Absolent Air Care : Group’s Interim Report Q2 2021

QUARTER 2

INTERIM REPORT JANUARY - JUNE 2021

QUARTER 2, 2021

• Net sales amounted to 269.6 MSEK (196.6) which is a growth of 37.2 % (-10.5).
• Operating profit before amortization of goodwill (EBITA) reached 41.4 MSEK (-41.9) with a margin of 15.3 % (-21.3)
• Operating profit after amortization of goodwill (EBIT) amounted to 16.8 MSEK (-62.1 ) with a margin of 6.2 % ( -31.6). Amortizations of goodwill had an impact on EBIT with -24.6 MSEK (-20.3).
• Earnings per share amounted to 0.6 SEK (-6.0)
• Cash flow from operating activities amounted to 28.8 MSEK (36.3)

FIRST SIX MONTHS, 2021

• Net sales amounted to 502.7 MSEK (475.7) which is an increase of 5.7 % (10.9).
• Operating profit before amortization of goodwill (EBITA) reached 67.8 MSEK (-8.9) with a margin of 13.5 % (-1.9).
• Operating profit after amortization of goodwill (EBIT) reached 19.5 MSEK (-49.3) with a margin of 3.9 % (-10.4). Amortizations of goodwill had an impact on EBIT with 48.3 MSEK (-40.3).
• Earnings per share amounted to 0.24 SEK (-5.7).
• Cash flow from operating activities after change in working capital amounted to 48.4 MSEK (21.4).

KEY RATIOS

	apr-jun	apr-jun	jan-jun	jan-jun	jan-dec
	2021	2020	2021	2020	2020
Net sales (TSEK)	269 643	196 590	502 723	475 701	895 860
Sales growth (%)	37.2	-10.5	5.7	10.9	-13.7
EBITDA (TSEK)	44 565	-33 658	74 329	3 143	73 455
EBITA (TSEK)	41 385	-41 856	67 783	-8 931	49 543
EBITA (%)	15.3	-21.3	13.5	-1.9	5.5
Amortization of goodwill (TSEK)	-24 556	-20 259	-48 275	-40 334	-80 728
Operating profit EBIT (TSEK)	16 829	-62 115	19 507	-49 265	-31 184
Operating margin EBIT (%)	6.2	-31.6	3.9	-10.4	-3.5
Cash flow from operating
activities (TSEK)	28 769	36 316	48 414	21 435	54 447
Debt/equity ratio (%)	28.5	29.0	28.5	29.0	30.5
Net debt (TSEK)	191 915	169 035	191 915	169 035	129 903
Earnings per share (SEK)	0.6	-6.0	0.24	-5.7	-4.9
Equity per share (SEK)	30.3	30.8	30.3	30.8	30.4
Number of shares, end of period	11 320 968	11 320 968	11 320 968	11 320 968	11 320 968

2	ABSOLENT AIR CARE GROUP 2021

COMMENTS BY THE CEO AXEL BERNTSSON

The second quarter has shown the same trend as we have seen since last autumn where order intake continues to exceed sales. We have increased production capacity compared to the first quarter and have been able to deliver sales of 270 MSEK (197), which corresponds to a growth rate of 37% compared to the corresponding period last year and 16% compared to the first quarter.

Operating profit after depreciation (EBITA) continues to increase and amounted to 41.4 MSEK (-41.8) in the second quarter corresponding to an operating margin after depreciation of 15.3% (-21.3%). The corresponding margin for the first quarter was 11.3%. Our cost reduction program proceeds according to plan and delivers the expected margin improvement.

In order to meet the growing demand, we continued to increase production capacity in several factories during the quarter. However, during the quarter we have seen delivery constraints at our suppliers, which in the short term reduces our total delivery capacity. In some material categories, such as sheet metal and electronics, prices have continued to rise. The increases are expected, as announced after the last quarter, to be absorbed by price adjustments to customers with some delayed effect.

The second quarter has been particularly strong in the industrial segment, while commercial kitchens has been neutral in development. Order intake has continued to be good in all regions as well as the inflow of new business opportunities and we look with confidence at how the business will develop.

Axel Berntsson, MD and CEO

Gothenburg, August 2021

3	ABSOLENT AIR CARE GROUP 2021

GROUP JANUARY TO JUNE 2021

NET SALES

The net sales for the Group amounted to 502.7 MSEK (475.7), which corresponds to a change of 5.7 % (-13.7).

