Inwido Annual Report 2013

Annual Report 2013 | Inwido AB 1

Annual Report 2013

How did Inwido become one of the top

performers in the industry of windows and doors?

Our answer: Because we decided that we actually are

in the business of well-being. We develop comfortable,

safe and environmentally friendly solutions, with

focus on human needs and smart thinking.

But that’s not the whole answer.

We also believe that we keep our position at

the industry forefront because of our mind-set

of constant improvement: We always strive

to do more with less. Combined with our

good growth potential, sturdy business

model and devoted, skilled workforce,

we are ready for the future.

The business of well-being


Key figures

8.1%Operating margin

(EBITA)

350 SEKm

Operating profit (EBITA)

4,300 SEKm

Net sales

376 SEKm

Cash flow from operating activities

f i n a n c i a l s t a t e m e n t s

3

Contents

Inwido in brief . . . . . . . . . . . . . . . . 2

A message from the CEO . . . . . . . 6

Our strategy . . . . . . . . . . . . . . . . . 8

Our business model . . . . . . . . . . 10

Our markets . . . . . . . . . . . . . . . . 12

Inwido segments . . . . . . . . . . . . 16

- Sweden . . . . . . . . . . . . . . . . . . 17

- Nordic . . . . . . . . . . . . . . . . . . . 19

- Europe. . . . . . . . . . . . . . . . . . . 22

- Supply . . . . . . . . . . . . . . . . . . . 25

The Inwido journey so far . . . . . . 26

Employees . . . . . . . . . . . . . . . . . 28

Sustainability . . . . . . . . . . . . . . . 30

Board of directors and auditors . . . . . . . . . . . . . . . . 32

Group management . . . . . . . . . . 34

Financial statements. . . . . . . . 36-79

Directors’ Report . . . . . . . . . . . . 38

Consolidated statement of comprehensive income. . . . . . . . 44

Consolidated statement of financial position. . . . . . . . . . . . . 45

Consolidated statement of changes in shareholders’ equity . . . . . . . . . . . . . . . . . . . . . 46

Consolidated cash flow statement . . . . . . . . . . 47

Income statement, Parent Company. . . . . . . . . . . . . 48

Balance sheet, Parent Company. . . . . . . . . . . . . 49

Summary of changes in equity, Parent Company . . . . . 50

Cash flow statement, Parent Company. . . . . . . . . . . . . 51

Notes . . . . . . . . . . . . . . . . . . . . . 52

Audit Report . . . . . . . . . . . . . . . . 76

Five-year summary . . . . . . . . . . . 78

Definitions of key figures . . . . . . 79

0

2,000

4,000

6,000

0

4

8

12

2009 2010 2011 2012 2013

SEKm %Operating margin (EBITA), excl.items affecting comparabilityNet sales

net sales & operating margin our markets

Inwido has operations in Sweden,

Norway, Finland, Denmark,

the UK, Ireland, Poland, Lithuania,

Austria and Russia (divested

during Q1 2014).

our brands

our mission

Smart homes to improve people’s well-being.

our vision

We will be a leading Nordic-based supplier of

environmentally friendly windows and doors

in Europe by focusing our resources, products

and services on people’s needs. By always

assuming the consumer perspective we

improve people’s well-being.

our core values:

Consumer in mind.

Courage to improve.

Competent people at hand.

This is Inwido

Inwido AB | Annual Report 20133

2013 at a glance

Manufacturer of prefabricated homes

10%

INDUSTRY

CONSUMER

Buildingcompanies

20%

Middleman

12%

Direct

24%

Retail

34%

SupplySEK 468 m

EuropeSEK 243 m

NordicSEK 2,260 m

SwedenSEK 1,737 m

37%

10%5%

48%

Customer break-downnet sales per segment 2013

Net sales: Net sales amounted to SEK 4,300 million, a decline of 3 percent when adjusted for currency and structural effects compared to previous years.

Higher gross margin: Improved efficiency, careful pricing and implement-ed cost savings resulted in higher gross margin despite decreased volumes.

Continued strong cash flow: The group’s strong cash flow enabled Inwido to reduce net debt by SEK 160 million.

New market entry: In October, Inwido entered the Austrian market with the brand Hemmafönster and opened a showroom in Vienna.

Smart products released: Inwido launched new, smart products within the IQ-concept, meaning products that are combined or enhanced by smart technol-ogy, for example InVent and Energy Frames.

Improved markets: The markets for win-dows and doors in UK and Ireland both showed promising signs of recovery after several years of economic downturn.

Russian export strategy: Inwido changed the structure for sales in Russia to an export-oriented model with Poland as the base.

Platform consolidation: Finland consolidated three product platforms, allowing further efficiency enhancements at Inwido’s factories there.

Reduced number of factories: The total number of Inwido production units is now 26, a reduction by 13 units since 2008.

Reduced number of employees: The average number of Inwido employees was 3,077 during 2013, a reduction of 25 percent since 2008.

