HANZA Q1 2017 final approved Odd

INTERIM REPORTFIRST QUARTER 2017

EMPOWERINGINNOVATION

of21 HANZA|InterimreportJanuary-March2017HANZA|InterimreportJanuary-March2017

INTERIMREPORT1January–31March2017Atthebeginningof2017,HANZAcompletedamajoraccelerationprogramme,Frontrunner,wheretheGroup,overa20-monthperiod,consolidatedproductionfacilitiesandmanufacturingresourcesinspecificgeographicalareas,knownasmanufacturingclusters.

Thesalesvolumesthatwerephasedoutduringtheprogramme,aswellasitemsthataffectedresults,aredescribedinthesectionsImpactofFrontrunnerandNetSalesandResults.

FIRSTQUARTER(1January–31March2017)• NetsalesamountedtoSEK350.0m(338.6)

• EBITfromtheoperativebusinessareasamountedtoSEK9.2m(14.5).TheGroup’sEBITamountedtoSEK8.4m(12.5).EBITwaschargedwithSEK-4.2m(2.3)fortheFrontrunnerprogramme.

• NetprofitamountedtoSEK3.3m(5.4),equivalenttoSEK0.15pershare(0.26)

• CashflowfromoperatingactivitiesamountedtoSEK33.1m(5.7)

CommentbyCEOErikStenfors:“Itisobviousthatproductcompaniesareinneedofnewmanufacturingsolutions.Weareexperiencingagoodorganicgrowthandwesignedseveralimportantmanufacturingcontractsduringthequarter.Ourworkwithcashflowhasalsobeensuccessfulandweshowasignificantlyreduceddebt,despitefactorytransitionsandaddedvolumes.Inoneyearournetdebthasdecreasedbynearlyonethird,fromSEK251mtoSEK175m.”“TheactivitieswecompletedintheElectronicssegmentin2015begantopositivelyaffectearningsin2016.Today,wehaveanindustry-leadingmargininelectronicsof7.8%.SimilaractivitiesintheMechanicssegmentarenowundercompletion,whyweseeamarginincreasethereaswell.Overall,earningsimprovedduringthequarterbySEK9.4mcomparedwiththefourthquarterof2016.”“WefacedanunexpectedchallengewithoursheetmetalfactoryinVaasa,Finland,whichisbeingconvertedtoalogisticscentre.Inearly2017,wewereunabletosignanew,moresuitableleaseagreementandwewereforcedtoapplyforarestructuringofoursubsidiary.However,continuednegotiationswiththepropertyownerresultedinanagreement,andtherestructuringisexpectedtosoonbefinalised.ThedelayneverthelesscausedsomedifficultiesfortheMechanicssegmentduringthequarter.”


FIRSTQUARTER2017HIGHLIGHTS• InJanuary,HANZAfiledtoreorganiseitslogisticscompanyinVaasa,Finland,afteranew,

moresuitableleasecouldnotbesigned.

• HANZA’sNominationCommitteepresenteditsproposalfortheAnnualGeneralMeetingon10May2017.MikaelSmedeby,FrancescoFranzéandHåkanHalénwerenominatedforre-electiontotheBoardofDirectorsandGeraldEngströmandHeleneRichmondwerenominatedasnewdirectors.GeraldEngströmisthefounderofSystemairABandbuiltitintooneoftheworld’sforemostventilationcompanies,withoperationsinaround50countries.HeleneRichmondhasextensivemanufacturingexperienceandcurrentlyservesasHeadofProductManagementatSKF.

• FärnaInvestAB,whichisownedbyGeraldEngström,inFebruaryconvertedaSEK15mloanto1,614,639shares,therebymakingGeraldEngströmoneofHANZA’slargestshareholders.

• HANZAsignedanagreementinFebruarytocreateacustomisedmanufacturingsolutiontosupplycompletesubassembliestoacustomer’sfinalassemblyplantinFinland.ComponentswillbemanufacturedatHANZA’sclusterinEstoniaandmoduleswillbeassembledinproximitytothecustomerinFinland.Manufacturingwillbegininsecondquarterof2017andisexpectedtoreachfullcapacitywithinoneyear.AnnualbusinessvolumeisestimatedatEUR5m.

• InMarch,HANZAsignedanagreementonamanufacturingsolutionforFlexenclosure,whichdevelopsInternetinfrastructureandintelligentpowermanagementsolutions.

SIGNIFICANTEVENTSAFTERTHEPERIOD• InMay,HANZAexpandeditsco-operationwiththedefenceandsecuritycompanySaabby

signinganagreementworthaboutSEK16mtoproducecomputerproductsfortheinternationalmarket.Deliveryisscheduledforthesummerof2017andproductionwilltakeplaceatHANZA’smanufacturingclusterinSweden.

