VBG Group Interim report January-June GROUP INTERIM REPORT JANUARY–JUNE 2015 2 VBG Group AB (publ) in Vänersborg is the Parent Company of an international engineering Group with

VBG Group Interim report January-June

2015 Q2

VBG GROUP INTERIM REPORT JANUARY–JUNE 2015

1

Second quarter of 2015:

• The Group’s net turnover increased by 19.6 per cent to SEK 331.5 M (277.1)

• Operating profit was SEK 30.7 M (27.0), with a margin of 9.3 per cent (9.7)

• Profit after financial items amounted to SEK 29.8 M (23.6) with a profit margin of 9.0 per cent (8.5)

• The Group’s profit after tax totalled SEK 20.7 M (17.0)

• Earnings per share amounted to SEK 1.65 (1.36)

KEY FIGURES

Q2 2015

Q2 2014

6 months2015

6 months2014

Full-year 2014

Net turnover, SEK M 331.5 277.1 686.6 593.5 1,186.8

Operating profit, SEK M 30.7 27.01 86.4 77.6 120.91

Operating margin, % 9.3 9.7 12.6 13.1 10.2

Profit after financial items, SEK M 29.8 23.6 85.3 72.3 112.7

Profit margin, % 9.0 8.5 12.4 12.2 9.5

Profit after tax, SEK M 20.7 17.0 61.2 52.5 78.9

Earnings per share, SEK 1.65 1.36 4.89 4.20 6.31

Equity per share 66.65 62.28 66.65 62.28 65.40

Cash flow from operating activities per share 2.77 1.47 6.73 4.80 9.81

Return on capital employed (ROCE), cumulative, % 16.8 16.7 16.8 16.7 12.5

Return on equity (ROE), cumulative, % 14.8 13.9 14.8 13.9 10.1

Equity/assets ratio, % 66.8 69.0 66.8 69.0 67.6

Interim report January – June 2015

First half of 2015:

• The Group’s net turnover increased by 15.7 per cent to SEK 686.6 M (593.5)


• Profit after financial items amounted to SEK 85.3 M (72.3) with a profit margin of 12.4 per cent (12.2)

• The Group’s profit after tax totalled SEK 61.2 M (52.5)

• Earnings per share amounted to SEK 4.89 (4.20)

1 Includes the following items affecting comparability: Capital gains of SEK 6.0 M in connection with the divestment of the Armaton product area (Q2). Negative goodwill of SEK 46.8 M in connection with the acquisition of Tschan (Q3). Cost for impairment of consolidated goodwill in Edscha Trailer Systems in the negative amount of SEK 60 M (Q4).Combined negative net effect of SEK 7.2 M for full-year 2014.


2

VBG Group AB (publ) in Vänersborg is the Parent Company of an international engineering Group with wholly owned companies in Europe, the USA, India and China. The Group’s operations are divided into three divisions – VBG Truck Equipment, Edscha Trailer Systems and Ringfeder Power Transmission – with products that are marketed under strong well-known brands. VBG Group AB’s Series B share was floated on the stock exchange in 1987 and is listed today on the Nasdaq OMX Stockholm Mid Cap list.

This is the VBG Group

Vision

We are number one or two globally in the industrial niches in

which we are active. We make a difference by creating the

products and services of the future.

Business concept

The VBG Group will, within selected product and market seg-

ments, acquire, own and develop industrial companies in busi-

ness-to-business commerce with strong brands and good

growth potential. Based on a long-term commitment and with

a focus on growth and profitability, the VBG Group’s share-

holders will be offered attractive value growth.

Goals

Minimum average annual turnover growth of 10 per cent.

Minimum average operating margin of 10 per cent.

Average return on capital employed of 18 per cent.

Strategies

The Parent Company, VBG Group AB, is responsible for the

strategic governance of the Group as a whole. This entails the

approval and follow-up of divisional targets and strategies.

The responsibility also includes identifying and implementing

strategic acquisitions and providing support in the form of

industrial expertise, the allocation of capital, strategic HR

work to ensure that the operations’ long-term competency

requirements are secured, as well as strategic IT work and the

operation of all shared IT systems.

Strategies for the divisions:

• Strong brands and leading market positions

in selected niches.

• High customer value in the products.

• Diversified customer base.

• International expansion.

Stable ownership situation

The VBG Group’s principal owners comprise three foundations

that were established by the Group’s founder, Herman Krefting.

In accordance with their regulations, the foundations may not

divest their shares in the VBG Group. This structure has histor-

ically provided us with a high degree of financial stability and

continuity in the implementation of the Group’s strategy

which, in turn, has resulted in solid total returns for shareholders.


3

VBG GROUP IN THE WORLD

The Parent Company of the VBG Group and pro-duction and sales companies for the VBG Truck Equipment division are located in Scandinavia.

Sales companies for the Ringfeder Power Transmission division, and the production and sales company Onspot of North America for the VBG Truck Equipment division, are located in the USA.

Production and sales companies for the Ringfeder Power Transmission division are located in India and China.

Production and sales companies for the VBG Truck Equipment, Ringfeder Power Transmission and Edscha Trailer Systems divisions are located in Europe.

