrued expenses and prepaid income

Consolidated

SEK m Other long-term liabilities Other liabilities Other current liabilities Personnel-related liabilities VAT payable

Fair value of currency derivatives

Advance payments from customers Purchase price not paid Other liabilities

2008

2007

2006

Personnel-related expenses 0.1

Interest expenses

0.6 0.6

0.1 15.1 19.1

12.1 13.0

4.6 9.8

17.2

10.1

7.1

9.9

13.0

6.3

8.7

0.8

3.3

73.3

49.0

27.8

2008

2007

2006

Personnel-related liabilities

0.7

0.4

Purchase price not paid

3.3

0.9 0.1

1.0

0.4

VAT payable

Other liabilities

0.9 4.9

Note 26 Financial risks and financial policies

Risks and uncertainties – finance policy 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 is 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 and exposure of different kinds. The Group’s central finance department is responsible for identifying and effectively limiting the Group’s financial risks. The finance function reports via CFO to the board.

2008

2007

2006

43.2

31.6 0.9

33.4 0.8

2.9

2.0

Auditing fees

1.6

Shipping costs and customs charges

0.1

Selling expenses

Parent company SEK m

SEK m

Other

4.1 4.5

1.8

1.6

0.1

1.5

6.8

53.5

44.1

46.1

2008

2007

2006

Personnel-related expenses

5.6

Auditing fees

0.2

3.7 0.9

3.3 0.8

0.9

0.5

Parent company SEK m Interest expenses Other

0.6 6.4

0.2

5.7

4.8

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 rate of 1per cent would have affected net financial items in 2008 by SEK 1.8 m based on the average of capital tied-up during the year. Effective interest rate and maturity structure Interest bearing financial liabilities The table below presents the effective interest rate on the balance sheet day and the financial liabilities’ maturity structure/interest rate negotiations.

Consolidated SEK m

Interest rate

Interest fixing period

Currency

Nominal amount in original currency

Total

Within 1 year

2006 Bank loan

3.815%

Bank loan (revolving)

3.815% 3.815%

07-02-15 07-02-15

SEK SEK

100.0 50.0

30.0

3.89%

Variable 1 year

SEK

5.0

7.9

1.6

Bank loan

Bank overdraft

Financial leasing liabilities

2007 Bank loan (revolving) Bank loan Bank loan

Bank overdraft

Financial leasing liabilities 2008 Bank loan (revolver)

Bank loan

Bank overdraft

Financial leasing liabilities

6.78%

4.873%

07-02-15

Variable 1 year

Variable

SEK

USD

20.0

0.4

20.0

2.9

08-02-15

SEK EUR

150.0 0.0

150.0 0.2

4.69% Variable 1 year

SEK

30.0

Variable

4.748%

4.653%

5.040%

2009-02-17 2009-03-03

BRL

SEK SEK

150.0 25.0

GBP

0.9

10.6

2.4

1.2

Variable 1 year

USD

12.0 0.2

13.4 1.8

100.0 20.0

20.0

6.3

150.0

0.1

30.0

11.5

CNY

Variable

0.1

0.2

11.5

2009-06-20

Variable 1 year

0.0

2.9

Between 1 5 years and 5 years and longer

3.4

13.4 1.8

8.1

150.0 25.0

1.2

cont. note 26 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. 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. At the present time, there are no interest rate hedges according to the board of directors’ decision. This decision will be reviewed in connection with a possible increase of the loan exposure. The Group’s financial liabilities amounted at the end of the year to SEK 203.2 m of which SEK 175.0 m was for a revolving amortisation free loan, SEK 13.4 m current interest-bearing liabilities, SEK 2.4 m financial leasing liabilities and SEK 12.4 mutilised credit. The Group had SEK 90,8 m in liquid funds and SEK 67.8 m in unutilised credit. 31 December 2008 the disposable amount of liquid funds was SEK 158.6 m. Credit risks Credit risks in customer accounts receivables 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 for risk markets it is normally 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 2.5 per cent of sales. The five largest customers accounted for 6.4 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 4.6 m 2008. Of the Group’s total accounts receivable of SEK 270 m, around 6 per cent (4) is made up of receivables overdue by more than 90 days. 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 2008, the provisions for credit losses amounted to SEK 9.4 m (7.4 ) corresponding to 3.4 per cent of total customer receivables.