• AleasewassignedwiththepropertyownerinVaasa,Finland,thankstowhichthereorganisationofthelogisticscompanycanbeconsideredsuccessfulandshouldsoonbefinalised.

TheHANZAGroup’ssalestrend.ThefigureshowshowsalesincreasedthroughtheacquisitionofMetallisetin2015andhowthefactoriesthatwereshutandcustomerswhowerephasedoutduringtheFrontrunnerprogrammein2016havesuccessfullybeenreplacedwithnewvolumes.

900

1000

1100

1200

1300

1400

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

Q12017

Sales,rolling12monthsbyquarter,SEKm


CEOCOMMENTHANZAisastrategicmanufacturingpartnerwhichisdevelopingmuchfasterthantraditionalcontractmanufacturers.Weareproudoftheadvisoryservicesandmanufacturingclustersweoffertoourbusinesspartners*).AstrongquarterItisobviousthatproductcompaniesareinneedofnewmanufacturingsolutions.Weareexperiencingagoodorganicgrowthandwesignedseveralimportantmanufacturingcontractsduringthefirstquarterof2017.OuractivitiesinourFrontrunnerprogramfortheElectronicssegmentin2015begantopositivelyaffecttheearningsin2016.Todaywehaveanindustry-leadingmargininelectronicsof7.8%.SimilaractivitiesintheMechanicssegmentarenowundercompletionandthemarginisincreasingthereaswell,althougheventsattheVaasafactoryunfortunatelydelayedtheworksomewhat(seebelow).Overall,earningsimprovedduringthequarterbySEK9.4mcomparedwiththefourthquarterof2016.Alsoworthmentioningaretheresultsofoureffortswithourworkingcapital.Wehavesignificantlyreducedourdebtdespitefactorytransitionsandnewcustomers.Inahalf-yearournetdebthasdecreasedbynearlyonethird,fromSEK251mtoSEK175m.

AnunusualquarterSometimestheunexpectedhappens.AspartoftheFrontrunnerprogrammewehaveconvertedourfactoryinVaasa,Finland,toalogisticscentreandthemanufacturingoperationsinVaasaarebeingtransferredtoourclusters.Inearly2017,wewereunabletosignanew,moresuitableleasewiththepropertyownerandwewereforcedtoapplyforarestructuringofoursubsidiaryinVaasatoavoidescalatedproblems.Continuednegotiationswaslaunchedandeventuallyledtoaleaseagreement.Asaresult,therestructuringisexpectedtobesuccessfullyfinalisedwithinshort,althoughthedelaycausedsomedifficultiesfortheMechanicssegmentduringthequarter.Youngcompany,long-termstrategyDuringourfirsttwobuild-upphases,wehavemethodicallycreatedmodernmanufacturingclustersanduniqueadvisoryservices.Wehavealsoaddedleadingcompaniesascustomersandbuiltupastrongcustomerportfolio.NowweareenteringtheGroup’sthirdphase,adevelopmentphasewherethefocusisonfurtherefficiencyimprovementsinourclustersandexpandingtonewmarkets,possiblythroughacquisitions.Butthecomingdevelopmentwillbeachievedbyaddingnewpartstoourexistingstructure.Inotherwords,HANZA’sfoundationissetandwillnotchange.*)Wedonotuseacustomerósuppliermodel.Instead,weseeHANZAasastrategicbusinesspartnertoproductcompanies.