SALES BY DIVISION SALES BY MARKET

Sweden, 14%

Other Nordic countries, 10%

Germany, 30%

Other European countries, 23%

North America, 14%

Rest of world, 9%

VBG Truck Equipment, 53%

Edscha Trailer Systems, 17%

Ringfeder Power Transmission, 30%

cont. This is the VBG Group

DIVISIONS

Ringfeder Power Transmission

By virtue of its own strong brands, the division is a recognised global market leader in selected niches within mechanical power transmission and energy and shock absorption. The division’s brands are Ringfeder, Tschan, Gerwah and Ecoloc. The custom-ers are found in such widely disparate industrial markets as con-struction, machinery, power and mining.

VBG Truck Equipment

By virtue of its own strong brands, the division is an interna-tionally leading supplier of coupling equipment for trucks with heavy trailers, where the division accounts for more than 50 per cent of the global market via the Ringfeder and VBG brands. The division also has Onspot – automatic tyre chains with a world-leading position in its niche.

Edscha Trailer Systems

By virtue of its own strong brands, the division is an interna-tionally leading supplier of equipment for trailers. The divi-sion accounts for more than 40 per cent of the global mar-ket for sliding roofs via the Edscha Trailer Systems and Sesam brands.

BRANDS

The VBG Group also has employees in Italy, Brazil, Turkey, South Africa, Canada and Thailand.

Importers/Agents Own companies


4

VBG Truck Equipment continues to improve products and develop its customer offering.

As expected, the Group’s turnover and earnings for the second

quarter were lower than the extremely strong first quarter.

However, year-on-year, both turnover and earnings increased

for all three divisions in the Group. This means that in the

second quarter, the Group posted turnover growth (rolling

four-quarter basis) of 4.5 per cent and earnings growth of

slightly more than 7 per cent.

VBG Truck Equipment – continues posting high-level performance

Following a top-class first quarter, the Group’s largest division

posted another strong quarter with an operating margin of close

to 15 per cent. For a long period, VBG Truck Equipment has

been the dependable engine room for the Group. In the first six

months of the year, the division accounted for slightly more than

half of the Group’s turnover and contributed almost 70 per cent

of the divisions’ total operating profit. Accordingly, VBG Truck

Equipment generates stability and financial security, not just

for the division itself, but also for the entire Group. Turn-

over growth and a strong earnings trend do not just

appear, they are generated through hard work. The

division has a constant desire to enhance products,

cultivate existing and new markets, develop the

customer offering and streamline processes.

Edscha Trailer Systems – acceptable earnings

in a weak market

The division continues to operate in a weak

market, but despite this, it has succeeded in

adapting the organization and streamlining pro-

cesses to achieve an operating margin for the

first six months of 7 per cent, which is a respecta-

ble level. I still hope, however, that the market condi-

tions will improve slightly toward the end of the year,

which will also provide the division’s new product range

with improved conditions for a successful market launch.

Ringfeder Power Transmission – vigorous growth and

a changing global organization

Efforts are ongoing to increase efficiency at and consolidate

Tschan, which was acquired 1 July 2014, and will continue for

the remainder of the year. In parallel, the division has invested

resources during the year to strengthen, expand and change the

organization with measures including new recruitments at

management level, primarily in the supply chain and sales/

marketing.

VBG Group’s largest division generates continued healthy profitability for the Group


5

The substantial increase in turnover in the second quarter and

the first half of the year was mainly attributable to the acquisition

of Tschan. However, the acquisition’s impact on earnings remains

extremely modest and, accordingly, this means that the operating

margin for the division is lower than in the year-earlier period. The

division is active globally in many industrial segments. One key

area is the mining industry and the weak market in this particular

segment has a relatively high degree of impact on the division.

Market outlook for the second half of 2015

In terms of the divisions’ market trends, I expect no major

changes in the third quarter but, hopefully, as the end of the

year approaches there will be a slight increase in activity and,

perhaps, primarily in the two vehicle-related divisions.

Anders Birgersson

Managing Director and CEO


6

Group trend

SEK M6 months

2015Q2

2015Q1

2015Full-year

2014Q4

2014Q3

20146 months

2014Q2

2014Q1

2014 Full-year

2013Q4

2013Q3

2013

Net turnover 686.6 331.5 355.1 1,186.8 303.4 289.9 593.5 277.1 316.4 1,171.4 294.4 280.0

Operating profit 86.4 30.7 55.7 120.94 –28.23 71.52 77.61 27.01 50.6 162.8 37.4 39.0

Operating margin, % 12.6 9.3 15.7 10.2 –9.3 24.7 13.1 9.7 16.0 13.9 12.7 13.9

Profit/loss after financial items 85.3 29.8 55.5 112.7 –29.7 70.1 72.3 23.6 48.7 151.7 33.1 37.2

Profit margin, % 12.4 9.0 15.6 9.5 –9.8 24.2 12.2 8.5 15.4 13.0 11.2 13.3

Profit/loss after tax 61.2 20.7 40.5 78.9 –37.8 64.2 52.5 17.0 35.5 112.5 25.8 27.1

