Kährs Holding AB (publ) Interim report – Q4 and full-year 2013

13 February 2014

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Chief Executive’s comments Net sales in the fourth quarter were 1% lower than last year, and explained by a weaker market in Finland and Russia. This sales decline was counterbalanced by a stronger development in the Swedish and American markets during the last quarter of 2013. The operating profit excluding depreciation and non-recurring items (adjusted EBITDA) amounted to 63 MSEK or 10.4% and this was 47 MSEK better than the same period 2012 (pro forma adjusted for gain on “bargain purchase” and transactions costs), despite a lower turnover 2013. The improved operating profit was mainly related to higher margins and lower costs than fourth quarter 2012.

The group’s total net sales during Q4-13 were lower than the same period last year (pro forma) due to a weaker development in Finland and Russia. However, this sales decline was compensated by an improved sales performance in the regions Nordics, Americas and Other markets.

Fixed costs have also been lower in the fourth quarter 2013 compared with the year before. Focus on profitable business in combination with improved product mix and realised synergies supported the improved operating profit for the group. Operating profit excluding depreciation and non-recurring items (adjusted EBITDA) was 47 MSEK higher than Q4-12 (pro forma adjusted for ”bargain purchase” and transaction costs) and amounted to 63 MSEK or 10.4% compared with 16 MSEK or 2.6% for the same period last year.

During the year, there has been a high focus on reducing net working capital. After an increase by 67 MSEK during the first three quarters, lower account receivables and higher account payables supported the net working capital reduction of 108 MSEK in the fourth quarter. The inventory has increased in 2013 due to safety stock of finished goods for the factory shutdown in Finland and the transfer of veneer floor production to Poland.

The parquet production in Kuopio, Finland, has been closed according to plan in October 2013, and the expected synergies linked to the shutdown have been verified in Q4. The parquet production in Tuupovaara has been scaled down and do currently focus on specific design products. All other parquet production in Finland has been transferred to the production sites in Sweden and Russia.

To summarize full-year 2013, a year with high focus on the integration process between Kährs and Karelia-Upofloor which has been performed according to plan. Net sales have declined by 6% during the year and this is partly explained by negative currency impact, but mainly due to weaker market development in Finland and Russia. During the second half of 2013, we have seen a positive development in especially Sweden and the US. The group’s gross margin was 34.7% in 2013 compared with 33.6% in 2012 (pro forma) and our operating profit excluding depreciation and non-recurring items (adjusted EBITDA) has improved to 227 MSEK or 9.3%.

Christer Persson President and CEO

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Financial highlights and key ratios In Kährs Holding AB’s consolidated financials, Karelia-Upofloor Oy is included since December 3, 2012, when 100% of the shares were acquired. In immediate connection with this acquisition, the owner of Kährs Group, Nanna II S.C.A., contributed 100% of the shares in Oak Norge AS. The contribution appeared on December 3, 2012 and Oak Norge AS is also included in the financial statements of Kährs Holding AB group from that date. Fourth quarter and full-year 2013 in brief

Comparative figures below are pro forma and show fourth quarter and full-year as if Kährs, Karelia-Upofloor and Oak Norge had been consolidated since 1 January 2012. It should be noted that the comparison figures below for 2012 have been affected positively with 249 MSEK from gain on “bargain purchase”1 and negatively by 19 MSEK from transaction costs in connection with the above mentioned acquisition.

Net sales amounted to 607 MSEK (615), a reduction of 8 MSEK or 1% compared with last year. For full-year 2013, net sales was 2,437 MSEK (2,605), a decrease of 6% of which 2.5% was related to currency impact.

The operating profit excluding depreciation and non-recurring items (Adj. EBITDA) in Q4 amounted to 63 MSEK (246) or 10.4% (40.0). The adjusted EBITDA for full-year 2013 was 227 MSEK (406) or 9.3% (15.6). Adjusted for gain on ”bargain purchase” and transaction costs for the Karelia-Upofloor acquisition, the 2012 adjusted EBITDA reached 176 MSEK or 6.8%. This means that the 2013 adjusted EBITDA of 227 MSEK was 29% higher than in 2012.