MARKETDEVELOPMENTHANZA’sprimarymarketistheNordicregion,butcustomersarealsolocatedintherestofEurope,AsiaandtheUS.ItsexposuretoabroadrangeofindustriesmeansthateconomicconditionsarenormallyreflectedinHANZA’svolumes.Economicgrowthisspreadingtomorecountries.Somepartsoftheworldhavecomefurtherthanothers,however.TheUShascomethefurthest,whileEuropestillhaspotentialforfurthergrowth.Atthesametime,therearerisks,mainlyassociatedwithpoliticaldevelopments,suchasBrexitandtheunpredictabilitysurroundingglobaltradecausedbytheUSpresident.InSweden,theeconomyremainsstrong,jobgrowthcontinuesandinflationisontherise.InMarch,thePurchasingManagersIndexforbothmanufacturingandservicesreachedthehighestlevelssince2011.TheFinnisheconomyhasbeguntogrowaftermanyyearsandcontinuestodevelopwell,althoughtherecoveryisslowerthanaveragefortheEurozone.HANZAdoesnotissuesalesforecasts,butisconfidentthatprospectsforfurtherorganicgrowthareverygood.IMPACTOFFRONTRUNNERThepurposeoftheFrontrunneraccelerationprogramhasbeentoquicklyputinplaceauniqueclusterstructureinselectedgeographicalareaswhereHANZAcanoffermultiplemanufacturingtechnologies.AspartofFrontrunner,someproductionvolumesandstandalonefactorieshavebeenmovedtotheseclusters.Involumeterms,manufacturinggeneratingtheequivalentofaboutSEK150minannualsaleshasbeenphasedoutintheprocess.Furthermore,inconsultationwiththecustomer,thebulkofthehigh-techproductionforthetelecomindustryhasbeenphasedoutaswell.In2014,thiswasoneoftheGroup’slargestvolumes,generatingannualsalesconsiderablyhigherthanSEK100m.Today,thisvolumerepresentsannualsalesoflessthanSEK10m.ThereasonforthistransitionistheGroup’sfocusonturnkeymanufacturingandMIGTMprojects,whichcreatehighervalueforcustomersandforHANZA.ExperienceshowsthatstaffreductionsinconnectionwithplantclosingscostoverSEK100,000perperson.In2016,around130employeeswereaffected.Layoffshavecontinuedin2017inVaasa,Finland.Costsforvacatedpremisesvarydependingonwhetherthepropertyisownedorleased.Thecostsfortheprogrammehavebeenrecognisedquarterlyinthecompany’sinterimreportsinNote4.Intermsofcashflow,aconsolidationofproductionunits(“Clusterformation”)normallyreducestied-upcapital.HANZAhasnotcreatedarestructuringreserveforFrontrunner,insteadexpensingthecoststhroughtheincomestatement(seeNetSalesandResultsbelow).OneofFrontrunner’sgoalsistooffsetnegativeone-offssuchasseveranceandcostsforvacatedpremiseswithastructureddivestmentoftheassetsthatarefreedupasoperationsareconcentratedinclusters.Thereorganisationalsoaffectedthefirstquarterof2017,andintotaltheitemshavereducedearningsbySEK4.2m.


SEKm Jan-Mar2017

Jan-Mar2016

Jan-Dec2016

Netsales 350.0 338.6 1305.8Operativebusinessareas’EBIT 9.2 14.5 30.0Businessdevelopment -0.8 -2.0 -4.8EBIT 8.4 12.5 25.2Cashflowfromoperatingactivities 33.1 5.7 41.6Interest-bearingnetdebt 175.2 250.6 226.7Equity/assetsratio 37.3% 34.2% 35.6%

NETSALESANDRESULTSFirstquarterNetsalesincreasedby3.4%toSEK350.0m(338.6).Thepreviousyear’ssalesincludevolumesthathavesincebeendivestedaspartoftheFrontrunnerprogramme;seeabove.EBITDAforthequarteramountedtoSEK20.0m(24.4),correspondingtoanEBITDAmarginof5.7%(7.2).DepreciationamountedtoSEK11.6m(11.9)duringtheperiod.TheGroup’sEBITamountedtoSEK8.4m(12.5),correspondingtoanoperatingmarginof2.4%(3.7).Recognisedoperatingresultsincludeallcosts,evenforspecialprogrammessuchasFrontrunner.Asaresult,thereisnoseparaterestructuringreserveortheequivalent.However,HANZAreportsinthenotesthosecoststhatarenon-recurringinnature,suchasseverancepay,rentalcostsforvacatedpremisesandimpairmentofassetsthatwillnotbeutilisedinthefuture.Inthefirstquarter,thesetotalledaboutSEK-4.2m;seeNote4.Thisonlyincludescostsdirectlyassociatedwiththeprogramme.Therearealsoindirectcostssuchasqualityassurancework,modificationsofmaterialstructures,internaltrainingofnewemployeesetc.HANZA’sstrategywhenmergingfactoriesistofreeupandsellsurplusassetstocovertheadditionalcoststoestablishclusterstructures.Nosuchone-offswererealisedinthefirstquarter,however.Duringthefirstquarterof2017,theElectronicssegmentpostedEBITofSEK9.9m(7.3),correspondingtoanoperatingmarginof7.8%(6.3).SalesincreasedbySEK10.0mtoSEK126.8m(116.8).EBITfortheMechanicssegmentamountedtoSEK-0.7m(7.2),correspondingtoanoperatingmarginof-0.3%(3.3%).AspartoftheFrontrunnerprogramme,electronicsplantswererestructuredin2015andmechanicsplantsin2016.AsopposedtotheElectronicssegment,theMechanicssegmentisstillhamperedbyone-offs.Directone-offcostswithintheMechanicssegmentamountedtoSEK3.9m(1.4)inthefirstquarter;seealsoNote4.Therearealsoindirectcoststhatarenotexplicitlyrecognised;seeabove.


