2015/16dustin-ab-ir.prod-mid-euw3.investis.com/themes/dustin_subtheme/im… · ANNUAL REPORT 2015/2016 DUSTIN GROUP AB 3 Our History Dustin was established in 1984 by two entrepreneurs,

Annual ReportSeptember 1, 2015 – August 31, 2016

2015/16

2 ANNUAL REPORT 2015/2016 DUSTIN GROUP AB

Introduction3 Our History4 The year in brief5 Dustin in brief6 Dustin as an Investment

CEO Statement8 Words from the CEO

Our Strategic Direction11 Our Vision and Mission12 Strategy and Financial Targets14 A strong Online Position

Customers and Markets16 Our Customer Offering18 Our Market22 Brand and Marketing

Logistics and Procurement24 Logistics and Procurement

Stakeholders27 Our Employees30 Our Corporate Responsibility efforts32 The Share and Shareholders

Directors’ Report34 Directors’ Report41 Risks and Risk Management45 Corporate Governance Report

Financial Reports55 Consolidated Financial Statements59 Parent Company Financial Statements63 Notes91 Board Signatures92 Auditor’s Report

Other information94 2015/16 Annual General Meeting95 Three-year Overview96 Definitions

Content

ANNUAL REPORT 2015/2016 DUSTIN GROUP AB 3

Our HistoryDustin was established in 1984 by two entrepreneurs, Bo and Ulla Lundevall, as a subsidiary business to the coup-le’s pet shop in the Stockholm suburb of Farsta. Their business idea was to sell computer accessories via mail order and to use a catalogue as the primary marketing tool. The big seller was colourful floppy disks.

After ten years, the range was broade-ned from focusing solely on products to also include software licenses. The company began online sales in 1995, the same year as Amazon. The compa-ny initially only sold to the corporate market, but in 2004 the offering was expanded into the consumer market through the launch of Dustin Home.

Altor Fund II GP Limited became Dustin’s new majority owner in 2006, and the company has expanded sig-nificantly since then by entering new

markets and making complemen-tary acquisitions in the its existing markets. Operations in Denmark were established in 2007 through the acquisition of Computerstore, and a new e-commerce business followed in Norway two years later.

Three acquisitions were completed in 2012 to expand the services and so-lutions range. In Sweden the acquisi-tions were Best Office, specialising in printing solutions, and IT-Hantverkar-na, who do everything from helping with installation to acting as an outsourced IT department for SMEs. Norsk Data Senter, with a focus on services and solutions for companies, was acquired in Norway.

In 2013 Dustin moved into Finland through the acquisition of Business-forum, with a focus on hardware sales to large companies and the public

sector. After this acquisition, Dustin operates in Sweden, Denmark, Finland and Norway.

Dustin was listed on Nasdaq Stock-holm on February 13, 2015, and in connection with this, Axel Johnson AB, through its subsidiary Axmedia AB, became one of its new principal owners.

In order to further strengthen its offering of more advanced products and services, Dustin acquired Resolute and Commsec in 2015. Resolute is one of Finland’s leading suppliers of network solutions for companies and the public sector and Swedish Comm-sec supplies network and security solutions. In 2016 the company also acquired Idenet, a Swedish company that specialises in cloud hosting and application management.

INTRODUCTION | OUR HISTORY


• Dustin acquired the Swedish company Commsec, which supplies network and security solutions to the corporate market.

• Dustin acquired Idenet, a Swedish company that specialises in cloud hosting and application management.

• Dustin introduced its online platform in Finland and launched e-commerce services directed at companies, the public sector and consumers.

• Dustin sold its lease portfolio and consolidated its financial offering in the Nordic region through a partnership agreement with De Lage Landen Finans AB (DLL).

• Dustin Concept Store opened as a meeting place where companies can find inspiration and the right combination of products and solutions thanks to expert advice.

• Dustin Sweden became a Cisco Gold Certified Partner, strengthening its market position for advanced services and solutions.

• Dustin began a partnership with the World Wildlife Fund (WWF) with the aim of jointly implementing activities that contribute to reducing Dustin’s and the IT sector’s climate impact.

Significant events 2015/16

Financial key ratios 2015/16All amounts in SEK million, unless otherwise indicated 2015/16 2014/15

Net sales, SEK million 8,301 7,934

Organic sales growth (%) 4.4 5.7

Gross margin (%) 15.0 14.1

Adjusted EBITA, SEK million 390 354

Adjusted EBITA margin (%) 4.7 4.5

EBITA, SEK million 324 218

Profit for the year, SEK million 225 125

Earnings per share, including discontinued operations, before and after dilution, SEK 2.95 1.75

Cash flow from operating activities, SEK million 447 59

Net debt/adjusted EBITDA (multiple) 2.1 2.6

Return on equity (%) 15.8 9.4

Dividend per share, SEK 2.40* 1.70

* The Board of Directors proposed dividend

The year in brief

dustin.�

INTRODUCTION | THE YEAR IN BRIEF


Share of sales B2B

93 %Share of sales B2C

7 %Active B2B customers

100,000Active B2C customers

350,000

Share of orders via the online platform

90 %Number of brands in the product range

1,200Unique products in the range

200,000

Share of sales via theonline platform

75 %

Average number of employees

944

Net sales 2015/16

8.3 BSEK

Dustin is one of the leading IT resellers in the Nordic region, offering a broad range of hardware, software and associated services and solutions. We ensure rapid and reliable deliveries through our centralised warehouse and an efficient logistics platform. By adding a high level of IT skills together with competitive prices, we meet the needs of primarily small and medium-sized enterprises, but also large companies, the public sector and the consumer market.

Dustin employs a multichannel model where the majority of sales take place online, supplemented by relationship-based and consultative sales over the telephone or through customer visits. Dustin operates in Sweden, Norway, Denmark and Finland through two business segments, B2B (the corporate market) and B2C (the consumer market). These segments are in turn supported by several scalable shared central functions, comprising the online platform, purchasing, storage and logistics, pricing, marketing, IT and HR.

Dustin is well positioned in the market where an ever greater share of sales of products and basic services takes place on online, thanks to its efficient online platform and focus on the SMEs, a group of customers that is more flexible and growing rapidly. We see a rising demand for more advanced services as demands for mobility and accessibility grow. By combining products and services into integrated solutions, and by adding more advanced services through acquisitions, Dustin is continually expanding its customer offering and is able to meet an ever-greater share of its customers’ IT needs in accordance with its vision. Our offering encompasses services and solutions in areas such as "Client", "Infrastructure", "Software", "Mobility" and "Print".

Dustin Group AB is a Swedish public limited liability company with its head office in Nacka Strand outside Stockholm. The share was listed in the Mid Cap segment on Nasdaq Stockholm on February 13, 2015.

Dustin in brief

INTRODUCTION | DUSTIN IN BRIEF


A solid market positionDustin is well positioned for continued growth in the B2B market, thanks to its strong customer offering consisting of a broad range, excellent IT skills and rapid and reliable deliveries. The market is characterised by an ever-increa-sing share of sales taking place online, as well as higher demand for mobility and cloud services. Moreover, small and medium-sized businesses, which is Dustin’s main customer group, are demonstrating relatively faster growth than the market as a whole.

An efficient sales modelDustin’s sales model is set up to drive growth at a low cost. We achieve this by combining online sales of basic products and services with relationship-based and consul-tative sales for more advanced products and services. This allows us to streamline the sales process and increase our share of the customer’s total IT purchases.

An attractive online channelDustin's central online engine is designed to efficiently handle large volumes of small orders. It is an attractive channel for all of our customer segments, from small and medium-sized businesses to large companies in the public sector, as well as consumers.

Cost-effectivenessDustin has gained a unique position by combining scalable and cost-effective online sales with a high service level through our relationship-based and consultative sales.

Scalable central functionsDustin has consolidated activities such as the online platform, purchasing, storage and logistics, pricing, mar-keting, IT and HR into central functions in order to achieve economies of scale and efficiently manage the integration of businesses the company has acquired.

Low capital requirementsThe company has little need for investment and is able to keep its working capital low through a close relationship

with suppliers and its own central warehouse with effi-cient stock-keeping. The business generates healthy cash flows which enable continued expansion and an attractive dividend level to shareholders.

A solid financial historyDustin has a solid financial history, with average organic growth of about 8 per cent and about 7 per cent additional growth through acquisitions, based on the most recent 10-year period. Moreover, we have demonstrated stable growth of both the gross margin and EBITA margin in recent years.

Growth strategyWith its attractive customer offering, broad and diversi-fied customer base and flexible sales model, Dustin sees promising opportunities for continued profitable growth by continuing to work in accordance with its established strategy.

Dustin as an Investment

Dustin is well positioned in the IT market, with a strong customer offe-ring and flexible sales model. The company’s scalable business model and low capital requirements that generate healthy cash flows give it excellent prospects for continued profitable expansion, both organically and through acquisitions.

Net sales

8,301 MSEK

Gross margin

15.0 %

Adjusted EBITA

390 MSEK

Cash flow from operating activities

447 MSEK

Earnings per share

2.95 SEK

Proposed dividend per share

2.40 SEK

Dividend yield*

4.0 %

Share price, August 31, 2016

60.00 SEK

Share performance for the financial year

6.2 %

* Based on the Board of Directors proposed dividend of SEK 2.40 and a share price of SEK 60.00.

INTRODUCTION | DUSTIN AS AN INVESTMENT



Strong online salesDustin can report sales growth of nearly five per cent for the financial year. Given the generally slow demand in the IT market over the past year, our sales trend confirms the robustness of our business model and our strong market position in the Nordic region.

The B2B segment demonstrated sales growth of almost 5 per cent, with growth mainly driven by strong online sales.. The sales trend during the year was also characterised by continued volatility between the quarters in terms of volu-me transactions to the large companies and public sector customer group.

The B2C segment accounted for about 7 per cent of the total sales during the financial year. The competition situation remained tough and sales were slightly lower compared with the preceding year. The strategy to prioriti-se profitability before volume stands firm.

Higher marginsThe gross margin rose by almost one percentage point to 15.0 per cent (14.1). This was mainly influenced by a better product mix, increasingly efficient pricing and a favourable customer mix. The acquisitions of Resolute and Commsec contributed positively by way of increased sales of more advanced products and services, and during the year our updated pricing platform had a progressively greater effect.

Adjusted EBITA increased by over ten per cent to SEK 390 million (354) and the adjusted EBITA margin rose to 4.7 per cent (4.5). These improved earnings are mainly attributable to the increased gross margin, although efforts to standar-dise the delivery of services and solutions have also yielded visible results.

Strong cash flow and raised dividendDustin had a strong cash flow from operating activities, which was mainly due to the higher EBIT and lower net working capital. Cash flow from investing activities was positively impacted by the sale of the lease portfolio within financial services in the first quarter.

The Board of Directors proposes a raised dividend of SEK 2.40 per share (1.70) for the 2015/16 financial year, which is equivalent to a total dividend payout of SEK 183 million (129). The proposal is in line with our dividend policy to distribute a dividend equal to more than 70 per cent of the profit for the year. Our debt/equity ratio is in the lower part of the target range, thus creating the conditions for continued growth, both organic and through acquisitions, and a positive dividend trend over the coming years.

Launch and integration in FinlandIn April, Dustin launched its online platform in Finland, a market in which we already hold a strong position, particularly in the public sector. We have now created good conditions to also focus on the small and medium-sized businesses customer group. We know from experience that confidence is built over time, and we see considera-ble potential for our online platform in Finland over the coming years.

The integration of the Finnish operation into Dustin’s Nordic IT platform was completed in October after the end of the financial year, and thus the entire Finnish operation is now operating under the Dustin brand. This integration will bolster the competitiveness of the Finnish operation and ultimately also reduce our costs thanks to the scalabi-lity of our central functions.

Words from the CEO

During the past financial year, Dustin has strengthened its position as one of the leading resellers of IT products and associated services and solutions. Our customers value our attractive offering and we are able to report strong sales growth and higher margins for our shareholders. We benefit from trends such as the ongoing transition to online sales and see opportunities in the rapid digitisation. As part of this shift, Dus-tin is undergoing a transformation where we both organic and through acquisitions broaden our portfolio of more advanced products and services, thus helping us solve our customers’ IT-related challenges to a greater extent.

CEO STATEMENT | WORDS FROM THE CEO


Transformation to broaden portfolioIn line with the rapid development of digitisation and the new conditions this creates, our customers are also beco-ming more aware of this technology’s potential. With this in mind, we are intent on continuing Dustin’s transforma-tion and broadening our portfolio of more advanced pro-ducts and services both organic and by way of acquisitions. We continuously seek potential acquisition candidates to complement and strengthen our existing operations.

At the beginning of the financial year, Dustin acquired the Swedish company Commsec, which supplies network and security solutions to the corporate market. In May, the Swedish company Idenet was acquired, thus giving us the opportunity to offer products and services in cloud hosting and application management in the Swedish market, and eventually to all of our Nordic B2B customers.

In September, after the end of the financial year, we acquired the Norway-based IKT Gruppen specialised in sales and operations of standardised IT services for small and medium-sized businesses. These acquisitions expand our customer offering and strengthen our position as the leading IT reseller to small and medium-sized businesses in the Nordic region.

Private labelDuring the past six months, we have been working to develop affordable products with good quality and at the end of the financial year Dustin launched private label products. These are found in certain categories of basic products, such as cables, USB sticks and accessories for mobiles and tablets. Through expansion to private label products, we see an opportunity to increased margins and greater control of product features and quality.

Dustin Concept Store and Dustin ExpoJust over a year ago, the Dustin Concept Store opened on Sveavägen in Stockholm. The Concept Store is mainly tar-geted at our corporate customers with a focus on advisory services. Our customers can seek inspiration here and see how our products and solutions could help them in their day-to-day work.

Along with about 80 exhibitors and partners, we arranged the 15th Dustin Expo in March, the largest IT exhibition in the Nordic region. The exhibition was held in the Ericsson Globe in Stockholm for the third year, and attracted a total of 10,000 visitors. The event is a fantastic opportunity for us to meet and strengthen relationships with new and existing customers.

Step by step towards sustainable ITCorporate Responsibility is an important area for us and the entire IT industry. During the financial year, we carried

out a materiality analysis whose aim was to confirm that our sustainability work is heading in the right direction. A little over a year ago, we established five focus areas; re-sponsible manufacturing, reduced climate impact, respon-sible use of resources, business ethics and anti-corruption, and diversity and equality. We have made good progress during the year in terms of our ambitious targets, and as a key player in the value chain I am convinced that our continuous sustainability work will have a positive impact on the industry and our customers and will strengthen our position and business in the long-term.

OutlookOrganic sales growth was 4.4 per cent for the 2015/16 financial year, with stable online sales to the small and medium-sized businesses customer group during the year. The assessment is that growth in the large companies and public sector customer group will remain volatile between quarters. Overall, we expect slightly higher organic sales growth in the financial year ahead. Our financially robust position provides us with the scope to further strengthen our position in the Nordic IT market and continue the transformation by expanding our range of more advanced products and services, both organic and by way of comple-mentary acquisitions.

Nacka, November 2016

Georgi Ganev, President and CEO

CEO STATEMENT | WORDS FROM THE CEO


Health & Fitness Nordic is one of the largest health companies in the Nordic region, with the brands SATS, ELIXIA, Fresh Fitness and SAFE. CIO Arvid Johansson explains that they were early adopters of digitisation and cloud services, and that they began their journey seven years ago when the company was only half its current size.

“In general you could say that we wanted to focus on our business rather than spend our time on technology. With 8,000 employees, 200 websites and half a mil-lion members, we can't manage IT oper-ations ourselves. The major cloud service suppliers have a higher security standard than we are capable of maintaining as a relatively small firm, so that we are provided with better operations than we could manage ourselves,” he says.

Dustin has already supplied clients includ-ing configuration, support and recovery to Health & Fitness Nordic’s entire opera-tion. Now they have also chosen to invest in Infrastructure as a service (IaaS) from Idenet, which is part of Dustin. The service is a turnkey solution in Microsoft Azure that includes operation, backup, monitor-ing, antivirus and security updates.

“Our strategy is to purchase capacity ser-vices for both new and existing business systems. This frees up time and resources to focus on IT and business development instead. We've decided to invest in Infra-structure as a service in a private cloud for areas where we do our own develop-ment or develop on platforms where we want to differentiate ourselves and that require monitoring. The reason is that we want to make changes at a rapid pace

while maintaining control. We get better performance and scalability at a lower, predictable cost,” says Johansson.One of the greatest challenges has been finding a supplier that is as far ahead in development as Health & Fitness Nordic wants to be. The objective is to perform active development in order to help people get started on their training with the aid of a selection of digital tools, even outside training centres.

“We are just at the beginning of our dig-ital journey. With Dustin and Idenet, we have a supplier with the specialised skills and flexibility we need to be able to fulfil our business’s requirements for rapid and secure IT delivery in accordance with our cloud strategy,” Johansson says.

OUR STRATEGY IS TO PURCHASE CAPACITY SERVICES FOR OUR BUSINESS SYSTEMS.

CLOUD STRATEGY WITH A FOCUS ON DIGITISATION.

Arvid Johansson CIO at Health & Fitness Nordic

ASSIGNMENT | HEALTH & FITNESS NORDIC

The health company Health & Fitness Nordic wanted to focus on its business rather than spend time on technology. Today they save time and resources by placing all of their IT operations in the cloud, in the form of Infrastructure as a service from Idenet, a Dustin subsidiary.


Our Vision and Mission

Dustin’s vision is to be the customer’s first choice and set the standard for efficient IT. For us, it is about being at the forefront and offering the best products and solutions based on customers’ needs. Our mission is that customers should be able to focus on their core operations. IT should be something that just works. In practice, this is expressed in Dustin’s brand promise, which is to solve customers’ IT challenges. We achieve this by offering a broad range of products and services, excel-lent IT skills and rapid and reliable deliveries.

VisionTo be the preferred partner,

setting the standard inproviding efficient IT.

MissionTo enable customers to focus

on their core business.

Brand promiseDustin solve your IT-needs.

OUR STRATEGIC DIRECTION | OUR VISION AND MISSION


The company’s overall strategy to further strengthen its position as one of the leading resellers of IT products and associated services and solutions in the Nordic region is based on the following elements:

• A flexible sales model• Introduction of the offering across the entire Nordic

region• Continuous efficiency enhancements• Acquisitions for growth and a broader customer offering

A flexible sales modelDustin employs a multichannel model where the majority of sales take place online, supplemented by relations-hip-based and consultative sales over the telephone or through customer visits.

A strong position in online salesDustin’s proprietary online platform leaves the company well positioned to take advantage of the current shift to online sales in the market, as customers choose to allocate an ever larger share of their IT purchases to the online channel by concentrating their IT purchases to a smaller number of suppliers. During the 2015/16 financial year we launched our online platform in Finland, and we now have an online presence in all of the Nordic countries where Dustin operates.

Customer acquisitionsDustin has successfully used its online platform as the first point of contact with new customers, supported by its high brand awareness, digital marketing such as SEO and through attractive offers and campaigns. We conti-nuously endeavour to further strengthen the brand, and invest selectively in marketing activities such as the Dustin Expo and Dustin Concept Store. Dustin expects its leading position in the Nordic online market combined with high growth in e-commerce will continue to contribute to a steady flow of new customers.

Increased sales to existing customersDustin estimates that the company’s average share of customers’ IT purchases is relatively low. Our objective is to increase this share through Dustin's leading position in online sales, and above all by further developing and st-rengthening customer relationships through relationship- based sales.

Strong customer relationships through relationship-based salesDustin offers relationship-based sales to selected groups within our large SME customer base in order to strengthen customer relationships and increase the share of sales to each customer. Relationship-based sales allow Dustin to take advantage of the potential for additional sales of more advanced products and services with a generally higher gross margin to its existing customers. Deeper customer relationships generally lead to higher online sales as well.

Introduction of the offering across the entire Nordic regionDustin sees opportunities to grow by introducing its entire product and services range to all the markets where we operate, as well as taking advantage of the strengths of the work methods and processes in these markets to bring growth to the whole Group. Continuously developing and improving internal processes, along with our com-pleted and future acquisitions, enable us to continually strengthen Dustin’s offering.

Product and service offeringDustin offers a broad range of products and associated services in Sweden, while the range is somewhat more limited in other Nordic countries. Dustin estimates that major opportunities exist for the introduction of the entire customer offering in all of its markets. In addition, Dustin intends to invest in new products and services, as well as integrated solutions to add to its existing offering, through

Strategy and Financial Targets

Dustin’s strategy to further strengthen its position as one of the leading resellers of IT products and associated services and solutions in the Nordic region is based on an attractive customer offering and a flex-ible sales model. We see promising potential for continued profitable growth by introducing the entire customer offering to all the marketswhere Dustin operates, broadening our existing offering through acqui-sitions and by achieving cost synergies.

OUR STRATEGIC DIRECTION | STRATEGY AND FINANCIAL TARGETS


acquisitions or by developing these products and services itself. By broadening our product and service portfolio in this way, we can capture a greater share of customers’ total IT purchases and thereby increase our sales and profitability.

Best practiceExchanging knowledge and experience between markets makes it possible to refine and streamline work methods and processes in several ways. The online platform that was originally introduced in Sweden has now been laun-ched in Norway, Denmark and Finland as well; the efficient sales process used for the Finnish public sector is now be-ing used in Sweden, Norway and Denmark; and the Danish model for relationship-based sales has been introduced in Sweden. There are additional areas where we can st-rengthen our customer offering by exporting best practice within the organisation.

Continuous efficiency enhancementsDustin has consolidated several scalable units to cen-tralised functions in order to serve the entire Group as efficiently as possible. These functions include the online platform, purchasing, storage and logistics, pricing, mar-keting, IT and HR. Our strategy is to try to leverage these functions to create economies of scale, thereby reducing operating expenses in relation to net sales as Dustin conti-nues to grow.

Dustin uses well-known methods such as Lean*, Six Sig-ma* and the NPS model combined with focused initiatives to create a culture of continuous improvement and strong customer focus. Dustin believes that these initiatives will gradually lead to increased efficiency and enable continu-ally improved profitability.

Dustin uses Net Promoter Score (NPS) as a tool to measure customer loyalty and drive its improvement efforts. NPS is used to measure the willingness of the customer base to recommend the company. The NPS process includes feedback from customers on areas to improve. These areas are given priority, and they serve as the basis for ongoing

improvement efforts.

Acquisitions for growth and a broader customer offeringThrough its recent acquisitions of Resolute, Commsec and Idenet, Dustin has broadened both its range of more advanced products and services and its customer base in specific markets. Acquiring local specialised expertise or unique product and service offerings enables us to offer them to our entire customer base through cross-selling.

Dustin continues to evaluate potential acquisition possibilities to support growth and increase shareholder value. New acquisitions are evaluated for their potential to consolidate our position in existing markets, broaden our customer base, achieve cost synergies and expand our existing offerings, thereby enabling us to take advantage of a larger proportion of our customers’ total IT purchases.

Financial TargetsGrowthDustin’s target is to achieve average annual organic growth of 8 per cent over a business cycle. In addition to this, Dustin intends to expand through acquisitions.

MarginDustin’s target is to increase the adjusted EBITA margin over time and, in the medium-term, to achieve an adjusted EBITA margin of between 5 and 6 per cent.

Capital structureDustin’s capital structure is to facilitate a high degree of financial flexibility, as well as to provide scope for acqui-sitions. The company’s target is for net indebtedness to amount to a multiple of 2.0 - 3.0 times the adjusted EBITDA for the last 12-month period.

Dividend policyDustin’s target is to distribute more than 70 per cent of the profit for the year. However, the company’s financial posi-tion, cash flow, acquisition potential and future prospects must be taken into account.

*Lean and Six Sigma are the two dominant global concepts used for business development today. They are tested methods for increased efficiency and improvement.

OUR STRATEGIC DIRECTION | STRATEGY AND FINANCIAL TARGETS


Our online platformOur proprietary online platform is the core of Dustin’s business. It is how we interact with and assist the majo-rity of our customers. Around 90 per cent of purchases are made on the online platform. Over the last two years we’ve invested in technology and expertise for the online platform, in order to improve and strengthen both systems and processes.

We can influence the online customer experience via the platform, by customising content to the user’s needs and behaviour, thereby maximising value for the customer. Customers can view their previous purchases and enter a repeat order, or easily find accessories for previous pur-chases. Simplicity of navigation and the ability to compare similar products is a given for customers today.

The company’s online marketing is also being adapted. Marketing automation enable the company’s marketing to target each customer based on the customer’s previo-us behaviour, in order to increase Dustin’s share of their purchasing budget.

The intelligent platform is supported by several modules to optimise the packaging of offers, pricing, marketing and customer service online. This simplifies expansion and the way we do business, and enables us to develop new types

of offers that can subsequently be exported to other geo-graphical markets, increasing sales without significantly affecting the cost base.

The online platform is used daily to synchronise activities such as campaigns, pricing, marketing and the selection of products to be placed in the display window, in order to have the most attractive customer offering at all times.

The structure is based on standard components such as a search engine, product information system and content management, which is an advantage when replacing mo-dules as well as when we hire staff for organic growth and when we have to integrate companies that we’ve acquired.

Expenses related to the online platform and its support functions are recognised as part of the central functions. Since they take the form of a sales channel they are relati-vely constant regardless of sales volumes. The increase in costs in recent years is related to investments in technolo-gy and expertise.

Our pricing platformDustin’s pricing platform has been developed and optimi-sed over the last year, so that it can automatically manage and adjust sales prices depending on supply and demand, as well as price changes and stock levels at suppliers and competitors.

If changes are made to the purchase price of any pro-duct(s) or if competitors change their sales prices, the pricing platform allows us to adjust our sales prices for corresponding products quickly and efficiently.

The pricing platform considers stock levels, both at Dustin and at suppliers and competitors, and then adjusts the sales price based on the relationship between supply and demand.

A strong Online Position

Dustin’s business model is based on offering customers a broad range of IT products and associated services through multiple complementary sales channels. The heart of this model is its proprietary online plat-form, which handles about 75 per cent of sales and is always available to customers. The online platform is scalable in the sense that we can increase our sales without any significant effect on operating expenses.

OUR STRATEGIC DIRECTION | A STRONG ONLINE POSITION


Last year Danish firm MM Composite A/S installed a new network from Cisco Meraki, which was supplied by Dustin. “We’ve already experienced lots of ad-vantages, and I think we’re getting a lot for our money, even if we’re not yet ex-ploiting it to its full potential. The better we get at using the network, the more its value will rise,” said Martin Olesen, who is responsible for the business’s IT solutions in addition to his role as sales director.

Since MM Composite only has one full-time IT staff member, it was important to choose a system that was extremely user-friendly.

“We wanted a high quality network that demanded fewer daily resources, ideally with higher security. Once we contacted

Dustin we arrived at the Meraki solution quickly. Since Dustin had seen our busi-ness, they could specify exactly which Meraki products were best suited to different places in the operation. For ex-ample, the functionality of access points and switches should not be the same in production as in administration,” said Olesen.

He and IT assistant Jacob Bøllingtoft Madsen implemented the network themselves.

“We did it over a weekend. It’s a very user-friendly system and Dustin was prepared to provide us with ‘remote support’ over the phone,” Olesen said.

MM Composite has multiple addresses. The new network is currently up and

running at two of them, one of which is in the US state of Iowa.“We can manage the network in the US here from Funen without having an IT professional at their site. It’s extremely efficient,” said Martin Olesen, who is also extremely satisfied with the Meraki network’s inbuilt software update func-tion, which is automatically sent to each device.

It's also easy to detect and correct errors when they occur in the new network.

“We receive a notification of exactly which cable has a loose connection, for example. In the past we had to go through the entire system manually, which took a tremendous amount of time. That's time that we're saving now,” said Olesen.

WE WANTED A HIGH QUALITY NETWORK WITH HIGHER SECURITY.