The operating result before non-recurring items (adjusted EBIT) in the fourth quarter was 47 MSEK (219) or 7.7% (35.6). Adjusted EBIT for full-year 2013 was 130 MSEK (290) or 5.3% (11.1).

The profit for the period amounted to -36 MSEK (141) during Q4-13 and -39 MSEK (194) in FY2013. The reason for this negative deviation in 2013 was non-recurring items of -72 MSEK mainly related to factory shutdown in Finland and also the above mentioned “bargain purchase” and transaction costs.

The shutdown of the parquet production in Finland during second half of 2013 has developed according to plan and the expected annual synergies have been verified during the fourth quarter.

The company has in December 2013 done a 130 MSEK partial repayment on shareholder loans.

1 In the PPA regarding the shares in Karelia-Upofloor the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed exceeded the aggregate of the fair value of the consideration transferred, usually referred to as bargain purchase. According to IFRS principles, the excess, 249 MSEK, was recognized as other operating income in the 2012 IFRS financial statements.

2 Pro forma is presented as if Kährs, Karelia-Upofloor and Oak Norge had been consolidated since 1 January 2012

MSEK Oct-Dec 2013

Oct-Dec 2012

Proforma2 Oct-Dec

2012

Jan-Dec 2013

Jan-Dec 2012

Proforma2 Jan-Dec

2012

Net sales 607 421 615 2,437 1,561 2,605

Operating profit excl. depreciation (EBITDA) 9 226 240 155 296 390

Operating profit excl. depreciation and non-recurring items (Adj. EBITDA) 63 223 246 227 301 406

Operating profit excl. non-recurring items (Adj. EBIT) 47 211 219 130 256 290

Operating profit (EBIT) -7 209 213 58 246 274

Profit for the period -36 168 141 -39 207 194

Operating profit excl. depreciation (EBITDA), % 1.5% 53.7% 39.0% 6.4% 19.0% 15.0%

Operating profit excl. depreciation and non-recurring items (Adj. EBITDA), % 10.4% 53.0% 40.0% 9.3% 19.3% 15.6%

Operating profit excl non-recurring items (Adj. EBIT), % 7.7% 50.1% 35.6% 5.3% 16.4% 11.1%

Operating profit (EBIT), % -1.2% 49.6% 34.6% 2.4% 15.7% 10.5%

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Kährs, fourth quarter and full-year 2013 In Kährs Holding AB’s consolidated financials, Karelia-Upofloor Oy is included since December 3, 2012, when 100% of the shares were acquired. In immediate connection with this acquisition, the owner of Kährs Group, Nanna II S.C.A., contributed 100% of the shares in Oak Norge AS. The contribution appeared on December 3, 2012 and Oak Norge AS is also included in the financial statements of Kährs Holding AB group from that date. Below comparison figures for last year show the group’s development for the fourth quarter 2012 and January to December 2012 as formally reported in the Provisional IFRS Financial Statement 2012 (i.e. not pro forma). The group’s result development pro forma is presented on page 5-7. It should be noted that the comparison figures for 2012 have been affected positively with 249 MSEK from gain on “bargain purchase” and negatively by 19 MSEK from transaction costs in connection with the above mentioned acquisition.

Net sales

Fourth quarter

Total group net sales amounted to 607 MSEK (421) in Q4-13.

Full-year 2013

The net sales for the group during 2013 amounted to 2,437 MSEK (1,561).