CostsforspecialprojectstodeveloptheGroupnotassociatedwithHANZA’snormaloperatingactivities,suchasacquisitions,divestments,listingcosts,thedevelopmentofservicesetc.,arerecognisedintheBusinessDevelopmentsegment.EBITfortheBusinessDevelopmentsegmentamountedtoSEK-0.8m(-2.0)inthefirstquarter.Thegrossmarginwas42.7%(45.1).OtherexternalcostsamountedtoSEK-46.5m(-50.1)andpersonnelcostsamountedtoSEK-85.4m(-83.4).NetfinancialitemsamountedtoSEK-3.7m(-6.3)inthequarter.ThisincludesanetinterestcostofSEK-3.1m(-4.9).Thedecreaseinnetinterestisduetolowernetdebtandlowerinterestratelevels.TheresultbeforetaxeswasSEK4.7m(6.2).NetprofitamountedtoSEK3.3m(5.4).

TheHANZAGroup’sEBIT,excludingdirectone-offs.ThefigureshowsoperatingEBIT,excludingdirectone-offs,whichareshownseparatelybelow.Thisisinadditiontoindirectone-offsthatcannotbequantified.

CASHFLOWANDINVESTMENTSCashflowfromoperatingactivitiesamountedtoSEK33.1m(5.7)inthefirstquarter.CashflowwaspositivelyaffectedinthefirstquarterbyadecreaseinworkingcapitalofSEK20.0m(-7.6).Theconsolidationofproductionunits(“clusterformation”)reducestied-upcapital.Inrecentyears,HANZAhasmadeextensiveinvestmentstodeveloptheGroup’sproductionfacilitiesandautomateprocessesbyinstallingnewmachinery,andtodayitisfullyinvested.Asaresult,investmentsareexpectedtobelowerthandepreciationmovingforward.Themergerofproductionunitsalsoleadstolowerinvestmentneeds. CashflowfrominvestingactivitiesamountedtoSEK3.3m(0.3)inthefirstquarterandconsistedofinvestmentsinproperty,plantandequipmentofSEK3.1mandthedivestmentofnon-currentassetsforSEK6.4m.LoansdecreasedbySEK18.5m(decreaseof32.7)duringthequarter.

-20

0

20

40

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

EBIT,rolling12monthsbyquarter,SEKm


FINANCIALPOSITIONEquityamountedtoSEK286.0m(262.2)attheendoftheperiodandtheequity/assetsratiowas37.3%(34.2).Aconvertibleloanwasconvertedduringthequarter,whichincreasedequitybySEK14.1mandreducedinterest-bearingnetdebtcorrespondingly.TotalassetsamountedtoSEK766.3m(766.5).CashandcashequivalentsamountedtoSEK42.2m(21.8)attheendoftheperiod.Interest-bearingnetdebtamountedtoSEK175.2m(250.6)attheendoftheperiod.EMPLOYEESDuringthequarter,theaveragenumberofemployeesintheGroupwas1,329(1,351).Attheendoftheperiod,thenumberofemployeeswas1,407,comparedwith1,399atthebeginningoftheyear.PARENTCOMPANYTheParentCompany’snetsales,whichconsistsolelyofrevenuesfromGroupcompanies,amountedtoSEK1.8m(0.7).TheresultbeforetaxesduringthequarterwasSEK-1.5m(-0.6).NoinvestmentsweremadeintheParentCompany.THESHAREAtthebeginningoftheyear,HANZAhadaconvertibleloanwithanominalvalueofSEK15.0mfromFärnaInvestAB.ThisloanwasconvertedatthebeginningofMarchatapriceofSEK9.29,increasingthenumberofsharesby1,614,639to22,324,008attheendofthequarter.Thecompanyhasonlyoneclassofshares.ErikPenserBankABisthecompany’sCertifiedAdviserandalsoservesasliquidityprovider.TheshareistradedonNasdaqFirstNorthPremier.SharestradedinthePremiersegmentaresubjecttomorestringentdisclosureandreportingrequirementsthansharessubjecttoFirstNorth’snormalregulations.AlistingonthePremiersegmentalsorequiresthecompanytoprovidewithahigherleveloftransparency,preparingitforapossibletransfertothemainlistofNasdaq.ThesharepriceattheendoftheperiodwasSEK10.40(7.25).Since2016,thereisawarrantprogrammecomprising1,001,000warrantswiththerighttosubscribefor1shareforSEK12duringtheperiod1November2018to31December2018.Ofthesewarrants,721,000weresubscribedattheendoftheperiod.SIGNIFICANTRISKSANDUNCERTAINTIESTheriskfactorsofgreatestsignificancetoHANZAarefinancialrisksandchangesinmarketconditions.Forfurtherinformationaboutrisksanduncertainties,refertoNote3inthecompany’sannualreportfor2016.Nosignificantchangesintheriskshavearisensincetheannualreportfor2016waspublished.