Earnings per share, SEK 4.89 1.65 3.24 6.31 –3.02 5.13 4.20 1.36 2.84 9.0 2.07 2.16

Equity per share 66.65 66.65 68.92 65.40 65.40 66.19 62.28 62.28 61.92 58.99 58.99 54.95

Cash flow from operating activities per share 6.73 2.77 3.96 9.81 3.28 1.73 4.8 1.47 3.33 10.3 3.03 2.50

ROCE (cumul.), % 16.8 16.8 21.2 12.5 12.5 20.4 16.7 16.7 21.8 18.5 18.5 18.9

ROE (cumul.), % 14.8 14.8 19.3 10.1 10.1 19.8 13.9 13.9 18.8 16.5 16.5 17.6

Equity/assets ratio, % 66.8 66.8 67.1 67.6 67.6 68.7 69.0 69.0 68.2 68.8 68.8 63.3

1 Includes item affecting comparability, SEK 6.0 M in capital gains from the divestment of Armaton2 Includes item affecting comparability, SEK 46.8 M in negative goodwill from the acquisition of Tschan GmbH3 Includes item affecting comparability, negative SEK 60.0 M in impairment of goodwill in Edscha Trailer Systems4 Includes negative SEK 7.2 M, net effect of the three items affecting comparability 1 + 2 + 3

NET TURNOVER, SEK M PROFIT AFTER FINANCIAL ITEMS*, SEK M

0

60

30

90

120

150

180

2012Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1Q1 Q2 Q2Q3 Q4

2013 2014

0

30

20

10

50

40

60

2015

Quarterly figures Rolling 4 quarters

01753505257008751,0501,2251,400

2012 2013 2014


050

100150200250300350400

2015

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1Q1 Q2 Q2Q3 Q4

Turnover and earnings Second quarter of 2015

The turnover of SEK 331.5 M (277.1), was 19.6 per cent higher

compared with the second quarter of 2014. Acquired opera-

tions (Tschan GmbH acquired on 1 July 2014), accounted for

SEK 21.3 M of the increase, corresponding to 7.7 percentage

points. Taking into account the exchange rate changes

between the quarters, the actual organic volume increase was

6.0 per cent.

Consolidated operating profit was SEK 30.7 M (27.0 includ-

ing a capital gain of SEK 6.0 M). The operating profit also

included Group-wide overheads in the Parent Company of

SEK 5.2 M (5.3) that were not allocated to the divisions.

The operating margin was 9.3 per cent (9.7).

Net financial items for the quarter amounted to an expense

of SEK 0.9 M (expense: 3.4), and, accordingly, profit after

financial items was SEK 29.8 M (23.6).

Profit after tax totalled SEK 20.7 M (17.0) and earnings per

share amounted to SEK 1.65 (1.36).

First half of 2015

The turnover of SEK 686.6 M (593.5), was 15.7 per cent

higher year-on-year. Acquired operations, accounted for

SEK 44.4 M of the increase, corresponding to 7.5 percentage

points. Actual organic volume growth was 1.4 per cent after

adjustment for exchange rate changes between the periods.

Operating profit amounted to SEK 86.4 M (77.6). The operat-

ing profit included Group-wide overheads in the Parent Company

of SEK 9.3 M (8.5) that were not allocated to the divisions.

The operating margin was 12.6 per cent (13.1).

Net financial items for the first half of the year amounted to

an expense of SEK 1.1 M (expense: 5.3), and, accordingly,

profit after financial items was SEK 85.3 M (72.3).

Profit after tax totalled SEK 61.2 M (52.5) and earnings per

share amounted to SEK 4.89 (4.20).

Return on capital employed was 16.8 per cent (16.7) and

return on equity was 14.8 per cent (13.9). The Group’s equity/

assets ratio declined slightly compared with year-end to 66.8

per cent (67.6).

* Excluding items affecting comparability.


7

Capital expenditures

The Group’s new capital expenditures during the second

quarter amounted to SEK 10.0 M (11.8), while total capital

expenditures for the first half of the year amounted to

SEK 13.7 M (15.8).

Financial position

Profit after tax for the first six months of the year amounted to

SEK 61.2 SEK M (52.5). Other comprehensive income during

the first half of the year was a negative amount of SEK 8.1 M

(23.0), corresponding to a total operating profit of SEK 53.1 M

(75.5). After the payment of dividends totalling SEK 37.5 M

(34.4) to the shareholders, equity amounted to SEK 833.2 M

at 30 June (817.6 at year-end).

The equity/assets ratio declined slightly compared with

year-end to 66.8 per cent (67.6).

Cash and cash equivalents at the end of June amounted to

SEK 186.3 M (195.6 at year-end), and there were unutilised

credit facilities of SEK 142.9 M (144.1), resulting in an available

liquidity of SEK 329.2 M (339.7 at year-end).

While the Group’s interest-bearing net debt (including pen-

sion liability) increased SEK 24.5 M in the second quarter, the

increase for the first half of the year was only SEK 0.3 M,

amounting to SEK 16.9 M at 30 June (16.3 at year-end).