Operating profit

Fourth quarter

The operating profit (EBIT) for the fourth quarter amounted to -7 MSEK (209). The result of -7 MSEK has been affected by non-recurring items of -54 MSEK. The operating profit excl. non-recurring items (Adj. EBIT) amounted to 47 MSEK (211) or 7.7% (50.1). The operating result excluding depreciation and non-recurring items (Adj. EBITDA) reached 63 MSEK (223) or 10.4% (53.0). All result items above from 2012 have been affected positively with 249 MSEK from gain on “bargain purchase” and negatively by 19 MSEK from transaction costs.

Full-year 2013

The operating profit (EBIT) for full-year 2013 amounted to 58 MSEK (246). The result of 58 MSEK was affected by non-recurring items of -72 MSEK during 2013. The operating profit before non-recurring items (Adj. EBIT) amounted to 130 MSEK (256) or 5.3% (16.4). Operating profit excluding depreciation and non-recurring items (Adj. EBITDA) was 227 MSEK (301) or 9.3% (19.3).

Net financial cost

Fourth quarter

The net financial cost was -41 MSEK (-28). The change from last year was mainly related to interest expense on the 500 MSEK bond financing.

Full-year 2013

The net financial cost during 2013 was -109 MSEK (-23). The deviation to last year is mainly related to the 500 MSEK bond financing, and also due to FX impact on shareholder loans to Nanna II S.C.A. denominated in EUR.

Cash flow and Investments

Fourth quarter

Operating cash flow in the fourth quarter amounted to 89 MSEK (85). In December, 130 MSEK was repaid on shareholder loans and in addition the company paid 11 MSEK in interest on the bond financing. Net working capital decreased by 108 MSEK in the fourth quarter and the investments amounted to 32 MSEK (15).

Full-year 2013

During 2013, the operating cash flow amounted to 81 MSEK (123). 130 MSEK was repaid on shareholder loans and the company also paid 44 MSEK in interest for the corporate bond. Net working capital decreased by 41 MSEK mainly due to higher account payables. The net investments during 2013 were 108 MSEK (46) with main focus on the largest production site in Nybro, Sweden.

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Financial position

Total assets of the group amounted to 2,164 MSEK per 31 December 2013 (2,261 MSEK per 31 December 2012) and the Equity ratio was 19% excl. shareholder loans to Nanna II S.C.A (21% per 31 December 2012).

The net debt of the group, including finance lease and excluding shareholder loans, amounted to 376 MSEK per 31 December 2013 to be compared with 220 MSEK per December 2012. The net debt to adjusted EBITDA ratio amounted per December 2013 to 1.7 and the ratio of adjusted EBITDA to net finance charges amounted to 4.4.

Consolidated cash and cash equivalents per December 31, 2013 was 236 MSEK compared with 391 MSEK per December 31, 2012, i.e. a reduction of 155 MSEK during the year.

Repayment of shareholder loans and paid interest on the bond financing explain 174 MSEK of this cash outflow. In addition, 108 MSEK has been invested in the production sites during the year.

The corporate bond issued in December 2012 by Kährs Holding AB (publ) was listed on the list for Corporate Bonds at NASDAQ OMX Stockholm on 4 October 2013.

Employees

The number of employees per 31 December 2013 was 1,544, which is a decrease of 68 employees during the year and 37 employees in the fourth quarter. The number of employees outside Sweden at the end of the period was 782 compared with 866 at the beginning of 2013, a reduction of 84.

Net sales and result pro forma in summary To increase the comparability between current period and previous periods, net sales, operative result and segment development below are presented as pro forma on page 5-7.

Net sales

Net sales for the group amounted to 607 MSEK (615) in the fourth quarter, a reduction of 8 MSEK or 1%. The main reason for this decline is explained by the sales development in Finland and Russia and also negative currency impact.

Full-year net sales 2013 amounted to 2,437 MSEK (2,605). The currency impact from the stronger Swedish krona explains 60 MSEK of the total sales reduction of 168 MSEK during the year.

Net Sales by Product Group

Hardwood flooring continued to show a mixed development in the regions during the fourth quarter. The hardwood sales dropped by 1% compared with LY to 525 MSEK.