Overdue customer receivables:

2008-12-31

181-360 days >360 days

Total overdue customer receivables: The provision for bad debt losses changed during the year as follows:

Translation differences

Closing balance, December 31

Fair value

-13.1

SEK m

EUR m

12.1

SEK m

117.8

-13.1

NOK m

8.4

SEK m

9.7

0.4

GBP m

USD m PLN m

DKK m

2.0

2.4

4.2

2.4

SEK m

23.5

0.8

SEK m

16.3

-2.4

SEK m

3.5

0.0

SEK m

11.5

0.8

0.4

-2.4

0.6

182.3

0.6

0.0

-13.7

Translation exposure The net assets in the Group are distributed amongst the following currencies:

SEK m

Currency

2008

2007

2006

274.0 59.6

60% 13%

235.5 44.1

63% 11%

8.8

USD

6.6

21.1

21.8

3.2 5.2

94.9

-7.4 -4.6 0.2 3.1

-0.7 -9.4

Other counterparties Credit exposure arises with the investments of liquid funds 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, liquid funds will only be invested in reputable banks. Foreign currency risks The Nederman Group is via its international operations exposed to currency risks due to changes in exchange rates, which influence the Group’s income statement and balance sheet. The Group’s currency exposure encompasses both transaction exposure and translation exposure. The Group´s income statement is affected by exchange rate differences of SEK 1.4 m (-3.5) in the operating result and SEK -1.7 m (1.5) in financial items. 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 sales company’s local currency. The transaction exposure in this way thus becomes very small in the sales companies.

Book value

58% 16%

9.4

91-180 days

Reversed reservations

Amount to retain

306.0 86.6

61-90 days

Receivables, written off and not recoverable

Amount to sell

SEK EUR

52.5

31-60 days

Provisions set off during the year

2008-12-31

15.8

1-30 days

Opening balance, January 1

Foreign exchange forward contracts entered:

Consolidated

Consolidated SEK m

The largest sourcing unit is located in Sweden. Approximately 50 per cent of the purchases are conducted in SEK and the rest primarily in EUR and to a minor extent in USD. Group invoicing in 2008 was: 42 per cent in EUR, 11 per cent in GBP, 12 per cent in SEK, 6 per cent in USD, 9 per cent in NOK and 20 per cent in other currencies. According to the Group’s finance policy, 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 fair value, which amounted to SEK -13.7 m December 31, 2008. Hedge accounting is not applied, which means that the changes in fair value have affected the result for the year. A change in exchange rates of +/-1 per cent would affect operating result by SEK 2.0 m concerning EUR, SEK 0.5 m concerning GBP, SEK 0.5 m concerning CAD and SEK 0.4 m concerning USD based on the Group’s net flows in these currencies and translation effects on the consolidated income statement.

GBP

CAD

NOK

PLN

CNY

Other

36.4

24.1

22.1

13.5

10.0

529.1

100%

23.8

37.0

17.6

17.5

12.1 12.8

451.7

3% 3%

100%

27.9

18.6

11.0

11.0 6.7

376.6

3% 2%

100%

The Group has a policy not to hedge translation exposures in foreign currencies Fair value The fair value substantially corresponds to the book value in the balance sheet. For further information see Accounting principles – financial instruments concerning valuation of financial assets and liabilities to fair 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 partly via continuously developing measures to prevent damages and losses, and partly via common group insurance policies. Liquidity risk The liquidity in the Group is not exposed to major 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 175 m in revolving credit. and SEK 30 m 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, the bank has the right to cancel the agreement in advance.