A NEW NETWORK MAKESTHE WORKDAY MORE EFFICIENT.

Martin Olesen Sales Director and responsible for the business IT solutions at MM Composite

ASSIGNMENT | MM COMPOSITE

All of MM Composite’s employees now share a network and have improved security – even the department in the US, which is currently managed from Funen.


Dustin endeavours to provide customers with products and services at competitive prices supplied via rapid and reliable deliveries. All of the sales channels where we interact with our customers show our IT expertise, which is tailored to the unique needs of each customer group.

A broad product and service offeringDustin offers its customers a broad range of hardware and software products, as well as a large number of ser-vices and solutions. A large portion of the services offered by Dustin to its customers are intended to complement hardware and software that has already been purchased, and to maximize and streamline their use. We offer inte-grated solutions, such as printing services and network services, to simplify purchasing for customers and to increase their efficiency.

Hardware and software Hardware and software comprise the foundation of Dustin’s offering. The offer includes a broad selection of hardware and software that have been selected to meet the needs of SMEs, as well as public organisations and large companies. Niche products that are not included in Dustin’s standard range can also be purchased for SMEs that are served through our relationship-based sales organisation.

Altogether, we offer our customers about 200,000 unique hardware and software products from over 1,200 brands. Dustin continues to develop its hardware and software

offering and closely monitors upcoming product launches to ensure that new products are offered to our customers as quickly as possible. Furthermore, thanks to its size and strong customer base, Dustin is an important partner to manufacturers and suppliers when it comes to product launches.

Our customers’ purchase patterns are largely based on immediate needs rather than planned purchases, thus making Dustin an attractive channel for manufacturers’ and distributors’ marketing efforts. Dustin offers its customers a steady flow of advertising campaigns by maintaining close and frequent dialogues with manu-facturers and distributors.

Services and integrated solutions Dustin offers services and solutions, both as a comple-ment to customers’ hardware and software purchases and as independent services. By combining several different items of hardware, software and services into one integrated solution, we are able to offer a simple and effective solution to our customers’ needs within an entire IT area in a single purchase.

Our service offering includes the following types of packaged services and solutions: "Client" (computers, tablets, mobiles), "Infrastructure" (servers, data storage, networks, security), "Software" (license), "Mobility" (cloud, business apps) and "Print" (document management). We also offer customised solutions in these areas for compa-nies and organisations of all sizes.

Some examples of complete services or solutions are “Workplace as a service,” which includes everything from how to make the business more efficient, product selec-tion and configuration to security, support and recovery for a better environment, or “License management” where existing licensing agreements are reviewed and then compared with the customer’s needs. The process concludes with the installation, upgrades and modifi-

Our Customer Offering

Dustin’s customer offering is based on a broad range of products and services, excellent IT skills and rapid and reliable deliveries. The product and service offering covers the majority of customers’ needs in terms of hardware and software, and comprises about 200,000 products and associated services.

CUSTOMERS AND MARKETS | OUR CUSTOMER OFFERING


cations to optimise licensing models and reduce costs. We offer services and solutions in the area of mobility, which enables customers to work where and when they want, as well as from any device, in order to simplify the process and help save time.

For most companies it is the use of IT equipment that creates business value rather than ownership, and the-refore Dustin offers different types of financing solutions as well, so that companies can lease their IT equipment rather than purchase it.

Excellent IT skills in two sales modelsDustin has built up an extensive breadth and depth of IT know-how since its foundation over 30 years ago. Many of our customers are SMEs, which are generally more spontaneous and flexible when making IT purchases. Dustin has designed its offering to make it easier for customers to receive the information they need before and after purchase, either online or through a consultant in the relationship-based sales organisation specifically regarding purchases of more advanced products and services.

Online sales Dustin has over 20 years’ experience of online sales. Our online platform is user-friendly, informative, easy to navigate and has inbuilt support functions that provide customers with relevant product information and buying advice. Suitable accessories and complementary pro-ducts are displayed next to a selected product, and the customers given the opportunity to compare different products’ functions and specifications. The interface is adapted to each unique customer based on the custo-mer’s behaviour and site history. Large companies and organisations have access to adapted websites with customised product ranges. Our existing customers can view their purchase history, make repeat purchases and find accessories and complementary products that are compatible with their previous purchases. During the 2015/16 financial year, Dustin had over 35 million visits to its website, of which corporate customers accounted for approximately 15 million. The number of visits by companies to the site increased by about one million in the past year.

Relationship-based salesDustin offers relationship-based sales to selected SMEs as a core part of its strategy to increase sales to existing customers. These customers are offered an expanded service where account managers use telemarketing and consultative sales to actively serve and process about 10,000 customers out of the total customer portfolio of over 100,000 B2B customers. Our relationship-based sales staff meet customers through telemarketing or via custo-

mer visits. Relationship-based sales handle somewhat more advanced IT solutions such as printing services and client as a service (CaaS). The aim of relationship-based sales is to capture customers whose purchase levels from Dustin have reached a critical level and are deemed to be a proportion in relation to their total IT purchases. Thus more customer-specific needs for more advanced products and services cannot be met solely via the online channel in the company’s view.

Customer offering contributes to a loyal customer baseDustin has a large and diversified customer base with a high degree of customer loyalty. In the 2015/16 financial year, about 75 per cent of B2B sales was attributable to customers who have been registered with Dustin for at least five years and the corresponding figure for custo-mers of at least one-year’s standing was about 90 per cent. Customer loyalty is generally lower with consumers and in B2C the corresponding figures was about 25 per cent for customers of at least five-years’ standing and about 55 per cent for customers of at least one-year’s standing in the 2014/15 period. A strong link exists in B2B between the length of a customer relationship and aver-age sales per customer. Average sales for a customer of at least five-years’ standing is several times higher than sales to a customer who has been added in the past year. This is due both to a higher number of purchases and larger order sizes.

CUSTOMERS AND MARKETS | OUR CUSTOMER OFFERING


The total B2B market for IT products in the private and public sectors in the Nordic region comprises hardware, software and services and is estimated at about SEK 316 billion.

Our addressable B2B marketDustin’s addressable B2B market in the Nordic region is estimated at about SEK 111 billion. It consists of basic products and standardised services equivalent to over SEK 90 billion, and more advanced products and services equivalent to about SEK 20 billion. The product and service categories not included in Dustin’s B2B market comprise complex software solutions, advanced consulting services, outsourcing of IT and the implementation of ERP systems. Dustin does not intend to expand in these areas in the foreseeable future.

In the company’s view, essentially all categories of basic products and standardised services can be purchased onli-ne, while more advanced products and services as well as integrated solutions require an initial contact with the sa-lesperson as a rule. Basic products and services comprise:

• Basic hardware, such as PCs, laptop computers, ta-blets and printers.

• Basic software, such as operating systems and Office suites.

• Configuration, support and help desk.

The category of more advanced products and services includes cloud solutions, server solutions, print solutions, network solutions and security solutions.

Market trends in the B2B marketDustin currently highlights three important trends that are expected to drive underlying growth in our addressable B2B market:

• Increased online sales of IT products and services.• Technological shifts that drive demand for more ad-

vanced products and services.• Relatively higher growth in smaller companies.

Increased online sales of IT products and servicesOnline sales have increased in significance in recent years and B2B customers are allocating an increasing share of their IT purchases to this channel. This trend is primarily due to the advantages online channels provide, mainly for purchases of basic products and standardised services. These advantages are:

• A broader range compared with conventional chan-nels.

• A more efficient purchasing process when compiling information ahead of purchasing is integrated with the transaction.

• Rapid and convenient deliveries that are adaptable to customers’ specific requirements.

• Competitive prices.

Online sales still account for a relatively small share of our addressable B2B market. For 2014, the online share was estimated at slightly more than SEK 15 billion, correspon-ding to a penetration rate of about 15 per cent. In compa-rison, the total B2B market in the US had a penetration rate of 30–40 per cent and the corresponding rate for the consumer home electronics market in the Nordic region was about 45 per cent.

The online shift in the B2B market has not been as rapid as the shift in the consumer market. This is partly because corporate customers do not adopt new trends as rapidly as consumers and because many corporate customers still have close relationships with small regional resellers that do not offer online as a sales channel. The online shift in the B2B market is expected to continue as its advantages become increasingly clear to corporate customers.

Technology shifts that drive demand for more advanced products and servicesThe IT industry is currently undergoing several shifts in technology that are expected to positively influence the market and drive growth in the next few years, primarily for certain advanced products and services. These shifts in

Our Market

Dustin has achieved market share of about seven per cent in our addressable B2B market, which is estimated at about SEK 111 billion. Based on our attractive customer offering, a strong market position and current market trends, we see continued opportunities to grow faster than the market.

CUSTOMERS AND MARKETS | OUR MARKET


technology are driven by increasing demand for mobility and cloud-based solutions.

Access to applications and networks from various loca-tions and with different devices is becoming increasingly important. Demand for security solutions that can protect corporate IT systems is also rising due to growing demand for mobility, access and availability.

Cloud solutions offer mobility and promote a flexible IT en-vironment, in terms of both cost and utilisation. They can be defined as online solutions where remote servers allow centralised data storage and online access to computer services applications, resources and data.

In Dustin’s assessment, these technology shifts in particu-lar will influence purchasing at SMEs, since smaller firms are generally more flexible regarding their IT procurement, which then accelerates investments in new technology and new solutions.

To meet this demand, Dustin is now undergoing a transfor-mation, where we both organically and via acquisitions bro-adens our range of more advanced products and services.

Relatively higher growth in smaller companies.According to data from Statistics Sweden (SCB), smaller

companies in Sweden have historically recorded higher revenue growth and increased their number of employees at a faster rate than larger companies. New employees are generally an important catalyst for IT purchases.

The consumer marketThe Nordic consumer market encompasses IT products and other consumer electronics (excluding domestic appliances) that are offered to private individuals. In 2014, this market amounted to slightly more than SEK 70 billion according to Euromonitor. Behaviour in the consumer market is characterised by a larger number of purchases with a lower average order value. The market is extremely competitive with high price transparency and price pres-sure. The large number of purchases is largely a result of the market having a high pace of innovation and relatively short product life cycles.

Sales in the consumer market mainly occur through retail chains and online resellers, with the majority of retail cha-ins also offering online sales. Conventional physical stores still account for the majority of total sales, but online sales are increasing rapidly and capturing market share from other sales channels. The shift to online in the consumer market is accelerated by the composition of the customer base, with younger people more used to using the Internet compared with older generations.

2011

96

111

130

Total Nordic B2B IT market 2014: SEK ~ 316bn

Addressable B2B market:SEK ~ 111bn

2014 2018E

CAGR*Advanced products and services

Basic products and services

O�ine

Online

~7% ~11%

5%

5%

5%

6%

4%

5%

*Compound Annual Growth Rate Note: Market data based on calendar year. The addressable market refers to hardware sales to the B2B segment and selected parts of software and services to the customer group small and medium enterprises.Source: Dustin estimates based on market data from IDC and market analysis from a senior advisor.

CUSTOMERS AND MARKETS | OUR MARKET


The digitisation of outdoor advertis-ing is advancing rapidly. 37 per cent of outdoor advertising in England is digital, a figure that is expected to jump to 50 per cent next year. The share of digital billboards will reach similar levels in Finland in a few years, according to Janne Tenkanen, IT Director at JCDecaux in Finland, one of the largest companies in the industry.

“Digital outdoor advertising is creat-ing new opportunities. It can be easily tailored to its environment, such as a railway station. The advertiser can inter-act directly with the recipient through smart phones or QR codes,” he said.

Clients who purchase advertising space from JCDecaux are paying not only for the space, but for maintenance and cleaning of the billboards as well. JCDecaux purchased 200 iPads with

custom apps for their subcontractors to facilitate this work. The tablets are used to receive work orders and send receipts when jobs are completed. It has turned out that the tablets can stand up to both heavy use and bad weather.

“Our investment in tablets has more to do with our desire to raise quality rather than to save money. Quality and innova-tion have always been an important part of JCDecaux’s culture.”

Sustainability is another important issue for JCDecaux.

“Sustainable development is one of our focus areas, and something that we are developing all the time. We use renewable energy sources to run our billboards when possible. When we choose a supplier, their commitment to sustainability is critical,” said Tenkanen.

He explained that his company has partnered with IT vendor Businessfo-rum, which is part of the Dustin Group, for at least 15 years. New devices are ordered online, where it is also possible to specify whether preinstalled software is needed.

“If we need something beyond the ordinary, I just talk to my contact person at Businessforum. We look at offers and prices, and then we make a buying decision.”

Tenkanen appreciates the speed and flexibility, as well as their understanding of JCDecaux’s business.

“We’ve always received good person-al service, even at times when we’ve ordered small volumes.”

OUR SUPPLIERS COMMITMENT TO SUSTAINABILITY IS CRITICAL.

MAINTENANCE WITH IPADS.

Janne Tenkanen IT Director at JCDecaux in Finland

ASSIGNMENT | JCDECAUX

One of outdoor advertising firm JCDecaux’s most important tasks is to keep its growing inventory of billboards around Finland in top condition – and now they have 200 iPads to help them.



The Dustin brandOur long-term profitable organic growth is largely attribu-table to the strength of the Dustin brand and awareness of the broad offering. Through our position in online retail, we have established a strong brand primarily in Sweden, but also in Denmark and Norway where relatively strong positions have been built up over the last few years.

Our vision is for the Dustin brand to symbolise offering the best products and solutions based on customers’ needs. Dustin’s vision is to be the customer’s first choice and set the standard for efficient IT.

MarketingDustin’s marketing activities in traditional media are ai-med at increasing awareness of and further strengthening the Dustin brand. Our marketing mainly targets the B2B market, and only to a lesser extent the B2C market. Even if marketing and campaigns are primarily at a Nordic level, they are also adapted to local needs. Due to our strong supplier relationships, we often receive contributions or compensation for a large portion of our advertising and

marketing expenses through various partnership program-mes.

Dustin’s digital marketing is primarily aimed at maximi-sing relevant traffic to the website at as low a cost as pos-sible. Dustin’s strong brand awareness and brand recogni-tion create favourable conditions for generating traffic that is both cost-efficient and which, to a high degree, can be converted into actual sales.

Web traffic can be categorised into two groups: unpaid and paid traffic, depending on how customers found the site. Unpaid traffic includes direct entry (for example, www.dustin.se), free traffic from customer relationship management (CRM), for example, through e-mail or so-mebody directing to the website, social media and search engine optimisation channels. Paid search terms consti-tute the greatest share of paid traffic for Dustin, but this category also comprises traffic generated by price compari-son websites (primarily the B2C segment).

In the last few years, Dustin has implemented a number of initiatives aimed at further strengthening and increasing the efficiency of the company’s online marketing. These initiatives include:

• investments in “marketing automation” intended to increase Dustin's relevancy, ensure communication at the right time and ensure the quality and efficiency of Dustin’s management of “leads”

• more dedicated internal digital marketing experts• an efficient bidding tool for paid search terms• implementation of targets, forecasts and follow-up

processes• an enhanced advertising platform that optimises our

marketing with the right products at the right time

These initiatives have increased the efficiency of our mar-keting and resulted in a higher conversion rate and larger average orders.

Brand and Marketing

Dustin has been operating in the Swedish IT market for over 30 years and has established a strong market position and a well-known brand. This success builds on our core philosophy: to offer customers a broad product range, excellent IT skills and rapid and reliable deliveries.

CUSTOMERS AND MARKETS | BRAND AND MARKETING

Sweden

2012/13

Denmark Norway

2013/14 2014/15 2015/16

0

20

40

60

80

100per cent

Brand awareness

Market surveys have been conducted in cooperation with external partners (Mindshare)


Dustin ExpoEvery year Dustin organises the Dustin Expo event, the largest IT and home electronics trade fair in the Nordic region. The exhibition is a unique opportunity for atten-dees to see and test the latest new products from over 80 of the market’s leading manufacturers. Visitor numbers have increased substantially since the first expo in 2002, and this year’s fair attracted more than 10,000 visitors over three days, including a large increase in consumers. New developments this year included a 500 sqm e-sports centre and an especially strong seminar programme. This resul-ted in a higher share of attendees listening to one or more of the seminars compared with previous years.

Dustin Concept StoreIn October 2015 we opened the Dustin Concept Store at

Sveavägen 44 in Stockholm as a meeting place for corporate IT environments. Our primary target group is SMEs, and the focus is on advisory services to support our customers in identifying the right combination of IT-related products, services and solutions. The Dustin Concept Store is operated together with four partners: Canon, HP, Microsoft and Sam-sung. Here you will find Dustin’s entire range of products and associated services and solutions for customers to order. They are also offered expert advice and the opportu-nity to test selected products. We also hold open events and seminars at the Dustin Concept Store, where customers can learn about new products, be inspired by IT and ask questions in a small forum. With the opening of the Dustin Concept Store we create a permanent meeting place, like Dustin Expo, albeit in a smaller format.

CUSTOMERS AND MARKETS | BRAND AND MARKETING


Efficient sourcing from multiple suppliersEfficient sourcing from several different suppliers improves our ability to offer competitive prices. Dustin is an impor-tant sales channel for many suppliers and our platform and substantial customer base enable us to offer an effi-cient and profitable route to markets that could be difficult and expensive for these suppliers to serve directly. Dustin’s sales model and large customer base that purchases accor-ding to needs rather than planned purchases, make Dustin an important partner for campaigns and product launches.

Dustin’s market position and high sales volumes have resulted in an advantageous position with suppliers when it comes to volume rebates, terms for product returns, price protection policies and marketing contributions. In the 2015/16 financial year, about 75 per cent of hardware and software products were purchased from distributors. The largest distributor represented 18 per cent of Dustin’s total purchases and together the three largest distributors accounted for 43 per cent. Dustin does not consider itself entirely dependent on any single supplier, since most pro-ducts are offered by several suppliers.

In addition to those purchases made from distributors, in the 2015/16 financial year Dustin purchased almost 25 per cent of its hardware and software products direct from the manufacturers, including Hewlett-Packard, Microsoft and Dell.

Although several of the brands account for a relatively small share of Dustin’s net sales, they all contribute to our strong position as a broad-based IT reseller with a comple-te product range.

Central logistics platform Since our customers’ purchases are usually based on immediate needs rather than planned replacements, additions or expansion, rapid and reliable deliveries are an integral part of Dustin’s customer offering. Our customers also place great importance on receiving one combined

delivery to reduce the administrative burden.

Dustin’s logistics system is based on a central warehouse in Sweden, complemented by smaller consolidation ware-houses in Denmark, Finland and Norway, as well as direct deliveries from suppliers to end customers.

The central warehouse in Rosersberg was built in 2008 and has about 20,000 sqm of warehouse space. Dustin has an efficient distribution process that on average handles al-most 20,000 products per day. When a customer places an order on our website and the purchase has been approved, the order is automatically routed to the central warehouse for picking and shipping. During the 2015/16 financial year, 1.4 million orders were sent from the Rosersberg warehou-se, which corresponds to about 5,000 deliveries per day. Over 98 per cent of all orders available for direct delivery were managed by staff at the central warehouse on the same day the order was placed.

The geographical location of the central warehouse ena-bles us to deliver products efficiently to the entire Nordic region, while our major suppliers can reach us quickly and easily. In the 2015/16 financial year, about 65 per cent of net sales went through Dustin’s central warehouse, and the equivalent of about 25 per cent of net sales passed through the consolidation warehouses in Denmark, Finland and Norway. The remainder was sent directly from suppliers.

Dustin plans to integrate the smaller warehouse in Finland with the central warehouse system. The warehouse ca-pacity of the Rosersberg warehouse is currently not being fully utilised, and therefore it will be able to handle many more years of growth. The central warehouse also per-forms customer-specific services, such as configuration, in-stallation and safety labelling. During the 2015/16 financial year, approximately 75,000 such services were performed and the business area reported strong growth. Configura-tion is also performed at the consolidation warehouses in

Logistics and Procurement

Dustin is an important sales channel for many of our suppliers, and efficient purchasing from these suppliers increases our ability to offer competitive prices. Dustin’s logistics system is based on a central ware-house in Sweden, complemented by smaller consolidation warehouses in Denmark, Finland and Norway, as well as direct deliveries from supp-liers to end customers.

LOGISTICS AND PROCUREMENT | LOGISTICS AND PROCUREMENT


Denmark, Finland and Norway. These may be centralised to the Rosersberg warehouse in the future. Dustin continual-ly strives to optimise logistics and inventory levels, driven from both customer and capital-efficiency perspectives.

A broad range Of the approximately 200,000 products that are available through Dustin’s online platform, less than 10 per cent of these products are stored in our own warehouses. Our lo-gistics system is integrated with those of several suppliers who provide real-time information about product availa-bility. This, combined with our ability to determine which products should be kept in stock, means that stock levels can be kept low while still offering rapid delivery. In the 2015/16 financial year, Dustin had a stock turnover ratio of about 25. Dustin’s agreements with many of its supp-liers include price protection and product returns. These agreements, combined with rapid stock turnover, result in extremely low stock obsolescence, corresponding to less than 1 per cent of the cost of goods and services sold for the 2015/16 financial year.

In addition to the central warehouse, direct deliveries from selected manufacturers and distributors are also used, thereby allowing us to supply our customers with products that do not pass through our own distribution system when this is more efficient. Direct deliveries to customers from selected manufacturers and distributors also contri-bute to the low level of obsolescence. This delivery model, which made up about 25 per cent of Dustin’s net sales for the 2015/16 financial year, is primarily used for large orders from a single supplier and, to a degree, for deliveries of advanced products and services. Direct deliveries are used to a greater extent outside Sweden since this allows for faster deliveries and the possibility of leveraging specific campaigns in the local markets. Dustin is also continually evaluating the expanded use of direct deliveries, including in situations where supply through the central warehouse can only create limited value, for example, in the case of shipments of televisions and laptops from a single supplier.

LOGISTICS AND PROCUREMENT | LOGISTICS AND PROCUREMENT


Bademiljø, a heating and plumbing sup-ply chain with 115 companies and shops throughout Norway, wanted to develop a shared cloud platform for its mem-bers. In the past all of its members had their own business systems, and many of the most important functions such as invoicing and processing work orders had to be done at the office.

“We didn't need to calculate the ROI to establish that there was a huge poten-tial to make this more efficient,” said Bademiljø’s CFO Hjalmar Sæther.

He explained that many members had been asking for a better and more up-to-date IT solution for a long time.

“They asked if we could help. So far five members have been given access to the new solution, and after the usual trial-and-error development period we now have a state-of-the-art cloud-based total solution that puts our business systems in the cloud and is customised to our needs.”

According to Günther Schnell, a contract IT consultant in charge of Bademiljø AS’s cloud solution, Microsoft’s Azure cloud service is one of several solutions that is suitable for this type of project. He is pleased that Dustin was not discour-aged despite numerous setbacks and shared his confidence that the solution was possible.

“The greatest challenge was to adapt the various business systems to a cloud-based operation. It was the first time that separate heating and plumbing systems would be tested in the cloud,” he said.

Bademiljø’s objective is to implement the system for 25 of its members during 2016, and for the rest of the members afterwards.

“There's a high level of interest, particu-larly among members who work close to the five who have had it installed. They see how well it works,” said Sæther.

NOW WE HAVE A STATE-OF-THE-ART CLOUD-BASED SOLUTION.

CLOUD OPERATIONS WHETTEDTHE APPETITE.

Günther Schnell Contract IT consultant in charge of Bademiljø AS’s cloud solution.

ASSIGNMENT | BADEMILJØ

When the Norwegian heating and plumbing supply chain Bademiljø de-cided to put their members’ business system in the cloud, they had clear requirements. Dustin accepted the challenge and developed a turnkey solution consisting of Server as a service.


The Dustin way – our cultureDustin’s success builds on being a Group that focuses on growth and entrepreneurship and has grown along with the market and our customers’ changing needs. To remain successful, we must work together and win as a team. Accordingly, “Win as a team” is our core value.

“Win as a team” is based on four support values:

Challenge all costWe are proud of being smart when we spend money and we have the courage to challenge our own costs. It’s about using our resources efficiently, standardising and trying to identify the best solutions, in order to offer our customers competitive prices.

Keep it simpleWe have a long history of trying to make things simple, and we’ve had an entrepreneurial mindset ever since the company was founded by selling colourful floppy disks. It’s about being pragmatic. We treat everyone the same and do not complicate things more than necessary. As a result, we are able to create smart and simple solutions for our customers’ IT challenges.

Live up to promisesIf you are to win as a team, you have to trust your teamma-tes. It’s about being open about what we are going to do and doing what we say. We do not dodge and we have open and honest communication where we respect each other’s opinions. We keep our promises both internally to our colle-agues and externally to our customers and partners.

Strive to improveWe are characterised by customer-driven changes and continuous improvement. It’s about being proactive and acting before problems arise. To learn from our mistakes and not hesitate to change the way we work to become better. In this way, we will remain efficient and competitive in a changing IT world.

Business management and developmentThe development of our corporate culture comes from developing people, who in turn shape our culture. Everyo-ne should be aware of our shared goals and our strategy to ensure that they are given what they need to commit and participate in our journey. One element of this is having a clear structure in place for performance and management by objectives for our leaders and employees. Dustin has implemented two methods for strategic target attainme-nt: the Target Management Process and the Talent Mana-gement Process. These support the entire process from the setting of strategic targets to developing individuals and achieving results.

Dustin Target ManagementThe concept behind the management by objectives pro-cess is for senior executives to set overall targets for the strategy and annual budget, while middle management and other employees create activities based on the targets, which they then implement and follow up. This ensures clarity in terms of direction and target-setting, as well as participation in the implementation.

Our Employees

Our employees are the key to reaching our goals and strengthening our brand. We believe that satisfied employees will give us satisfied custo-mers. Having a clear agenda provides us with continuity and helps us to attract, recruit and develop employees, giving them what they need to develop our business and our customers.

STAKEHOLDERS | OUR EMPLOYEES



Dustin Talent ManagementThe talent development process allows the organisation to identify employees’ performance and potential, to help leaders to develop and motivate their staff. It also helps them provide better and clearer feedback to employees, as well as feedback from employees. The process makes it possible to create internal career paths for employees and ensures internal recruitment, both vertically and horizon-tally in the organisation.

Diversity and equalityOne high-priority area in Dustin’s sustainability efforts is diversity and equality. As one of the leading resellers of IT products and associated services in the Nordic market, we have the responsibility and the opportunity to promote equality in the IT industry. Therefore, Dustin’s objective is for each gender to make up at least 40 per cent of each level in the organisation by 2020. To achieve this, we have decided that all management recruitments must comprise at least one candidate of each gender with equal compe-tence among those assessed as the foremost candidates. In Sweden, we are also pursuing the “Women in Business” initiative and we’re involved in “Womentor,” a mentor and leadership programme.

Dustin also wishes to promote increased diversity in terms of age and share of employees with a foreign background, and it objects to all types of discrimination.

Employer brandingAttracting and retaining talent at the company is an important success factor for Dustin. In 2016 we launched a new career website in Sweden, Norway and Denmark in order to strengthen our attractiveness in the labour market, as well as creating an interactive e-learning plat-form that offers induction for our new hires. In 2016 we began an internal process to communicate and imple-ment Dustin’s core values in the company. Dustin takes a more structured approach to its employees’ professional development as an important part of retaining talent in the company.

Trainee programmeDustin introduced a new high-quality trainee programme at the beginning of the 2013/2014 financial year, in order to further strengthen the company and identify potenti-al future leaders. The 12-month programme is run at an overall level, and is not associated with any particular field of expertise. During their year as trainees, new gradua-tes are given the opportunity to follow the daily work of Dustin's CEO and executive management. Our objective is for trainees to have a springboard into our business operations after completing the programme, as well as consulting with the CEO to find a position where they can grow professionally in the company. Since its inception, the programme has generated three trainees who are all still working in different areas of the business.