The resilient flooring business reached a net sales in Q4 of 60 MSEK and this is a decrease by 13% compared with the same period LY, mainly related to the development in Finland. Net sales for other business, including flooring accessories, did increase by 22% in the fourth quarter to 22 MSEK.

Net sales FY2013 within hardwood flooring amounted to 2,106 MSEK (2,231), a decline of 6%, while sales within resilient flooring business amounted to 247 MSEK (291), a decline of 15%. Net sales during the year for other business, i.e. flooring accessories, during the period January to December was 84 MSEK (83), an increase of 1%.

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Net Sales by region

The sales regions had a continued mixed development during the fourth quarter with Americas as the strongest region with 28% growth, followed by Other markets at 25% and Nordics at 7%. The positive development in the key markets in the Nordic region was driven by a favorable market situation but also due to taken market shares from competitors.

Central Europe delivered net sales 2% lower than the fourth quarter last year, while region Finland/Baltics and Russia/CIS showed a declining sales development during the quarter at -19% and -18% respectively, mainly due to the weaker market situation in the project business.

Also for the full-year 2013, Americas was the strongest growing region for Kährs with a sales growth of 13%, followed by a positive development in Sweden where the group is clearly taking market shares from competitors in most market segments. Within the group’s key markets, Russia and Finland had the weakest development during the year due to a passive project market.

Operating result (adjusted EBITDA and EBIT)

The operating result excluding depreciation and non-recurring items (adjusted EBITDA) amounted to 63 MSEK (246) or 10.4% (40.0) in the fourth quarter. Adjusted EBITDA for 2013 was 227 MSEK (406) or 9.3% (15.6). Operating result (EBIT) during Q4-13 was -7 MSEK (213) and for the full-year 2013 EBIT amounted to 58 MSEK (274).

The negative EBIT development in 2013 compared to last year is explained by -72 MSEK in non-recurring items. In addition, EBIT for 2012 has been affected positively by 249 MSEK from gain on bargain purchase and negatively by 19 MSEK for transaction costs.

Adjusted for all items above, the adjusted EBITDA in the fourth quarter 2012 was 16 MSEK or 2.6% to be compared with 63 MSEK or 10.4% during the same period 2013. The corresponding adjustments on full-year 2012 results in an adjusted EBITDA of 176 MSEK or 6.8% to be compared with 2013 at 227 MSEK or 9.3%, i.e. an improvement in 2013 with 51 MSEK.

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Segment development (pro forma)

”Bargain purchase” and transaction costs during 2012 have been allocated between the segment’s result items below.

Hardwood flooring

Resilient products

Other

MSEK Oct-Dec 2013 Oct-Dec 2012 Jan-Dec 2013 Jan-Dec 2012

Segment revenue

External customers 525 528 2,106 2,231 Operating profit excl. non-recurring items (Adj. EBIT) 42 190 105 236 Operating profit excl. non-recurring items (Adj. EBIT), % 8.0% 36.0% 5.0% 10.6% Operating profit, (EBIT) -10 184 37 220 Operating profit (EBIT), % -1.9% 34.8% 1.8% 9.9%

MSEK Oct-Dec 2013 Oct-Dec 2012 Jan-Dec 2013 Jan-Dec 2012

Segment revenue

External customers 60 69 247 291 Operating profit excl. non-recurring items (Adj. EBIT) 3 27 20 43 Operating profit excl. non-recurring items (Adj. EBIT), % 5.0% 39.3% 8.1% 14.8% Operating profit, (EBIT) 2 27 18 43 Operating profit (EBIT), % 3.3% 39.3% 7.3% 14.8%

MSEK Oct-Dec 2013 Oct-Dec 2012 Jan-Dec 2013 Jan-Dec 2012

Segment revenue External customers 22 18 84 83 Operating profit excl. non-recurring items (Adj. EBIT) 2 2 5 11 Operating profit excl. non-recurring items (Adj. EBIT), % 9.1% 11.1% 6.0% 13.3% Operating profit, (EBIT) 1 2 3 11 Operating profit (EBIT), % 4.5% 11.1% 3.6% 13.3%

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General information

Accounting principles in 2013

This interim report is prepared in accordance with the Swedish Annual Accounts Act and IAS34, Interim Financial Reporting. For information regarding the accounting policies applied, see the Provisional IFRS Consolidated Financial Statements for fiscal year 2012.