The ratio of interest-bearing net debt to equity was 0.02 at

30 June (0.02 at 31 December 2014).

The Group’s aggregate goodwill amounted to SEK 264.3 M

(266.8 at year-end), which in relation to equity was a ratio of

0.32 (0.33).

Cash flow

Cash flow from operating activities during the first half of the

year amounted to SEK 48.0 M (26.8). Paid capital expendi-

tures during the period amounted to SEK 16.3 M (17.6). Divi-

dends totalling SEK 37.5 M (34.4) were paid to the sharehold-

ers. The Group’s total non-current and current financial

liabilities decreased during the first half of the year by a net of

SEK 3.2 M (4.9). Consequently, net cash flow for the period

was a negative amount of SEK 9.0 M (negative: 30.1).

Personnel

At 30 June 2015, there were 622 employees in the VBG Group

(612 at year-end), including 184 (175) in Sweden.

During the first half of the year, the Group employed an

average of 594 persons (525 during the year-earlier period).

Of these, 181 (185) were active in Sweden. The cost of salaries

and social security contributions was SEK 185.1 M (148.2).

Per share data

Earnings per share for the first six months of the year rose to

SEK 4.89 (4.20). Equity per share was SEK 66.65 at 30 June

2015, compared with SEK 62.28 at the same time last year

and SEK 65.40 at year-end.

The number of shareholders declined by 100 in the second

quarter and amounted to 4,209 at 30 June (4,001 at year-

end).


8

Second quarter of 2015:• Turnover increased by 13.1 per cent to

SEK 172.6 M (152.6)• Operating profit was SEK 25.0 M (23.3), with a

margin of 14.5 per cent (15.3)

Second quarter of 2015

Turnover in VBG Truck Equipment increased by 13.1 per cent

to SEK 172.6 M (152.6).

The translation of the turnover of foreign subsidiaries to SEK

had a positive impact and the actual volume increase was 8.7

per cent.

The operating profit of SEK 25.0 M was up slightly year-on-

year (23.3) despite the positive impact on last year’s earnings of a

capital gain of SEK 6 M from the divestment of the Armaton

product area. The operating margin was 14.5 per cent (15.3).

VBG Truck Equipment

First half of 2015:• Turnover increased by 10.0 per cent to SEK 361.2 M (328.3)


First half of 2015

Turnover increased 10.0 per cent to SEK 361.2 M (328.3). Tak-

ing into account the translation of the turnover of foreign sub-

sidiaries to SEK, the actual volume increase was 4.8 per cent.

Operating profit increased to SEK 64.4 M (57.0), with an

operating margin of 17.8 per cent (17.4).

0

200

400

600

800

2012 2013 2014

0

50

100

150

200

2015Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1Q1 Q2 Q2Q3 Q4


0

40

80

120

160

2012 2013 2014

0

10

30

20

40

2015

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1Q1 Q2 Q2Q3 Q4


NET TURNOVER, SEK M ADJUSTED OPERATING PROFIT, SEK M

KEY FIGURES

SEK M6 months

2015 Q2 2015 Q1 2015Full-year

2014 Q4 2014 Q3 20146 months

2014 Q2 2014 Q1 2014Full-year

2013 Q4 2013 Q3 2013

Net turnover 361.2 172.6 188.6 636.6 166.9 141.4 328.3 152.6 175.7 650.2 167.3 155.3

Operating profit 64.4 25.0 39.4 103.71 29.5 17.2 57.01 23.31 33.7 116.2 29.9 28.8

Operating margin, % 17.8 14.5 20.9 16.3 17.7 12.2 17.4 15.3 19.2 17.9 17.9 18.5

1 Includes items affecting comparability, SEK 6.0 M in capital gains in connection with the divestment of the Armaton product area.

TURNOVER BY MARKET

SEK M6 months

2015 Q2 2015 Q1 2015Full-year

2014 Q4 2014 Q3 20146 months

2014 Q2 2014 Q1 2014Full-year

2013 Q4 2013 Q3 2013

Sweden 97.8 48.0 49.8 174.4 42.1 35.5 96.8 44.6 52.2 168.4 41.6 38.2

Other Nordic countries 64.3 30.9 33.4 106.8 24.9 22.7 59.2 26.7 32.5 116.2 32.0 27.6

Germany 51.1 24.7 26.4 90.8 20.7 23.7 46.4 22.2 24.2 100.6 24.5 22.8

Other European countries 85.8 39.3 46.5 143.8 37.3 32.9 73.6 34.9 38.7 150.0 39.3 37.0

North America 33.7 15.6 18.1 59.1 21.2 13.6 24.3 10.8 13.5 56.9 19.1 14.0

Rest of world 28.5 14.1 14.4 61.7 20.7 13.0 28.0 13.4 14.6 58.1 10.8 15.7

VBG Truck Equipment 361.2 172.6 188.6 636.6 166.9 141.4 328.3 152.6 175.7 650.2 167.3 155.3


9

0

80

160

240

320

400

2012 2013 2014

0

20

40

60

100

80

2015

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1Q1 Q2 Q2Q3 Q4


4

0

12

8

16

24

20

0

2

4

10

8

6

12

2012

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1Q1 Q2 Q2Q3 Q4

2013 2014 2015



Edscha Trailer Systems

First half of 2015:• Turnover decreased by 6.9 per cent to SEK 116.8 M (125.5)


First half of 2015

Turnover decreased by 6.9 per cent compared with the first six

months of last year to SEK 116.8 M (125.5). Adjusted for

exchange rate changes, the actual volume decrease was 10.8

per cent. The operating profit was slightly lower at SEK 8.1 M

(10.1), with an operating margin of SEK 6.9 per cent (8.0).