STAKEHOLDERS | OUR EMPLOYEES


We believe that when we work responsibly and ethically, it strengthens not only our own business but creates opportu-nities for us to be the customer's first choice. Our responsibi-lity is based on the entire value chain and is conducted in line with international standards and regulations. Our efforts in-volve responsibility for business ethics, human rights, health, safety, environmental protection, diversity and equality.

For more information, see Dustin's Corporate Responsibili-ty Report published in November, 2016.

Our ethics and sustainability policies form Dustin’s ethical code. We integrate these efforts into our corporate culture and ensure that our employees act in a responsible way by setting out clear values. Dustin’s Corporate Responsibility Council, Chaired by the CEO, ensures that the corporate responsibility efforts across all operations have an objec-tive and are monitored. The monitoring process is also supported by our management system, relevant targets and performance indicators for prioritised areas along with a Group-wide risk process.

Progress within the focus areasDuring the 2014/15 financial year, Dustin established five fo-cus areas along with a long-term 2020 target for each focus area. In 2015/16, we made progress in four of these areas.

Responsible manufacturingTarget: 100 per cent of our suppliers from whom our total annual purchases exceed SEK 200,000 or equivalent are re-quired to accept the undertakings set out in Dustin’s Code of Conduct for Suppliers.2015/16 result: 97 per cent of our suppliers from whom our total annual purchases exceed SEK 200,000 or equivalent have accepted the undertakings set out in our Code of Con-duct or have their own Code of Conduct that matches our expectations. Those suppliers corresponds to 94 per cent of the total number of suppliers from whom purchases were made in 2015/16, or 96 per cent of the total purchases when measured in SEK.

Reduced climate impactTarget: We will reduce our climate impact by 40 per cent by 2020, compared with 2014/15.2015/16 result: We reduced the total amount of green-house gas emissions during the financial year by 6 per cent, while our organic growth was 4.4 per cent. One of the main reasons was efficiency measures in logistics. If we consider emissions savings from the re-use of recovered products and the recycling of waste, our total greenhouse gas emissions declined by 11 per cent.

Responsible use of resourcesTarget: We will have recovered 140,000 sold products by 2020.2015/16 result: We recovered 4,592 products during the year. Of these, 3,984 were re-used and 608 were recycled. In total, we have recovered 5,965 units since we set the target. We are far behind our target, partially due to the the fact our internal recovery process did not enable scalability. This focus area will be one of our prioritised areas in 2016/17.

Business ethics and anti-corruptionTarget: 100 per cent of our business areas will undergo a risk assessment concerning business ethics and anti-corrup-tion. 100 per cent of incidents reported will be followed up.2015/16 result: 100 per cent of our business areas have un-dergone a risk assessment concerning business ethics and corruption. One incident was reported and investigated. No incidents of corruption were observed.

Diversity and equalityTarget: By 2020, each gender is to make up at least 40 per cent of the entire organisation.2015/16 result: We made progress in terms of our equality target at every level of the organisation. The largest increa-se in female employees was at managerial level, where the proportion increased by 11 per cent. The distribution between male and female managers is now 69 and 31 per cent, respectively. For Dustin as a whole, the distribution is 73 per cent men and 27 per cent women, which is an impro-vement of 5 per cent during the year.

Our Corporate Responsibility efforts Our strive to act responsibly is pervaded by our corporate culture, our core values and and by leveraging our stakeholders' viewpoints.Corporate responsibility efforts are anchored in Dustin’s strategy and support our vision of being the customer’s first choice. During the 2015/16 financial year, we carried out a materiality analysis for our sta-keholders, and this confirmed that our corporate responsibility work is heading in the right direction.

STAKEHOLDERS | OUR CORPORATE RESPONSIBILITY EFFORTS


Materiality analysisIn 2015/16, Dustin carried out its first materiality analysis. The aim was to survey our stakeholders’ views regarding the aspects of corporate responsibility they consider to be most important. The results were then analysed based on their impact on our vision and strategic targets.

Business ethics, responsible manufacturing and the integrity and protection of customer data stood out as the most significant areas in the analysis. Environmental issues were also among the top priorities of stakeholders, as was the work surrounding diversity and equality.

This stakeholder dialogue was the most comprehensive Dustin had ever undertaken with regard to corporate re-sponsibility. In total, 77 stakeholders took part, among them manufacturers, distributors, customers, business partners, employees, the Board of Directors, executive management, investors, non-governmental organisations and partners. Business ethics and anti-corruptionThe purpose of our business ethics efforts is to create a responsible corporate culture and increased awareness of risks. In 2016/17, we will launch an updated training pro-gramme to intensify the focus on this area. The program-me will consist of general business ethics via e-learning and practical guidance in terms of business ethics through discussions about ethical issues. The general business ethics aspect will be targeted at all employees. We consider e-learning an important tool for us in terms of obtaining more systematic insight into the general skills level and including all employees in the training.

Responsible manufacturing a top priority In 2015/16, we decided to initiate monitoring of complian-ce with the requirements we set regarding human rights,

health and safety, business ethics and environmental protection in the manufacturing stage. Dustin is currently focusing on the first stage, which is the distributors, and is pursuing improvements via these channels. By working one stage further down the chain, the aim is to obtain bet-ter insight into the manufacturers’ ongoing activities, com-mitment and competence. This work will include assessing the manufacturers’ ability to fulfil the requirements we set, monitoring compliance and following up any non-con-formances. We will also begin carrying out factory audits and arranging training sessions.

Responsible use of data In 2015/16, we started making preparations to adapt to the new data protection legislation that will come into force in May 2018. Purposeful and effective use of information is highly important if we are to achieve our targets. To guarantee responsible processing of customer data, we will implement a data protection strategy in 2017 that will address future challenges with regard to customers’ expectations and legislation.

Eco-labelled productsDustin currently offers its customers 1,636 eco-labelled products. In 2015/16, we launched a new category in the webshop that allows customers to filter their search down to a number of internationally recognised eco-labels. We are seeing considerable demand for products with a strong environmental performance (for example, in terms of requirements governing chemicals), particularly among municipalities and schools.

By informing customers about products with a strong environmental performance and making them available, Dustin is making it easier for customers to make well-in-formed choices.

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Responsible sourcing and usage of raw materials

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STAKEHOLDERS | OUR CORPORATE RESPONSIBILITY EFFORTS


Share price performance and turnoverAt August 31, Dustin’s share price was SEK 60.00 (56.50) per share, equivalent to a total market capitalisation of SEK 4,570 (4,304) million. This represents an increase of 6.2 per cent compared with the corresponding time last year. The performance of OMX Stockholm Mid Cap PI index during the corresponding time period was 35.8 per cent.

Total turnover during the year was just over 41 million sha-res with a total value of about SEK 2.4 billion. The average daily turnover amounted to slightly more than 160,000 shares, corresponding to a daily value of about SEK 9.5 million.

A full exercise of the outstanding warrants would entail a maximum dilution effect of about 2.2 per cent.

Dividend According to the dividend policy adopted by the Board of Directors, Dustin’s target is to distribute more than 70 per cent of the profit for the year. The Board of Directors propo-ses a dividend of SEK 2.40 (1.70) per share, corresponding to SEK 183 (129) million for the 2015/16 financial year.

Share-based remunerationAt the AGM on January 19, 2016, the shareholders resol-ved to adopt a long-term incentive programme (LTI 2016) for the Dustin Group’s executive management team. The programme has the same structure as the previous year's incentive programme, and consists of warrants. Each war-rant carries the entitlement to subscribe for one new share in the company.

Share-related key ratios

The Share and Shareholders

Dustin’s share is listed in the Mid Cap segment on Nasdaq Stockholm. The company’s market capitalisation amounted to SEK 4.6 (4.3) billion at the end of the period, and its share price was SEK 60.00 (56.50) per share.

2015/16 2014/15

Dividend per share (SEK) 2.40* 1.70

Dividend in relation to net profit (%) 81.4 103.2

Closing share price (SEK) 60.00 56.50

Closing market capitalisation (SEK million) 4,570 4,304

Dividend yield (%) 4.0 3.0

Earnings per share, including discontinued operations, before and after dilution (SEK) 2.95 1.75

Equity per share, before and after dilution (SEK) 18.67 17.38

Cash flow from operating activities per share before and after dilution (SEK) 5.87 0.82

Number of shares outstanding 76,173,115 76,173,115

Number of shareholders 5,822 6,436

* The Board of Directors proposed dividend

Programme Period of utilisation Outstanding warrants Exercise price*, SEKDilution effect if fully

exercised

LTI 2015 2018-01-30 - 2018-06-30 1,053,387 59.50 1.4 %

LTI 2016 2019-01-30 - 2019-06-30 593,108 74.50 0.8 %

Total number of outstanding warrants 1,646,495 2.2 %

*The exercise price will be adjusted for dividends during maturity.

STAKEHOLDERS | THE SHARE AND SHAREHOLDERS


Ownership structureAt the end of the period the company had a total of 5,822 (6,436) shareholders, which is equivalent to a reduction of 614. The table below shows the ten largest shareholders and their holdings at August 31, 2016.

Analysts who follow DustinABG Sundal Collier - Anders HillerborgCarnegie Investment Bank AB - Mikael LaséenHandelsbanken Capital Markets - Magnus RåmanNordea Bank - Martin Nilsson and Elias Porse SEB - Victor Höglund

Name Number of shares Holding (%)

Axmedia AB (Axel Johnson AB) 19,043,280 25.0

DG Holding S.à.r.l. (Altor Fund II GP Limited) 7,646,222 10.0

The Fourth Swedish Pension Insurance Fund 7,531,017 9.9

Swedbank Robur Småbolagsfond Sverige 3,892,601 5.1

Swedbank Robur Småbolagsfond Norden 2,609,273 3.4

Placeringsfond Småbolagsfond, Norden 2,566,425 3.4

Stenshagen Invest AS 1,933,000 2.5

Investeringsselskabet Af 4 Juli 2007 1,846,838 2.4

Nordea Swedish Stars 1,615,000 2.1

Protector Forsikring ASA 1,539,460 2.0

Total, ten largest owners 50,223,116 65.9

Other shareholders 25,949,999 34.1

Total 76,173,115 100.0

STAKEHOLDERS | THE SHARE AND SHAREHOLDERS


OperationsDustin Group (“Dustin”) is a leading online reseller of IT products and services in the Nordic region. Dustin provides a comprehensive range of hardware, software and services to a large number of small and medium-sized companies (SMEs), public organisations, large corporates and consu-mers. Dustin’s headquarter is located in Nacka, Sweden.

Dustin’s operations are divided into two business areas: B2B and B2C. Within B2B, customers are served through both the online platform and relationship selling. Dustin’s sales model has been adapted to meet customer needs as efficiently as possible. In addition to B2B, which is Dustin’s core segment, there are advantages to also serving private customers, such as a similar product range, limited addi-tional costs and insights into trends and pricing. In the B2C segment, customers are only served through the online platform.

Significant events during the year

• The Dustin Concept Store has now opened on Sveavägen in Stockholm.

• The Swedish company, Commsec, which supplies network and security solutions, was acquired.

• A partnership agreement was signed with De Lage Landen Finans AB (DLL) in

connection with Dustin’s divestment of its lease portfolio to DLL.

• The AGM resolved on January 19, 2016 that a new incentive programme

would be introduced for Group Mana-gement. It also resolved to distribute SEK

1.70 per share.

• Investments in Dustin’s pricing platform conti-nued during the quarter. Positive margin effects related to these investments started to materialise.

• In April, Dustin launched the online platform in Finland; dustin.fi and dus-tinhome.fi.

• The Swedish company, Idenet, speciali-sed in cloud hosting and application mana-gement, was acquired.

• Dustin secured a new framework agreement for servers and storage, including associated services, with the Swedish Defence Material Administration, FMV. Annual sa-les are estimated at approximately SEK 100 million.

• Dustin secured a new customer agre-ement with an international Group. Deliveries include clients and mobile telephones. Annual sales are estima-ted at approximately SEK 100 million.

Directors’ Report

The Board of Directors and the CEO of Dustin Group AB (publ), Corpora-te Registration Number 556703-3062, hereby present the Annual Report and Consolidated Financial Statements for the financial year September 1, 2015 to August 31, 2016. The legal Annual Report including Directors’ Report has been audited and can be found on pages 34-91.

Net sales

8,301 MSEK

Gross margin

15.0 %

Proposed dividend per share

2.40 SEK

Organic sales growth

4.4 %

Adjusted EBITA margin

4.7 %

Q1Q4

Q2Q3

DIRECTORS’ REPORT | DIRECTORS’ REPORT


Financial overview This report has been prepared in millions of SEK, unless otherwise indicated, and comparable figures are provided in parentheses and refer to the corresponding items in the full 2014/15 financial year. Rounding differences may occur in this report.

Net sales and consolidated earnings

Net sales increased during the year by 4.6 per cent to SEK 8,301 million (7,934), mainly due to solid growth in online sales to the small and medium-sized businesses customer group. Organic growth in fixed exchange rates was 4.4 per cent (5.7).

During the year, gross profit rose SEK 130 million, correspon-ding to 11.6 per cent, to SEK 1,246 million (1,117). The gross margin rose 0.9 percentage points to 15.0 per cent (14.1), mainly attributable to the small and medium-sized busi-nesses customer group in Sweden and the large companies and public sector customer group in Finland and Sweden.

During the year, adjusted EBITA rose 10.2 per cent to SEK 390 million (354). The adjusted EBITA margin increased to 4.7 per cent (4.5). Adjusted EBITA includes operating profit from Financial Services, but excludes items affecting comparability, which amounted to a negative SEK 5 million (neg: 69) and are specified in the table below. Information regarding the divestment of leasing operations is specified in a separate section below. For a comparison of adjusted EBITA and EBIT, see Note 2 Business segments and sales by geographic area.

EBIT for continuing operations amounted to SEK 324 mil-lion (218). The year-on-year improvement was mainly the result of higher sales and a higher gross margin. Historical-ly, EBIT has also included Financial Services. This operation was discontinued during the first quarter of the financial

year, which is why EBIT attributable to Financial Services is recognised separately.

Net sales and B2B segment earnings

Net sales for the year increased 5.1 per cent to SEK 7,703 mil-lion (7,327). Organic growth in fixed exchange rates was 4.8 per cent. The increase in net sales is principally attributable to the positive trend within online sales to the small and medium-sized business customer group.

During the year, segment results rose SEK 71 million to SEK 660 million (589). The increase was the result of higher sales and an improved gross margin. The rising gross margin derived from the continued positive effects of the completed pricing project, a favourable customer mix in the large companies and public sector customer group, and a positive product mix related to the acquired companies. Synergies from the integration of acquisitions completed earlier in Finland also contributed positively. The segment margin increased to 8.6 per cent (8.0).

Net sales and B2C segment earnings

During the year, net sales declined 1.5 per cent, amounting to SEK 598 million (607). Organic growth in fixed exchange rates was -0.2 per cent. There was a positive trend in Sweden and the launch of the online platform in Finland made a positive contribution towards the end of the year. There was a negative trend in the other Nordic countries partially due to a high level of price competition.

The segment result increased during the year to SEK 22 million (19), positively impacted by an improved gross margin in all markets. The segment margin improved to 3.7 per cent (3.1). Central functionsDustin’s central functions hold the key to efficient delivery of the Group’s offerings in all markets, the generation of economies of scale and the simplification of the integra-tion of acquired operations. Total costs for the financial year for central functions, excluding items affecting comparability and in relation to sales, amounted to 3.5 per cent (3.2). This year's costs for the central functions has

Condensed consolidated incomestatement for continuing operations

SEK million 15/16 14/15 Change %

Net sales 8,300.8 7,933.5 4.6%

EBIT 323.5 218.0 48.4%

Profit after net financial items 286.8 150.9 90.1%

Profit for the year 224.9 125.0 79.9%

Items affecting comparability

SEK million 15/16 14/15

Within EBIT

Acquisition and divestment related expenses -5.0 -3.6

Costs for integrated IT platform - -32.0

IPO-related expenses - -33.0

Total -5.0 -68.7


Net sales 7,703.3 7,326.9 5.1

Segment results 660.3 589.0 12.1

Segment margin, % 8.6 8.0 n/a


Net sales 597.5 606.6 -1.5

Segment results 22.4 18.9 18.8

Segment margin, % 3.7 3.1 n/a



ble credit terms. Adjusted for this, net working capital was in line with the preceding year.

Net debt and cash and cash equivalentsNet debt includes current and non-current interest-bearing liabilities, excluding acquisition-related contingent liabi-lities (such as performance-based earn-outs), that have been reduced with cash and cash equivalents and recei-vables from finance leasing. At the end of the period, net debt amounted to SEK 826 million (937). Lower net debt compared with the preceding year was mainly the result of increased cash and cash equivalents due to a reduction in working capital.

Net debt in relation to adjusted EBITDA was 2.1 (2.6) at the end of the period.

In total, cash and cash equivalents amounted to SEK 243 million (78), up SEK 165 million year-on-year. At the end of the period, there was also an unutilised overdraft facility of SEK 270 million.

been affected by acquisitions and investments in delivery capacity for more advanced products and services.

Divestment of leasing operationsThe leasing operations were divested during the first quarter of the financial year, yielding total sales proceeds of SEK 308 million. In connection with the divestment, a repayment of SEK 174 million was made on external loans. The net increase in cash and cash equivalents was SEK 75 million. The capital gain on the divestment amounted to SEK 1 million before tax.

Financial itemsFinancial expenses amounted to SEK 38 million (69), and financial income to SEK 1 million (2). The financial expenses item and other similar income-statement items primarily relate to interest expense of SEK 32 million (70), and a negative currency effect of SEK 3 million (19) on external financing. The lower interest expense is due to a change in the financing structure, with improved terms and lower interest rates year-on-year.

Effective from the first quarter of 2016/17, currency effects on external financing will be recognised in other com-prehensive income in conjunction with hedging of net investments in foreign subsidiaries, in accordance with IAS 39 Financial Instruments: Recognition and Measurement.

TaxThe effective tax rate for continuing operations amounted to 21.6 per cent, compared with 21.6 per cent the previous year.

Consolidated profit for the yearProfit for the year, including discontinued operations, totalled SEK 225 million (125). Earnings per share amounted to SEK 2.95 (1.75), before and after dilution.

Financial position

Net working capitalAt year-end, net working capital amounted to a SEK 32 million (158). The change was mainly due to an increase in accounts payable as a result of temporarily more favoura-

Condensed consolidated balance sheet

SEK million 16-08-31 15-08-31

Non-current assets 2,400.8 2,513.0

Current assets 1,498.0 1,330.9

Total assets 3,898.9 3,843.9

Equity 1,422.2 1,323.7

Non-current liabilities 1,214.7 1,305.1

Current liabilities 1,262.0 1,215.0

Total equity and liabilities 3,898.9 3,843.9

SEK million 16-08-31 15-08-31

Inventories 229.3 241.1

Accounts receivable 877.7 800.4

Tax assets, other current receivables, as well as prepaid expenses and accrued income 148.2 148.5

Accounts payable -912.8 -735.0

Tax liabilities, other current liabilities, accrued expenses and deferred income -310.7 -296.8

Net working capital 31.6 158.3

SEK million 16-08-31 15-08-31

Non-current liabilities 1,066.4 1 ,056.9

Current liabilities - 40.9

Liabilities for financial leasing (short-term and long-term) - 179.7

Financial leasing liabilities 2.8 -

Cash and cash equivalents -242.9 -77.8

Receivables for financial leasing (short-term and long-term) - -262.7

Net debt 826.3 936.9



InvestmentsInvestments made during the year mainly refer to capitali-sed costs for the integrated IT platform totalling SEK 19 mil-lion (17), largely related to the integration of the Finnish ope-rations. Other investments mainly comprise investments in Dustin’s pricing platform totalling SEK 12 million (2).

Cash flow

Cash flow for the year was SEK 168 million (neg: 55). In the second quarter, shareholder dividends had a negative impact of SEK 129 million (-) on cash flow.

Cash flow from operating activities was SEK 447 million (59), which was attributable to the higher EBIT and a change of SEK 105 million (neg: 138) in working capital. The change in working capital is primarily related to higher

accounts payable. The higher level of accounts payable was impacted by temporarily more favourable credit terms.

Cash flow from investing activities was SEK 80 million (neg: 211) and was mainly affected by the acquisition of subsidiaries, including a contingent earn-out payment of SEK 148 million (neg: 139), and divestment of subsi-diaries, amounting to SEK 249 million (-). Acquisition of subsidiaries pertains to the acquisitions of Commsec for SEK 23 million and Idenet for SEK 86 million. The earn-out payment pertains to Resolute, which amounted to SEK 39 million. Divestment of subsidiaries refers to the purchase consideration received on the divestment of leasing operations. Investments in tangible and intangible assets amounted to a negative SEK 36 million (neg: 27), of which SEK 19 million (neg: 17) pertained to development expenditure for the integrated IT platform. In addition, the investment in Dustin’s pricing platform amounted to a negative SEK 12 million (neg: 2) during the year. Cash flow from leasing operations pertains to the period until the operations were transferred.

Cash flow from financing activities was a negative SEK 359 million (pos: 98), pertaining to shareholder dividends of SEK 129 million (-) and consideration payments of SEK 4 million (367) for warrants and a new share issue, and was negatively impacted by a previously utilised overdraft facility. During the year, cash flow from financing activities was also impacted by a repayment of SEK 11 million (-) on interest-rate derivatives in the third quarter. For further information on financial instruments, refer to Note 13 Financial assets and liabilities. In connection with the divestment of the leasing operations, a credit facility of SEK 180 million was repaid.

Cash flow, condensed


Cash flow from operating activities 447.2 58.6

Cash flow from investing activities 79.7 -211.2

Cash flow from financing activities -359.3 97.6

Cash flow for the year 167.5 -55.0

Three-year overview

All amounts in SEK million, unless otherwise indicated 15/16 14/15 13/14

Net sales 8,300.8 7,933.5 7,370.9

Organic sales growth (%) 4.4 5.7 21.0

Gross margin (%) 15.0 14.1 14.4

Adjusted EBITA 389.6 353.5 353.5

Adjusted EBITA margin (%) 4.7 4.5 4.8

EBIT 323.5 218.0 294.9

Profit for the year 224.9 125.0 163.7

Earnings per share, including discontinued operations, before and after dilution, SEK 2.95 1.75 2.48

Cash flow from operating activities 447.2 58.6 255.7

Net debt/adjusted EBITDA (multiple)* 2.1 2.6 3.0

Return on equity (%) 15.8 9.4 22.0

InvestmentsSEK million 15/16 14/15

Capitalised expenditure for IT deve-lopment attributable to integrated IT platform 19.1 16.6

Other investments in tangible and intangible assets 16.9 10.9

Total 36.0 27.5



Key ratiosThe key ratios that Dustin has chosen to present in its external reporting are relevant in view of the company’s operations and considering its financial targets, which rela-te to growth, margins, capital structure and dividend policy. Definitions of key ratios can be found on page 96 and in the Three-year overview, and page 95 presents complementary information from which these calculations can be derived.

Financial instrumentsGuidelines for financial risk management are contained in Dustin’s financial management policy. For information about financial risks, please refer to the section on Risks and risk management.

In conjunction with securing new bank financing in the second quarter of 2015, all liabilities to former sharehol-ders were settled. Current financing is fully external, on market terms and with variable interest rates. Derivative instruments have been structured as hedges for variable interest on external bank loans. At August 31, 2016, the fair value of liabilities for derivative instruments was SEK 9 million (13). During the financial year, some parts of former interest-rate derivatives were repaid prematurely and replaced with new ones. This was mainly done to achieve greater maturity spreads. The amount repaid totalled SEK 11 million. From 2015/16, cash flow hedges will also be used to a limited extent to purchase foreign currency. However, at August 31, 2016 there were no outstanding cash flow hedges of this kind.

The Group applies hedge accounting for derivatives and cash flow hedges, and the fair value measurement is Level 2 in accordance with the definition in IFRS 13: Fair value measurement. The valuation level is unchanged compared with August 31, 2015.

External bank loans are raised in foreign currencies in line with net investments in foreign subsidiaries. Currency effects on these loans are recognised in net financial items for both the current and previous periods. Effective from the first quarter of 2016/17, currency effects on external fi-nancing will be recognised in other comprehensive income in conjunction with hedging of net investments in foreign subsidiaries, in accordance with IAS 39 Financial Instru-ments: Recognition and Measurement.

Research and developmentDustin does not conduct any kind of research. However, a certain level of development work is carried out in connection with the implementation of the integrated IT platform.

Market overviewDustin primarily targets companies in the Nordic region.

The B2B segment registered sales of SEK 7,703 million in 2015/16, which corresponds to approximately 93 per cent of the Group’s net sales. Since Dustin is positioned in the online portion of the market segment, it is benefiting from the shift in spending from offline to online. Dustin believes that the online spending will continue to grow going forward, as a large part of the addressable IT market can be more efficiently serviced by the integrated IT platform. Online spending will lead to numerous customer benefits, including ease of ordering, access to a wide product range, fast and convenient delivery options and competitive prices.

Dustin expects that three key market trends will drive underlying growth in specific niches of the addressable B2B market:

• Increased online sales of IT products and services.• Technological shifts that drive growth for more advan-

ced products and services.• Relatively higher growth in smaller companies.

Seasonal variationsDustin is impacted by seasonal variations. Each quarter is comparable between years. Sales volumes are normal-ly higher in November and March, and lower during the summer months when sales and marketing activities are less intense. Seasonal variations are similar in nature in all geographical markets.

OutlookOrganic sales growth was 4.4 per cent for the 2015/16 financial year, with stable online sales to the small and medium-sized business customer group during the year. The assessment is that growth in the large companies and public sector customer group will remain volatile between quarters. Nevertheless, Dustin’s financially robust posi-tion provides the scope to further strengthen its position in the Nordic IT market and continue the transformation by expanding the range of more advanced products and services, both organic and by way of complementary acquisitions.

The shareThe Parent Company’s share has been listed on Nasdaq Stockholm since February 13, 2015 and is included in the Mid Cap index. The outstanding number of shares was 76,173,115 at closing date. The share price was SEK 60.00 on August 31, representing a total market value of SEK 4,570 million.

At the end of the period, the company had a total of 5,822 shareholders. At August 31, 2016, the company’s sharehol-ders with holdings of at least 10 per cent were Axmedia AB (Axel Johnson AB) (25.00 per cent) and DG Holding S.à.r.l. (Altor Fund II GP Limited) (10.04 per cent).



• Other benefits may include health insurance and other typical benefits. Other benefits are not to con-stitute a significant proportion of the total remunera-tion.

• Senior executives are to be offered individual pension plans amounting to maximum 30 per cent of fixed salary or premium-based pension solutions.

• In the event of termination on the part of the Compa-ny, the notice period for senior executives is to amount to a maximum of 12 months.

In exceptional circumstances, the Board of Directors may deviate from the guidelines outlined above. In this case, the Board of Directors is obliged to explain the grounds for the deviation at the following Annual General Meeting.

Guidelines for the remuneration of senior executives are resolved by shareholders at the Annual General Meeting. The Annual General Meeting, which is to be held on De-cember 13, 2016, will take a decision about the guidelines for remuneration of senior executives. Proposals ahead of the Annual General Meeting are available at www.dustingroup.com.

For more information about the current guidelines for remuneration to the CEO and other senior executives for 2015/16, see Note 7 Number of employees, employee bene-fits expense and remuneration to Executive Management.

Significant events after the balance-sheet dateAcquisition in NorwayIn September 2016, Dustin signed an agreement to acquire the Norway-based IKT Gruppen specialised in sales and operations of standardised IT services for small and medi-um-sized businesses. The acquisition is part of Dustin’s strategy to broaden its customer offering and strengthen its position in the Nordic IT market.