Related-party transactions

Transactions with related parties are priced in accordance with market terms and prices. Related parties refer to companies over which Kährs Holding AB (publ) has a controlling or significant influence in terms of the operational and financial decisions. Related parties also includes those companies and individuals, such as board of directors and members of management, who have the ability to control or exercise significant influence over the Group's financial and operational decisions.

Risk and uncertainty factors

Kährs is a global company represented in many countries and as such exposed to a number of commercial and financial risks. Accordingly, risk management is an important process for Kährs in its work to achieve established targets.

Efficient risk management is an ongoing process conducted within the framework of business controlling, and is a continuing review of the operations and forward-looking assessments of the business.

Kährs long-time risk exposure is not assumed to deviate from the inherent exposure associated with Kährs ongoing business operations.

Parent company

The parent company, Kährs Holding AB (publ) was established in 1996 and is a limited liability company with its registered office in Nybro, Sweden.

The revenue for the period January to December was 0 MSEK (0) with a profit after tax of -7 MSEK (65). The parent company’s income statement and statement of financial position are presented on page 13-14 in this interim report.

Events after balance sheet date

No significant events have taken place after the balance sheet date.

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Consolidated Income Statement

Consolidated statement of comprehensive income

MSEK Note Oct-Dec 2013

Oct-Dec 2012

Jan-Dec 2013

Jan-Dec 2012

Sale of goods 2 607 421 2,437 1,561

Cost of goods sold 3 -512 -366 -1,989 -1,279

Gross profit % of Sale of goods

95 15.7%

55 13.1%

448 18.4%

282 18.1%

Selling and distribution expenses 3 -72 -51 -286 -191

Administrative expenses 3 -26 -16 -99 -54

Other operating income 2 258 6 258

Other operating expenses -6 -37 -11 -49

Operating profit 2 % of Sale of goods

-7 -1.2%

209 49.6%

58 2.4%

246 15.7%

Financial income 2 2 6 22

Financial expenses -43 -30 -115 -45

Profit before tax -48 181 -51 223

Income tax expense 12 -13 12 -16

Profit for the period 5 -36 168 -39 207

Profit for the period -36 168 -39 207

Other comprehensive income Items that can be reclassified into profit and loss: Translation differences -3 -6 -26 -7

Other comprehensive income, net of tax 5 -39 162 -65 200

Total comprehensive income for the period -39 162 -65 200

Attributable to shareholders of the Parent Company -39 162 -65 200

Attributable to non-controlling interests - - - -

Total -39 162 -65 200

Earnings per share before and after dilution -1.2 5.6 -1.3 6.9

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Consolidated statement of financial position

MSEK Note

31 Dec 2013 30 Sept 2013 31 Dec 2012

ASSETS

Non-current assets

Intangible assets 3 5 6 Property, plant and equipment 796 756 771

Financial assets 5 6 6 Deferred tax assets 98 108 99 Total non-current assets 902 875 882

Current assets Inventories 665 652 630 Trade receivables 300 339 286

Derivatives 3 4 16 Other current assets 58 60 56 Cash and cash equivalents 236 317 391

Total current assets 1,262 1,372 1,379

TOTAL ASSETS 2,164 2,247 2,261 EQUITY AND LIABILITIES Equity Share capital 0 0 0

Other reserves -33 -29 -7 Retained earnings 438 473 477

Total 405 444 470 Non-controlling interests - - -

Total equity 5 405 444 470 Non-current liabilities

Interest bearing liabilities 4 1,074 1,182 1,177 Provisions for pensions 1 1 1 Other provisions 11 13 17