RELATED-PARTYTRANSACTIONSDuringthequarter,therewerenotransactionsbetweentheHANZAGroupandrelatedpartiesthatmateriallyaffectedtheGroup’sfinancialpositionandresultsduringtheyear.Theinterimreportprovidesatrueandfairoverviewoftheoperations,financialpositionandresultsoftheParentCompanyandtheGroupanddescribesthematerialrisksanduncertaintiesfacedbytheParentCompanyandthecompaniesintheGroup.Stocksund,10May2017

OnbehalfoftheBoardofDirectors ErikStenfors,CEOThisreporthasnotbeenreviewedbythecompany’sauditors.


FINANCIALSTATEMENTSCONSOLIDATEDSTATEMENTOFCOMPREHENSIVEINCOMEAmountsinSEKm Note Jan-Mar Jan-Mar Jan-Dec 2017 2016 2016

Netsales 4 350.0 338.6 1305.8

Changeininventoriesduetoproduction,finishedgoodsandworkinprogress

4.8 -1.6 4.3

Rawmaterialandsupplies

-205.4 -184.4 -722.6Otherexternalcosts

-46.5 -50.1 -196.2

Personnelcosts

-85.4 -83.4 -332.8Depreciation

-11.6 -11.9 -47.5

Otheroperatingincome 5 3.9 5.7 20.7Otheroperatingcosts 5 -1.4 -0.4 -6.5EBIT 4 8.4 12.5 25.2

Resultfromfinancialitems

Financialincome

0.3 0.0 0.3

Financialcosts -4.0 -6.3 -22.0Netfinancialitems 6 -3.7 -6.3 -21.7 Resultbeforetaxes

4.7 6.2 3.5

Incometaxes

-1.4 -0.8 -1.6Netprofit/loss

3.3 5.4 1.9

Othercomprehensiveincome

Itemsthatcanlaterbereversedtoprofitorloss Translationdifferences -0.1 2.5 11.4Othercomprehensiveincomefortheperiod -0.1 2.5 11.4Totalcomprehensiveincomefortheperiod

3.2 7.9 13.3

Netprofit/lossandtotalcomprehensiveincomearerelatedinitsentiretytotheParentCompany’sshareholders

Resultpersharebeforedilution

0.15 0.26 0.09Resultpershareafterdilution

0.15 0.26 0.09

Weightedaveragenumberofsharesbeforedilution

21,265,522 20,642,179 20,651,884

Adjustmentforcalculationofresultpershareafterdilution: Convertibles

1,058,486 359,167 1,538,917

Weightedaveragenumberofsharesafterdilution

22,324,008 21,001,346 22,190,801

of21 HANZA|InterimreportJanuary-March2017

CONSOLIDATEDBALANCESHEET

AmountsinSEKm Note31Mar2017

31Mar2016

31Dec2016

ASSETS

Non-currentassets

Intangibleassets

Goodwill

145.0 142.3 145.1Otherintangibleassets 0.5 0.3 0.5Intangibleassets

145.5 142.6 145.6

Tangiblenon-currentassets

229.5 257.4 243.5

Financialnon-currentassets

Otherlong-termsecuritiesholdings

0.3 0.4 0.3

Deferredtaxassets 16.1 16.8 17.2Financialnon-currentassets

16.4 17.2 17.5

Totalnon-currentassets

391.4 417.2 406.6 Currentassets

Inventory

256.3 238.2 243.5Accountsreceivable

52.6 62.6 57.2

Otherreceivables

14.1 16.5 14.6Prepaidcostsandaccruedincome

9.7 10.2 9.6

Cashandcashequivalents 42.2 21.8 24.1Totalcurrentassets

374.9 349.3 349.0

TOTALASSETS

766.3 766.5 755.6


CONSOLIDATEDBALANCESHEET,cont.