IKT Gruppen was founded in 2013 and is now being acqui-red from the owner constellation comprising most of the company’s ten employees. In the 2015 financial year, the company reported sales of about NOK 18 million. The ac-quisition is expected to have a marginal impact on Dustin’s earnings per share during the current financial year and is not considered to be material from a financial perspective.

Change in Executive ManagementDustin has recruited Rebecca Tallmark as VP Product Mar-keting and head of Dustin’s product, analysis and marke-ting organisation. Rebecca will take up the role on January 1, 2017 and will become part of the Executive Management.

Dustin’s shareholder register with the largest shareholders is presented on the company’s website and on page 33 in this report.

Dividend Dustin’s target is to distribute more than 70 per cent of the profit for the year. However, the company’s financial position, cash flow, acquisition potential and future pro-spects must be taken into account. The Board of Directors proposes a dividend of SEK 2.40 (1.70) per share, totalling SEK 183 million (129).

EmployeesThe average number of full-time employees was 944 (944).

Proposal for guidelines governing remuneration of senior executivesThe Board of Directors proposes that the Annual General Meeting take a decision on guidelines for remuneration of the CEO and other senior executives as follows.

The total remuneration of individual senior executives at Dustin is to be both in line with the market and competiti-ve in order to attract, motivate and retain key individuals. The aim is to create an incentive for senior executives to execute strategic plans and deliver good operational results, as well as to unite senior executives’ interests with those of shareholders.

Remuneration of the CEO and other senior executives is to consist of a fixed salary, short-term variable remuneration incentive (STI), which is linked to the achievement of Dus-tin’s financial targets and individual performance targets, and a long-term share or share price-related incentive pro-gramme (LTI), in addition to a pension and other standard benefits.

• The fixed salary is to be based on each senior executi-ve’s skills and area of responsibility. The fixed salary is to be reviewed annually.

• STI programmes are to be based on results relating to established targets. The targets are to be individual, measurable and linked to Dustin’s financial results as well as to specific performances and processes (indivi-dual targets). The CEO’s STI is to amount to a maxi-mum of 100 per cent of his/her fixed salary. For other senior executives, the STI is to amount to a maximum of 60 per cent of their fixed salary.

• Long-term share or share price-related incentive programmes are to be connected to certain pre-de-termined financial and/or share or share price-related performance requirements and are intended to ensure long-term commitment to the Company’s development.



Parent CompanyThe Parent Company, Dustin Group AB (Corp. Reg. No. 556703-3062), which is domiciled in Nacka, Sweden only conducts holding operations. The annual report of the Parent Company has been prepared in accordance with the Swedish Annual Accounts Act, and the Swedish Financial Reporting Board’s recommendation RFR 2: Accounting for Legal Entities. The share for Dustin Group AB (publ) has been listed on Nasdaq Stockholm since February 2015.

Net sales amounted to SEK 0.4 million (0.4). Profit for the year totalled SEK 160 million (6) and the year-on-year change was attributable to items affecting comparability in the amount of SEK – million (neg: 19), a negative net cur-rency position of SEK 11 million (pos: 2), interest expense of SEK 30 million (63) and appropriations of SEK 197 million (95).

Annual General Meeting Information about this year’s Annual General Meeting can be found on page 94.

Proposed appropriation of earningsThe Board of Directors proposes that available earnings totalling SEK 317,857,728 be distributed at SEK 2.40 per share as an ordinary dividend. The proposal states that this amount be appropriated as follows:

SEK

Dividends 182.815.476

To be carried forward 135.042.252

Total 317.857.728

In its proposed appropriation of earnings, the Board of Director’s has taken into consideration the company’s operations, need for consolidation, liquidity and financial position in general. The Board of Director’s complete state-ment regarding the proposed dividend is available on the company’s website, www.dustingroup.com.



Dustin’s Group-wide risk management process is in-tegrated into operations and is based on cooperation between Dustin’s Risk Committee, operational managers in all Group functions and other individuals who work on different parts of the risk management process. The pro-cess consists of four main activities: (i) identification, (ii) Assessment, (iii) Response & Mitigation and (iv) reporting and monitoring.

Risk is defined as a future uncertain event that could have an adverse impact on Dustin’s ability to achieve set goals.

IdentificationIn 2015/16, risk meetings were held with respective ope-rational management groups in Dustin’s various Group functions, with the aim of identifying the most significant risks for each area. The results of these meetings have

since been coordinated, supplemented and analysed by the Risk Committee, which has resolved which risks are to be followed up at Group level.

All risks are classified into one of the following three categories: strategic risks, operational risks and external risks. This allocation provides support in choosing suitable methods to identify current, new and emerging risks, as well as the link between them and how to manage them.

• The strategic risks are normally identified in conjunc-tion with risk discussions connected to a strategic initiative and are managed by measures that restrict the impact and probability of the risk occurring.

• The operational risks arise during operations and are identified mainly through process reviews. Manage-ment of operational risks focuses on restricting the probability of the risk occurring, for example, through internal controls or process efficiency enhancements.

• The external risks comprise risks that are outside the direct control of the Group, for example, changes in regulations or altered market conditions.

AssessmentThe extent of the identified risks is evaluated using a risk tool that takes into account both the potential impact of the risk on operations and the likelihood of the risk occur-ring over a defined period of time. This provides support when deciding upon the significance and prioritisation of the risk and what response it should be given.

Response & Mitigation The choice of response and mitigation is determined by using a risk assessment and existing controls. This could include, for example, monitoring methods, implementing

Risks and Risk Management

Risks are a natural part of all business operations and a certain level of risk-taking is a prerequisite for financial growth. The Board of Directors bears ultimate responsibility for Dustin’s risk management, but activi-ties intended to manage risk exposure are distributed across every level of the Group. Dustin’s risk management aims to maintain good control of the Group’s collective risk exposure and to ensure efficient manage-ment of the risks. Efficient risk management is a fundamental part of Dustin’s ability to manage and develop its business operations.

1. IDENTIFICATION

MITIGATION

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Risks Management Process

DIRECTORS’ REPORT | RISKS AND RISK MANAGEMENT


to manage relevant risks within a reasonable timeframe and with a high level of quality.

Reporting and MonitoringEach Risk owner monitors the current risk and reports their findings back to the Risk Committee. The Risk Commit-tee compiles, coordinates and develops the Group’s risk management, after which reports are submitted to Group Management and the Board of Directors.

The Group’s greatest risks and the measures for managing them are reported at least twice per year to the Audit Committee.

Below is a selection of the greatest risk areas that may have a significant impact on Dustin’s target fulfilment, and a brief description of the measures for managing the risks. Work to prevent errors in the financial reporting is not included in this section, but can instead be found in the section Internal control over financial reporting in the Corporate Governance Report on pages 50-51.

extra controls to reduce the risk, or amending procedures and processes. An important part of Dustin’s risk manage-ment is the appointment of a Risk owner for all prioritised risks. The Risk owner is responsible for pursuing measures

STRATEGICRISKS

EXTERNALRISKS

OPERATIONALRISKS

Risks related toacquisition operations

IT-related risks

Employee risks

Market risks

Sustainabilityrisks

Financial risks

Risks relatedto customersatisfaction

Brand risks

Risks related tothe customero�ering

Risk areas

Strategic risks Description Mitigation

Risks related to acquisition of operations

To support growth, Dustin has acquired operations with the aim of broadening its customer base or customer offering, for example. An inability or failure to evaluate and implement acquisitions as well as integrate acquired companies can therefore have a negative impact on Dustin’s earnings and market position.

Prior to acquisition, the target company and its opera-tions are evaluated by internal and/or external specialists to gain a clear picture of the economic conditions, risks and target company’s capacity for integration into Dus-tin’s operations.

The evaluation of a potential target company and implementation and integration of an acquisition are conducted in line with a structured process. This work is managed by an M&A project group with the support of legal and financial consultants, among others.

Brand risks A good reputation is highly significant to Dustin’s success as one of Dustin’s success factors is a strong brand. If Dustin or any of the Group’s suppliers, distributors, other partners or employees acts in a way that goes against the values Dustin represents, this could have a negative impact on Dustin’s reputation.

Dustin undertakes preventive work with a responsible en-trepreneurial attitude by providing continuous informa-tion and training concerning values, business principles, policies and guidelines.

Read more about Dustin’s values on pages 27-29 and Dustin’s sustainability work on pages 30-31 and in the Sustainability report.

Risks related to the customer offering

Dustin operates in a dynamic market, and this could have an impact on its role in the market and the value chain.

Changes include new market strategies from manu-facturers (for example manufacturers’ acquisitions of companies that supply advanced products and services), new customer behaviour patterns (for example heighte-ned demand for packaged and commodified services) and development of new technology (including new storage technology whereby hardware-based storage systems move to cloud-based storage services).

An inability to create attractive and profitable customer offerings could have a negative impact on Dustin’s ear-nings and market position.

To adapt Dustin’s strategy to this changeable market, Dustin’s management closely monitors any changes in the market, customers’ expectations or technological developments. Dustin works intensively to develop new and attractive offerings for its customers. To meet the heightened demand for more advanced products and services, Dustin has created a special function that focuses on developing and enhancing the Group’s product range and service offerings, chiefly within managed IT services. This work is carried out in close collaboration with our suppliers and other business partners. In addition, during the year Dustin has added new skills to the Group and strengthe-ned its offering by acquiring companies in Finland and Sweden.



Operational risks Description Mitigation

IT-related risks The Group’s operations are highly dependent on an efficiently performing IT platform. Dustin is in the process of centralising its IT environment for the whole Group. During the restructuring process, there is an increased risk of IT-related problems that could affect the company’s day-to-day operations.

Increasing digitisation has raised the threat from cyber attacks, and these attacks pose a constant and increasing risk for Dustin. Inadequate protection and incident ma-nagement could lead to considerable disruptions to the company’s IT platform.

The inability to ensure a modern, secure and operationally adapted IT infrastructure and IT platform could also have a considerable adverse effect on the Group’s operations and earnings.

Dusitn works continuously to restrict the number of disruptions in the system and their consequences. Fur-thermore, regular follow-ups of customers’ views of the availability and response of the IT platform are conducted to ensure a high level of customer satisfaction.

Dustin has experience in implementing the IT platform in the Swedish, Danish and Norwegian companies, which is a valuable asset in terms of the remaining implementa-tion. Furthermore, regular evaluations are carried out to pinpoint enhancement measures and sources of potential errors.

The Group’s security system and software are updated continuously to protect Dustin from cyber attacks and to prevent data breaches. The company also carries out regular penetration tests and ensures solid incident and escalation processes are in place.

Employee risks Dustin has enjoyed strong growth over the past few years, which in turns places great demands on employees and necessitates continuous skills development.

The company’s ability to retain competent and commit-ted employees is crucial to driving development in accor-dance with the strategic plan and achieving set goals. If the Group does not have access to the right skills at the right time, the Group’s operations and earnings could be negatively impacted.

Dustin works continuously on skills development with the aim of developing operations and achieving set goals. The company has a talent development process that aims to identify the employees’ performance and potential, help managers focus on the future development of their staff and enable managers to obtain qualitative input about their staff. During the fiscal year, all middle managers took part in management training with the aim of enhan-cing management quality throughout all operations.

To identify focus areas expected to increase employee satisfaction, the company regularly carries out employee surveys.

Risks related to customer satisfaction

A large proportion of Dustin’s sales are made online, le-ading to a greater distance from the customer compared to relationship selling.

The inability to retain and attract new customers could have a significantly adverse impact on the Group’s opera-tions and earnings.

Dustin works continuously to follow up and improve its customers’ experience by using the Net Promoter Score “NPS”, which is used to measure customer satisfaction and customer loyalty among online customers. These factors are evaluated and updated continuously in order to pinpoint new factors that have an impact on the overall experience. Wherever the results of the surveys fail to achieve the expected level, measures are taken to increase customer satisfaction and customer loyalty.

External risks Description Mitigation

Market risks Dustin’s operations are impacted by the general economic climate, structural changes, as well as procurement and distribution costs.

By continuously monitoring the market trend, Dustin strives to adapt its prices, range, quality and service to match customers’ demands.

Corporate responsibility risks

The electronics industry is characterised by complex value chains, with a large proportion of manufacturing taking place in so-called risk countries, where the manufacturing of products can lead to a negative climate impact.

Increased awareness of issues surrounding working conditions, origin, ethical conduct and concern for the en-vironmental is leading to greater expectations in terms of the conduct of companies. Inadequate pursuit of efficient and relevant sustainability initiatives could, for example, lead to and reduced customers loyalty.

Responsible conduct is a central aspect of Dustin’s operations. The Group works to integrate corporate responsibility initiatives into the daily operations of the entire organisation. This is achieved by focusing on the company’s culture and values, systematic efforts, a clear distribution of responsibility and continuous improve-ments made to processes and procedures. Dustin has an ongoing dialogue with its most important stakeholders and has produced concrete sustainability targets for responsible manufacturing, business ethics, reduced environmental impact, diversity and equality as well as product withdrawal.

Read more about Dustin’s sustainability initiatives andtargets on pages 30-31 and in the Corporate Responsibility report

Financial risks Dustin’s operations are linked to various financial risks such as foreign exchange risk, credit and counterparty risk, liquidity risk and interest rate risk. The ability to secure the Group’s financing is essential to fulfilling the Group’s objective to provide a long-term, favourable and stable return.

The management of the main financial risks is described separately in the Financial Risks section on page 44.



companies. External financial risks are managed centrally within the Group. The ability to secure the Group’s finan-cing and ensure that the financial exposure is in line with the policy and other guidelines is essential to fulfilling the Group’s objective to provide a long-term, favourable and stable return. The management of the main financial risks is described below.

Financial RisksDustin is exposed to financial risks, and these are outlined individually below. These risks are managed in accordance with the established financial management policy that regulates the distribution of responsibility between the Board of Directors, the CFO and Head of Financial Re-porting, and is managed both centrally and in other Group

Financial risks Description Mitigation

Foreign exchange risk

Foreign exchange risk is divided into transaction exposure and translation exposure. Transaction exposure refers to risks associated with purchases and sales in foreign curren-cies. Translation exposure refers to the exposure of the net assets of the foreign subsidiaries in Denmark, Finland and Norway.

Transaction exposure is limited since the Group primarily operates in the Nordic market, where purchases and sales are chiefly conducted in the local currency. Decisions as to whether a transaction should be hedged are taken based on the assessed transaction risk.

The translation exposure is partially hedged by borrowing via external loans in the respective currency (Danish kroner, Norwegian kroner and euro). The loans raised for each cur-rency are specified in the supplementary disclosures.

Credit and counterparty risk

Credit and counterparty risk refers to the risk that the coun-terparty to a transaction fails to meet its obligations, thereby resulting in a loss for the Group.

The Group has established procedures to ensure that products are sold only to customers with a good payment history. The Group’s credit policy includes credit limits, depending on the size and risk category of the company. The creditworthiness of corporate customers is verified before any supply of goods takes place. When private customers utilise credit, an external party acts as a guarantor for the entire credit risk. The maximum credit risk exposure is the carrying amount recognised in the balance sheet for each financial asset.

Liquidity risk The Group’s liquidity risk pertains to the risk of not being able to reach agreements on external credit facilities and external bank loans. This also includes the ability to finance short-term payment obligations.

The financial management policy includes short and long-term cash flow planning. The current financing for the Group is based on external bank loans, which are subject to covenants that are reported to the banks. The covenants had been fulfilled as per August 2016. The short and long-term borrowing is specified in the supplementary disclosures.

Interest rate risk The Group’s interest rate risk pertains to the risk that mate-rial changes in market interest rates will affect the variable interest rate of external bank loans.

The variable interest rate on external bank loans is hedged through interest-rate derivatives (about 70-75 per cent of total loans). The Group applies hedge accounting, which is described in the accounting principles. As of August 2016, the Group had external bank loans denominated in various currencies, which are specified in the supplementary disclosures.



public and the capital market. The Code is based on the principle of “comply or explain,” which means that com-panies can deviate from the Code if an explanation can be provided for the reason behind the deviation.

On June 15, 2016, the composition of the Nomination Committee was published. It was subsequently decided that the Annual General Meeting be brought forward to December 13, 2016, meaning this publication did not take place at least six months before the Annual General Me-eting. Otherwise, there were no deviations from the Code.

Applicable Regulations for Stock TradingDustin has neither deviated from Nasdaq Stockholm’s Rule Book for Issuers nor from good stock market practice.

IntroductionDustin Group AB (“Dustin”) is a Swedish public limited liability company that was listed on Nasdaq Stockholm in February 2015. The Corporate Governance Report is sub-mitted in accordance with the Swedish Corporate Gover-nance Code (“the Code”) and the Swedish Annual Accounts Act. The Corporate Governance Report forms part of the Directors’ Report and has been reviewed by the company’s auditor, Ernst & Young AB, whose report is available as part of the Audit Report.

Swedish Corporate Governance CodeThe Swedish Corporate Governance Code must be applied by all companies listed on Nasdaq Stockholm. The aim is to improve corporate governance in listed companies and promote confidence in companies among both the general

Corporate Governance Report

Corporate Governance refers to the decision-making systems through which the owners, directly or indirectly, govern the company. Good cor-porate governance is a prerequisite for establishing confidence among shareholders, customers and other external stakeholders and is based on the company’s strategies, targets and values permeating the entire organisation.

Board of Directors Remuneration CommitteeAudit Committee

Nomination CommitteeAuditors

Shareholders

General Meeting

Group Management

Model for Corporate Governance

External rules and regulation• The Swedish Companies Act• The Swedish Annual Accounts Act• Nasdaq Stockholm’s Rule Book for Issuers• The Swedish Corporate Governance Code

Significant internal steering policies• Vision, mission and buiness plan• The Articles of Association• The Board of Directors rules of procedure• Instructions to the CEO,

Board Committees etc.• Policies and instructions

President and CEOInternal control overfinancial reporting

DIRECTORS’ REPORT | CORPORATE GOVERNANCE REPORT


ard members and election of Johan Fant and Gunnel Duveblad as new Board members. Fredrik Cappelen was re-elected as Chairman of the Board.

• Re-election of audit firm Ernst & Young AB as auditor, with Jennifer Rock-Baley as the Auditor in Charge.

• Ratification of 2014/15 Annual Report and resolution to distribute SEK 1.70 per share in dividends. The re-cord date for the dividend was set for January 21, 2016. The dividend was paid out to shareholders on January 26, 2016.

• Granting of discharge from liability for the Board members and CEO.

• Approval of fees to Board members and the auditor.• Approval of instructions for the Nomination Com-

mittee and guidelines for remuneration of senior executives.

• Decision on Dustin’s share-related long-term incentive programme for 2016, involving up to 711,731 warrants and up to ten people.

The minutes of the Annual General Meeting can be found on www.dustingroup.com.

2015/16 Annual General MeetingDustin’s Annual General Meeting for the 2015/16 fiscal year will be held in Stockholm on December 13, 2016. For more information about the next Annual General Meeting, see page 94 and Dustin’s website, www.dustingroup.com. Nomination CommitteeThe Nomination Committee is tasked with submitting, prior to the , proposals for the Chairman of the Annual General Meeting, Board members, as well as Chairman of the Board, remuneration for Board work and Committee work, the election and remuneration of auditors and proposals for the Nomination Committee for the next Annual General Me-eting. The Nomination Committee also evaluates the Board’s work and assesses its competency. The Annual General Meeting resolved that, ahead of the 2015/16 Annual General Meeting and in accordance with the Nomination Committee’s proposal, the Nomination Committee is to comprise representatives of the four largest shareholders in the company in accordance with the shareholders’ register maintained by Euroclear Sweden at May 31, 2016 as well as the Chairman of the Board. The committee‘s mandate period extends until such time as a new committee has been appointed.

Ahead of the Annual General Meeting 2015/16, Dustin’s No-mination Committee comprises the following members:

• Paul Schrotti, Axel Johnson AB/Axmedia AB, Chairman of the Nomination Committee

• Risto Siivonen, Altor Equity Partners• Jannis Kitsakis, Fourth Swedish National Pension Fund

Shareholders and General MeetingThe General Meeting is Dustin’s highest decision-making body, with all shareholders entitled to attend, raise issues for discussing and exercise voting rights. The Annual General Meeting (AGM) appoints the company’s Board of Directors, external auditors and adopts the Annual Report. The Annual General Meeting also resolves on the appointment of the Nomination Committee, the remuneration of Board members and approves policies for remuneration of senior executives and makes decision regarding dividends and any discharge from liability.

ShareholdersDustin’s share was listed on Nasdaq Stockholm in 2015. All shares carry equal voting rights and equal entitlement to the company’s profits and equity . The number of share-holders was 5,822 (6,436) at the end of the fiscal year. The company’s largest shareholders, representing at least 10 per cent of the share capital each, were Axmedia AB (Axel Johnson AB) (25.00 per cent) and DG Holding SARL (Altor Fund II GP Limited) (10.04 per cent) as of August 31, 2016.

2014/15 Annual General MeetingDustin’s Annual General Meeting for the 2014/15 fiscal year was held on January 19, 2016. 71 shareholders were repre-sented at the meeting, corresponding to 70.41 per cent of the share capital and voting rights. All Board members and the Group’s Auditor in Charge were present at the meeting.

The following major decisions were taken at the Annual General Meeting:

• Re-election of Fredrik Cappelen, Tomas Franzén, Stefan Linder, Mattias Miksche and Maija Strandberg as Bo-

Procentuellt ägande (röster)

Svenska juridiska personer: 60,73%

Svenska fysiska personer: 5,95%

Utlandsboende ägare: 33,32%

Per cent ownership (voting rights)

Swedish legal entities: 60.7%

Swedish natural persons: 6.0%

Foreign shareholders: 33.3%

Source: Euroclear



Pursuant to the Articles of Association, Dustin’s Board of Directors is to comprise a minimum of three and a maxi-mum of ten members with no deputy members. Dustin’s Board of Directors currently comprises seven members: Fredrik Cappelen (Chairman), Gunnel Duveblad, Johan Fant, Tomas Franzén, Stefan Linder, Mattias Miksche and Maija Strandberg. During the 2015/16 fiscal year, Dustin’s Board of Directors fulfilled the Code’s requirement stating that the majority of the members elected at the AGM must be independent in relation to the company and com-pany management, and that at least two of the members must be independent in relation to the company’s major shareholders. The independence of the members of the Board is detailed in the table “Board of Directors during the 2015/16 fiscal year.”

The Board of Directors has adopted rules of procedure that regulate the Board’s work methods and assignments, as well as instructions to the CEO, including instructions for financial reporting. The Board has also adopted policies for important parts of the operations, for example, communi-cation and ethics. All policies are evaluated when necessa-ry and at least once per year.

The Board does not have any specific internal distribution of work except for the certain issues being prepared by Committees. Dustin has established an Audit Committee and a Remuneration Committee. The members of the com-mittees are elected annually and the duties are regulated in the instructions established for each committee annually. The committees have a preparatory and administrative role. The issues considered at committee meetings are re-corded in minutes and reported at the next Board meeting.

• Lennart Francke, Swedbank Robur funds• Fredrik Cappelen, Dustin’s Chairman of the Board

The composition of the Nomination Committee fulfils the requirements of the Code, which include the independen-ce of the members.

The Nomination Committee has held six meetings to date. In addition, discussions and interviews have been held between the meetings. The Chairman of the Board has informed the Nomination Committee of the work of the Board and the committees and presented the Board’s evaluation of its work. Together with the company-specific requirements, this evaluation has formed the basis of the Nomination Committee’s work. A report of the Nomination Committee’s work will be submitted at the Annual General Meeting. No special remuneration was paid to the mem-bers of the Nomination Committee.

The Nomination Committee’s proposal and motivation for the proposal to the Board of Directors can be found on www.dustingroup.com. Board of DirectorsThe Board of Directors has overall responsibility for the company’s organisation and management by continuously monitoring the operations, ensuring an appropriate orga-nisation, management, guidelines and internal control. The Board of Directors establishes strategies and goals, and ma-kes decisions concerning major investments and operational changes. The Chairman has a leading role and is responsible for ensuring that the Board’s work is well organised and performed efficiently.

Attendance at meetings

Board members ElectedBoard of

DirectorsAudit

CommitteeRemuneration

Committee Director fees (SEK) Dependent*

Fredrik Cappelen (Chairman) 2010 11/11 4/5 3/3 750,000

Gunnel Duveblad** 2016 5/6 250,000

Johan Fant** 2016 6/6 2/2 250,000

Tomas Franzén 2013 11/11 3/3 250,000

Stefan Linder 2006 11/11 5/5 2/3 250,000

Mattias Miksche 2006 11/11 250,000

Risto Siivonen*** 2014 5/5 3/3 -

Maija Strandberg 2013 11/11 5/5 250,000

Total 2,250,000

= Dependent in relation to major shareholders. No member is to be considered dependent in relation to the company or company management.

* According to the definition in the Swedish Corporate Governance Code.

** Became a member of the Board on January 19, 2016.

*** Resigned as a member of the Board on January 19, 2016.

Board of Directors during the 2015/16 fiscal year



The Work of the Board 2015/16During the fiscal year, a total of eleven Board meetings were held, including statutory, extraordinary and per capsulam. Ordinary Board meetings follow a calendar that is established annually. In addition to the Board meetings, the Chairman of the Board and the CEO have continuous contact pertaining to operations. The Board has also con-ducted an evaluation of the Group Management together with the external auditors during the fiscal year.

The company’s CEO and CFO are present at all ordinary Board meetings. However, they do not participate in the items on the Board’s agenda in which the Board evaluates the CEO, makes decisions about remuneration to the CEO/CFO or meets with the company’s auditors to evaluate the management team.

The Board’s annual calendar gives a clear overview of the Board’s assignments during the year. The calendar is coordinated with the most important processes at the company, such as strategy, budget and risk.

Evaluation of the Board’s workThe work of the Board of Directors and CEO is evaluated annually through a systematic and structured process. The aim is to prepare a good basis for the Board’s own develop-ment with respect to work methods and efficiency, as well as provide the Nomination Committee with a basis for the nomination work. The Chairman of the Board is respon-sible for the evaluation.

For the 2015/16 fiscal year, the annual evaluation was car-ried out in survey form followed by reporting and discus-sion by the Board. The survey focuses on how the Board’s work is progressing, as well as the Board’s commitment and competence. The results of the evaluation were also presented to the Nomination Committee.

In line with the results of previous years’ evaluations, the Board’s work is deemed to be progressing well. The mem-bers are considered to be making a constructive contribu-tion to both the strategic discussion and the governance of the company. The discussions are seen as open and the dialogue between the Board and management is also perceived to be positive. Providing key employees with extended space to present matters at Board meetings was highlighted as a potential area for improvement.

The Board is also evaluated within the scope of the Nomi-nation Committee’s work. The Nomination Committee has held meetings with some members of the Board and the CEO in order to put questions to individual members as to how the Board’s work is progressing.

Audit CommitteeThe main task of the Audit Committee is to ensure the quality of the financial reporting, risk management and efficiency in the company’s internal control and regulatory compliance.

The committee currently comprises four members: Maija Strandberg (Chairman), Fredrik Cappelen, Johan Fant and

Q1

Q2

Q4

Q3

SEP

OCT

NOV

DEC

JAN

FEBMAR

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• Q2 Interim Report

• Strategy Day

• Monitoring of strategy and risks


• Budget and financial outlook

• Evaluation of the Board's work

• Q4 Interim Report and the Annual Report

• Statutory Board Meeting


• Significant steering instructions and policies

The Board’s annual calendar



Stefan Linder. During the 2015/16 fiscal year, the commit-tee held five meetings, which were recorded in minutes. The company’s CFO, external auditors and representatives from specific functions of the organisation were present at all committee meetings.