Note 27 Operationell leasing

Note 28 Pledged assets and contingent liabilities

Leasing contracts where the company is the lessee Future payments for non-cancellable leasing contract amounts to:

Consolidated SEK m

Consolidated SEK m Within one year

Between one and five years More than five years

2008

2007

2006

39.2

84.5

23.8 47.1

24.9 41.4

126.4

73.8

70.4

2.7

2.9

4.1

Of the Groupâ&#x20AC;&#x2122;s operational leasing contracts the major part concerns rental agreements for real property and the premises where the business operations are conducted. Parent company SEK m Within one year

Between one and five years More than five years

2008

2007

2006

0.4

0.3

0.2 0.2

0.3 0.1

0.7

0.4

Expenses for operational leasing contracts amount to: Consolidated SEK m Total leasing expenses

2008

2007

2006

35.1

29.2

24.7

Parent company SEK m Total leasing expenses

2008

2007

2006

0.4

0.3

0.2

2008

2007

2006

none

304.5

none

none 11.5 11.5

35.0

7.6 372.1

Contingent liabilities Guarantee commitments, FPG/PRI

0.6

Total contingent liabilities

0.6

0.4 1.0

2008

2007

2006

none

none none

229.7 229.7

0.6

44.5 45.1

60.2 60.8

45.0 45.6

Pledged assets Pledged assets for debts and provisions Net assets in subsidiaries

none

Real estate mortgages

none

Chattel mortgages

Assets with ownership reservation Total pledged assets

Other

1.8 1.8

none

25.0

0.6

Parent company SEK m Pledged assets Pledged assets for debts and provision Shares in subsidiaries

Total pledged assets

Contingent liabilities Guarantee commitments, FPG/PRI Securities provided for the benefit of subsidiaries Total contingent liabilities

Note 29 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 with Group companies which is or was of an exceptional character.

Nor has any Group company provided any loan, given any guarantees or entered into any surety relationships for any of the members of the Board of Directors or senior executives.

Summary of transactions between closely related parties Parent company SEK m

Other operating income Dividends received

Financial income and expenses Receivables December 31 Liabilities December 31

2008

9.4 29.4 11.8

73.5 14.0

2007

8.5 5.9 6.7

60.0 14.2

2006

7.6 18.9

9.0

19.7 21.0

Transactions with key persons in leading positions Regarding the salaries and other remuneration, costs and commitments for 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 2008 Subsidiary

Organisation number

Domicile / Country

AB Ph. Nederman & Co

556089-2951

Helsingborg, Sweden

Nederman S.A.S.

Paris, France

Air Care System AB

Nederman A/S

Shanghai, China

01-09-874950

Budapest, Hungary

556426-7358

Helsingborg, Sweden

858741882

Oslo, Norway

933202054

Sandefjord, Norway

24218849

Vlaardingen, The Netherlands

Nederman N.V.

428727

Brussels, Belgium

LEDA bvba

Nederman Holding GmbH

120336521

Kamp-Lintfort, Germany

Schoten Antwerp, Belgium

HRB48292

Frankfurt a M, Germany

Nederman GmbH

HRB43352

Nürtingen, Germany

Nederman Ltd

1393492

Preston, UK

25634364

Prag, Czech Republic

Nederman GmbH (Austria) Fumex Installations Ltd Lev Coshh Testing Ltd

Nederman CR s.r.o.

Nederman Inc.