31Mar2016

31Dec2016

EQUITY

EquityattributabletoParentCompany’s

286.0 262.2 268.8shareholders

LIABILITIES

Long-termliabilities

Liabilitiestocreditinstitutions 3 88.5 110.5 69.1Otherlong-terminterest-bearingliabilities

- 2.7 -

Convertibleloan

- 13.0 -Long-termnon-interest-bearingliabilities 7.6 6.8 7.1Totallong-termliabilities

96.1 133.0 76.2

Currentliabilities

Bankoverdraft 3 61.5 60.5 74.5

Liabilitiestocreditinstitutions 3 60.7 69.4 86.4Convertibleloan

- 4.5 13.9

Otherinterest-bearingliabilities

6.7 11.8 6.9Accountspayable

179.1 144.6 155.2

Otherliabilities

29.0 25.0 25.1Accruedcostsanddeferredincome 47.2 55.5 48.6Totalcurrentliabilities

384.2 371.3 410.6

TOTALEQUITYANDLIABILITIES

766.3 766.5 755.6

Equitypershareattheendoftheperiod,SEK

12.81 12.70 12.98

Numberofsharesattheendoftheperiod

22,324,008 20,642,179 20,709,369


CONSOLIDATEDSTATEMENTOFCHANGESINEQUITYAmountsinSEKm

Sharecapital

Othercontributions

received Reserves

Profitbroughtforward

includingprofitfortheperiod

Totalequity

Openingbalanceasof1January2016 2.0 294.8 -3.3 -39.4 254.1Profitaftertax - - - 1.9 1.9Othercomprehensiveincome

Translationdifferences - - 11.4 - 11.4Totalcomprehensiveincome 11.4 1.9 13.3Employeeoptions - 0.9 - - 0.9Newshareissue 0.1 0.6 - - 0.7Issuecosts - -0.2 - - -0.2Totalcontributionfromandvaluetransferstoshareholdersrecogniseddirectlyinequity 0.1

1.3 - - 1.4

Closingbalanceasof31December2016 2.1 296.1 8.1 -37.5 268.8

Openingbalanceasof1January2017 2.1 296.1 8.1 -37.5 268.8Profitaftertax - - - 3.3 3.3Othercomprehensiveincome

Translationdifferences - - -0.1 - -0.1Totalcomprehensiveincome - - -1.1 3.3 3.2Issuecosts - -0.1 - - -0.1Conversionofconvertibleloan 0.1 14.0 - - 14.1Totalcontributionfromandvaluetransferstoshareholdersrecogniseddirectlyinequity 0.1 13.9 - - 14.0Closingbalanceasof31March2017 2.2 310.0 8.0 -34.2 286.0


CONSOLIDATEDCONDENSEDSTATEMENTOFCASHFLOWSAmountsinSEKm Jan-Mar Jan-Mar Jan-Dec 2017 2016 2016Cashflowfromoperatingactivities

Profit/lossafterfinancialitems 4.7 6.2 3.5Depreciation 11.6 11.9 47.5Othernon-cashitems -1.6 -2.9 -7.4Incometaxespaid -1.6 -1.9 -4.6Cashflowfromoperatingactivitiesbeforechangesinworkingcapital 13.1 13.3 39.0

Totalchangeinworkingcapital 20.0 -7.6 2.6Cashflowfromoperatingactivities 33.1 5.7 41.6

Cashflowfrominvestingactivities Investmentsinnon-currentassets -3.1 -4.8 -28.2Saleoftangiblenon-currentassets 6.4 5.1 28.5Cashflowfrominvestingactivities 3.3 0.3 0.3

Cashflowfromfinancingactivities Newshareissue - - -0.2Changeinloans -18.5 -32.7 -67.8Cashflowfromfinancingactivities -18.5 -32.7 -68.0

Decrease/increaseincashandcashequivalents 17.9 -26.7 -26.1Cashandcashequivalentsontheopeningdate 24.1 48.8 48.8Exchangeratedifferencesincashandcashequivalents 0.2 -0.3 1.4Cashandcashequivalentsattheendoftheperiod 42.2 21.8 24.1


CONDENSEDINCOMESTATEMENT,PARENTCOMPANYAmountsinSEKm Jan-Mar Jan-Mar Jan-Dec 2017 2016 2016

Operatingrevenue 1.9 0.7 9.2

Operatingcosts -3.1 -2.4 -12.1 EBIT -1.2 -1.7 -2.9

Profit/lossfromfinancialitems

Profit/lossfromparticipationsinGroupcompanies - 1.8 2.1Otherinterestincomeandsimilarprofit/lossitems 0.3 0.4 1.2Interestcostsandsimilarprofit/lossitems -0.6 -1.1 -4.2Totalprofit/lossfromfinancialitems -0.3 1.1 -0.9

Profit/lossbeforetax -1.5 -0.6 -3.8

Taxonnetprofit/lossfortheperiod - - 1.3 Netprofit/loss -1.5 -0.6 -2.5

Otherinterestincomeandsimilarprofit/lossitemsincludeinterestincomefromGroupcompaniesofSEK0.3m(0.4).