The work of the committee focused mainly on monito-ring improvements pertaining to financial reporting and financial processes, with a special focus on identifying risks and evaluating the internal control environment, as well as following up the results of the review by external auditors. The review of the company’s financial reports, examination of company risks, examination and updating of internal control and the follow-up of reported whistle-blowing cases were standing items on the agenda. During the financial year, the Audit Committee also reviewed the annual impairment test of goodwill, evaluated the Group’s dividend policy, approved the audit plans of the external auditors, as well as evaluated the independence of the auditors.

CEO and Group ManagementThe CEO is responsible for Dustin’s day-to-day management and daily operations. Distribution of work between the Board and CEO is outlined in the rules of procedure for the Board and instructions to the CEO.

The CEO reports to the Board of Directors and ensures that the Board receives the information required to be able to make well-founded decisions. Pursuant to the adopted instructions, the CEO must keep the Board continuous-ly informed about the development of the company’s operations, the sales trend, the company’s earnings and financial position, liquidity forecast, important business events, as well as all other events, circumstances or con-ditions that may be considered material to the company’s operations.

Remuneration CommitteeThe main task of the Remuneration Committee is to review and provide recommendations to the Board of Di-rectors pertaining to principles for remuneration of senior executives.

The Committee currently comprises three members: Fred-rik Cappelen (Chairman), Stefan Linder and Tomas Franzén. During the 2015/16 fiscal year, the Committee held three meetings and work pertained primarily to planning related to remuneration of the CEO and senior executives, as well as the structure for target formulation, financial goals and the performance management model.

The company’s CEO and CFO are present at all Committee meetings. However, they do not participate in the items on the agenda that relate to remuneration of the CEO/CFO.

Dustin’s CEO leads the Group Management’s work and makes decisions pertaining to the operations in consulta-tion with other senior executives in the Group. At the be-ginning of the fiscal year, Group Management comprised nine individuals with each member holding responsibility for one of the Group’s business areas or functions. Group Management meetings were held monthly and otherwise as necessary. The meetings focus primarily on strategic and operative monitoring and development, as well as per-formance follow-up. In addition to these meetings, there is almost daily cooperation within management. The presen-tation of the members of Group Management is available under the section “Group Management” on page 54.

Board Committees

Audit Committee

Main tasks• Monitoring of the quality of financial reporting and risk

management• Monitoring the effectiveness of internal control and

compliance

Members• Maija Strandberg (Chair)• Fredrik Cappelen• Johan Fant• Stefan Linder

MeetingsFive meetings were held during the fiscal year

Remuneration Committee

Main tasksProvide recommendations to the Board regarding remune-ration of senior executives (including long-term incentive programmes)

Members• Fredrik Cappelen (Chair)• Tomas Franzén• Stefan Linder

MeetingsThree meetings were held during the fiscal year



the Board and Committees, instructions to the CEO, a code of ethics, a financial management policy and a commu-nication policy. The aim of these control documents is to achieve and maintain a high ethical standard within the Group and to lay the groundwork for excellent internal control.

Dustin has clear guidelines regarding the responsibilities and authorities of different levels and functions within the Group, and communicating this to the entire Group is an important task. An important aspect of Dustin’s control environment is the internal control framework, including the most important control activities and those respon-sible for each activity.

Risk AssessmentDustin regularly evaluates the risks that affect internal control of the financial reporting. Measures to manage identified risks are established in connection with the evaluation. Significant risks are discussed by the Board and Audit Committee in order to establish measures aiming to ensure excellent internal control of the financial reporting.

Control ActivitiesDustin’s control activities are defined in a Group-wide control framework that is divided up into the company’s most significant processes. The control activities are designed to manage the risks identified in the risk analysis. Examples of control activities included in the framework are authorised approval of business transactions, accounts reconciliation, analysis of income statement items and documentation of critical processes. Each control has an assigned control owner who continuously evaluates the ability of the control to address the risk and the execution of the control.

Information and CommunicationDustin's control documents, in the form of policies, instructions and procedures, insofar as they concern the financial reporting, are updated at least once per year and mainly communicated via the intranet. There is also an financial manual on the intranet containing instruc-tions and procedures for financial reporting. The financial manual is updated continuously based on changes in external requirements or changes in Dustin’s operations and processes.

To ensure that external information publication is consistent and of a high quality, an information policy is available describing how external information should be communicated.

Monitoring Activities Dustin’s internal control function follows up and evaluates the Group’s control environment on a continuous basis

AuditorsThe auditor reviews the annual accounts for the company and the Group, and conducts a review of the quarterly re-port for the third quarter. The auditors report on the results of the review of the annual accounts and the review of the Corporate Governance Report, which are presented to the Annual General Meeting. At the 2014/15 Annual General Meeting, Ernst & Young AB was re-elected as the audit firm, with Jennifer Rock-Baley as the Auditor in Charge for the period up to the end of the next Annual General Meeting. In addition to her assignment with Dustin, Jennifer Rock-Baley is the Auditor in Charge for DeLaval International AB, Recipharm AB (publ), Reitan Conve-nience Sweden AB, Skånemejerier AB and Swedfund Interna-tional AB. Jennifer Rock-Baley is a Board member of FAR.

When Ernst & Young AB is engaged to provide services other than the ordinary audit, decisions pertaining to the nature, scope and fees for such work are made by the Audit Committee. Information about fees that Dustin paid the auditors for the 2015/16 fiscal year is found in Note 6 of the Annual Report. Internal Control of the Financial ReportingDustin’s internal control structure is based on the COSO mo-del, whose framework has been adapted to Dustin’s opera-tions. The framework consists of the following five compo-nents: control environment, risk assessment, control activities, information and communication and monitoring activities. Based on this framework, areas for development are identi-fied and prioritised for Dustin’s internal control work. The Board of Directors is responsible for internal control of the financial reporting. The Audit Committee supports the Board by continuously monitoring the financial reporting, any risks that could affect the reporting and the company’s internal control environment.

Dustin has an internal control function that aims to support the management in providing excellent internal control of the financial reporting. This work focuses on ensuring compliance with guidelines and following up control activities in significant processes relating to the fi-nancial reporting. The Audit Committee is informed about the results of the work conducted by Dustin’s internal control function pertaining to risks, control activities and follow-up.

Control EnvironmentThe control environment forms the basis of internal con-trol of the financial reporting. The basis of Dustin’s control environment consists of the Group’s values, policies and instructions. Dustin’s Board of Directors has adopted fun-damental policy documents such as rules of procedure for



by way of self-assessments and evaluations by external parties. Any deviations are reported to the control owner responsible for correcting shortcomings and improving the internal control in their area of responsibility.

During the fiscal year, external advisors conducted an independent evaluation of Dustin’s control activities. The results of the evaluation showed that the internal control environment improved during the fiscal year.

Internal control developments are reported on a quarterly basis to the Audit Committee. Furthermore, the compa-ny’s external auditor reports to the Audit Committee the observations from the review and the assessment of the internal control environment.

Q1

Q2

Q4

Q3

SEP

OCT

NOV

DEC

JAN

FEBMAR

APR

MAY

JUN

JUL

AUG

Review of the internal control environment performed by external auditors

Self-assessment of control activities

Evaluation of the internal control envi-ronment performed by external advisors.

Monitoring activities of internal control during 2015/16.

Evaluation of a specific review functionThere is currently no specific review function at Dustin (internal audit). The Board has examined the issue and determined that the current monitoring structure and activities conducted within the risk management and internal control frameworks provide a satisfactory ba-sis. The Board evaluates the need for a specific review function annually.



Board RemunerationRemuneration and fees that were approved by the Annual General Meeting 2014/15 and attendance at meetings during the 2015/16 fiscal year are described in the table “The Board of Directors during the 2015/16 fiscal year” on page 47 and in Note 7. No separate remuneration has been paid for Committee work during the financial year. Board members are not entitled to any benefits after their assignments as Board members have come to an end.

Guidelines for RemunerationThe Annual General Meeting 2014/15 resolved to adopt guidelines for remuneration of senior executives within the Dustin Group, consisting of a fixed salary, short-term variable remuneration incentive (STI), which is linked to the achievement of Dustin’s financial targets and indivi-dual performance targets, and a long-term share-based or share-related incentive programme (LTI), in addition to pension and other benefits. The guidelines can be found on www.dustingroup.com/en/guidelines-remunerations.

The Annual General Meeting 2015/16 will decide on the guidelines for remuneration of senior executives. The Board is proposing guidelines whose content is essentially unchanged.

Deviations from guidelines adopted by the Annual Gene-ral Meeting 2014/15In exceptional circumstances, the Board of Directors may deviate from the guidelines outlined above. In this case, the Board of Directors is obliged to explain the grounds for the deviation at the following Annual General Meeting.

The guidelines resolved by the Annual General Meeting 2014/15 were followed and all agreed remunerations is were within the guidelines specified above.

Remuneration of Senior ExecutivesThe shareholders resolves on guidelines for remuneration of the CEO and other senior executives at the AMG. Remunera-tion to the CEO and other members of Group Management is thereafter decided by the Board, based on the recommen-dation of the Remuneration Committee.

Remuneration of Group ManagementDuring the 2015/16 fiscal year, the remuneration to Group Management consisted of a fixed salary, short-term variable remuneration of between 35 and 70 per cent of fixed salary, long-term incentive programmes, pension and other customary benefits. The variable salary was linked to established, individual and measurable financial targets.

During the 2015/16 fiscal year, the total remuneration of Group Management amounted to SEK 36.3 million and is reported in more detail in Note 7 Number of employees, employee benefits expense and remuneration to Executive Management.

Long-term Incentive ProgrammeThe Board evaluates on an annual basis whether a long-term incentive programme is to be proposed to the Annual General Meeting or not. Dustin has two outstanding in-centive programmes; LTI 2015 and LTI 2016. Neither of these programmes includes the Board.

The Annual General Meeting on January 19, 2016 it was re-solved to introduce a new incentive programme for senior executives. The programme comprises a total of 593,108 warrants, acquired at a market value of approximately SEK 4 million. Dustin has reserved the right to repurchase warrants if the participant’s employment or assignment at the company comes to an end or the participant wishes to transfer the warrants.

For further information, see Note 7 Number of employees, employee benefits expense and remuneration to Executive Management.



Board of Directors

Dustin’s Board of Directors comprises seven ordinary members, including the Chairman of the Board, with no deputy members, who are elected for the period until the end of the 2015/16 Annual General Meeting.

FREDRIK CAPPELEN

Born 1957. Chairman of the Board since 2010.

Education: MSc in Business and Economics from Upp-sala University. Studies in political science at Uppsala University.

Key competencies: Fredrik Cappelen brings broad expe-rience of leading newly listed companies and contributes significant retail knowledge by his current and previous assignments at retail companies.

Other current assignments: Chairman of the Board of Do-metic AB, Terveystalo Oy and Board member of Securitas AB and Transcom AB.

Previous positions (in recent years): Chairman of the Board of Byggmax Group AB, Sanitec Oy, Svedbergs i Dals-torp AB, Granngården AB, Munksjö AB, Munksjö Holding AB, GG Holding AB, Carnegie Holding AB and Carnegie Investment Bank AB, vice Chairman of Munksjö Oy, Board member of Cramo Oyj and WPO Service AB as well as President and CEO of Nobia AB.

Shareholding1: 432,746, through companies

GUNNEL DUVEBLAD

Born 1955. Member of the Board since 2016.

Education: Systems Scientist, Umeå University

Key competencies: Gunnel Duveblad contributes exten-sive Board experience thanks to her current and previous Board assignments, as well as valuable competencies from the IT sector where she held several senior executive positions at IBM and was CEO of EDS in northern Europe.

Other current assignments: Chairman of the Board of companies including Team Olivia AB, Global Scanning A/S, Ruter Dam Foundation and HiQ International AB. Board member of companies including PostNord AB and Sweco AB.

Previous positions (in recent years): Board member of companies including Anoto Group AB, Aditro Holding AB and SAM Headhunting Group A/S.

Shareholding1: –

JOHAN FANT


Education: MSc in Economics from the Stockholm School of Economics

Key competencies: Johan Fant brings broad retail experience through his Board assignments at companies including Åhléns, Martin & Servera and Axel Johnson In-ternational. Johan also has extensive financial knowledge thanks to his role as CFO at Axel Johnsson and Boliden.

Other current assignments: CFO of Axel Johnson AB. Bo-ard member of Axel Johnson International AB, Axstores AB, Amazing Brands AB, Åhléns AB and Martin & Servera AB.

Previous positions (in recent years): CFO Boliden AB, Seni-or Vice President Group Treasurer Electrolux AB, Corporate Controller Ericsson AB and CFO Assa Abloy AB.

Shareholding1: –

TOMAS FRANZÉN


Education: MSc in Engineering in Industrial Economics from Linköping University.

Key competencies: Through his current role as President of Bonnier and previous role as CEO of Com Hem, among others, Tomas Franzén has extensive and wide-ranging experience of leading major companies as well as solid financial knowledge.

Other current assignments: President of Bonnier AB.

Previous positions (in recent years): CEO and Chairman of the Board of UPC Digital AB and Com Hem Holding AB.

Shareholding1: 57,686

MATTIAS MIKSCHE


Education: MSc in Business and Economics from the Stockholm School of Economics.

Key competencies: Mattias Miksche contributes extensive experience within digital enterprises thanks to his roles as CEO and Board member of Stardoll and Board member of companies including Avanza, Pricerunner and Sportamore.

Other current assignments: Chairman of the Board of Glorious Games Group AB (previously Stardoll AB) and So-Marketplaces AB. Board member of Avanza Bank Holding AB, Pricerunner Group AB and EuroFlorist Intressenter AB.

Previous positions (in recent years): Board member of Eniro AB and Sportamore AB.


MAIJA STRANDBERG


Education: MSc in Business and Economics from Turku School of Economics at Turku University.

Key competencies: Maija Strandberg offers experience in the sector thanks to her previous role as CEO of ALSO. Maija brings experience of Finnish business following several Board assignments and managerial positions at Finnish companies.

Other current assignments: Vice President Finance of Pulp and Energy Business Line at Valmet Technologies Oy. Board member of Danske Bank Oy and VR Group Oy.

Previous positions (in recent years): Board member of Vuorenmaa Yhtiöt Oy and FinnSonic Oy. Member of group management of ALSO Holding AG. CEO of ALSO Nordic Holding Oy and ALSO Finland Oy.


STEFAN LINDER


Education: MSc in Business and Economics from the Stockholm School of Economics.

Key competencies: Stefan Linder has a broad experience of Board work in both publicly established and unlisted companies as well as extensive financial knowledge.

Other current assignments: Employed at Altor Equity Partners AB as a partner. Chairman of the Board of Rotla B.V. Board member of CTEK Group AB and Q-MATIC AB.

Previous positions (in recent years): Chairman of the Bo-ard of Euro Cater A/S. Board member of Byggmax Group AB and Apotek Hjärtat Holding AB.

Shareholding1: -

Top row from left: Mattias Miksche, Maija Strandberg, Stefan LinderBottom row from left: Tomas Franzén, Gunnel Duveblad, Fredrik Cappelen, Johan Fant

1 Own or related legal and/or physical holdings as of August 31, 2016.



Group Management

Dustin’s Group Management includes the CEO Georgi Ganev, and addi-tional eight senior executives with various areas of responsibility.

GEORGI GANEV

Born 1976. President and CEO. Employed at Dustin since 2012.

Education: MSc in Engineering in Information Technology from Uppsala University.

Previous assignments: CMO at Telenor Sweden AB, as well as CEO of Bredbandsbolaget AB.

Other assignments: Board member of Tele2 AB.


Warrants: 515,531

JOHAN KARLSSON

Born 1965. CFO & VP Business Support. Employed at Dustin since 2009.

Education: MSc in Business and Economics from the Gothenburg School of Economics.

Previous positions: Regional Finance Director at Tech Data AB, as well as CFO at ACO Hud Nordic AB.


Warrants: 228,465

GÖRAN LINDÖ

Born 1973. VP SMB & B2C. Employed at Dustin since 2007.

Education: MSc in Engineering in Industrial Economics from Chalmers University of Technology.

Previous positions: Partner and Co-founder of Cordial AB. Consultant at Boston Consulting Group AB.

Other assignments: Board member of Boostcom Group AS.

Shareholding1: 124,052, through companies.

Warrants: 92,525

JENS HAVIKEN

Born 1966. VP Services & Solutions. Employed at Dustin since 2013.

Education: BSc in Information Technology from Østfold University College.

Previous positions: Director Microsoft Enterprise Services Norway at Microsoft AS. Director of Accenture AS.

Shareholding1: 18,718, through companies.

Warrants: 92,525

MICHAEL HAAGEN PETERSEN

Born 1971. VP CEP. Employed at Dustin since 2008.

Education: BSc in Economics from Aarhus University School of Business and Social Science.

Previous positions: Sales Manager at thy:data A/S. Mar-ket Manager at Logica A/S.


Warrants: 151,836

JUHA KIVIKOSKI

Born 1970. VP BusinessForum. Employed at Dustin since 2015.

Education: MSc in Economics from the University of Helsinki.

Previous positions: Vice President at Intel Security. COO of Stonesoft Oyj. President of Siemens Enterprise Communications Oy.

Shareholding1: 0

Warrants: 151,836

MORTEN JAKOBI NIELSEN

Born 1975. VP People Development. Employed at Dustin since 2004.

Education: BSc in History and Society from Aarhus University.

Previous positions: Executive assistant at Dustin A/S. Senior team manager at Computerstore A/S.


Warrants: 63,843

CAROLINE RUDBECK

Born 1981. VP Group Communication. Employed at Dustin since 2012.

Education: BSc in Media and Communication Studies and a Degree in Business Administration from the University of Stockholm.

Previous positions: Head of Brand Management and CRM Project Manager at Tele2 AB. Marketing Manager at Reklamvision AB.


Warrants: 75,918

ROBERT PAP

Born 1964. VP Group Supply Chain. Employed at Dustin since 2008.

Education: BSc in Economics from Linköping University.

Previous positions: Managing Director, Spectra Stage & Event Technologies AB. Director Vendor Management, Ingram Micro Nordics. Sales and Marketing Director, Computer 2000 Sweden.


Warrants: 122,180

Top row from left: Göran Lindö, Johan Karlsson, Jens HavikenBottom row from left: Juha Kivikoski, Caroline Rudbeck, Michael Haagen Petersen, Georgi Ganev, Morten Jakobi Nielsen. Missing in the picture: Robert Pap

1 Own or related legal and/or physical holdings as of August 31, 2016.



FINANCIAL REPORTS | CONSOLIDATED FINANCIAL STATEMENTS

SEK million Note 15/16 14/15

Continuing operations:

Net sales 2 8,300.8 7,933.5

Cost of goods and services sold 3 -7,054.7 -6,816.9

Gross profit 1,246.1 1,116.5

Selling and administrative expenses 3,6,7,8 -911.5 -824.5

Items affecting comparability 5 -5.0 -68.7

Other operating income 5.6 16.3

Other operating expenses -11.6 -21.6

Operating profit 323.5 218.0

Financial income and other similar income-statement items 9 1.4 2.1

Financial expenses and other similar income-statement items 9 -38.2 -69.2

Profit after financial items 286.8 150.9

Tax attributable to continuing operations 21 -62.1 -32.6

Profit for the year from continuing operations 224.7 118.3

Discontinued operations:

Profit for the year from discontinued operations 10 0.2 6.6

Profit for the year 224.9 125.0

Other comprehensive income (all items will be transferred to the income statement)

Translation differences 2.9 -3.5

Cash flow hedging -5.4 -1.0

Tax 1.2 0.2

Other comprehensive income -1.3 -4.3

Comprehensive income for the year is entirely attributable to the shareholders of the Parent Company 223.6 120.7

Comprehensive income for the year attributable to Parent Company shareholders arose from:

Continuing operations 223.4 114.0

Discontinued operations 10 0.2 6.6

Total comprehensive income 223.6 120.7

Earnings for continuing operations per share (SEK) 12 2.95 1.65

Earnings for continuing operations per share after dilution (SEK) 12 2.95 1.65

Earnings per share, including discontinued operations (SEK) 12 2.95 1.75

Earnings per share after dilution including discontinued operations, (SEK) 12 2.95 1.75

Consolidated Income Statement



SEK million Note Aug 31, 2016 Aug 31, 2015

ASSETS

Non-current assets

Goodwill 15 1,894.7 1,771.6

Other intangible assets attributable to acquisitions 15 364.4 407.4

Other intangible assets 15 112.2 98.2

Tangible assets 16 20.3 21.1

Deferred tax assets 21 6.5 11.2

Receivables pertaining to financial leasing 8 - 199.7

Other non-current assets 2.7 3.8

Total non-current assets 2,400.8 2,513.0

Current assets

Inventories 17 229.3 241.1

Accounts receivable 13 877.7 800.4

Tax assets 6.2 29.7

Other receivables 13 4.0 6.2

Receivables pertaining to financial leasing 8,13 - 63.1

Prepaid expenses and accrued income 19 138.0 112.6

Cash and cash equivalents 13 242.9 77.8

Total current assets 1,498.0 1,330.9

TOTAL ASSETS 3,898.9 3,843.9

EQUITY AND LIABILITIES

Equity 23

Share capital 380.9 380.9

Other contributed capital 392.1 387.8

Reserves 1.2 2.4

Profit brought forward including net profit for the year 648.1 552.7

Total equity (entirely attributable to the shareholders of the Parent Company) 1,422.2 1,323.7

Non-current liabilities

Provisions for pensions and similar obligations 0.4 0.4

Deferred tax liabilities 21 121.9 131.4

Liabilities to credit institutions 13 1,066.4 1,146.7

Acquisition-related liabilities 13,14 26.0 26.6

Total non-current liabilities 1,214.7 1,305.1

Current liabilities

Liabilities to credit institutions 13 - 130.7

Accounts payable 13 912.8 735.0

Tax liabilities 35.9 22.0

Derivative instruments 13 9.0 12.6

Other current liabilities 13 68.3 48.0

Acquisition-related liabilities 13,14 26.6 39.9

Accrued expenses and deferred income 22 209.3 226.9

Total current liabilities 1,262.0 1,215.0

TOTAL EQUITY AND LIABILITIES 3,898.9 3,843.9

Consolidated Balance Sheet



Consolidated Statement ofchanges in Equity

Equity attributable to Parent Company shareholders

SEK millionShare

capitalOther contrib-

uted capitalTranslation

reserveHedge

reserveRetained earnings Total equity

Opening balance, Sep 1, 2015 380.9 387.8 12.3 -9.9 552.7 1,323.7


Other comprehensive income

Translation differences - - 2.9 - - 2.9

Cash flow hedging, changes in fair value - - - -5.4 - -5.4

Tax - - - 1.2 - 1.2

Total other comprehensive income - - 2.9 -4.2 - -1.3

Total comprehensive income - - 2.9 -4.2 224.9 223.6

Dividends to shareholders - - - - -129.5 -129.5

Subscription with the support of warrants - 4.3 - - - 4.3

New share issue - - - - - -

Total transactions with shareholders - 4.3 - - -129.5 -125.2

Closing balance, Aug 31, 2016 380.9 392.1 15.2 -14.1 648.1 1,422.2


SEK millionShare

capitalOther contrib-

uted capitalTranslation

reserveHedge

reserveRetained earnings Total equity

Opening balance, Sep 1, 2014 161.6 147.0 15.8 -9.1 427.7 743.0


Other comprehensive income

Translation differences - - -3.5 - - -3.5

Cash flow hedging, changes in fair value - - - -1.0 - -1.0

Tax - - - 0.2 - 0.2

Total other comprehensive income - - -3.5 -0.8 - -4.3

Total comprehensive income - - -3.5 -0.8 125.0 120.7

Subscription with the support of warrants 90.6 126.3 - - - 216.9

New share issue 128.7 114.5 - - - 243.2

Total transactions with shareholders 219.3 240.8 - - - 460.0

Closing balance, Aug 31, 2015 380.9 387.8 12.3 -9.9 552.7 1,323.7


Consolidated Statement ofCash flow


Operating activities

Profit before financial items including operating profit from discontinued operations 323.9 226.5

Adjustment for non-cash items 25 71.6 64.4

Interest received 1.4 2.1

Interest paid -26.2 -56.3

Income tax paid -28.9 -40.0

Cash flow from operating activities before changes in working capital 341.9 196.7

Decrease (+)/increase (-) of inventories 12.1 -17.4

Decrease (+)/increase (-) of receivables -86.4 -103.5

Decrease (-)/increase (+) of current liabilities 179.5 -17.1

Cash flow from changes in working capital 105.2 -138.0

Cash flow from operating activities 447.2 58.6

Investing activities

Acquisition of intangible assets -32.1 -18.5

Acquisition of tangible assets -3.8 -8.9

Acquisition of operations 14 -109.4 -138.6

Divestment of operations 248.7 -

Contingent consideration paid 14 -38.8 -

Cash flow from lease portfolio, financial services 25 15.1 -45.2

Cash flow from investing activities 79.7 -211.2

Financing activities

New share issue 4.3 367.0

Loans raised - 1,251.2

Repayment of debt -54.4 -1,289.9

Payment of capitalised interest - -255.6

Paid liabilities start-up costs - -7.0

Dividends -129.5 -

Cash flow from lease portfolio, financial services 25 -179.7 31.9



Cash and cash equivalents at the start of the year 77.8 133.6


Exchange-rate differences in cash and cash equivalents -2.5 -0.8

Cash and cash equivalents at the end of the year 242.9 77.8



Parent Company IncomeStatement

Parent Company Statement of Comprehensive Income


Net sales 0.4 0.4

Net sales 4 0.4 0.4

Operating expenses

Selling and administrative expenses 4,6,7 -6.7 -26.8

Other operating expenses 0.0 0.0

Operating profit -6.3 -26.4

Financial income and other similar income-statement items 9 48.7 1.0

Financial expenses and other similar income-statement items 9 -41.0 -61.5

Profit after financial items 1.4 -86.9

Appropriations 11 196.5 95.3

Tax 21 -38.3 -1.9




Other comprehensive income - -

Comprehensive income for the year 159.6 6.5

FINANCIAL REPORTS | PARENT COMPANY FINANCIAL STATEMENTS


Parent Company Balance Sheet


ASSETS

Non-current assets

Participations in Group companies 18 1,221.7 1,221.7

Total non-current assets 1,221.7 1,221.7

Current assets

Receivables from Group companies 460.9 455.8

Tax assets - 24.0

Prepaid expenses and accrued income 19 10.0 1.1

Cash and cash equivalents 147.4 65.3

Total current assets 618.3 546.2

TOTAL ASSETS 1,839.9 1,767.9

EQUITY AND LIABILITIES

Restricted equity 23

Share capital 380.9 380.9

Total restricted equity 380.9 380.9

Non-restricted equity 23

Share premium reserve 388.1 388.1

Retained earnings -229.9 -110.2


Total non-restricted equity 317.9 284.4

Total equity 698.7 665.3

Untaxed reserves 20 50.6 -

Non-current liabilities

Liabilities to credit institutions 13 1,066.5 1,056.9

Total non-current liabilities 1,066.5 1,056.9

Current liabilities

Liabilities to credit institutions 13 - 40.9

Accounts payable 13 0.1 0.4

Tax liabilities 22.2 0.0

Other current liabilities 13 0.2 0.1

Accrued expenses and deferred income 22 1.6 4.4

Total current liabilities 24.1 45.7

TOTAL EQUITY AND LIABILITIES 1,839.9 1,767.9

Pledged assets and contingent liabilities

Pledged assets 24 - 10.1

Contingent liabilities - -



Parent Company Statement of changes in Equity


SEK million Share capitalShare premium

reserve Retained earnings Total equity

Opening balance, Sep 1, 2015 380.9 388.1 -103.7 665.3


Total comprehensive income - - 159.6 159.6

Dividends - - -129.5 -129.5

Subscription with the support of warrants - - 4.3 4.3

New share issue - - -1.0 -1.0

Total transactions with shareholders - - 33.4 33.4

Closing balance, Aug 31, 2016 380.9 388.1 -70.3 698.7


SEK million Share capitalShare premium

reserve Retained earnings Total equity

Opening balance, Sep 1, 2014 161.6 147.0 -110.2 198.4


Total comprehensive income - - 6.5 6.5

Subscription with the support of warrants 90.6 126.6 - 217.2

New share issue 128.7 114.5 - 243.2

Total transactions with shareholders 219.3 241.1 - 460.4

Closing balance, Aug 31, 2015 380.9 388.1 -103.7 665.3



Parent Company Statement of Cash flow


Operating activities

Profit/loss before financial items -6.3 -26.4

Adjustment for non-cash items 25 247.1 0.4

Interest received 2.5 1.0

Interest paid -31.3 -44.8

Income tax paid 7.9 -23.9

Cash flow from operating activities before changes in working capital 220.0 -93.7

Decrease (+)/increase (-) of receivables -13.9 -266.5

Decrease (+)/increase (-) of current liabilities -3.0 -56.0

Cash flow from changes in working capital -16.9 -322.4

Cash flow from operating activities 203.1 -416.2

Financing activities

New share issue 4.3 367.0

Loans raised - 1,250.9

Repayment of debt -41.9 -951.4

Payment of capitalised interest - -255.6

Paid liabilities start-up costs - -7.0

Dividends received 46.1 -

Dividends paid -129.5 -



Cash and cash equivalents at the start of the year 65.3 77.6

Cash and cash equivalents at the end of the year 147.4 65.3



Notes

Contents

Note 1 Significant accounting policies

Note 2 Business segments and sales by geographic area

Note 3 Expenses by type of cost

Note 4 Information on purchases and sales within the Group

Note 5 Items affecting comparability

Note 6 Auditor’s remuneration and expenses

Note 7 Number of employees, employee benefits expense and remuneration to Executive Management

Note 8 Lease agreements

Note 9 Financial items

Note 10 Discontinued operations

Note 11 Appropriations

Note 12 Earnings per share

Not 13 Financial assets and liabilities

Note 14 Acquisition of businesses

Note 15 Intangible assets

Note 16 Tangible assets

Note 17 Inventories

Note 18 Participations in Group companies

Note 19 Prepaid expenses and accrued income

Note 20 Untaxed reserves

Note 21 Tax

Note 22 Accrued expenses and deferred income

Note 23 Equity

Note 24 Pledged assets and contingent liabilities

Note 25 Cash flow statement

Note 26 Related-party transactions

Note 27 Important estimates and assessments

Note 28 Significant events after the balance-sheet date

FINANCIAL REPORTS | NOTES


ginning September 1, 2015 had any material impact on the financial statements for the Group or the Parent Company.