Nederman Canada Ltd

Nederman do Brasil Comércio de Produtos de Exaustao Ltda AB Norclean

Arboga-Darenth AB

Arboga-Darenth Ltd

Arboga-Darenth Sarl

Nederman India Private Limited

Wien, Austria Sheffield, UK Sheffield, UK

465-416

856 876

556223-4319

1048823

Creuzier Le Vieux, France

New Delhi, India

Istanbul, Turkey

Total Parent company

SEK m

2008

2007

2006

Accumulated acquisition value Book value as of 31 December

518.8 31.5

523.0 6.1

522.9 0.1

550.3

518.8

523.0

Book value as of 31 December

100.0%

0.2

6.6

31.6

200

100.0%

33.0

100.0%

0.0

4 000 0

100.0%

100.0% 100.0%

100.0%

0.0

30.4 0.0

100.0%

73.9

10 000

100.0%

49.3

5 000

4 000 10

500

100 000

100.0% 100.0% 100.0%

100.0%

100.0% 100.0%

0.0

25.9

32.1 6.1

15.1

100.0%

13.5

100.0%

0.3

100.0%

0.3

100.0%

2.0

0.3

550.3

Parent company

Reduction of capital

2 200

3 365

Erith, UK

U74900DL2008FTC178218

2 000

Sao Paolo, Brazil Arboga, Sweden

339878449

1 680

Varberg, Sweden

556053-6715

100.0%

Detroit, USA

Mississauga, Canada

05.880.850/0001-45

Nederman Makine Sanayi Ve Ticaret Limited 647743 Sirketi

Acquisition

100.0%

Vara, Sweden

Nederman Norclean Nederland B.V. Nederman Norclean GmbH

100.0%

Fredrikssund, Denmark

Töredal Verkstad AB

Nederman Norclean A/S

100.0%

Hallam, Australia

Nederman Danmark Aps

Nederman Svenska Försäljnings AB

100.0%

Mississauga, Canada

Nederman Pty Ltd

229.7

100.0%

Bucharest, Romania

Nederman Logistics North America Ltd

100.0% 100.0%

Madrid, Spain

Nederman & Co S.R.L.

100.0%

Book value SEK m

100.0%

Katowice, Poland

Nederman Ibérica

Nederman Magyarorszag Kft

550 000

Helsingborg, Sweden

Nederman Polska Sp zo.o.

Nederman Air Clean (Shanghai) Co., Ltd.

Number of Percentage shares of shares

-10.3

Note 31 Untaxed reserves

cont. note 32 Cash flow statements

Parent company

Transactions which do not result in payments

SEK m

2008

2007

2006

Excess depriciations/ Machinery and equipment Opening balance. January 1

0.0

Closing balance. December 31

0.0

0.2 -0.2

0.4 -0.2

Change during the year

0.0

0.2

Consolidated SEK m Acquisition of assets via financial leasing Sales of assets under a financial lease agreements Conversion of debt to shareholdersâ&#x20AC;&#x2122; equity

Tax allocation reserves Provision with the assessment of taxes. 2009

12.0

Provision with the assessment of taxes. 2007

0.8

SEK m

18.5

6.5

1.0

Conversion of debt to shareholdersâ&#x20AC;&#x2122; equity

Provision with the assessment of taxes. 2008

5.7

Closing balance. December 31

5.7

18.5

Total untaxed reserves

6.5

2008

2007

2006

1.3

5.3

2.6

8.1

1.6

1.1 5.9

Parent company 0.8

2008

2007

2006 5.9

Unutilized credit SEK m Consolidated

Note 32 Cash flow statements

Parent company

2008

2007

2006

67.8

36.4

42.9

50.0

5.0

20.0

Cash and cash equivalents Consolidated SEK m

Liquid assets consists of:

Cash and cash equivalents Short term investments, comparable to liquid funds Closing balance

2008

2007

2006

90.6

76.4

50.2

90.8

76.4

50.2

2008

2007

2006

0.2

Parent company SEK m

Liquid assets consists of:

Cash and cash equivalents Closing balance

18.5

5.2

0.0

5.2

0.0

2008

2007

2006

-1.1

-0.4

-0.8

6.9

2.5

-4.6

0.3 7.6

-0.2 3.7

0.9 -4.6

Adjustments for items not included in cash flow Consolidated SEK m Unrealised currency differences Change in fair value of financial instruments Provisions

Other items

1.5

1.8

Depreciation

2008

2007

2006

0.5

0.8 0.8

0.5

No major events have happened after the reporting period

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. Risk of particular changes in value during the subsequent year, is of significance and therfore 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 at least once a year with respect to the possible need for impairment. The review requires an assessment of the value in use of the cash-generating unit, or group of cashgenerating 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 2009 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 at the impairment test of the cash-generating units will result in a recoverable value lower than the carrying amount.