SincetherearenoitemsintheParentCompanyrecognisedincomprehensiveincome,totalcomprehensiveincomecorrespondstoprofit/lossfortheperiod.


CONDENSEDBALANCESHEET,PARENTCOMPANY


31Mar2016

31Dec2016

ASSETS

Non-currentassets

Financialnon-currentassets

253.9 256.4 257.2 Totalnon-currentassets

253.9 256.4 257.2

Currentassets

Currentreceivables

0.4 0.4 0.4

Cashandcashequivalents 0.0 0.8 0.0Totalcurrentassets

0.4 1.2 0.4

TOTALASSETS

254.3 257.6 257.6

EQUITYANDLIABILITIES

Equity

224.7 213.2 212.1

Provisions

- 2.6 0.1

Long-termliabilities

13.4 15.8 15.0

Currentliabilities

16.2 26.0 30.4 TOTALEQUITYANDLIABILITIES

254.3 257.6 257.6


NOTESNote1 GeneralinformationAllamountsarestatedinSEKmillions(SEKm)unlessotherwiseindicated.Figuresinparenthesespertaintothecorrespondingyear-earlierperiod.Thequarterlyinformationonpages5-8isanintegralpartofthisfinancialreport.Note2 BasisforpreparationofthereportandaccountingpoliciesHANZAHoldingAB(publ)appliestheInternationalFinancialReportingStandards(IFRS)endorsedbytheEU.ThisinterimreporthasbeenpreparedincompliancewithIAS34InterimReporting.TheinterimreportfortheParentCompanyhasbeenpreparedinaccordancewithChapter9oftheSwedishAnnualAccountsActandRFR2Accountingforlegalentities.Theaccountingpoliciescomplywiththepoliciesappliedintheprecedingfinancialyear.Formoreinformation,seeNote2inthecompany’sannualreportfor2016.Theinterimreportshouldbereadtogetherwiththisannualreport.Note3 Financialinstruments–FairvalueoffinancialliabilitiesatamortisedcostTheGroup’sborrowingcomprisesalargenumberofcontractsenteredintoatvarioustimesandsubjecttovariousterms.Mostoftheloanscarryfloatinginterestrates.Onthisbasis,therecognisedamountsmaybeconsideredfairapproximationsoffairvalue.Thefairvalueofshort-termborrowingcorrespondstoitscarryingamount,sincediscountingeffectsareinsignificant.Note4 SegmentinformationRevenuesInter-segmentsalesaremadeoncommercialterms.

Jan-Mar2017 Jan-Mar2016

Segmentrevenue

Lesssalesbetweensegments

Revenuesfrom

externalcustomers

Segmentrevenue

Lesssalesbetweensegments

Revenuesfrom

externalcustomers

Mechanics 224.5 -1.7 222.8

226.8 -5.4 221.4Electronics 136.0 -9.2 126.8

126.6 -9.8 116.8

BusinessDevelopment 0.4 - 0.4 0.4 - 0.4Total 360.9 -10.9 350.0 353.8 -15.2 338.6


Note4 Segmentinformation,continuedEBITisreconciledasincomebeforetaxasfollows: Jan-Mar Jan-Mar Jan-Dec 2017 2016 2016EBIT Mechanics -0.7 7.2 6.0Electronics 9.9 7.3 24.0BusinessDevelopment -0.8 -2.0 -4.8Total 8.4 12.5 25.2Netfinancialitems -3.7 -6.3 -21.7Resultbeforetaxes 4.7 6.2 3.5 One-offs Revaluationofsupplementalpurchaseprice - - 1.7TransactioncostsMetalliset - 0.4 0.4Restructuring -4.2 -2.1 -17.7ReserverentalcostsEstonia - -3.7 -Capitalgainonproperty - 4.4 6.6Total -4.2 -1.0 -9.0EBITpersegmentexcludingone-offsMechanics 3.2 8.6 15.7Electronics 9.9 7.3 24.0Total 13.1 15.9 39.7BusinessDevelopment -0.5 -2.4 -5.5Total 12.6 13.5 34.2One-offs -4.2 -1.0 -9.0EBIT 8.4 12.5 25.2


Note5 Otheroperatingincomeandoperatingcosts

Jan-Mar Jan-Mar Jan-DecOtheroperatingincome 2017 2016 2016Resultfromsaleofnon-currentassets 2.6 4.4 11.3Revaluationofsupplementalproceeds - - 1.7Insurancecompensation - - 0.7Exchangerategains 1.0 0.2 3.2Otheritems 0.3 1.1 3.8Total 3.9 5.7 20.7 Otheroperatingcosts Resultfromsaleofnon-currentassets -0.4 - -0.5Exchangeratelosses -0.9 -0.2 -4.9Otheritems -0.1 -0.2 -1.1Totalotheroperatingincome -1.4 -0.4 -6.5Resultfromsaleofnon-currentassetsin2016referstogainsonthesaleofpropertiesinTörebodaandRihimäki,Finland,aswellasequipmentinSweden.