KEY FIGURES

SEK M6 months

2015 Q2 2015 Q1 2015Full-year

2014 Q4 2014 Q3 20146 months

2014 Q2 2014 Q1 2014Full-year

2013 Q4 2013 Q3 2013

Net turnover 116.8 58.4 58.4 219.8 49.2 45.1 125.5 56.8 68.7 254.6 62.0 59.3

Operating profit/loss 8.1 3.2 4.9 –52.71 –61.61 –1.2 10.1 2.9 7.2 22.9 4.7 3.5

Operating margin, % 6.9 5.5 8.4 –24.0 –125.2 –2.7 8.0 5.1 10.5 9.0 7.6 5.9

1 Includes item affecting comparability, negative SEK 60.0 M in impairment of consolidated goodwill in Edscha Trailer Systems

TURNOVER BY MARKET

SEK M6 months

2015 Q2 2015 Q1 2015Full-year

2014 Q4 2014 Q3 20146 months

2014 Q2 2014 Q1 2014Full-year

2013 Q4 2013 Q3 2013

Sweden 0.2 0.1 0.1 0.3 0.1 0.0 0.2 0.1 0.1 0.5 0.1 0.1


Germany 71.9 38.6 33.3 136.3 33.3 28.7 74.3 32.4 41.9 140.0 34.1 32.3


Rest of world 0.9 0.4 0.5 0.3 0.0 0.2 0.1 0.1 0.0 0.6 0.3 0.1

Edscha TS 116.8 58.4 58.4 219.8 49.2 45.1 125.5 56.8 68.7 254.6 62.0 59.3

Second quarter of 2015:• Turnover increased by 2.8 per cent to SEK 58.4 M (56.8)



Edscha Trailer Systems’ turnover increased by 2.8 per cent

compared with the year-earlier period to SEK 58.4 M (56.8).

The translation of the turnover of the Group’s foreign subsidi-

aries to SEK had a positive impact, and thus the actual sales

volume was at the same level as last year. The European mar-

ket for trailers continued to be soft, which impacted all players

in the industry. Despite low turnover, the division reported an

operating margin of 5.5 per cent (5.1) and operating profit of

SEK 3.2 M (2.9).


10

2012Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1Q1 Q2 Q2Q3 Q4

2013 2014 2015

0

25

50

75

100

125

0

100

200

300

400


0

15

30

45

60

0

5

15

10

20

2012Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1Q1 Q2 Q2Q3 Q4

2013 2014 2015



Ringfeder Power Transmission

Second quarter of 2015:• Turnover increased by 48.4 per cent to SEK 100.5 M (67.7)



Turnover increased by 48.4 per cent to SEK 100.5 M (67.7).

Tschan, which was acquired on 1 July 2014, reported sec-

ond-quarter turnover of SEK 21.3 M, thereby accounting for

31.4 percentage points of the increase in turnover. The under-

lying organic growth was thus 16.9 per cent. When the rela-

tively substantial movements in exchange rates between the

quarters are also taken into account, the actual organic volume

increase was 4.9 per cent. Operating profit was SEK 7.7 M

(6.1), with an operating margin of 7.7 per cent (9.0).

First half of 2015:• Turnover increased by 49.3 per cent to SEK 208.6 M (139.7)


First half of 2015

Turnover increased by 49.3 per cent to SEK 208.6 M (139.7).

The acquired operations accounted for 31.8 percentage points

of the increase and underlying organic growth was 17.5 per

cent, which after adjustment for exchange rate changes meant

that the actual organic increase in volume was 4.4 per cent.

Operating profit for the first six months amounted to SEK

23.2 M (19.0), with an operating margin of 11.1 per cent

(13.6).

KEY FIGURES

SEK M6 months

2015 Q2 2015 Q1 2015Full-year

2014 Q4 2014 Q3 20146 months

2014 Q2 2014 Q1 2014Full-year

2013 Q4 2013 Q3 2013

Net turnover 208.6 100.5 108.1 330.4 87.3 103.4 139.7 67.7 72.0 266.6 65.1 65.4

Operating profit 23.2 7.7 15.5 83.01 6.3 57.71 19.0 6.1 12.9 35.3 5.7 8.6

Operating margin, % 11.1 7.7 14.3 25.1 7.2 55.8 13.6 9.0 17.9 13.2 8.8 13.1

1 Includes SEK 46.8 M in negative goodwill from the acquisition of Tschan

TURNOVER BY MARKET

SEK M6 months

2015 Q2 2015 Q1 2015Full-year

2014 Q4 2014 Q3 20146 months

2014 Q2 2014 Q1 2014Full-year

2013 Q4 2013 Q3 2013

Sweden 2.5 1.4 1.1 4.1 1.4 1.2 1.5 0.9 0.6 4.1 1.0 1.2


Germany 84.1 40.5 43.6 127.8 33.2 44.8 49.8 22.1 27.7 90.6 20.4 24.1


North America 59.6 28.0 31.6 96.1 27.0 24.8 44.3 21.6 22.7 81.3 18.2 20.0

Rest of world 30.4 15.6 14.8 56.6 14.6 17.0 25.0 12.9 12.1 56.2 17.5 11.6

Ringfeder Power Transmission 208.6 100.5 108.1 330.4 87.3 103.4 139.7 67.7 72.0 266.6 65.1 65.4