-0.1

Parent company SEK m

Note 33 Events after the close of the reporting period

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 2008 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

101,821,155

Profit for the year

9,006,054

Total, SEK

116,693,909

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

81,538,859

Total, SEK

116,693,909

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 28 April 2009. Helsingborg, Sweden, 16 February 2009

Jan Svensson Chairman

Per Borgvall

Peter Möller

Eric Hielte

Jan Eric Larson

Gunnar Gremlin

Sven Kristensson CEO

Rolf Rånes

Mikael Kram

Employee Representative

Our audit was issued on 23 February 2009 KPMG 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 2008 financial year. The annual accounts and the consolidated accounts of the company are included in the printed version of this document on pages 16-52. 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, 23 February 2009 KPMG AB Alf Svensson

Authorised Public Accountant

Corporate governance report Nederman Holding AB (publ) is a Swedish public limited company with its registered office in Helsingborg, Sweden. Nederman is listed on the OMX Nordic Exchange Stockholm on the Small Cap list 2007. Governance of the Nederman Group takes place via the Annual 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, other rules and regulations, 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. With effect from 1 July 2008, The Swedish Code of Corporate Governance shall be applied to all firms on the Nasdaq OMX Stockholm AB. In the past this only applied to companies with a market capitalisation exceeding SEK 3,000 m. Certain parts of the Code will not be applicable until the first Annual General Meeting, after which the new regulations come into force. Considering that Nederman’s market capitalisation is substantially less than SEK 3,000 m the Company has chosen to hold off on applying the code in its entirety. However, Nederman already uses several of the procedures that the code prescribes in order to benefit the shareholders’ opportunities for corporate governance. The next Annual General Meeting will be held on 28 April 2009 and thereafter the Code will be applied in its entirety. Shareholders At the end of 2008 the company had 3,755 shareholders. Investment AB Latour was the largest shareholder with 26.5 per cent of the shares. Foreign investors held 21.6 per cent of the shares. The ten largest shareholders had a total holding corresponding to 70.7 per cent of the shares. Annual General Meetings The Annual General Meeting (AGM) 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. The AGM was held in Helsingborg on 29 April 2008. - The AGM adopted the income statement and balance sheet as well as the consolidated income statement and consolidated balance sheet, decided that the profit be dealt with in accordance with the proposed appropriation of profits meaning a dividend of SEK 2.50 per share for the 2008 financial year and discharged the board of directors and CEO from liability for the financial year. - The AGM resolved, in accordance with the proposal in the notification to attend the AGM, to elect seven board members, that remuneration to the board should amount to SEK 650,000, of which SEK 150,000 to the Chairman of the board SEK 100,000 to other regular members, with exception to the CEO, that Gunnar Gremlin, Jan Eric Larson and Peter Möller, should be re-elected as board members, that Jan Svensson, Eric Hielte, Per Borgvall and Sven Kristensson should be elected as new members, and that Jan Svensson should be elected Chairman of the board.

Nominations committee Holders representing more than 51 per cent of the company’s shares have appointed Jan Svensson (Investment AB Latour), Eric Hielte (Ernströmgruppen) and Peter Rönström (Lannebo Fonder) to the nominations committee ahead of 2009’s AGM. The AGM will also decide about the instructions for the nominations committee regarding appointments to the committee and the committee’s assignments. According to the proposal to the instructions, the nominations committee will consist of one representative from each of the three largest shareholders and the Chairman of the board. If any of the three largest shareholders decline from their right to appoint a representative to the committee, then the right will pass to the next largest shareholder. The nominations committee’s tasks will be to prepare proposals, before the next AGM, for electing the Chairman of the board and other board members, election of the Chairman of the meeting, remuneration issues and related issues, and where applicable, election of auditors. Board of directors The board of directors is the second highest decision-making body after the Annual General Meeting. The overall assignment of the board is to decide on the Company’s business direction, its resources and capital structure, as well as its organisation and management of urgent matters. 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, issuing annual reports and interim reports, as well as appointing the Chief Executive Officer, etc. The board of directors follows written procedures that are adopted 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 CEO, 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 managing the Company. Attendance at board meetings

Number of meetings

Anders Scharp Hans Stråberg Caspar Callerström Gunnar Gremlin Peter Möller Jan Eric Larson Jan Svensson Eric Hielte Per Borgvall Sven Kristensson