OPERATING PROFIT

Operating profit (EBIT) amounted to 19.5 MSEK (-49.3), which corresponds to an operating margin (EBIT) of 3.9 % (-10.4). The parent company and the Group do not apply IFRS/IAS 36. Thereby, impairment test of the goodwill is not performed. The Group amortize the goodwill linear over the estimated useful life, which is five to ten years. The amortizations of the goodwill do not affect the taxable profit. EBITA amounted to 67.8 MSEK (-8.9).The currency rates impacted the operating profit (EBIT) positively with 0.3 MSEK(2.1) for the period. The financial items were positively impacted with 1.2 MSEK (-2.4) by the currency rates. The impact is related to the credit facility in foreign currency. After taxes and financial items of -16.8 MSEK (-15.4) the result for the period was 2.7 MSEK (-64.7). Earnings per share amounted to 0.24 SEK (-5.7)

INVESTMENTS

The Group invested 8.1 MSEK (10.1) for the period January to June mainly in software, machinery, and inventory in current operations. Additional earn out for Interzon of 35.5 MSEK (0) has been paid, in the period. In January 2021, the Group acquired the commercial kitchen ventilation company Tessu Systems B.V. in the Netherlands for 5.3 MEUR on a cash and debt-free basis with an opportunity for an additional earn out conditional on Tessu's performance in 2021 and 2022. In January 2021 Absolent Group divested Gallito Limited in the UK.

CASH FLOW

Cash flow from the operating activities before changes in working capital amounted to 48.8 MSEK (37.7). Cash flow after changes in working capital amounted to 48.4 MSEK (21.4).

FINANCIAL POSITION

Interest bearing liabilities amounted to 583.2 MSEK at the end of the period. At the beginning of the period the liabilities amounted to 580 MSEK. Net debt of the Group was 191.9 MSEK by the end of June compared to 129.9 MSEK in the beginning of the period. The debt/equity ratio was at the end of the period 28.5% (30.5). The parent company's credit facility amounts 600 MSEK and expires during 2024.

4

NET SALES PER REGION, JAN TO JUN

EUROPE45%

UK & I 20%

APAC 12%

AMERICAS

23%

NET SALES

MSEK
300					1
250							0,8
200							0,6
150
100							0,4
50							0,2
0								0
Q2	Q3	Q4	Q1		Q2
	2020	2020	2020	2021	2021

EBITA AND EBITA MARGIN

MSEK
60						30%
40						20%
20						10%
0						0%
Q2	Q3	Q4	Q1	Q2
-20	-10%
-40	2020	2020	2020	2021	2021	-20%
-60						-30%

CASH. FLOW FROM OPERATING ACTIVITES

MSEK
40					100%
35					80%
30
25					60%
20
15					40%
10					20%
5
0						0%
Q2	Q3	Q4	Q1	Q2
	2020	2020	2020	2021	2021

ABSOLENT AIR CARE GROUP 2021

OTHER INFORMATION

RISKS AND UNCERTAINTIES

The Group and the parent company are exposed to different risks in their daily operations such as business risk, competitor risk, distributor risk, supplier risk and acquisition risk. These risks are described in detail in the Annual Report of Absolent Air Care Group for 2020 (available on www.absolentgroup.com). The risk profile remains since the Annual Report of 2020 was published. However, the spread of Covid-19 has created uncertainties in the market that are difficult to predict.

FINANCIAL IMPACT OF COVID 19

The Group has received governmental grants of approximately 2.4 MSEK for the period January to June 2021. The impact of Covid-19 remains, and the Group management follows the development closely and evaluates both the operational and financial impact and takes proactive measures to limit the effects.

ACCOUNTING PRINCIPLES

The Group and the parent company applies the Swedish Annual Accounts Act (1995:1554) and General recommendation BFNAR 2012:1 Annual Accounts and Consolidated Financial Statements (K3) of the Swedish Accounting Standard Board. The accounting principles applied are the same as those described in the disclosures of the annual report for 2020 (available on www.absolentgroup.com). The group have changed the presentation of deferred tax assets and liabilities, and the comparison figures have been adjusted accordingly. Government grant is reported as other operating income.

No new accounting principles for 2021 has been applied by the Group.

CONTACT INFORMATION

Axel Berntsson, Managing Director and CEO Absolent Air Care Group AB (publ)

Västra Hamngatan 10 SE 411 17 Göteborg Company ID: 556591-2986

Phone: [phone]

Fax: [phone]

E-mail:[e-mail]

Website:www.absolentgroup.com

CERTIFIED ADVISER

Erik Penser Bank AB is the Company's Certified Adviser.

FINANCIAL CALENDER

Third quarter 2021, November 12, 2021

This interim report has not been reviewed by the company auditors.

This document is a translation of the Swedish original. In the event of any discrepancies between this translation and the Swedish original, the latter shall prevail.

The interim report is available on the Group website (www.absolentgroup.com).

Göteborg August 18, 2021

Axel Berntsson

MD and CEO

This information is information Absolent Air Care Group AB (publ.) is obligated to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 1:00 p.m. CEST Aug 18, 2021

5	ABSOLENT AIR CARE GROUP 2021