As of the first quarter of the 2016/17 financial year, hedge ac-counting according to IAS 39 Financial Instruments: Recogni-tion and Measurement will be applied to net investments in foreign subsidiaries. As a consequence of this, exchange-rate differences on external loans in foreign currencies will here-inafter be recognised in other comprehensive income.

A number of new standards and amendments and inter-pretations of existing standards have been published but have not yet come into force. Dustin has chosen not to prospectively apply any of these. Of these, the standards set out below are deemed to potentially have a material impact on the financial statements:

IFRS 9 Financial InstrumentsThe standard replaces IAS 39 Financial Instruments: Rec-ognition and Measurement. It contains rules for classifica-tion and measurement of financial assets and liabilities, impairment of financial instruments and hedge account-ing. The assessment is that this standard will not impact the recognition of financial instruments, but will primarily affect disclosures and categorisation.

IFRS 15 Revenue from Contracts with CustomersThe standard deals with the recognition of revenues from contracts with customer and the sale of certain non-finan-cial assets.It replaces IAS 11 Construction Contracts and IAS 18 Reve-nue and relating interpretations. The standard will be ap-plied from 2018. During the 2016/17 and 2017/18 financial years, Dustin will evaluate how the financial reporting will be impacted.

IFRS 16 LeasingThis standard comes into effect in 2019 and covers the recognition of lease agreements. Dustin’s financial statements will be impacted by this standard and work to evaluate the effects will be carried out in the 2016/17 and 2017/18 financial years.

Comparative dataThe key ratio net debt previously included acquisition-re-lated liabilities. As of the 2015/16 financial year, the definition of net debt has been updated and now excludes acquisition-related liabilities.

The leasing operation Dustin Financial Services AB was divested during the year. Accordingly, this business is rec-ognised under discontinued operations for the current and comparative periods including tax. For further information relating to discontinued operations, refer to Note 10 Dis-continued operations.

The consolidated financial statements for Dustin have been prepared in accordance with the Swedish Annual Accounts Act, International Financial Reporting Standards (IFRS), and interpretations issued by the International Financial Report-ing Interpretations Committee (IFRIC) as adopted by the EU. In addition, the Swedish Financial Reporting Board’s recom-mendation RFR 1 Supplementary Accounting Rules for Groups is applied. The Parent Company applies the same accounting policies as the Group except for the cases described under the section “Parent Company’s accounting policies. On November 17, 2016, the Board and the CEO approved this Annual Report and Consolidated Financial Statements for publication.

Valuation basis in the preparation of the financial statementsThe functional currency of the Parent Company is the Swedish krona (SEK), which is also the presentation cur-rency for both the Parent Company and the Group. This means that the financial statements are presented in SEK. All amounts, unless otherwise stated, are rounded to the nearest million SEK.

Assets and liabilities are recognised at historical cost, except for certain financial assets and liabilities that are measured at fair value. Non-current assets and liabilities consist pri-marily of assets and liabilities that are expected to be recov-ered or settled more than 12 months after the balance-sheet date. Current assets and liabilities primarily consist of assets and liabilities that are expected to be recovered or settled within 12 months of the balance-sheet date.

Preparing the financial statements in accordance with IFRS requires management to make estimates and as-sumptions that impact the application of the accounting policies and the carrying amounts for assets, liabilities, in-come and expenses. These estimates and assumptions are based on historical experience and various other factors that under current circumstances seem reasonable. The outcome of these estimates and assumptions is then used to determine the carrying amounts of assets and liabili-ties that are not significantly clarified from other sources. The actual outcome may differ from these estimates and assumptions, but not significantly. The estimates and assumptions are regularly updated to identify factors that may impact the initial assumption. A change in estimates is recognised in the period in which the change occurred.

The accounting policies outlined in this section are applied consistently to all external reporting, unless otherwise stated.

Changes to accounting policiesNone of the changes and interpretations in existing stan-dards that have been applied from the financial year be-

Note 1 Significant accounting policies



end-customers and on the internal report structure used by management, the Board of Directors and the chief operating decision maker (the CEO). Dustin has identified two segments: B2B and B2C. The B2B segment includes all sales and transactions with businesses and the B2C segment includes sales and transactions with consumers. The segments are followed up using the key performance indicators of net sales and segment earnings. A central function also exists, to which all non-allocated costs and amortisation/depreciation are recognised. The leasing operation in the B2B segment is included in the segment reporting.

Foreign currencyForeign currency transactions are translated to the func-tional currency using the exchange rates prevailing on the transaction date.

Functional currency is the currency of the primary eco-nomic environment in which the entity operates, meaning that the local currency corresponds to the functional cur-rency for the companies. Upon consolidation, this means that all assets and liabilities included in the subsidiaries’ balance sheets are translated at the closing day rate and all profit or loss items are translated at the average exchange rate. Any translation differences that arise are recognised in other comprehensive income and accumu-lated in the translation reserve in equity.

Exchange-rate differences attributable to revaluation of borrowings in foreign currencies are recognised under net financial items in profit or loss, while exchange-rate differences arising from translation of foreign subsidiaries are recognised in other comprehensive income and accu-mulated in the translation reserve in equity. As of the first quarter of the 2016/17 financial year, hedge accounting according to IAS 39 Financial Instruments: Recognition and Measurement will be applied to net investments in foreign subsidiaries. As a consequence of this, exchange-rate dif-ferences on external loans will hereinafter be recognised in other comprehensive income.

Revenue recognitionIncome included in operating profit is recognised at the fair value of sold goods and services, excluding discounts, VAT and after eliminating intra-Group sales, except for intra-Group sales to Dustin Financial Services AB. Income is recognised in profit or loss when the following criteria have been fulfilled:

• it is probable that any future financial benefits associ-ated with the income item will accrue to the entity, and

• the income can be calculated in a reliable manner.

Dustin’s sales consist primarily of sales of IT products to companies (B2B) and consumers (B2C). For sales in the B2B

Previous published annual reported were prepared in thousands of SEK. As of the first quarter of the 2015/16 financial year, all external reports are prepared in millions of SEK, unless otherwise indicated.

Consolidation policies

Scope of the GroupThe Group comprises the Parent Company and subsidiaries in the Group over which the Parent Company exercises control, which means that the Parent Company is exposed to or is entitled to variable returns from subsidiaries and could influence the return through its controlling influence. The financial statements of subsidiaries are recognised in the consolidated financial statements as of the date on which the controlling influence is attained and until the date on which controlling influence no longer exists.

Consolidation of subsidiaries and purchase price allocationsSubsidiaries are recognised in accordance with the pur-chase method and a preliminary purchase price allocations is prepared in connection with acquisition. Using this meth-od, the acquisition of a subsidiary is regarded as a trans-action whereby Dustin indirectly acquires the subsidiary’s assets and assumes its liabilities and contingent liabilities.

In the event of an acquisition, the purchase price alloca-tions is to determine the cost of the shares or the business and the fair value at the acquisition date of identifiable assets, liabilities and contingent liabilities. If the purchase consideration exceeds the fair value of identified assets and liabilities assumed, the difference is recognised as goodwill. If the purchase consideration is lower than the fair value of the acquired company’s net assets, the differ-ence is recognized directly in profit and loss. Transaction costs directly attributable to the acquisition are expensed.

Transactions eliminated upon consolidationIntra-Group receivables and payables, income and expens-es, and unrealised gains arising from intra-Group trans-actions are eliminated when preparing the consolidated financial statements. Unrealised losses are eliminated to the extent that no impairment is recognised on the asset. Income and expenses connected to the sale of equipment to Dustin Financial Services AB are not eliminated in the consolidated financial statements. The equipment is rec-ognised as a tangible asset in Dustin Financial Services AB. However, on consolidation in the balance sheet, reclassifi-cation to financial non-current assets is required. During the year, the operations of Dustin Financial Services AB were divested, and thus these transactions only occurred in the accounts up until the divestment date.

Segment reportingIn Dustin, segment reporting is based on the Group’s



Operating leasesOther lease contracts are classified as operating. Assets held for operating leases are recognised in Dustin’s statement of financial position according to the nature of the asset. Lease income is recognised straight line over the leasing period.

Dustin Group as a lessee

Financial leasingA lease is classified as financial leasing when the risk and rewards associated with ownership have been transferred to Dustin. The assets are recognised as tan-gible assets and the future payments as liabilities. De-preciation/amortisation and payments are recognised over the estimated useful life.

Operating leasesOther lease contracts are classified as operating. Costs for operating leases are recognised in profit or loss for the year on a straight-line basis over the term of the lease.

Tangible assetsTangible assets are recognised as assets in the balance sheet when it is probable that the future financial benefits associated with the assets will accrue to the company and the cost of the asset can be measured reliably. Tangible as-sets are recognised at cost less accumulated depreciation and impairment losses. Cost includes the purchase price and costs directly attributable to the asset for delivering it to its intended place and in a condition that matches the intended purpose.

The carrying amount of tangible assets is derecognised from the balance sheet when the item is disposed of or sold or when no future financial benefits are expected to accrue from the asset. Gains or losses on the sale or dis-posal of an asset are calculated as the difference between the selling price and the carrying amount of the asset (less direct selling expenses). Gains or losses are recognised as other operating income/expenses in profit or loss.

Amortisation and depreciationDepreciation is applied on a straight-line basis over the estimated useful life. Evaluation of the useful lives is carried out continuously and the estimated useful lives are as follows:

Estimated useful lives (years):Investment in rented premises 5–10Computers and accessories 3Equipment, tools, fixtures and fittings 5

segment, the risk passes to the buyer when the goods are delivered to the carrier, and for the B2C segment, the risk passes to the customer when the goods are handed over by the carrier. Financial lease income is not included in net sales.

Cost of goods and services soldCost of goods and services sold includes the purchase price, customs, other taxes, distribution costs, payroll expenses for consultants and other directly attributable costs. Discounts, cash discounts, vendor bonuses and simi-lar items reduce the cost of goods and services sold.

Selling and administrative expensesSelling expenses includes costs directly attributable to sales of goods and services, excluding costs of financing and taxes. This item includes the cost of freight to custom-ers, marketing, remuneration to sellers, debt collection, credit information, etc. Administrative expenses include administration costs not attributable to the cost of goods and services sold or selling expenses.

Items affecting comparabilityItems affecting comparability relate to material income and expense items recognised separately due to the significance of their character and amount. Items affect-ing comparability are specified in Note 5 Items affecting comparability.

Financial income and expensesFinancial income and expenses consist of interest income from bank deposits and receivables, interest expenses from bank credits and loans and exchange-rate differences from external loans in foreign currencies. The financial income and expenses item also includes amortisation of capitalised borrowing costs.

Lease accounting

Dustin as a lessorThe section below relating to Dustin as a lessor is only applicable to the first quarter of the 2015/16 financial year. Following the divestment of Dustin Financial Services AB, there is no financial leasing with Dustin as the lessor.

Financial leasingA lease contract is classified as financial leasing when the risk and rewards associated with the asset are transferred to Dustin’s customer. When the lease term comes into effect, the sales proceeds and a financial receivable are recognised at the present value of future minimum lease payments. The cost of the lease assets is financed through external bank loans and recognised as a liability.



Estimated useful lives (years):Customer contracts 3–7ERP platform 8–15Web platform 3–6BI/BizTalk platform 2–4Licenses and hardware 3Dustin brand –Other brands 5–7Pricing platform 3

Impairment losses Dustin impairment tests assets in order to ensure that the company’s assets are not recognised at more than their recoverable amount. Impairment of goodwill and brands with an indefinite useful life is tested annually during the third quarter or whenever indication of an impairment requirement arises. If it is not possible to determine the recoverable amount of the individual asset, the recover-able amount of the asset’s cash-generating unit (CGU) is established. The CGU is the smallest identifiable group of assets that generates cash flows that are largely indepen-dent of the other assets or groups of assets. The following cash-generating units have been identified:

• Dustin Norway • Dustin Denmark• Dustin Finland• Dustin Sweden• IT-Hantverkarna • Commsec• Idenet

The recoverable amount of the CGU is based on value in use. Any impairment loss is recognised whenever the car-rying amount of an asset or CGU exceeds its recoverable amount, where the recoverable amount comprises the highest of an asset’s net realisable value and value in use. Impairment is recognised as an expense in profit or loss. Impairment of assets attributable to a cash-generating unit is primarily allocated to goodwill. Thereafter, propor-tional impairment is carried out of other assets in the unit.

Calculation of recoverable amountThe cash-generating units to which goodwill has been allocated are to be impairment tested by comparing the carrying amount of the unit, including goodwill, with the recoverable amount of the unit.When impairment testing goodwill, the recoverable amount of the operating capital, including goodwill, is compared with the carrying amount. Operating capital is defined as the net of operating assets and operating lia-bilities. Joint operating assets in Dustin include goodwill, inventory, accounts receivable, personnel receivables, tax assets and accrued receivables. Joint operating liabilities in Dustin include accounts payable, provisions, tax liabilities and deferred tax. Interest-bearing items in the balance

Intangible assets

GoodwillGoodwill arises when the cost of acquisition exceeds the fair value of Dustin’s share of the acquired subsidiary’s identifiable net assets on the acquisition date. Goodwill on the acquisition of businesses is recognised as an intangible asset. Goodwill items are tested for impairment at least once annually and goodwill is recognised at cost reduced by any impairment losses.

Other intangible assetsOther intangible assets consist of brands, customer contracts and capitalised IT expenditures for the integrat-ed IT platform and Dustin’s prising platform. Intangible assets are recognised in the balance sheet if they meet the criteria for intangible assets according to IAS 38 Intangible Assets.

The Dustin brand is recognised as an intangible asset with an indefinite useful life and is not amortised.Brands are included in the annual impairment testing, or more often if there is any indication of an impairment requirement.

Capitalisation of IT costs for the integrated IT platform is only applied to systems that Dustin considers strate-gic long-term systems. Expenses for other systems are expensed immediately. Capitalised IT expenditures consist of:

• System development that improves system function-ality. System development activities include function-al and technical design, development/configuration, deployment, migration and project management of said activities within the framework of the architec-ture principles.

• Work to upgrade platforms, modules or systems in order to gain significant new functionality.

• Work to expand the use of the platforms to new parts of the organisation.

Dustin’s pricing platform has been developed so that it can automatically manage and adjust sales prices depending on supply and demand, as well as price changes and stock levels at suppliers and competitors. Capitalised costs for Dustin’s pricing platform mainly comprises external con-sultancy costs.

Amortisation Amortisation is recognised on a straight-line basis in profit or loss over the estimated useful life of the intangible asset, unless this is indefinite. Intangible assets with a finite useful life are amortised as from the date the asset is available for use.



leasing. Accounts receivable are included in the balance sheet when an invoice has been issued. Financial liabilities relate to liabilities to credit institutions, accounts payable and other liabilities. Liabilities are recognised when the counterparty has performed and there is a contractual obligation to pay. Accounts payable are included in the bal-ance sheet when an invoice has been received. Derivative instruments is a financial item recognised as a liability or receivable, depending on its current market value.Financial assets and liabilities are derecognised from the balance sheet when an item has been realised, expires or the company loses control over the item.

Measurement Financial assets and liabilities, with the exception of deriv-ative instruments, are initially recognised at cost (fair val-ue) plus any transaction expenses. Derivative instruments are initially recognized at fair value with the transaction costs charged directly to profit or loss for the period. For further information regarding recognition of derivative instruments, refer to the separate section below.

Fair value measurement of financial instruments is divided into three hierarchy levels on the basis of how classifica-tion in the fair-value hierarchy is carried out:

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 – On the basis of observable market data that is not included in Level 1, either direct (market prices) or indirect (derived from market prices).

Level 3 – Inputs for the asset or liability that are not based on observable market data.

Derivatives and hedge accountingDerivatives comprise interest-rate derivatives to cover the interest-rate risk in external bank loans and, in certain cas-es, currency derivatives to cover the transaction exposure that may arise upon purchase of foreign currency. Deriva-tives to hedge the transaction exposure in foreign currency are mainly entered into in connection with purchases from China when part-payment is made on the goods reaching the hub prior to being shipped from China and the remain-ing amount is paid on the arrival of the goods in Dustin’s warehouse in Sweden. Hedging is carried out at the ex-change rate prevailing on the date the first part-payment is made. Derivative instruments are recognised on the contract date and are measured at fair value, both initially and in subsequent revaluations via other comprehensive income, in the hedge reserve in shareholders’ equity, on condition the hedge is effective. If the hedge accounting ceases, the cumulative gain or loss

sheet are normally not included in working capital.The valuation is based on a business plan and a discounted cash flow analysis, as the main approach in estimating the recoverable amount. A sensitivity analysis of the discount rate and growth assumptions is made after each impair-ment test in order to determine whether the remaining surplus value (the difference between the recoverable amount and the carrying amount) is material.

Reversal of impairmentAny impairment of assets is reversed only when there is no longer any indication of impairment and the assumptions used as the basis for calculating the recoverable amount have changed. However, impairment of goodwill is never reversed. An impairment loss is only reversed to the extent that the asset’s carrying amount, after reversal, does not exceed the recognised residual value that would have existed had the impairment not occurred.

InventoriesInventories are measured at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the operating activities, less the estimated costs for accomplishing a sale. Goods are considered to be included in Dustin’s inventory from the date on which the goods are owned by Dustin according to civil law. The cost of inventories is measured according to a moving average method. This averaging approach is considered to yield a safe and conservative approach to recognising financial results. Calculation of the moving average cost is made by dividing the total cost of the items purchased by the number of items in inventories. The average cost includes all inventory items in stock and is re-calculated after every inventory purchase.

Accounts receivableAccounts receivable are recognised at fair value on initial recognition and subsequently at cost less a provision for any impairment. The impairment is carried out when the assessment is that Dustin will not receive full payment. The impairment is recognised in profit or loss as selling and administrative expenses. Since the expected maturity of an account receivable is short, the value is recognised without discounting.

Cash and cash equivalentsCash and cash equivalents include cash and bank balanc-es. These items are generally recognised at amortised cost.

Financial assets and liabilitiesA financial asset or financial liability is recognised in the balance sheet when Dustin becomes party to this in ac-cordance with the instrument’s contractual conditions. Fi-nancial assets recognised in the balance sheet include ac-counts receivable, cash and cash equivalents and financial



Remuneration of employees

Defined-contribution pension plansDefined-contribution plans are plans under which the company’s obligations are limited to the payment of fixed contributions. The Group only has defined-contribution pension plans. Dustin has no legal or informal obligations to pay further contributions should the fund not have sufficient assets to pay all employee benefits relating to employee service in current and prior periods. For de-fined-contribution plans, Dustin pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The contri-butions are recognised as expenses for employee benefits when the amounts become due for payment. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments accrues to Dustin.

Share-based remunerationA small number of senior executives has been allotted warrants. Dustin’s warrants are not subject to IFRS 2 Share-based Payments since the price of the warrants matched the market value at the time of subscription and it was therefore not considered a benefit.

ProvisionsA provision is recognised in the balance sheet when Dustin has an existing legal or informal obligation as a result of a past event, and it is probable that an outflow of financial benefits will be required to settle the obligation and when a reliable estimate of the amount can be made. If the effect of the date of payment is material, provisions are calculated by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

Contingent liabilities A contingent liability is recognised when there is a possible obligation depending on whether some uncertain future event occurs or when there is an existing obligation for which payment is not probable or the amount cannot be measured reliably.

Earnings per shareThe calculation of earnings per share before dilution has been based on net profit for the year in relation to the weighted average number of shares outstanding. When calculating earnings per share after dilution, the weighted average number of shares outstanding is adjusted for the dilution effect of the warrants outstanding held by senior executives.

on the hedging instrument remains until such time the forecast transaction occurs. If the forecast transaction is no longer expected to occur, the cumulative gain or loss on the hedging instrument is immediately recognised in profit or loss. If the derivative is discontinued prematurely and replaced with a new, similar derivative, the derivative’s cost is recognised on an accruals basis via the income statement over the original remaining period.

Share capitalOrdinary shares are classified as equity. Transaction costs directly attributable to the issue of new shares or warrants are recognised (net of tax) in equity as a deduction from the issue proceeds.

BorrowingBorrowing and drawdowns are initially measured at fair value, net after transaction expenses. Borrowing is thereafter recognised at amortised cost and any difference between the amount received (net after transaction ex-penses) and the repayment amount is recognised in profit or loss distributed over the borrowing period, applying the effective interest method. Liabilities are classified as cur-rent liabilities unless Dustin has an unconditional right to defer payment of the liability for at least 12 months after the balance-sheet date.

TaxesDustin’s total income tax charge consists of current and deferred tax. Income tax is recognised in profit or loss, except when the underlying transaction is recognised in other comprehensive income or directly in equity, in which case the related tax effect is recognised in other compre-hensive income or directly in equity. Current tax is tax that is to be paid or received in the current year, with the appli-cation of the tax rates that have been decided or decided in practice on the balance-sheet date. This also includes adjustments of current tax attributable to prior periods.

According to the balance-sheet method, deferred tax is recognised on all temporary differences arising between the taxable value of assets and liabilities and their carrying amounts in the consolidated financial statements. Howev-er, if the deferred tax arises from a transaction constitut-ing the initial reporting of an asset or liability that is not a business combination and affects neither accounting nor taxable profit during the time of the transaction, it is not recognised. Deferred tax is calculated using the tax rates and tax regulations that have been decided or announced as per the balance-sheet date. Deferred tax assets are rec-ognised only to the extent that it is probable that future taxable surplus will be available for offsetting the tempo-rary differences within the foreseeable future.



an impairment test is conducted. Anticipated dividends from subsidiaries are to be recognised in cases where the Parent Company has exclusive rights to decide about the size of the dividend, and whether the Parent Company made a decision about the size of the dividend before the Parent Company published its financial statements.

Parent Company’s accounting policiesThe Parent Company Dustin Group AB’s financial state-ments have been prepared in accordance with the Swedish Annual Accounts Act, the standard RFR 2 Accounting for Legal Entities and other recommendations issued by the Swedish Financial Reporting Board (RFR). RFR 2 requires that, to the extent possible, financial statements for the Parent Company should comply with all IFRS standards and interpretations approved by the EU. Furthermore, the recommendation specifies permissible exceptions from IFRS, as well as additions to IFRS that are required in order for the Parent Company to be compliant with Swedish legislation. Differences between the accounting policies of the Group and the Parent Company are presented below.

Amended and new accounting policiesThe Parent Company’s accounting policies were un-changed during the year.

Financial instrumentsThe Parent Company does not apply IAS 39 Financial Instruments. Financial instruments are recognised at cost in accordance with the Annual Accounts Act. In accordance with Dustin’s Finance Policy, derivatives are to be used for hedging of variable interest rates on external loans. To minimise the risk of fluctuations in interest rates for the Group, the derivatives must be structured so that ma-turities are spread over several periods. During the year, derivatives were prematurely discontinued and replaced with new derivatives with wider maturity spreads. The effect of the derivatives being prematurely discontinued is that the early payment is recognised as an asset (prepaid expense) in the balance sheet and the cost is recognised on an accruals basis over the original remaining duration.

TaxThe Parent Company has recognised untaxed reserves (appropriations) and deferred tax.

Shareholders’ contributionsShareholders’ contributions are capitalised in shares and participations. Any impairment requirements are taken into account.

Group contributionsDustin applies alternative regulations pursuant to RFR 2, which means that Group contributions are recognised as appropriations.

SubsidiariesShares in subsidiaries are recognised in the Parent Com-pany according to the cost method. Any dividend from subsidiaries is recognised in profit or loss for the Parent Company as financial income. If there is an indication that the value of the shares in the subsidiaries has decreased,

Note 2Business segments and sales by geographic area

Group

Net sales 15/16 14/15

B2B 7,703.3 7,326.9

B2C 597.5 606.6

Total net sales 8,300.8 7,933.5

Segment result

B2B, Segment results 660.3 589.0

B2B, Segment results, margin (%) 8.6% 8.0%

B2C, Segment results 22.4 18.9

B2C, Segment results, margin (%) 3.7% 3.1%

Cost for central functions -293.1 -254.4

In relation to net sales (%) -3.5% -3.2%

Adjusted EBITA 389.6 353.5

Reconciliation with operating income

Items affecting comparability -5.0 -68.7

Amortisation and impairment of intan-gible assets -60.6 -58.4

Less: Operating profit attributable to discontinued operations included in segment results for B2B -0.4 -8.5

Operating profit, Group 323.5 218.0

Net sales Non-current assets

By geographic area 15/16 14/15 15/16 14/15

Sweden 4,531.1 4,214.0 1,661.6 1,537.3

Finland 1,458.8 1,307.4 271.1 272.5

Denmark 1,246.7 1,300.5 199.6 230.6

Norway 1,064.2 1,111.5 259.3 257.9

Total 8,300.8 7,933.5 2,391.6 2,298.2

Business segmentsDustin is divided into two business segments: Busi-ness-to-business (B2B) and Business-to-consumer (B2C). These two business segments are supported by a number of Group-wide functions including product procurement, pricing, online, marketing, business support and people development. These Group-wide functions are referred to above as Costs for central functions.



Note 6 Auditor’s remuneration and expenses

Note 5 Items affecting comparability

Note 4Information on purchases and sales within the Group

Note 3 Expenses by type of cost

Audit assignments are defined as the examination of the Annual Report and accounting records and of the Board of Directors’ and CEO’s administration of the Company, other tasks incumbent on the auditor, as well as advice and other assistance occasioned by observations made in the course of such examinations or the performance of such other tasks.