Note6 Financialincomeandcosts–Netfinancialitems

Jan-Mar Jan-Mar Jan-Dec

Financialincome 2017 2016 2016Interestincome 0.0 0.0 0.0Netexchangerategainsandlosses 0.3 - -Otherfinancialincome - - 0.3Totalfinancialincome 0.3 0.0 0.3

Financialcosts Interestcosts -3.1 -4.9 -15.0Netexchangerategainsandlosses - -0.5 -3.4Otherfinancialcosts -0.9 -0.9 -3.6Totalfinancialcosts -4.0 -6.3 -22.0

Netfinancialitems -3.7 -6.3 -21.7


KEYFINANCIALRATIOS

Jan-Mar Jan-Mar Jan-Dec

2017 2016 2016Netsales,SEKm 350.0 338.6 1,305.8EBITDAmargin,% 5.7% 7.2% 5.6%Operatingmargin,% 2.4% 3.7% 1.9%Operativebusinessareas’EBIT,SEKm 9.2 14.5 30.0OperativeEBITmargin,% 2.6% 4.3% 2.3%Operatingcapital,SEKm 461.2 512.8 495.5Returnonoperatingcapital,% 1.9% 2.9% 6.0%Capitalturnoverrateonoperatingcapital,times 0.7 0.7 2.6Interest-bearingnetdebt,SEKm 175.2 250.6 226.7Netdebt/equityratio 0.6 1.0 0.8Equity/assetsratio,% 37.3% 34.2% 35.6%Averageno.ofemployees 1,329 1,351 1,346DATESFORFORTHCOMINGFINANCIALINFORMATION• InterimreportfortheperiodJanuary-June2017:28August2017• InterimreportfortheperiodJanuary-September2017:23October2017

Forfurtherinformation,pleasecontact:ErikStenfors,CEOTel:+46709508070,e-mail:[email protected]Åkerblom,CFOTel:+46707949878,e-mail:[email protected]


DEFINITIONS

Unlessotherwisestatedinthisinterimreport,thedefinitionsrefertotheGroup.Figuresinparenthesespertaintotheoutcomeforthecorrespondingperiodin2016.

Businessdevelopmentcostsincludenon-recurringcostsfordevelopingthebusinessmodelandtheorganisation,suchaslistingcosts,coststotransitiontoIFRS,theeliminationofunprofitablefactoriesuponacquisition,andacquisitioncostsintheformofduediligence

Capitalturnoveronaverageoperatingcapitalisnetsalesdividedbyaverageoperatingcapital

EBIT(Earningsbeforeinterestandtaxes)isprofit/lossbeforeinterestandtaxes

EBITDA(Earningsbeforeinterest,taxes,depreciationandamortisation)isprofit/lossbeforeinterest,taxesanddepreciationandamortisationoftangibleandintangibleitems

EBITDAmarginisEBITDAdividedbynetsales

Equity/assetsratioisequitydividedbytotalassets

Interest-bearingnetdebtisinterest-bearingliabilitieslesscash,similarassetsandshort-terminvestments

Netdebt/equityratioisinterest-bearingnetdebtdividedbyequity

Operatingmargin(EBITmargin)isoperatingprofitdividedbynetsales

Operatingcapitalistotalassetslesscash,financialassetsandnon-interest-bearingliabilities

Operativebusinessareas’EBIT(operativeEBIT)isoperatingprofit/lossbeforebusinessdevelopmentcosts

OperativeEBITmarginisoperativebusinessareas’EBITdividedbynetsales

ReturnonoperatingcapitalisoperatingEBITdividedbyaverageoperatingcapital


ABOUT HANZA

HANZA is a fast-growing industrial business partner in

manufacturing. The company creates increased growth and profitability for customers by providing complete manufacturing

solutions involving mechanics, electronics, cabling and final assembly. HANZA was founded in 2008 and has rapidly grown into a billion kronor company. The company has operations in Sweden, Finland, Estonia, Poland, Czech Republic and China. HANZA's customers include leading companies such as ABB,

Atlas Copco, Ericsson, Saab Defence and Siemens.

HANZA Holding AB (publ) Brovägen 5, SE-182 76 Stocksund, Sweden

Telephone: +46 8 624 62 00

Corporate Registration Number 556748-8399 www.hanza.com

Erik Penser Bank AB is HANZA’s Certified Advisor on First North.

HANZA Q1 2017 final approved Odd

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