Deferred tax liabilities 8 30 26

Total non-current liabilities 1,094 1,226 1,221

Current liabilities Interest bearing liabilities 4 4 3 3 Other provisions 43 48 48

Trade payables 276 194 186 Income tax payable 3 1 1 Derivatives 12 7 11

Other current liabilities 327 324 321

Total current liabilities 665 577 570

TOTAL EQUITY AND LIABILITIES 2,164 2,247 2,261

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Consolidated statement of cash flows

MSEK Oct-Dec 2013

Oct-Dec 2012

Jan-Dec 2013

Jan-Dec 2012

Operating activities

Profit before tax -48 181 -51 223 Reconciliation between profit before tax & net cash flow 24 -209 109 -199

-24 -28 58 24 Interest received 1 0 5 4 Interest paid -11 -18 -44 -18 Income tax paid 0 1 -1 1

Cash flow from operating activities -34 -45 18 11

Working capital adjustments Changes in inventories -13 22 -35 -15 Changes in operating receivables 42 133 -3 85

Changes in operating liabilities 94 -25 101 42

Net cash flows from operating activities 89 85 81 123

Investing activities Business combinations - -71 - -71 Purchase of property, plant and equipment -32 -15 -108 -46

Change in financial assets -1 -1 -1 -2 Proceeds from sale of property, plant and equipment 2 2 4 6

Net cash flows used in investing activities -31 -85 -105 -113 Investing activities Dividends paid to equity holders of the parent - -80 - -80

Unconditional shareholders´ contribution - 107 - 107 Cash from contributed subsidiary - 5 - 5 Proceeds from borrowings -1 489 0 489

Repayment of borrowings -130 -270 -130 -270

Net cash flows used in investing activities -131 251 -130 251

Cash flow for the period -73 251 -154 261 Cash and cash equivalents, opening balance 317 140 391 134 Exchange - rate differences -8 - -1 -4

Cash and cash equivalents, closing balance 236 391 236 391

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Consolidated statement of changes in equity

MSEK Share capital Contributions of other capital

Other reserves Retained earnings

Total equity

As at 1 January 2013 0 0 -7 477 470

Profit for the period -39 -39

Other comprehensive income -26 -26

As at 31 December 2013 0 0 -33 438 405

MSEK Share capital Contributions of other capital

Other reserves Retained earnings

Total equity

As at 1 January 2012 0 0 0 256 256

Profit for the period 207 207

Other comprehensive income -7 -7

Transaction with shareholders:

Dividends -80 -80

Contribution of Oak Norge Group -13 -13

Unconditional shareholders´ contribution 107 107

As at 31 December 2012 0 0 -7 477 470

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Kährs Holding AB (publ) - Income Statement

MSEK Oct-Dec 2013

Oct-Dec 2012

Jan-Dec 2013

Jan-Dec 2012

Sale of goods - - - -

Cost of goods sold - - - -

Gross profit % of Sale of goods - - - -

Selling and distribution expenses - - - -

Administrative expenses -2 -1 -3 -2

Other operating income 0 0 0 0

Other operating expenses -2 0 -5 0

Operating profit % of Sale of goods

-4 -1 -8 -2

Financial income 13 67 46 78

Financial expenses -13 -3 -57 -11

Profit excl. tax -4 63 -19 65

Income tax expense 12 0 12 0

Profit for the period 8 63 -7 65

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Kährs Holding AB (publ) - Statement of financial position

MSEK

31 Dec 2013 30 Sept 2013 31 Dec 2012

ASSETS Non-current assets

Financial assets 960 1,075 1,085 Deferred tax assets 12 - - Total non-current assets 972 1,075 1,085