Audit activities other than audit assignment relates to the auditor’s review of interim reports.

Other services via Ernst & Young AB mainly includes IPO-related expenses in 2014/15.

Group

15/16 14/15

Cost of goods sold 6,987.0 6,764.4

Personnel costs 644.1 622.6

Depreciation/amortisation 71.0 69.4

Other, including items affecting compara-bility 269.0 185.0

Total 7,971.2 7,641.4

Parent Company

15/16 14/15

Income 100% 100%

Costs 0% 0%

Group

15/16 14/15

Acquisition and divestment-related expenses -5.0 -3.6

Costs for integrated IT platform - -32.0

IPO-related expenses - -33.0

Total -5.0 -68.7

Group Parent Company

15/16 14/15 15/16 14/15

Ernst & Young AB

Audit assignment 3.1 3.1 1.0 0.7

Audit activities other than audit assignment 0.5 0.5 0.2 0.2

Other services 0.0 4.2 - 2.8

Total 3.6 7.8 1.2 3.6

The table above pertains to the lines Cost of goods and services sold, Selling and administrative expenses and Items affecting comparability in the Group’s income state-ment.



Note 7 Number of employees, employee benefits expense and remuneration to Executive Management

15/16 14/15

Average number of employees Women Men Total Women Men Total

Parent Company - - - - - -

Subsidiaries

Sweden 162 461 623 150 464 614

Norway 19 92 110 18 99 117

Finland 20 79 99 17 81 98

Denmark 16 96 112 19 96 115

Total in subsidiaries 216 727 944 204 740 944

Total in the Group 216 727 944 204 740 944

15/16 14/15

Distribution of Board members and seniorexecutives at the balance-sheet date Women Men Total Women Men Total

Parent Company

Board members 2 5 7 1 5 6

Other members of Executive Management, including CEO - - - - - -

Total 2 5 7 1 5 6

Group

Board members 2 5 7 1 5 6

Other members of Executive Management, including CEO 1 8 9 1 10 11

Total 3 13 16 2 15 17

Payroll expenses 15/16

Salaries and other remuneration to the CEO, Executive Management and other employees

CEO andExecutive

Managementof which, CEOGeorgi Ganev

Otheremployees Total

Salaries and other remuneration 26.9 6.7 469.0 496.0

of which, bonus 8.3 2.4 14.9 23.2

Social security expenses 9.4 3.5 140.3 149.7

of which, pension costs 3.9 1.5 36.7 40.5

Total 36.3 10.2 609.4 645.7

Payroll expenses 14/15

Salaries and other remuneration to the CEO, Executive Management and other employees

CEO andExecutive

Managementof which, CEOGeorgi Ganev

Otheremployees Total

Salaries and other remuneration 25.3 4.9 467.1 492.3

of which, bonus 3.4 0.9 12.5 16.0

Social security expenses 7.9 2.5 128.1 136.0

of which, pension costs 3.3 1.0 31.1 34.4

Total 33.2 7.4 595.1 628.3

Parent CompanyThe parent company has no payroll expenses in the cur-rent or previous financial year.



Note 7 Cont’d. Number of employees, employee benefits expense and remuneration to Executive Management

Remuneration to the Board of Directors and senior executives Guidelines for remuneration of senior executives Guidelines for remuneration of senior executives are re-solved by the shareholders at the Annual General Meeting (AGM). The AGM, which is to be held on December 13, 2016, will make decisions about the guidelines for remuneration of senior executives. The proposal ahead of the AGM is avail-able in the Directors’ Report and at www.dustingroup.com.

Board membersRemuneration and fees that were approved for 2015/16 are described in the table “Board remuneration (annual fees)”. No separate remuneration has been paid for Committee work during the financial year.

CEO and other Executive ManagementRemuneration to the CEO comprises fixed salary, pension and other standard benefits, as well as variable remuner-ation. The CEO is entitled to a fixed annual salary of SEK 4,000,000 and an annual bonus target corresponding to70 per cent of the fixed salary. The retirement age for the CEO is 65. Until the agreed retirement age, the company is to contribute a monthly amount corresponding to 30 per cent of the fixed salary in a pension.

Remuneration to other senior executives comprises fixed salary, pension and other standard benefits, as well as variable remuneration in the form of a bonus of 35 – 50 per cent of the fixed salary. Pension for other senior executives is paid as a percentage of the fixed salary or premium-based pension scheme. The CEO has twelve months notice of termination from the company and six months notice on his/her own initiative. In the event of termination of other senior executives by the company, the notice of termination is six to twelve months. In the event of termination of other senior executive on his/her own initiative, the notice of termination is six months. One of the other senior executives is entitled to severance pay in the form of a maximum variable salary to be paid upon termination by the company.

Long-term incentive programmeAt the AGM on January 19, 2016, the shareholders resolved to adopt a long-term incentive programme (LTI 2016) for the Dustin Group’s executive management team. The programme has the same structure as the previous year’s incentive programme, and consists of warrants. Each warrant carries the entitlement to subscribe for one new share in the company. The programme includes a total of 1,053,387 warrants and carries the right to subscribe to an equal number of shares. The duration period for the war-

rant is 3.5 years. Furthermore, there is a long-term incen-tive programme from previous year (LTI 2015), which covers a total of 593,108 warrants with a duration of 3.5 years. A full exercise of the warrants would result in a dilution of approximately 2.2 per cent. The purpose of the warrants programme is to increase the proportion of ownership among senior executives, and to motivate them to remain at the company. In addition, the ownership is expected to increase the long-term commitment to Dustin and its earnings performance.

Remuneration CommitteeThe main task of the Remuneration Committee is to pre-pare matters regarding remuneration and other employ-ment terms for the CEO and other senior executives. The work includes to review and provide recommendations on guidelines for the distribution between fixed and variable remuneration and the relationship between performance and compensation, the principal terms of bonus and incentive schemes, conditions for other benefits, pension, notice of termination and severance pay, and to prepare proposals for individual compensation packages for the CEO and other senior executives. The Remuneration Committee shall monitor and evaluate the outcome of the variable remuneration, and if the company complies with the guidelines for remuneration adopted by the AGM. In the 2015/16 the Board members Fredrik Cappelen (Chair-man), Stefan Linder and Tomas Franzén members of the Remuneration Committee. For the financial year 2016/17, the Committee will to submit a proposal for remuneration of the CEO for approval by the Board. The Committee will also assist the CEO in the approval of remuneration to other senior executives.

Board membersRemuneration and fees that were approved for 2015/16 at the AGM are described in the table below. No separate remuneration has been paid for Committee work during the financial year. Remuneration to the Board is approved annu-ally at the AGM and relates to the period until the next AGM.

Board remuneration(annual fees in SEK) 15/16 14/15

Fredrik Cappelen 750,000 750,000

Gunnel Duveblad 250,000

Johan Fant 250,000

Tomas Franzén 250,000 250,000

Stefan Linder 250,000

Mattias Miksche 250,000 250,000

Maija Strandberg 250,000 250,000

Total 2,250,000 1,500,000



Not 8 Lease agreements

Operating lease agreements (Dustin as a lessee):The Group’s lease expense for the year amounts to SEK 71 million (72).

The Dustin Group leases IT equipment, office equipment, vehicles and premises under operating lease agreements. Maturity of the lease agreements is usually 36 months, with an option to renew. No lease agreements contain requirements for extension. When the lease agreements expire, the Group has the option to purchase the equip-ment at prevailing market prices. There are index clauses in the lease agreements.

Financial lease agreements (Dustin as a lessee)The Group leases assets under financial lease agreements. As per 31 August 2016, the Group had assets under finan-cial lease agreement with a planned residual value of SEK 5.3 million (-). No financial lease agreements extend over a period that is longer than 36 months. No variable fees were reported in profit for the year. The leased assets are attributable to Idenet AB, which was acquired during the year, and mainly consist of servers.

Financial lease agreements (Dustin as a lessor)Dustin has decided to consolidate its financial offering to the B2B market in all Nordic countries through a partner-ship agreement with De Lage Landen Finans AB (DLL). In conjunction with this, the lease portfolio was divested to DLL. The transaction was completed on November 2, 2015. The sales value of the lease portfolio corresponded to the carrying amount.

The provision for doubtful accounts receivable regarding leasing amounts to SEK - million (1.7).

Group

15/16 14/15

Non-current receivables

Gross financial leasing - 244.1

Unearned financial income - -44.4

Total - 199.7

Current receivables

Gross financial leasing - 77.1

Unearned financial income - -14.0

Total - 63.1

Gross investment in financial leasing dis-tributed as follows:

Within 1 year - 77.1

Between 1-5 years - 244.1

More than 5 years - -

Total - 321.2

Net investment in financial leasing distrib-uted as follows:

Within 1 year - 63.1

Between 1-5 years - 199.7

More than 5 years - -

Total - 262.7

Group

Future lease expenses amount to: 15/16 14/15

Within 1 year 66,8 62,6

Year 2 54,9 51,6

Year 3 30,6 44,8

After 3 years 45,6 78,9

Total 196,9 237,9

Group

15/16 14/15

Future minimum lease fees amount to:

Within one year 2.0 -

Between one and five years 0.8 -

Total 2.8 -



Note 10 Discontinued operations

Note 9 Financial items

During the financial year, the lease portfolio in Dustin’s lease operations was divested to De Lage Landen Finans AB (DLL). Dustin thus consolidated its financial offering to the B2B market in all Nordic countries through a partner-ship agreement with DLL. In conjunction with this, the lease portfolio in Dustin’s lease operations was divested to DLL. The transaction was conducted in accordance with the agreement dated November 2, 2015 and generated total sales proceeds of SEK 308 million. In connection with the divestment, a repayment of SEK 174 million was made on external loans. The net increase in cash and cash equiv-alents, before settlement of the VAT liability, was there-fore SEK 134 million. The capital gain on the divestment amounted to SEK 1 million before tax.

The business is now defined as a discontinued operation in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations.

Profit for the year from divested operations mainly relates to the business up until the date of divestment. All assets and obligations as per the balance-sheet date on August 31, 2016 were settled after the balance-sheet date.

Refer also to the section Divestment of leasing operations on page 36 of the Directors’ Report.

For information on cash flow impact from the discontinued leasing operation, refer to Note 25 Cash flow statement.


Interest income and similar income-statement items 15/16 14/15 15/16 14/15

Bank interest 0.3 0.0 0.3 -

Dividends - - 46.1 -

Other financial income 1.2 2.1 2.2 1.0

Total 1.4 2.1 48.7 1.0


Interest expense and similar income-statement items 15/16 14/15 15/16 14/15

Bank interest 29.6 42.3 26.6 36.1

Subordinated shareholder loans and other non-current liabilities - 21.1 - 21.1

Currency differences on loans and other non-current liabilities 6.8 -3.8 10.7 -1.8

Other financial expenses 1.8 9.5 3.6 6.0

Total 38.2 69.2 41.0 61.5

Profit/loss from discontinued operations:


Financial services

Interest income 5.7 19.6

Interest expense -0.4 -3.6

Net interest income 5.3 16.0

Selling and administrative expenses -6.3 -7.5

EBIT, financial services -0.9 8.5

Capital gain from divestment of operations 1.3 0.0

Tax -0.2 -1.9

Profit for the year from discontinued operations 0.2 6.6



Note 12 Earnings per share

Note 11 Appropriations

Parent Company

15/16 14/15

Group contributions received 247.1 92.5

Group contribution paid - -5.0

Change in tax allocation reserve -50.6 7.8

Total 196.5 95.3

Earnings for continuing operations per share 15/16 14/15

Profit for the year for continuing operations, SEK million 224.7 118.3

Weighted number of shares outstanding 76,173,115 71,545,731

Number of shares when calculating earnings per share 76,173,115 71,545,731

Earnings per share, continuing operations, SEK 2.95 1.65

Earnings for continuing operations per share after dilution 15/16 14/15

Profit for the year for continuing operations, SEK million 224.7 118.3


Adjustment for adopted dilution through incentive programme - 6,294


Earnings per share after dilution for continuing operations, SEK 2.95 1.65

Earnings per share, including discontinued operations 15/16 14/15

Net profit for the year including discontinued operation, SEK million 224.9 125.0



Earnings per share, including discontinued operations, SEK 2.95 1.75

Earnings per share, including discontinued operations after dilution 15/16 14/15

Net profit for the year including discontinued operation, SEK million 224.9 125.0


Adjustment for adopted dilution through incentive programme - 6,294


Earnings per share after dilution including discontinued operations, SEK 2.95 1.75

Earnings per share before dilutionThe calculation of earnings per share before dilution has been based on net profit for the year in relation to the weighted average number of shares outstanding according to the above. Changes occurred in the number of shares outstanding in connection with listing.

Earnings per share after dilutionWhen calculating earnings per share after dilution, the weighted average number of shares outstanding accord-ing to the above is adjusted for a potential dilution effect of the warrants outstanding.



Note 13 Financial assets and liabilities

Overview of financial assets and liabilities

Aug 31, 2016

Accounts receivable and loans receivable

Financial assets and

liabilities measured

at fair value via income statement

Other financial

assets and liabilities

Derivatives used in hedge

accounting

Total carrying amount Fair value

Assets

Accounts receivable and other receivables 881.7 - - - 881.7 881.7

Accrued income 98.0 - - - 98.0 98.0

Cash and cash equivalents 242.9 - - - 242.9 242.9

Total assets 1,222.5 - - - 1,222.5 1,222.5

Liabilities

Liabilities to credit institutions - - 1,066.4 - 1,066.4 1,066.4

Derivative instruments (Level 2) - - - 9.0 9.0 9.0

Tax liabilities - - 35.9 - 35.9 35.9

Accounts payable - - 912.8 - 912.8 912.8

Acquisition-related liabilities (Level 3) - 52.6 - - 52.6 52.6

Other current liabilities - - 68.3 - 68.3 68.3

Accrued expenses - - 203.4 - 203.4 203.4

Total liabilities - 52.6 2,286.8 9.0 2,348.5 2,348.5

Aug 31, 2015

Accounts receivable and loans receivable

Financial assets and

liabilities measured

at fair value via income statement

Other financial

assets and liabilities

Deriva-tives used

in hedge accounting

Total carrying amount Fair value

Assets in the balance sheet

Accounts receivable and other receivables 806.6 - - - 806.6 806.6

Accrued income 85.4 - - - 85.4 85.4

Cash and cash equivalents 77.8 - - - 77.8 77.8

Receivables pertaining to financial leasing 262.7 - - - 262.7 262.7

Total assets 1,232.6 - - - 1,232.6 1,232.6

Liabilities in the balance sheet

Liabilities to credit institutions - - 1,277.5 - 1,277.5 1,277.5

Derivative instruments (Level 2) - - - 12.6 12.6 12.6

Accounts payable - - 735.0 - 735.0 735.0

Acquisition-related liabilities (Level 3) - 66.4 - - 66.4 66.4

Other current liabilities - - 47.9 - 47.9 47.9

Accrued expenses - - 200.0 - 200.0 200.0

Total liabilities - 66.4 2,260.3 12.6 2,339.3 2,339.3



Calculation of fair valueFor the current financial year, the fair value of financial assets and liabilities is considered to approximate the fair value, whereupon the carrying amount is deemed to be the same as the fair value, except for derivatives, which are commented below.

Derivative instruments Derivative instruments are designated as hedging instru-ments for external bank loans. The Group applies hedge accounting on derivatives and the fair value is measured as defined for Level 2 in IFRS 7.

Long-term and short-term loansSince the interest rate for bank loans is variable, the carry-ing amount of the loans is assessed as being approximate to the fair value.

Acquisition-related liabilitiesThe measurement of acquisition-related liabilities is car-ried out on a continuous basis at fair value and the liability is settled as required via income statement. If a change in value occurs before the purchase price allocation is finalized, valuations is carried out via the balance sheet. Of SEK 52.6 million, SEK 26.0 million is related to prelimi-nary purchase price allocations. The fair value is calculat-ed as defined for level 3 in IFRS 7, meaning according to inputs that are not based on observable market data. The calculation of the contingent earn-out liability is based on the parameters of each acquisition agreement. These parameters are usually linked to the outcome of perfor-mance measures taken for up to three years from the date of acquisition.

For this financial year, an earn-out liability of SEK 26 mil-lion for the acquisition of Idenet AB and Communication & Security i Mälardalen AB was recognised, with the assess-ment that the maximum earn-out liability will be paid. Of the earn-out liabilities of SEK 66 million recognised in the preceding year, SEK 39 million was settled in the current year. The remaining portion is estimated to fall due for payment within one year. For a table of contingent earn-out liabilities, see Note 14 Acquisition of businesses.

Due to the short-term nature of accounts receivable, the effect of discounting is not deemed to be material and the carrying amount is considered to be consistent with the fair value. This is thus the maximum exposure. The Group’s risk exposure in foreign currencies is deemed to be low. The provision for doubtful accounts receivable amounted to SEK 2.6 million (8.2) and amounted to 0.3 per cent (1.03) in relation to accounts receivable. Dustin has historically low bad debt losses. The company continuously obtains credit information for all corporate customers and does not offer any credit itself to private customers.

Accounts receivableGroup

Maturity structure of outstanding accounts receivable

Aug 31, 2016

Aug 31, 2015

0-30 835.8 752.8

31-90 24.0 34.3

91- 20.5 21.7

Doubtful accounts receivable -2.6 -8.3

Total 877.7 800.4

Group

Changes in the provision for doubtful accounts receivable

Aug 31, 2016

Aug 31, 2015

Opening balance 8.3 4.5

Provision for possible bad debt losses 3.8 7.1

Confirmed bad debt losses -8.7 -2.7

Reversed bad debt losses -0.8 -0.6

Exchange-rate differences 0.0 0.0

Closing balance 2.6 8.3

Note 13 Cont’d. Financial assets and liabilities



Maturity structure of borrowing

Group

Totalborrowing

Maturity within one

year

Maturitywithin one-

two years

Maturitywithin three-

five years

Maturityafter five

yearsAug 31, 2016

Liabilities to credit institutions* 1,089.8 16.6 1,073.3 - -

Of which deferred borrowing expenses -23.0 -6.7 -13.3 -3.0 -

Accounts payable 912.8 912.8 - - -

Tax liabilities 35.9 35.9 - - -

Derivative instruments and Other current liabilities 77.3 77.3 - - -

Acquisition-related liabilities 52.6 26.6 26.0 - -

Accrued expenses 203.4 203.4 - - -

Total 2,372.0 1,272.7 1,099.3 - -

Totalborrowing

Maturity within one

year

Maturitywithin one-

two years


five years

Maturityafter five

yearsAug 31, 2015

Liabilities to credit institutions* 1,333.4 153.9 23.2 1,156.4 -




Derivative instruments and Other current liabilities 60.5 60.5 - - -

Acquisition-related liabilities 66.4 39.9 26.6 - -


Total 2,417.3 1,211.1 49.7 1,156.4 -

Parent Company

Totalborrowing

Maturity within one

year

Maturitywithin one-

two years


five years

Maturityafter five

yearsAug 31, 2016

Liabilities to credit institutions* 1,090.0 16.6 1,073.4 - -




Other current liabilities 0.2 0.2 - - -


Total 1,114.4 40.7 1,073.4 - -

Totalborrowing

Maturity within one

year

Maturitywithin one-

two years


five years

Maturityafter five

yearsAug 31, 2015

Liabilities to credit institutions* 1,153.7 64.0 23.2 1,066.5 -



Tax liabilities - - - - -

Other current liabilities 0.1 0.1 - - -


Total 1,158.6 68.9 23.2 1,066.5 -

*Including future interest payments.




Group and Parent Company, Aug 31, 2016Liabilities to

credit institutions Interest termsInterest

period

Bank loan SEK 280.2 Stibor + interest margin 1.15 -1.80% 3 + 2 years

Bank loan EUR 27.0 Euribor + interest margin 1.15 -1.80% 3 + 2 years

Bank loan NOK 240.0 Nibor + interest margin 1.15 -1.80% 3 + 2 years

Bank loan DKK 240.0 Cibor + interest margin 1.15 -1.80% 3 + 2 years

In order to hedge the Group’s cash flow interest-rate risk, Dustin has entered into interest-rate swaps, whereby variable interest rate is converted into a fixed interest rate. Swaps have been entered into for loans in the currencies SEK, EUR, NOK and DDK that will mature between January

GroupAcquisitions 2015/16 On October 1, 2015, all the shares in Communication & Security i Mälardal AB (Commsec), Corp. Reg. No. 556693-6869 were acquired through the subsidiary Dustin Sverige AB. Commsec is a small Swedish company that supplies network and security solutions. The purchase consider-ation amounted to SEK 27 million, of which SEK 1 million was a contingent earn-out. On May 2, 2016, all the shares in Idenet AB, Corp. Reg. No. 556443-9072, were acquired through the subsidiary Dustin Sverige AB. Idenet is a Swedish company that specialises in cloud hosting and application management. The purchase

29, 2018 and April 22, 2022. During the financial year, some parts of former derivatives were repaid prematurely and replaced with new interest-rate derivatives. This was main-ly done to achieve longer and wider maturity spreads. The amount repaid totalled SEK 11 million.

consideration amounted to SEK 110 million, of which SEK 25 million was a contingent earn-out. The effects of the acquisitions on the Group’s financial position are specified below. The purchase price alloca-tions are preliminary and the final analyses of acquired assets will take place within one year from the acquisition date. The difference between the purchase consideration and identified assets and liabilities has preliminary been allocated to goodwill. A definitive allocation will be made before the end of the valuation period. Acquisition-related costs amounted to SEK 5.0 million (3.6).

Note 14 Acquisition of businesses


Preliminary purchase price allocationsCommunication &

Security i Mälardalen AB Idenet AB

Fair value of acquired assets and liabilities

Tangible assets - 6.3

Other intangible assets - 0.6

Inventories - -

Other current assets 7.3 15.0

Cash and cash equivalents 2.3 8.5

Other current liabilities -3.6 -10.4

Total identified assets and liabilities 6.0 20.1

Consolidated goodwill 20.7 99.5

Purchase consideration including estimated contingent earn-out 26.7 119.6

Less:

Cash balances (acquired) -2.3 -8.5

Estimated contingent earn-out -1.0 -25.0

Net cash outflow 23.3 86.1



Income and earnings attributable to acquired companiesThe acquisition of Commsec and Idenet during the year contributed a total of SEK 56 million to the Group’s income and SEK 7 million to the Group’s operating profit.

GoodwillIn the preliminary purchase price allocations, acquired surplus values have been allocated to goodwill in their entirety. Goodwill is deemed to be attributable to em-ployee know-how and expected synergies. Goodwill is not deemed to be tax deductible.

Acquisition-related liabilitiesAcquisition-related liabilities relate to contingent earn-outs and the increase for the year includes SEK 25 million for the acquisition this year of Idenet and SEK 1 million for the acquisition of Commsec. The decrease in the liability comprises payments for the year and pertains to earn-outs for Resolute ISMS OY, which was acquired in the preceding financial year. The agreed contingent consideration for the acquisition during the year of Idenet is attributable to the earnings trend for the period extending to December 31, 2017. For further information on contingent earn-outs, refer to Note 13 Financial assets and liabilities.

Note 14 Cont’d. Acquisition of businesses

Change in acquisition-related liabilities 15/16 14/15

Opening balance 66.4 89.3

Acquisition 26.0 70.3

Payment attributable to previous acquisitions -38.8 -88.3

Change in value - -0.9

Translation differences -1.0 -3.9

Closing balance 52.6 66.4

Acquisitions 2014/15On May 18, 2015, all of the shares in the Finnish company Resolute Oy were acquired through Dustin’s subsidary in Finland. The purchase consideration amounted to SEK 129 million, of which SEK 70 million was a contingent earn-out. In the 2015/16 financial year, SEK 39 million of the contingent earn-out was paid and the remaining portion is

Parent CompanyNo acquisitions were made in the Parent Company in the current or previous financial year.

Purchase price allocation Resolute ISMS OY

expected to be settled in the 2016/17 financial year. In 2015/16, the preliminary purchase price allocations presented in the 2014/15 Annual Report was confirmed without any adjustment being made to the preliminary analysis. In the 2015/16 financial year, the two Finnish companies were merged.

Fair value of acquired assets and liabilities

Tangible assets 0.8

Övriga immateriella anläggningtillgångar 0.0

Inventories 5.9

Other current assets 18.4

Cash and cash equivalents 9.2

Other current liabilities -17.1

Total identified assets and liabilities 17.2

Consolidated goodwill 112.1

Purchase consideration including estimated contingent earn-out 129.2

Less:

Cash balances (acquired) -9.2

Estimated contingent consideration -31.6

Net cash outflow 88.5



GoodwillGroup

Note 15 Intangible assets

Change in goodwill for the yearAug 31,

2016Aug 31,

2015

Opening cost 1,771.6 1,660.7

Acquisition of operations 120.2 112.1

Exchange-rate differences 2.9 -1.2

Closing residual value according to plan 1,894.7 1,771.6

The goodwill in Dustin Group is attributable to surplus val-ues upon acquisitions of new entities. In conjunction with each acquisition, an analysis is carried out to allocate the surplus value arising in connection with the acquisition to intangible assets. The acquired units largely comprise goodwill, since is it primarily employee know-how that constitutes the value in these acquisitions. Goodwill is allocated to cash-generating units. The cash-generating units correspond to a separate organisational entity in the Dustin Group.

Goodwill per cash-generating unit Aug 31,

2016Aug 31,

2015

Dustin Sweden 998.2 998.1

Dustin Denmark 259.0 257.8

Dustin Norway 159.6 159.0

Dustin Finland 265.3 264.3

IT-Hantverkarna 92.4 92.4

Commsec 20.7 -

Idenet 99.5 -

Total 1,894.7 1,771.6

Impairment testing is performed every year or when indications of a potential decline in value are identified. When calculating the value in use of the cash-generating units, a discount rate of 8.2-8.7 per cent (9.1-9.8) before tax was used as specified in the table below. The lower dis-count rate compared with the preceding year was mainly

attributable to the use of a lower debt-free beta value and a lower risk-free interest rate in the calculation of the discount rate compared with the preceding year. In this year’s impairment test, the estimated value exceeded the carrying amount and no impairment was recognised. The calculation of the value of Dustin’s cash-generating units is based on management’s cash flow forecasts for a period of five years. Cash flow for the ensuing years has been extrapolated by applying a growth assumption of 2.5 per cent. The main assumptions used by management in the calculation of forecasts of future cash flows are market growth, the cash-generating units’ expected market shares, the trend in product margins and personnel costs. The estimated market was based on ex-ternal industry estimates. The market share trend, product margin and personnel costs were determined based on previous experience.

A sensitivity analysis with respect to growth assumptions and the discount rate has been carried out. The analysis in-cluded a calculation involving the discount rate increasing 0-3.6 per cent and the growth assumption falling 0-3.5 per cent, without any indication of an impairment require-ment. Accordingly, the sensitivity analysis did not result in any potential impairment requirements.