2 1 1 8 8 7 6 6 5 6

Number of held meetings

2 2 2 8 8 8 6 6 6 6

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 of this annual report have been defined as senior executives. Over the past few financial years the board of directors has had to address many issues of strategic importance. Special focus in 2008 was placed on the Group’s continued expansion, including acquisitions, the Group’s financial framework and objectives, as well as preparations for listing the Company’s shares on the OMX Nordic Exchange Stockholm. In 2008 the board of directors held eight minuted meetings and to date in 2009 the board has held one minuted meeting. The 2008 AGM resolved that SEK 150,000 would be paid as directors’ fees to the Chairman of the board and SEK 100,000 to each regular member. No board remunerations are paid to the CEO. The AGM elects board members annually for the time until the next AGM 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. The main shareholders and board members carry out an annual, 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 seven members elected by the 2008 AGM and two employee representatives. The Chief Executive Officer is a member of the board. The Chief Financial Officer is not a member of the board of directors but participates at meetings by presenting information. The Chairman of the board does not participate in the operating management of the Company. Chief Executive Officer 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 responsible for implementing the business plan as well as day-to-day management of the Company’s affairs and the daily operations of the Company. This means that the Chief Executive Officer makes decisions on those issues that can be considered to fall under the day-to-day management of the Company. The Chief Executive Officer may also 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, and 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’s developments. Moreover, the material contains comments from the Chief Executive Officer and the Chief Financial Officer (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 formulate 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 “bottom-up” 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.

Committees Questions about salary structuring and benefits for the Chief Executive Officer and management are addressed and approved by a remuneration committee. This committee consists of Jan Svensson and Eric Hielte. Jan Svensson is Chairman of the committee. The 2008 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 Remuneration to the board of directors and senior executives below. The Company’s auditors inform the entire board about the results of their work by at least 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 AGM. The Company appointed a formal nomination committee during the year, which besides the Chairman of the board consists of one representative and convenes the major shareholders annually well in advance of the AGM in order to gain support for proposals to the AGM’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 AGM after each financial year. The AGM appoints auditors for a period of four years. At the AGM on 27 April 2007, KPMG AB and its auditor Alf Svensson as the person 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 management of the board of directors and the Chief Executive Officer. The annual report and financial statements are reviewed during January and February. Apart from Nederman, Alf Svensson does not have any assignments in companies over which Nederman’s principle shareholders, 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 900,000 in 2008 and related mainly to specific auditing assignments in connection with acquisitions. Remuneration to the board of directors and senior executives The 2008 AGM adopted a policy relating to remuneration and terms of employment for 2008, applying the following underlying principles: Fixed salary is paid for satisfactory work. In addition there is a potential for variable remuneration linked to the Company’s performance and tied up capital. Variable remuneration can 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 30 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 CEO resigns, 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 price-related incentive schemes at this time for the board of directors or senior executives. Nederman’s executive management team consists of seven people (including the CEO). Internal controls According to the Swedish Companies Act and the Swedish Code of Corporate Governance, the board of directors is responsible for the Company’s internal controls. According to point 3.7.2. of the Code, the board shall annually prepare a report about how the internal control of financial reporting is organised and how well it has functioned over the past financial year. In accordance with the statement made by the Swedish Corporate Governance Board on 5 September 2006, this report has been produced for the first year, as the Company incorporates the Code, confining it to a description of how the internal controls for financial reporting are organised. Control environment Operative decisions are made at a company or business area level, while decisions about strategy, aims, acquisitions and comprehensive financial issues, are made by the parent company’s board and management. The internal controls at the Group are designed to function in this organisation. The Group has clear rules and regulations for delegating responsibility and authority in accordance with the Group’s structure. The platform for internal controls concerning financial reporting consists of the comprehensive control environment and organisation, decision processes, authority and responsibility that is documented and communicated. In the Group the most significant components are documented in the form of instructions and policies, e.g. financial manuals, ethics policy (Code of Conduct), communication policy, IT policy, financial policy and authorization lists.