Current assets

Other current assets 3 1 5 Cash and cash equivalents 6 20 8 Total current assets 9 21 13

TOTAL ASSETS 981 1,096 1,098 EQUITY AND LIABILITIES

Equity Share capital 0 0 0 Retained earnings 335 327 342

Total 335 327 342 Non-controlling interests - - - Total equity 335 327 342

Non-current liabilities

Interest bearing liabilities 577 694 693 Total non-current liabilities 577 694 693 Current liabilities

Trade payables 2 - 8 Other current liabilities 67 75 55 Total current liabilities 69 75 63

TOTAL EQUITY AND LIABILITIES 981 1,096 1,098

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Notes Note 1, Accounting policies This interim report is prepared in accordance with the Swedish Annual Accounts Act and IAS34, Interim Financial Reporting. For information regarding the accounting policies applied, see the Provisional IFRS Consolidated Financial Statements for fiscal year 2012.

The preparation of the financial reports in accordance with IFRS requires management to make judgments and estimates, as well as assumptions, which affect the application of the accounting principles and the carrying amounts in the income statement and balance sheet. Estimates and assumptions are based on historical experience and a number of factors that under current circumstances seem reasonable. The results of these estimates and assumptions are then used to determine the carrying amounts of assets and liabilities that otherwise are not clearly indicated by other sources. Actual outcomes may deviate from these estimates and judgments.

Note 2, Segment Sale of goods by segment

Operating profit excl. non-recurring items (Adj. EBIT) by segment

Operating profit (EBIT) by segment

MSEK Oct-Dec 2013

Oct-Dec 2012

Jan-Dec 2013

Jan-Dec 2012

Hardwood flooring 525 398 2,106 1,497 Resilient products 60 14 247 14

Other 22 9 84 50

Sale of goods 607 421 2,437 1,561

MSEK Oct-Dec 2013

Oct-Dec 2012

Jan-Dec 2013

Jan-Dec 2012

Hardwood flooring 42 199 105 240 Resilient products 3 3 20 3

Other 2 9 5 13

Operating profit excl. non-recurring items (Adj. EBIT) 47 211 130 256

MSEK Oct-Dec 2013

Oct-Dec 2012

Jan-Dec 2013

Jan-Dec 2012

Hardwood flooring -10 197 37 230 Resilient products 2 3 18 3

Other 1 9 3 13

Operating profit (EBIT) -7 209 58 246

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Note 3, Non-recurring items

Note 4, Interest bearing liabilities

MSEK Oct-Dec 2013

Oct-Dec 2012

Jan-Dec 2013

Jan-Dec 2012

Operating profit excl. non-recurring items (Adj. EBIT) 47 211 130 256

Effects of acquisitions - - - 1

Production footprint changes -49 - -62 -

Other non-recurring items -5 -2 -10 -11

Operating profit (EBIT) -7 209 58 246

MSEK

31 Dec 2013 30 Sept 2013 31 Dec 2012

Non-current liabilities

Shareholder loans 1 466 575 569

Corporate bond 500 500 500

Financing costs 2 -10 -10 -12

Finance lease 117 117 119

Other loans - - 1

Total non-current interest bearing liabilities 1,074 1,182 1,177

Current liabilities Finance lease 4 3 3

Other loans - - 0

Total current interest bearing liabilities 4 3 3

Total interest bearing liabilities 1,078 1,185 1,180

1 Shareholder loans to Nanna II S.C.A. (PIK interest only) 2 Financing costs accrued over the corporate bond-loan maturities

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Note 5, Change of accounting principles – transition to IFRS The Group is a first time adopter of IFRS. In accordance with IFRS 1, the opening statement of financial position as at the transition date, 1 January 2012, has been prepared. The main differences in the IFRS opening statement of financial position between the previously applied Swedish accounting principles and IFRS is the identification and accounting of finance leases and financial derivative instruments. As a consequence of the business combination with Karelia Upofloor Group and the contribution by the shareholders of the Oak Norge Group, additional differences between the previously applied Swedish accounting principles and IFRS are affecting the financial statements. In the table below reconciliation is shown for the conversion effects on the Group´s equity and net profit/loss after tax between Swedish accounting principles and IFRS.