11

Parent Company

VBG Group AB’s operations are focused on managing, devel-

oping and coordinating the Group. The assets in the Parent

Company consist primarily of shares in subsidiaries and trade-

marks. The company also owns the industrial property in

Vänersborg that is rented by the subsidiary VBG Group Truck

Equipment AB.

The objective is that the Group’s intellectual property in the

form of trademarks and other rights should be gathered in the

Parent Company. VBG Group AB focuses on maintaining and

developing all the Group’s trademarks and rights.

The Parent Company’s net turnover pertains primarily to

intra-Group services, license revenues and rentals and

amounted to SEK 10.3 M (9.9) during the first half of the year

. The operating loss for the year was SEK 11.8 M (loss: 9.1).

Profit after dividends from Group companies and net financial

items totaled SEK 58.5 M (58.4).

Accounting policies

The VBG Group applies International Financial Reporting

Standards (IFRSs) as adopted by the EU in its consolidated

accounts. This report has been prepared in accordance with

IAS 34, Interim Financial Reporting, and the Swedish Annual

Accounts Act.

The Parent Company’s financial statements have been pre-

pared in accordance with the Swedish Annual Accounts Act

and RFR 2.

The accounting policies that have been applied in the prepa-

ration of this report, as well as definitions of key figures, etc.,

are described in Note 1 of VBG Group AB’s annual report for

2014.

Risks and uncertainty factors

The Group’s and the Parent Company’s significant risks and

uncertainty factors include business-related operational risks

in the form of commodity risks, product risks, development

risks, intellectual property risks, environmental risks, political

risks, business interruption and property risks, cyclical risks, IT

security risks and legal risks. To these can be added financial

risks such as financing risks, liquidity risks, interest rate risks,

currency risks and credit and counterparty risks.

For a more detailed description of the Group’s risks and risk

management, see VBG Group AB’s annual report for 2014,

Note 2.

Outlook for 2015

The company makes no forecast.

Financial information 2015/2016

Interim report, nine months 21 October 2015

Year-end report 2015 17 February 2016

Interim report, three months 2016 28 April 2016

Annual General Meeting 2016 28 April 2016

Related party transactions

There have been no related party transactions in 2015 that

have significantly affected the company’s financial position

and results. Related party transactions during 2014 are dis-

closed in Note 6 in the annual report for 2014.

Affirmation

The Board of Directors and Managing Director affirm that the

interim report provides a true and fair view of the Parent Com-

pany’s and the Group’s operations, financial position and

results, and describes significant risks and uncertainty factors

facing the Parent Company and the companies included in the

Group.

Other information


12

Anders Birgersson Peter Hansson Johnny Alvarsson Managing Director and CEO Chairman Deputy Chairman

Peter Augustsson Helene Richmond Louise NicolinBoard member Board member Board member

NOTE

This information is of the type that VBG Group AB is obli-

gated to disclose in accordance with the Swedish Securities

Exchange and Clearing Operations Act and/or the Financial

Instruments Trading Act. The information was submitted for

publication on 20 August 2015 at 1:00 p.m.

Vänersborg, 20 August 2015

VBG Group AB (publ)

Press releases in the second quarter of 2015

Report from the AGM 2015 23 April 2015

Interim Report Jan-Mar 2015 23 April 2015

For further information, please contact:

Anders Birgersson, Managing Director and CEO

Telephone: +46 (0)521–27 77 67, +46 (0)702–27 77 78

E-mail: [email protected]

No significant events occurred after the close of the period.

This report is unaudited.

Michael Jacobsson Cecilia Pettersson Employee representative Employee representative


13

Consolidated Income Statement and Statement of Comprehensive Income – Highlights

SEK MQ2

Apr-Jun 2015Q2

Apr-Jun 20146 months

Jan-Jun 20156 months

Jan-Jun 2014Full-year

2014

Net turnover 331.5 277.1 686.6 593.5 1,186.8

Cost of goods sold –193.8 –170.0 –395.4 –348.3 –718.0

Gross profit 137.7 107.1 291.2 245.2 468.8

Selling expenses –53.6 –47.5 –107.7 –91.9 –190.1

Administrative expenses –40.5 –31.8 –76.7 –65.2 –120.3

Research and development costs –11.5 –8.7 –21.7 –17.5 –36.2

Other operating income and expenses –1.4 7.91 1.3 7.01 –1.31

Operating profit 30.7 27.0 86.4 77.6 120.9

Net financial items –0.9 –3.4 –1.1 –5.3 –8.2

Profit after financial items 29.8 23.6 85.3 72.3 112.7

Tax –9.1 –6.6 –24,1 –19.8 –33.8

Profit for the period 20.7 17.0 61.2 52.5 78.9

Net profit for the period attributable to Parent Company shareholders 20.7 17.0 61.2 52.5 78.9