Control activities To safeguard the internal controls there are both automated controls, such as authorization controls in the IT system and approval controls, as well as manual controls such as auditing and stocktaking. Financial analyses of the results as well as following up plans and forecasts, complete the controls and give a comprehensive confirmation to the quality of the reporting. Information and communication Documentation of governing policies and instructions are constantly updated and communicated in electronic or printed format. For communications with external parties, there is a communication policy that contains guidelines for ensuring that the Company’s information obligations are applied fully and correctly. Following-up The CEO is responsible for the internal controls being organised and followed up according to the guidelines that the board has decided on. Financial management and control is carried out by the Group’s financial department. Financial reporting is analysed monthly and at a detailed level. The board has dealt with the Company’s financial position at its meetings and has also received reports and observations from the Company’s auditors. Articles of Association The Articles of Association include establishing the Company’s activities, the number of board meetings, the auditors, how notification of the AGM will be made, how matters will be handled at the AGM and where the meeting will be held. The current Articles of Association were adopted at an Extraordinary General Meeting on 10 April 2007, and can be found on the company’s website at www. nederman.com and in the annual report for 2008 on page xx. Review The corporate governance report has not been subject to review by the Company’s auditors.

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

Jan Eric Larson

Gunnar Gremlin

Sven Kristensson

Jan Svensson

Eric Hielte

Jan Eric Larson Born 1947. Chairman of the board of Camfil AB and other Camfil companies. Chairman of the board of Swedeship AB. Mr Larson owns 17,260 Nederman shares. Gunnar Gremlin Born 1945. Chairman of the board of Leybold Optics GmbH, PSM International Ltd and TitanX Engine Cooling AB. Mr Gremlin is a board member of Dyckerhoff AG. Mr Gremlin owns 43, 939 Nederman shares. Sven Kristensson Born 1962. Chief Executive Officer and CEO of Nederman. Chairman of the board of BK PAC AB and Ekodoor AB. Mr Kristensson is a board member of Conoctica Holding AB. Mr Kristensson owns 164,881 Nederman shares. Jan Svensson Born 1956. Chairman of the board of Nederman. Chief Executive Officer and board member of Investment AB Latour. Chairman of the board of OEM International AB and AB Fagerhult. Mr Svensson is a board member of Loomis AB, Munters AB and Oxeon AB. Mr Svensson owns 2,000 Nederman shares.

Per Borgvall

Peter Möller

Rolf Rånes

Eric Hielte Born 1948. Chairman of the board of Ernströmgruppen AB. Board member of Bygg-Fast AB. Per Borgvall Born 1958. Chief Executive Officer and board member of AB Fagerhult. Chief Executive Officer of Gunnebo AB during spring 2009. Peter Möller Born 1952. Mr Möller is Chief Executive Officer of SAS Technical Services AB. Mr Möller owns 19,751 Nederman shares. Rolf Rånes Born 1946. Mr Rånes is Employee Representative and chairman, I F Metall. Board member since 2001. Mr Rånes owns 300 Nederman shares. Mikael Kram Born 1968. Mr Kram is chairman of the local union, Nederman. Board member since 2008.

Mikael Kram

Senior executives Sven Kristensson President and CEO. Born 1962. Employed in Nederman since 2001. Mr. Kristensson owns 164,881 Nederman shares.

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

Anders Agering CFO. Born 1951. Employed in Nederman since 2002. Mr Agering owns 60,100 Nederman shares (privately or by companies).

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

Per-Ove Eriksson VP Production & Logistics. Born 1956. Employed in Nederman since 2003. Mr Eriksson owns 30,399 Nederman shares.

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

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

Per Lind VP Business Area Manager Extraction & Filter Systems. Born 1957. Employed in Nederman since 2007. Mr Lind owns 2,000 Nederman shares.

Financial definitions Key figures are defined as follows:

Return on equity Net profit for the period divided by average shareholders’ equity.

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

Return on operating capital EBIT as a percentage of average operating capital.

Net debt/equity ratio Net debt divided by shareholders’ equity.

EBIT Operating profit after depreciation and amortisation.

Operating capital Shareholders’ equity plus net debt.

EBIT margin EBIT as a percentage of net sales.

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.

EBITDA Operating profit before depreciation and amortisation. EBITDA margin EBITDA as a percentage of net sales. Equity per share Average shareholders’ equity divided by average number of outstanding shares. Capital turnover rate Net sales divided by average operating capital.

Equity/asset ratio Equity divided by total assets (balance sheet total). Earnings per share Net profit divided by average number of outstanding shares. Annual average Average of year-beginning and year-end balance.

Nederman Holding AB (publ.) P.O. Box 602 Visiting address: 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 organisation 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, Turkey, 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