Equity

Net profit/loss after tax

MSEK 1 Jan 2012

30 Sep 2012

31 Dec 2012

Equity in accordance with Swedish accounting principles 246 291 466

IAS 17 - leases -1 -1 -1

IAS 39 – derivative contracts 10 4 9

IAS 39 – corporate bond - - 9

IFRS 3 – transaction costs - - -21

IFRS 3 – gain on bargain purchase - - 21

IFRS 3 – common control contribution - - -13

IAS 19 - pensions 0 0 0

Equity in accordance with IFRS 255 294 470

MSEK Oct-Dec 2012

Jan-Sep 2012

Jan-Dec 2012

Net profit/loss after tax according to Swedish accounting principles -74 46 -28

IAS 17 - leases 0 -1 -1

IAS 39 – derivative contracts 5 -6 -1

IAS 39 – corporate bond 9 - 9

IFRS 3 – transaction costs -21 - -21

IFRS 3 – gain on bargain purchase 249 - 249

IAS 19 - pensions 0 0 0

Net profit/loss after tax according to IFRS 168 39 207

Other comprehensive income

Translation differences -6 -1 -7

Total comprehensive income for the period 162 38 200

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Consolidated key performance indicators

1 Corporate bond and finance lease minus cash and cash equivalents

Financial reporting calendar 2014 Kährs Holding AB (publ)’s interim reporting as well as the year end-report are available on Kährs website www.kahrs.com.

The reporting calendar is as follows:

Statutory report 2013 April 2014 Interim report Q1 May 2014 Interim report Q2 August 2014 Interim report Q3 November 2014 Interim report Q4 February 2015

Governing text This report has been translated from Swedish. The Swedish text shall govern for all purposes and prevail in the event of any discrepancy between the versions.

MSEK Oct-Dec 2013

Oct-Dec 2012

Jan-Dec 2013

Jan-Dec 2012

Net sales 607 421 2,437 1,561

Operating profit excl. depreciation (EBITDA), % 1.5% 53.7% 6.4% 19.0%

Operating profit excl. depreciation and non-recurring items (Adj. EBITDA), %

10.4 % 53.0 % 9.3% 19.3%

Operating profit excl. non-recurring items (Adj. EBIT), % 7.7% 50.1% 5.3% 16.4%

Operating profit (EBIT), % -1.2% 49.6% 2.4% 15.7%

Profit for the period, % -5.9% 39.9% -1.6% 13.3%

Net working capital - - 689 730

Net debt 1 - - 376 220

Equity ratio - - 19% 21%

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Nybro, 13 February 2014

KÄHRS HOLDING AB (PUBL)

Sven-Gunnar Schough Chairman

Carl Johan Falkenberg Anders Wassberg Hannu Paitula Bertel Langenskiöld Board director Board director Board director Board director Anne Berner Stefan Karlsson Jakob Jakobsson Board director Union representative Union representative

Christer Persson President and CEO

The information in this interim report is what Kährs Holding AB (publ) is obliged to publish under the provisions of the Stock Exchange and Clearing Operations Act and/or the Trading in Financial Instruments Act. The

information was released to the media for publication on February 13, 2014 at 1500 CET.

This report has not been reviewed by the company’s auditors.

For further information, please contact:

Christer Persson President and CEO Phone: +46 70 271 2014 Email: christer.persson@kahrs.se Peter Ericsson CFO Phone: +46 70 461 1039 Email: peter.ericsson@kahrs.se Address: Kährs Holding AB (publ) Dunderbergsgatan 10 382 28 Nybro Sweden Corporate identity number: 556534-2481 Phone: +46 481 46000