Depreciation and amortisation charged to profit –10.6 –8.5 –20.9 –17.0 –37.5

Other comprehensive income

Profit for the period 20.7 17.0 61.2 52.5 78.9

Items that will not be reversed in the Income Statement

Effect of translation of defined-benefit pension plans, net after tax — — — — –28.7

Items that may later be reversed in the Income Statement

Translation differences pertaining to foreign operations –15.4 22.7 –9.5 23.8 68.6

Translation differences pertaining to hedge accounting for net investments in foreign operations 3.8 –0.8 1.4 –0.8 –4.3

Other comprehensive income, net after tax –11.6 21.9 –8.1 23.0 35.6

Comprehensive income for the period 9.1 38.9 53.1 75.5 114.5

Comprehensive income for the period attributable to Parent Company shareholders 9.1 38.9 53.1 75.5 114.5

Earnings per share, basic and diluted, SEK 1.65 1.36 4.89 4.20 6.31

Number of shares at end of period (‘000) 12,502 12,502 12,502 12,502 12,502

Average number of shares during the period 12,502 12,502 12,502 12,502 12,502

Number of own shares at end of period 1,192 1,192 1,192 1,192 1,192

Average number of own shares 1,192 1,192 1,192 1,192 1,192

1 Includes the following items affecting comparability: Capital gains of SEK 6.0 M in connection with the divestment of the Armaton product area (Q2). Negative goodwill of SEK 46.8 M in connection with the acquisition of Tschan (Q3). Cost for impairment of consolidated goodwill in Edscha Trailer Systems in the negative amount of SEK 60 M (Q4).Combined negative net effect of SEK 7.2 M for full-year 2014.


14

Turnover and earnings by segment

SEK M

VBG Truck Equipment

Edscha Trailer

Systems

Ringfeder Power

TransmissionGroup-

wide Group

2015

Q2 Apr–Jun: Net turnover 172.6 58.4 100.5 331.5

Operating profit/loss 25.0 3.2 7.7 –5.2 30.7

Operating margin, % 14.5 5.5 7.7 9.3

Net financial items –0.9 –0.9

Profit after financial items 29.8

6 months Jan–Jun: Net turnover 361.2 116.8 208.6 686.6





2014

Q2 Apr–Jun: Net turnover 152.6 56.8 67.7 277.1





6 months Jan–Jun: Net turnover 328.3 125.5 139.7 593.5





1 Includes items affecting comparability, SEK 6.0 M in capital gains in connection with the divestment of the Armaton product area.

Consolidated Balance Sheet – Highlights

SEK M 30 Jun. 2015 30 Jun. 2014 31 Dec. 2014

Goodwill 264.3 308.7 266.8

Other intangible assets 52.4 46.8 57.7

Property, plant and equipment 192.1 161.1 200.8

Long-term investments 20.3 13.9 20.6

Total non-current assets 529.1 530.5 545.9

Inventories 276.6 243.2 251.1

Receivables 254.6 250.2 216.1

Cash on hand, demand deposits and short-term investments 186.3 103.9 195.6

Total current assets 717.5 597.3 662.8

TOTAL ASSETS 1,246.6 1,127.8 1,208.7

Equity 833.2 778.6 817.6

Non-current liabilities 243.6 194.2 253.8

Current liabilities 169.8 155.0 137.3

TOTAL EQUITY AND LIABILITIES 1,246.6 1,127.8 1,208.7


15

Changes in Group equity

SEK M 6 months 2015 6 months 2014 Full-year 2014

Opening equity according to balance sheet at 31 December 817.6 737.5 737.5

Total comprehensive income for the period 53.1 75.5 114.5

Dividend –37.5 –34.4 –34.4

Equity at end of period 833.2 778.6 817.6

Cash Flow Statement – Highlights


Cash flow from operating activities before changes in working capital 84.2 60.0 122.7