Discount rate before tax, %

Cash-generating unitsAug 31,

2016Aug 31,

2015

Dustin Sweden 8.2 9.2

Dustin Denmark 8.3 9.1

Dustin Norway 8.7 9.8

Dustin Finland 8.4 9.3

IT-Hantverkarna 8.2 9.2

Commsec 8.2 -

Idenet 8.2 -



Note 15 Cont’d. Intangible assets

Other intangible assets attributable to acquisitionsGroup

Customer contracts Brands Total Group

Aug 31, 2016

Aug 31, 2015

Aug 31, 2016

Aug 31, 2015

Aug 31, 2016

Aug 31, 2015

Opening accumulated cost 257.2 284.6 318.3 318.3 575.5 602.9

Divestments and disposals* -0.7 -12.7 - - -0.7 -12.7

Exchange-rate differences 0.6 -14.7 - - 0.6 -14.7

Closing accumulated cost 257.1 257.2 318.3 318.3 575.4 575.5

Opening accumulated amortisation -162.8 -137.8 -5.3 -5.0 -168.2 -142.8

Amortisation for the year according to plan -42.1 -44.3 -0.3 -0.3 -42.4 -44.6

Divestments and disposals* 0.7 12.7 - - 0.7 12.7

Exchange-rate differences -1.1 6.5 - - -1.1 6.5

Closing accumulated amortisation according to plan -205.4 -162.8 -5.6 -5.3 -211.0 -168.2

Closing residual value according to plan 51.7 94.4 312.7 313.0 364.4 407.4

*Of divestments for the year, SEK 0.7 million (12.7) relate to disposals.

Brands refer to Dustin’s brand of SEK 312 million and other acquired brands related to IT-Hantverkarna of SEK 1 mil-lion. The Dustin brand was acquired in 2006 and has been assigned an indefinite life given that the Dustin brand is well established and it is difficult to estimate when it will cease generating revenues. All intangible assets with indefinite useful lives are tested at least each year to ensure that the value does not deviate negatively from the

current carrying amount. Individual assets may be tested more frequently if there are indications of impairment. The recoverable amounts of the cash-generating units were determined by using the value in use. The brand is part of the cash-generating unit “Dustin Sweden”, see also the note on goodwill.



Note 15 Cont’d. Intangible assets

Other intangible assets Group

Capitalised IT development related to integrated IT platform Other Total Group

Aug 31, 2016

Aug 31, 2015

Aug 31, 2016

Aug 31, 2015

Aug 31, 2016

Aug 31, 2015

Opening accumulated cost 124.4 111.7 31.5 221.8 155.9 333.5

Purchases 19.1 15.3 13.1 3.3 32.1 18.6

Acquisition of operations - - 0.6 - 0.6 -

Reclassification 0.0 -2.5 0.1 -1.1 0.1 -3.5

Divestments and disposals* - - -2.7 -191.9 -2.7 -191.9

Exchange-rate differences 0.0 -0.1 0.0 -0.6 0.0 -0.7

Closing accumulated cost 143.4 124.4 42.7 31.5 186.1 155.9

Opening accumulated amortisation -9.2 0.0 -24.9 -212.1 -34.1 -212.1

Amortisation for the year according to plan -13.0 -9.2 -5.6 -5.0 -18.5 -14.2

Acquisition of operations - - 0.0 - 0.0 -

Reclassification 0.0 - -0.1 - -0.1 -

Divestments and disposals* - - 2.6 191.9 2.6 191.9

Exchange-rate differences 0.0 - 0.0 0.3 0.0 0.3

Closing accumulated amortisation according to plan -22.2 -9.2 -28.1 -24.9 -50.3 -34.1

Opening impairment -23.6 -23.6 - - -23.6 -23.6

Impairment for the year - - - - - -

Closing impairment -23.6 -23.6 - - -23.6 -23.6

Closing residual value according to plan 97.6 91.5 14.6 6.6 112.2 98.2

*Of divestments for the year, SEK 3.4 million (191.9) relate to disposals.



Note 17 Inventories

Note 16 Tangible assets


Cost ofimprovements on external property Equipment Total Group Equipment

Aug 31, 2016

Aug 31, 2015

Aug 31, 2016

Aug 31, 2015

Aug 31, 2016

Aug 31, 2015

Aug 31, 2016

Aug 31, 2015

Opening accumulated cost 17.0 23.9 56.0 57.9 73.0 81.8 0.1 0.1

Purchases 0.6 3.3 3.3 5.6 3.8 9.0 - -

Acquisition of operations - - 12.0 0.8 12.0 0.8 - -

Reclassification - -10.1 0.0 13.6 0.0 3.5 - -

Divestments and disposals -2.7 0.0 -13.2 -21.5 -15.9 -21.5 - -

Exchange-rate differences 0.0 -0.1 0.1 -0.5 0.1 -0.6 - -

Closing accumulated cost 14.9 17.0 58.2 56.0 73.1 73.0 0.1 0.1

Opening accumulated amortisation -9.8 -18.1 -42.1 -45.4 -51.9 -63.5 -0.1 -0.1

Amortisation for the year according to plan -3.0 -2.1 -7.6 -8.5 -10.6 -10.6 - -

Acquisition of operations - - -5.5 - -5.5 - - -

Reclassification - 10.1 -0.1 -10.1 -0.1 - - -

Divestments and disposals 2.7 0.0 12.9 21.4 15.6 21.4 - -

Exchange-rate differences 0.0 0.3 -0.3 0.4 -0.3 0.7 - -

Closing accumulated depreciation according to plan -10.1 -9.8 -42.7 -42.1 -52.8 -51.9 -0.1 -0.1

Closing residual value according to plan 4.8 7.2 15.5 13.9 20.3 21.1 - -


Aug 31,

2016Aug 31,

2015Aug 31,

2016Aug 31,

2015

Goods for resale 229.3 241.1 - -

Total 229.3 241.1 - -

Cost of goods sold -6,987.0 -6,764.4 - -

Of which, obsolescence -5.4 - - -



Note 20 Untaxed reserves

Note 19 Prepaid expenses and accrued income

Note 18 Participations in Group companies

Parent Company’s holdings in Group companies

The following companies are included in the Group in addition to the Parent Company’s direct holdings:

Carrying amountParent Company

Company nameCorp. Reg.

No. DomicileNumber of

sharesParticipa-

tion EquityProfit/loss

for the year Aug 31, 2016 Aug 31, 2015

Dustin AB 556237-8785 Stockholm 25,000,000 100% 479.0 109.4 1,211.6 1,211.6

Dustin Finan-cial Services AB

556740-9726 Stockholm 1,000 100% 7.5 7.4 10.1 10.1

Total 1,221.7 1,221.7

Aug 31, 2016 Aug 31, 2015

Company name Corp. Reg. No.Participating

interestParticipating

interest

Dustin Sverige AB 556666-1012 100% 100%

IT-Hantverkarna Sverige AB 556653-7311 100% 100%

Dustin Norway AS 939483969 100% 100%

Dustin A/S 26092183 100% 100%

Businessforum Oy (now Dustin Finland Oy) 0935141-3 100% 100%

Communication and Security i Mälardalen AB 556693-6869 100% -

Idenet AB 556443-9072 100% -


Aug 31, 2016 Aug 31, 2015 Aug 31, 2016 Aug 31, 2015

Prepaid expenses for suppliers 23.5 19.4 0.5 -

Accrued marketing subsidies 20.4 50.9 - -

Accrued discounts from suppliers 60.2 23.0 - -

Accrued lease income 14.5 6.7 - -

Accrued income attributable to delivered but not invoiced 2.9 4.9 - -

Other prepaid expenses and accrued income 16.5 7.8 9.4 1.1

Total 138.0 112.6 10.0 1.1

Parent Company

Aug 31, 2016 Aug 31, 2015

Tax allocation reserve 2017 50.6 -

Total 50.6 -

Accrued marketing subsidies relate to payments that Dustin is waiting to receive from suppliers on the basis that Dustin has fulfilled an obligation to carry out mar-keting activities on behalf of a supplier. Accrued discounts from suppliers relates to payments from suppliers for

which there is no obligation to the supplier.

Accrued lease income is attributable to the Norwegian business.


During the first quarter of 2016/17, Dustin Financial Services AB was divested and the carrying amount in the Parent Company was impaired in full.


Note 21 Tax


Tax expense 15/16 14/15 15/16 14/15

The following components are included in the tax expense in the income statement:

Tax due to changes in tax assessment -5.0 0.2 -4.9 -

Current tax -61.3 -39.1 -33.4 -

Deferred tax 4.0 4.5 - -1.9

Recognised effective tax -62.3 -34.5 -38.3 -1.9

Recognised effective tax rate 21.7% 21.6% 19.4% 22.7%

Recognised profit before tax 287.2 159.4 198.0 8.4

Reconciliation of effective tax rate

Tax according to current tax rate -63.2 -35.1 -43.6 -1.8

Tax effect of:

Non-deductible expenses -1.3 -1.0 0.0 0.0

Non-taxable income 0.0 0.1 10.2 -

Standardised income attributable to tax allocation reserve -0.1 -0.1 0.0 0.0

Adjustment of tax for previous years and others -1.3 -0.6 -4.9 0.0

Difference in tax rate between Parent Company and subsidiaries 2.9 2.3 - -

Changed tax rate 0.7 0.0 - -

Recognised effective tax -62.3 -34.5 -38.3 -1.9

Deferred taxGroup

Other Non-current

assetsAppropria-

tionsFinancial

instrumentsDeferred tax

liabilities

Other Non-current

assetsLoss carry-

forwardsDeferred

tax assets

Opening balance, September 1, 2015 93.1 41.1 -2.8 131.4 8.2 3.0 11.2

Recognised in profit for the year -12.0 3.0 - -9.0 -3.6 -1.4 -5.0

Recognised in statement of financial position - 0.9 - 0.9 - - -

Recognised in other compre-hensive income -0.1 - -1.2 -1.3 - 0.3 0.3

Closing balance, August 31, 2016 80.9 45.0 -4.0 121.9 4.6 1.9 6.5

Opening balance, September 1, 2014 104.0 39.9 -2.6 141.3 12.6 4.7 17.3

Recognised in profit for the year -10.9 1.2 - -9.7 -4.3 -1.7 -6.0

Recognised in statement of financial position - - - - - - -

Recognised in other compre-hensive income - - -0.2 -0.2 - - -

Closing balance, August 31, 2015 93.1 41.1 -2.8 131.4 8.2 3.0 11.2

The Parent Company has not reported any receivable or lia-bility attributable to deferred tax as of August 31, 2016 (-).

Dustin has a loss-carryforwards amounting to SEK 7.7 million (11.8) in the Group and to SEK - million in the Parent

Company. There are no unrecognised deferred tax assets in the Group or Parent Company. Deferred tax recognised as a receivable is expected to be utilized within one to three years.

Recognised effective tax



Note 24 Pledged assets and contingent liabilities

Note 23 Equity

Note 22 Accrued expenses and deferred income


Aug 31, 2016 Aug 31, 2015 Aug 31, 2016 Aug 31, 2015

Accrued personnel costs 101.5 89.3 0.0 0.0

Accrued expenses for suppliers 73.5 85.7 0.6 0.9

Accrued discounts to customers 1.5 3.3 - -

Deferred lease income 2.7 21.3 - -

Deferred marketing subsidies 3.1 5.7 - -

Other accrued expenses and deferred income 27.0 21.6 0.9 3.5

Total 209.3 226.9 1.6 4.4

Deferred marketing subsidies relate to payments that Dustin has received from suppliers on the basis that Dustin has an obligation to carry out marketing activities.

Share capitalThere is only one class of share in the Dustin Group and, accordingly, all shares carrying the same number of votes per share. The share capital was increased by warrants of SEK 91 million and a new share issue of SEK 129 million in the preceding year. The share capital was unchanged in the 2015/16 financial year.

Other contributed capitalThis item pertains to equity that has been contributed by the owners. During the year, other contributed capital increased by SEK 4 million on account of warrants. The increase in the preceding year related to warrants amount-ing to SEK 126 million and a new share issue totalling SEK 115 million.

Dustin has not pledged any assets for its obligations under the current loan agreement. In the preceding financial year, Dustin Financial Services AB (DFS) entered into a loan agreement under which Dustin provided a Parent Com-pany guarantee to cover DFS’s obligations. Furthermore,

DFS had pledged all financial customer contracts (leases) that had been provided as cover in accordance with the conditions stipulated in the DFS facility. In the first quarter of the 2015/16 financial year, the leasing operation was divested and the DFS loan agreement thus ceases to apply.

Translation reserveThe translation reserve pertains to all exchange-rate differences arising on the translation of foreign operations that have prepared their financial statements in a currency other than SEK.

Hedge reserveThe hedge reserve includes the effective portion of the fair value measurement of derivatives that were entered into to hedge the variable interest rate on external bank loans.

Retained earningsRetained earnings include net profit for the year and profit earned in the preceding year in the Parent Company and the Group’s subsidiaries.


Aug 31, 2016 Aug 31, 2015 Aug 31, 2016 Aug 31, 2015

For loans and bank overdrafts

Floating mortgages 82.8 80.8 - -

Shares in subsidiaries - - - 10.1

Other pledged assets

Mortgaged financial customer contracts - 197.7 - -

Total 82.8 278.5 - 10.1



Note 26 Related-party transactions

Note 25 Cash flow statement


Adjustment for non-cash items Aug 31, 2016 Aug 31, 2015 Aug 31, 2016 Aug 31, 2015

Depreciation of tangible assets 10.6 10.6 - -

Amortisation of intangible assets 60.5 58.8 - -

Exchange-rate differences 0.5 -5.1 - -

Outstanding group contributions - - 247.1 -

Other - - - 0.4

Total 71.6 64.4 247.1 0.4

Group

Cash flow from lease portfolio, Financial Services Aug 31, 2016 Aug 31, 2015

Investments

Acquisitions of lease assets -22.0 -148.6

Depreciation/amortisation 37.1 103.4

Total 15.1 -45.2

Financing

Loans raised 43.0 217.7

Repayment of debt -222.6 -185.8

Total -179.7 31.9

Transactions with related suppliers and customersDustin has transactions with suppliers and customers that have been defined as related parties. These transactions are normal business transactions and the amounts have not been deemed to be material to the Group and thus are not presented. Transactions between Group companies are eliminated on consolidation With respect to salaries

and remuneration of Board member and senior executives, refer to Note 7 Number of employees, employee benefits expense and remuneration to Executive Management Financial costs in the preceding year comprised interest expenses attributable to shareholders loans of SEK 21.1 mil-lion. All shareholder loans were settled in conjunction with the stock-market listing in 2015.

Transactions with former and current shareholders 15/16 14/15

Recognised in comprehensive income

Finance expenses to related parties - -21.1

Total - -21.1



Note 28 Significant events after the balance-sheet date

Note 27 Important estimates and assessments

The preparation of these financial statements involves management making estimates and assessments about the future. These assumptions and estimates are based on historical experience and other factors considered for these important areas, and the estimates and assessments are evaluated continuously. The identified key estimates are: Goodwill impairmentThe calculated recoverable amount of identified cash-gen-erating units is based on a number of assessments and estimates. Changes to these could result in a material effect on the value of goodwill. The most significant assumption are outlined in Note 14 Acquisition of busi-nesses. The sensitivity analysis shows that reasonable changes in assumptions made would not result in a lower recoverable amount than the carrying amount of goodwill.

Acquisition in NorwayIn September 2016, Dustin signed an agreement to acquire the Norway-based IKT Gruppen specialised in sales and operations of standardised IT services for small and me-dium-sized businesses. The acquisition is part of Dustin’s strategy to broaden its customer offering and strengthen its position in the Nordic IT market.

The impairment tests for the current financial year did not indicate any need of impairment.

Performance-based contingent earn-out liabilityThe performance-based earn-out liability includes supple-mentary purchase considerations for acquisitions of new entities. These earn-outs are based on the future finan-cial performance of the acquired businesses. The actual earnings of the businesses could differ from the estimated outcome and result in deviations between the recognised liability and the actual payment. The earn-out liability for the preceding year was settled during the year. The acqui-sition of Idenet and Commsec during the year led to an increase in the earn-out liability of SEK 26 million on the acquisition dates. For further information regarding earn-out liabilities, see Note 14 Acquisition of businesses.

IKT Gruppen was founded in 2013 and is was acquired from the owner constellation comprising most of the company’s ten employees. In the 2015 financial year, the company reported sales of about NOK 18 million. The ac-quisition is expected to have a marginal impact on Dustin’s earnings per share during the current financial year and is not considered to be material from a financial perspective.



Stockholm, November 17, 2016

Fredrik CappelenChairman of the Board

Gunnel Duveblad Johan Fant

Tomas Franzén Stefan Linder Mattias Miksche

Maija Strandberg

Georgi Ganev CEO

Our audit report was submitted on November 17, 2016Ernst & Young AB

Jennifer Rock-BaleyAuthorised Public Accountant

FINANCIAL REPORTS | BOARD SIGNATURES

The consolidated income statement and balance sheet will be submitted to the Annual General Meeting on December 13, 2016 for adoption. The consolidated financial statements were prepa-red in accordance with the International Financial Reporting Standards (IFRS) as adopted by the EU and present a true and fair view of the Group’s financial position and earnings. The Annual Report was prepared in accordance with generally accepted accounting principles and presents

a true and fair view of the Parent Company’s financial position and earnings. The Directors’ Report for the Group and the Parent Company presents a fair review of the Group’s and the Pa-rent Company’s operations, financial position and earnings and describes the material risks and

uncertainties facing the Parent Company and the companies included in the Group.


selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the annual accounts and consolidated accounts, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the compa-ny’s preparation and fair presentation of the annual ac-counts and consolidated accounts in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effec-tiveness of the company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting esti-mates made by the Board of Directors and the Managing Director, as well as evaluating the overall presentation of the annual accounts and consolidated accounts.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

OpinionsIn our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the parent company as of 31 August 2016 and of its financial performance and its cash flows for the year then ended in accordance with the Annual Accounts Act. The conso-lidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the group as of 31 August 2016 and of their financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards, as adopted by the EU, and the Annual Accounts Act. A corporate governance statement has been prepared. The statutory administra-tion report and the corporate governance statement are

Report on the annual accounts and consolidated accountsWe have audited the annual accounts and consolidated accounts of Dustin Group AB for the financial year 2015-09-01 – 2016-08-31. The annual accounts and consoli-dated accounts of the company are included in the printed version of this document on pages 34-91.

Responsibilities of the Board of Directors and the Mana-ging Director for the annual accounts and consolidated accountsThe Board of Directors and the Managing Director are responsible for the preparation and fair presentation of these annual accounts in accordance with the Annual Accounts Act and of the consolidated accounts in accor-dance with International Financial Reporting Standards, as adopted by the EU, and the Annual Accounts Act, and for such internal control as the Board of Directors and the Managing Director determine is necessary to enable the preparation of annual accounts and consolidated accounts that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibilityOur responsibility is to express an opinion on these annual accounts and consolidated accounts based on our audit. We conducted our audit in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the annual accounts and consolidated accounts are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the annual accounts and consolidated accounts. The procedures

Auditor’s Report

To the annual meeting of the shareholders of Dustin Group AB, corpora-te identity number 556703-3062

FINANCIAL REPORTS | AUDITOR’S REPORT


consistent with the other parts of the annual accounts and consolidated accounts.

We therefore recommend that the annual meeting of sha-reholders adopt the income statement and balance sheet for the parent company and the group. Report on other legal and regulatory requirementsIn addition to our audit of the annual accounts and consolidated accounts, we have also audited the proposed appropriations of the company’s profit or loss and the ad-ministration of the Board of Directors and the Managing Director of Dustin Group AB for the financial year 2015-09-01 -– 2016-08-31.

Responsibilities of the Board of Directors and the Mana-ging DirectorThe Board of Directors is responsible for the proposal for appropriations of the company’s profit or loss, and the Bo-ard of Directors and the Managing Director are responsible for administration under the Companies Act.

Auditor’s responsibilityOur responsibility is to express an opinion with reasonable assurance on the proposed appropriations of the compa-ny’s profit or loss and on the administration based on our audit. We conducted the audit in accordance with general-ly accepted auditing standards in Sweden.

As a basis for our opinion on the Board of Directors’ proposed appropriations of the company’s profit or loss, we examined the Board of Directors’ reasoned statement and a selection of supporting evidence in order to be able to assess whether the proposal is in accordance with the Companies Act.

As a basis for our opinion concerning discharge from lia-bility, in addition to our audit of the annual accounts and consolidated accounts, we examined significant decisions, actions taken and circumstances of the company in order to determine whether any member of the Board of Di-rectors or the Managing Director is liable to the company. We also examined whether any member of the Board of Directors or the Managing Director has, in any other way, acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association.

We believe that the audit evidence we have obtained is suf-ficient and appropriate to provide a basis for our opinions.

OpinionsWe recommend to the annual meeting of shareholders that the profit be appropriated in accordance with the proposal in the statutory administration report and that the members of the Board of Directors and the Managing Director be discharged from liability for the financial year.

Stockholm, 17 November 2016

Ernst & Young AB

Jennifer Rock-BaleyAuthorized Public Accountant

FINANCIAL REPORTS | AUDITOR’S REPORT


The notice and other information will be available at http://www.dustingroup.com/en/annual-general-me-eting no later than four weeks prior to the Annual General Meeting.

Trustee-registered sharesTo be entitled to participate in the Meeting, shareholders who have their shares registered with a trustee must temporarily re-register the shares in their own name in the share register (known as voting rights registration), in addi-tion to their notification of participation in the Meeting. To ensure this registration is completed by December 7, 2016, shareholders should contact their trustee or bank well in advance of this date.

DividendsThe Board of Directors proposes a dividend of SEK 2.40 per share in 2015/16, corresponding to a total payout of SEK 183 million. The proposed dividend represents approximately 81 per cent of the profit for the year. Thursday, December 15, 2016 is proposed as the record date for the dividend. The estimated payment date for the dividend is Tuesday, December 20, 2016.

Financial calendar2015/16 Annual General Meeting December 13, 2016Interim Report, Sept - Nov January 11, 2017Interim Report, Dec - Feb April 5, 2017Interim Report, Mar - May July 5, 2017Year-End Report Sept - Aug October 18, 2017

ParticipationShareholders wishing to participate at the Annual General Meeting must:

• be entered in the share register maintained by Euroc-lear AB no later than Wednesday, December 7, 2016.

• notify the company of their attendance via e-mail: [email protected] or by post to Dustin Group AB (publ), Att: Bolagsstämma, Box 1194, SE-131 27 Nacka Strand, Sweden, no later than Wednesday, December 7, 2016.

NotificationIn their notification to the company, shareholders must state their name, personal identity number or corporate registration number, address and telephone number, re-gistered shareholdings and, where applicable, information regarding proxies and assistants.

If participation is to take place based on a power of attor-ney, such power of attorney must be dated and signed. The original power of attorney must be sent to Dustin Group AB at the address above well in advance of the Annual General Meeting.

The power of attorney registration form is available in both Swedish and English on the Group’s website: http://www.dustingroup.com/en/annual-general-meeting. Represen-tatives of legal entities must present a certified copy of the registration certificate or equivalent documents of authorisation.

Shareholders are to present identification when registering their arrival at the Meeting.

2015/16 Annual General MeetingDustin’s Annual General Meeting will be held on Tuesday, December 13, 2016 at 1:00 p.m. at the Playhouse Teater, Drottninggatan 71A in Stock-holm, Sweden. Registration will begin from 12:00 p.m.

OTHER INFORMATION | 2015/16 ANNUAL GENERAL MEETING


Three-year OverviewAll amounts in SEK million, unless otherwise indicated

Financial key ratios 15/16 14/15 13/14


Gross margin (%) 15.0 14.1 14,.4

Adjusted EBITDA 400.2 364.1 361.9


Adjusted EBITA margin (%) 4.7 4.5 4.8

Net working capital 31.6 158.3 7.1

Capital employed 173.3 292.6 145.1

Net debt* 826.3 936.9 1076.7

Net debt/adjusted EBITDA (multiple)* 2.1 2.6 3.0

Operating cash flow 500.7 217.2 458.9

Maintenance investments -4.7 -8.9 -8.0

Return on equity (%) 15.8 9.4 22.0

Equity/assets ratio (%) 36.5 34.4 20.4

The share

Earnings per share, including discontinued operations before dilution (SEK) 2.95 1.75 2.48

Earnings per share, including discontinued operations after dilution (SEK) 2.95 1.75 2.48

Equity per share before dilution (SEK) 18.67 17.38 11.24

Equity per share after dilution (SEK) 18.67 17.38 11.24

Cash flow from operating activities per share before dilution (SEK) 5.87 0.82 3.87

Cash flow from operating activities per share after dilution (SEK) 5.87 0.82 3.87

Average number of shares 76,173,115 71,545,731 66,095,090

Average number of shares after dilution 76,173,115 71,552,025 66,095,090

Number of shares issued at end of period 76,173,115 76,173,115 66,095,090

All amounts in SEK million, unless otherwise indicated

Financial data 15/16 14/15 13/14

EBIT from continuing operations 323.5 218.0 294.9

EBIT from discontinued operations 0.4 8.5 6.1

EBIT 323.9 226.5 301.0

Items affecting comparability 5.0 68.7 -1.1

Amortisation of intangible assets 60.6 58.4 53.6


Depreciation of tangible assets 10.6 10.6 8.5

Adjusted EBITDA 400.2 364.1 361.9

Sales growth (%) 4.6 7.6 35.5

Acquired growth (%) -1.2 -0.6 -14.3

Currency effects in sales growth (%) 1.0 -1.3 -0.2


Earnings before financial items including EBIT from discontinued operations

EBIT from continuing operations 323.5 218.0 294.9

EBIT from discontinued operations 0,4 8.5 6.1

Total 323.9 226.5 301.0

OTHER INFORMATION | THREE-YEAR OVERVIEW

* The definition of net debt was updated during the financial year, acquisition-related contingent liabilities (eg. Performance-based earn-outs) are excluded from the calculation.


Adjusted EBITA: EBIT according to the income statement and EBIT for Financial Services, which is recognised under discontinued operations, before items affecting compa-rability and amortization and impairment of intangible assets.

Adjusted EBITDA: EBIT according to the income statement and EBIT for Financial Services, which is recognised underdiscontinued operations, before items affecting compara-bility and amortization, depreciation and impairment of tangible and intangible assets.

B2B: Pertains to all sales to companies and organisations.

B2C: Pertains to all sales to consumers.

Capital employed: Working capital plus total assets, exclu-ding goodwill and other intangible assets attributable to acquisitions, and interest-bearing receivables pertaining to finance leasing, at the end of the year.

Cash flow from operating activities: Cash flow from opera-ting activities, after changes in working capital.

Cash flow from operating activities per share: Cash flow from operating activities as a percentage of the average number of shares outstanding.

Central functions: Includes all non-allocated central expenses, including amortisation and depreciation, and excluding items affecting comparability.

Dividend yield: Dividend per share in relation to the share price at the end of the year.

Earnings per share: Net profit/loss in relation to average number of shares, according to IAS 34.

EBIT: Is a measurement of the company’s earnings before income tax and financial items.

Equity/assets ratio: Equity at the end of the year in rela-tion to total assets at the end of the year.

Equity per share: Equity at the end of the year in relation to the number of shares at the end of the year.

Gross margin: Gross profit in relation to net sales.

Items affecting comparability: Items affecting comparabi-lity refer to material income or expense items that are re-cognised separately due to the significance of their nature and amounts, and that are also considered non-recurring, unusual or infrequent.

Maintenance investments: Investments required to main-tain current operations.

Net debt: Current and non-current interest-bearing liabili-ties, excluding cquisition-related liabilities (eg. Performan-ce-based earn-outs) and shareholder loans, less cash and cash equivalents and receivables from finance leasing, at the end of the year.

Net working capital: Total current assets less cash and cash equivalents, current financial lease assets and current non-interest-bearing liabilities, at the end of the year.

Operating cash flow: Adjusted EBITDA less maintenanceinvestments plus cash flow from changes in working capital.

Operating profit: See EBIT.

Organic growth: Change in net sales for comparable unitsadjusted for currency effects.

Return on equity: Net profit for the year in relation to equi-ty at the end of the year.

Segment results: The segment’s EBIT excluding amortisa-tion and depreciation and items affecting comparability.

For more information, please contact:Dustin Group ABJohan Karlsson, CFO Fredrik Sätterström, Head of [email protected] [email protected] 79 97 0705-10 10 22

Definitions

OTHER INFORMATION | DEFINITIONS


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