Change in working capital –36.2 –33.2 14.5

Cash flow from operating activities 48.0 26.8 137.2

Cash flow from investing activities –16.3 –17.6 –39.9

Cash flow from financing activities –40.7 –39.3 –39.4

Cash flow for the period –9.0 –30.1 57.9

Cash and cash equivalents at start of year 195.6 131.5 131.5

Translation difference, cash and cash equivalents –0.3 2.5 6.2

Cash and cash equivalents at end of period 186.3 103.9 195.6

Unutilised overdraft facilities 142.9 142.8 144.1

Available cash and cash equivalents 329.2 246.7 339.7

Key figures for Group


Profit margin (ROS), % 12.4 12.2 9.5

Return on equity (ROE), % 14.8 13.9 10.1

Return on capital employed (ROCE), % 16.8 16.7 12.5

Equity/assets ratio, % 66.8 69.0 67.6

Equity per share, SEK 66.65 62.28 65.40

Cash flow per share (before change in working capital), SEK 6.73 4.80 9.81

Share price at end of period, SEK 125.50 140.50 103.75

Number of employees, average 594 524 559


16

Parent Company Balance Sheet

SEK M 30 Jun. 2015 30 Jun. 2014 31 Dec. 2014

Intangible assets 7.4 9.2 8.4

Property, plant and equipment 8.4 7.0 6.8

Long-term investments 558.1 558.1 558.1

Total non-current assets 573.9 574.3 573.3

Receivables 90.4 98.4 90.1

Cash on hand, demand deposits and short-term investments 101.9 36.7 89.9

Total current assets 192.3 135.1 180.0

TOTAL ASSETS 766.2 709.4 753.3

Equity 499.4 421.1 478.4

Untaxed reserves 15.2 20.2 15.2

Provisions 12.2 11.2 12.0

Non-current liabilities 12.4 16.9 15.6

Current liabilities 227.0 240.0 232.1

TOTAL EQUITY AND LIABILITIES 766.2 709.4 753.3

Parent Company Income Statement


Net turnover 10.3 9.9 22.0

Operating expenses –22.1 –19.0 –34.3

Operating loss –11.8 –9.1 –12.3

Net financial items 70.3 67.5 110.1

Profit after financial items 58.5 58.4 97.8

Appropriations — — 18.0

Tax 0.0 0.0 –0.1

Profit after tax and comprehensive income 58.5 58.4 115.7

www.vbggroup.com

VBG GROUP

SwedenVBG GROUP AB (publ) Box 1216SE-462 28 VänersborgTel +46 521 27 77 00Street address: Herman Kreftings gata 4

RINGFEDER POWER TRANSMISSION

GermanyRINGFEDER POWER TRANSMISSION GMBHWerner-Heisenberg-Straße 18 DE-64823 Groß-UmstadtTel +49 6078-9385-0Fax +49 6078-9385-100

RINGFEDER POWER TRANSMISSION TSCHAN GMBHPostfach 2166DE-66521 NeunkirchenTel +49 6821 866 0Fax +49 6821 866 4111

Czech RepublicRINGFEDER POWER TRANSMISSION S.R.O. Oty Kovala 1172CZ-33441 DobranyTel +420 377 201 511Fax +420 377 900 860

USARINGFEDER POWER TRANSMISSION USA CORPORATION165 Carver AvenueWestwood, N.J. 07675Tel +1 201 666 3320Fax +1 201 664 6053

IndiaRINGFEDER POWER TRANSMISSION INDIA PRIVATE LTDPlot No. 4, Door No. 220Mount Poonamallee High RoadKattuppakkamChennai-600056Tel +91 44 2679 1411Fax +91 44 2679 1422

ChinaKUNSHAN RINGFEDER POWER TRANSMISSION CO., LTD.No. 10, Dexin RoadZhangpu 215321Kunshan, Jiangsu ProvinceTel +86 512 5745 3960Fax +86 512 5745 3961

EDSCHA TRAILER SYSTEMS

Germany EUROPEAN TRAILER SYSTEMS GMBHIm Moerser Feld 1fDE-47441 MoersTel +49 2841 6070 700Fax +49 2841 6070 777

Czech RepublicEUROPEAN TRAILER SYSTEMS S.R.O.Ke Gabrielce 786CZ-39470 Kamenice nad LipouTel +420 565 422 402Fax +420 565 422 405

VBG TRUCK EQUIPMENT

Sweden VBG GROUP TRUCK EQUIPMENT AB Box 1216SE-462 28 VänersborgTel +46 521 27 77 00, Fax +46 521 27 77 90

GermanyVBG GROUP TRUCK EQUIPMENT GMBHPostfach 13 06 55DE-47758 KrefeldTel +49 2151 835-0Fax +49 2151 835-200/207

DenmarkVBG GROUP SALES A/SIndustribuen 20–22DK-5592 EjbyTel +45 64 46 19 19Fax +45 64 46 10 88

NorwayVBG GROUP SALES ASPostboks 94 LeirdalNO-1009 OsloTel +47 23 14 16 60Fax +47 23 14 16 61

UKVBG GROUP SALES LIMITEDUnit 9, Willow CourtWest Quay Road, Winwick QuayWarrington, Cheshire WA2 8UFTel +44 1925 23 41 11Fax +44 1925 23 42 22

BelgiumVBG GROUP TRUCK EQUIPMENT NVIndustrie Zuid Zone 2.2Lochtemanweg 50BE-3580 BeringenTel +32 11 458 379Fax +32 11 458 378

USAONSPOT OF NORTH AMERICA, INC.P.O. Box 1077North Vernon, IN 47265-5077Tel +1 800 224 2467Fax +1 812 346 1819

Branch:555 Lordship BlvdStratford, CT 06615-7124Tel +1 800 766 7768Fax +1 203 380 0777

FranceONSPOT E.U.R.L14 Route de SarrebruckFR-57645 Montoy-FlanvilleTel +33 387 763 080Fax +33 387 761 944

Documents

VBG Group Interim report January-June GROUP INTERIM REPORT JANUARY–JUNE 2015 2 VBG Group AB (publ) in Vänersborg is the Parent Company of an international engineering Group with