Shared KPIs introduced: All production units now use the same KPIs to make implementation of lean processes through the group quicker and easier.

New Code of conduct: The group’s Code of Conduct was revised and updated.

New launches: The Hemmafönster direct sales concept, which includes installation services, was launched in Sweden, aimed at home owners and housing societies. The Hajom brand launched Hajom Step, a series of sliding doors, windows and doors with an innovative, sleek design.

New recruit: Lars Petersson was appointed as new SVP, Operations & Development.


A m e s s A g e f r o m t h e C e o


Doing more with less

Håkan Jeppsson

President and CEO

processes for products and concepts quite remarkably. We have launched innovative products like InVent, a window with a built-in ventilation system, and Hajom Step, a series of sliding doors, windows and doors with an innovative, sleek design. We have also lowered our costs by implementing lean thinking throughout

Someone once told me that scientists had figured out how far away the future actually is. Their answer was: 40 seconds. This made a lot of sense to me.

When you are at the helm of an interna-tional business like Inwido, no matter how things are at the moment, you are constantly aware of the fact that the future will soon arrive. How can we, without losing focus on our long-term strategy, strive to be in the very best position when it does?

The past few years have been tough for Inwido from a market perspective. Demand and volume has fallen in basi-cally all of our markets and although we now see some positive signs, customers remain difficult to interpret.

Having said that, I must also add that Inwido has managed remarkably well to defend its leading industry position dur-ing this rough period. Since we launched our new strategy in 2009, we have worked hard with three ambitions: To grow, focus-ing on the consumer segment, to develop new smart products and to strengthen our one-group efficiency.

To date, our greatest challenge has been growth, this due to the economic downturn. However, we have defended our market positions and developed growth by, for example, increasing market shares in existing markets. At the same time, we have speeded up our innovation

Although 2013 was a

rough year in terms of

the market, it was also

a period in which Inwido

developed its business

from many perspectives.

We firmly believe that

we are on the right track

with our strategy of devel-

oping a consumer-driven

company with the mission

of contributing to smart

homes to improve

people’s well being.

A m e s s A g e f r o m t h e C e o


the organization, a process that we continue to advance. Furthermore, we are now developing a product platform structure with great potential for improved group efficiency. We took our first step in this direction in 2013, with the consolidation of three Finnish products. In addition, during 2013, we took the first step in our organic growth strategy by establishing our Hemmafönster brand in the Austrian market.

The result of our efforts is that we have kept our leading positions and still have top-class profitability in the indus-try. I would say that we are in better shape now than before the financial crisis, and that we are very well prepared when demand picks up again.

Meanwhile, we are not satisfied. We are not sitting around waiting for the upturn; because we must remain humble to the fact that we do not know when an upturn will occur. Finding growth opportunities in existing markets is there fore prioritized. Our view is that we can do more with less. For example, we can improve even further in using sales and marketing as a way to push the market forward. Our product platform harmonization process is another opportunity, not just for efficiency enhancements but also as a way of

developing new products, resulting in us being able to offer consumers more options to choose from. We will also heavily prioritize developing what we call our IQ-branded products – smart products for the home of the future. Developing and launching the next generation of smart products and concepts represents a cornerstone for us in achieving our

financial targets. Finally, let me say

a few words about Inwido’s people. When we implemented our lean processes in 2013, I also met with most of our employees at our production units. Meeting all of these skilled and attentive Inwido employees really emphasized the importance of good

leadership to achieving success. I am happy to say that, in general, we already have a positive and professional leadership culture in the group, and that this is growing stronger. Our Great-place-to-work-index is constantly on the rise and reached an all-time-high score in 2013. In the future, we will be focusing even more on creating a safe and stimulating work environment. Sustainable thinking should not be limited to our products and processes; it concerns our people as well. Our sustainability approach is regulated

in the Inwido Code of Conduct, which was re-evaluated and updated during 2013. To conclude, I am very pleased with several of our achievements over the past year and convinced that Inwido is well prepared for the future with our current strategy. However, I am not satisfied. We will work hard to improve ourselves even further in the upcoming year.

M A LM ö, SWED EN IN FEBR UA RY 2014

Håkan Jeppsson, President and CEO ‘‘

The result of our efforts is that we

have kept our leading positions and still have top-class profitability in the industry”


O u r S t r a t E g y

Strategic ambitions

Create a consumer-driven company with top-class sales and marketing

Grow with profitability in selected European markets, segments and distribution channels

From an end-user perspective develop the next generation of smart and innovative window and door concepts together with accessories for: • Lower cost of living • Green environment • Smart design • Higher security • Enhanced user friendliness

Together, in one coordinated group with the right leadership, cooperation and a lean approach, reach maximum operational efficiency

Strive to have the best people and competences for the business

Areas of focus

Market

Products

Efficiency

Inwido is the leading

Nordic supplier of environ-

mentally friendly windows

and doors. On our journey

towards our ambitious

goals, we focus on consumer

insight, innovative thinking

and our ability to do more

with less.

In this overview you will

find our core strategies,

major achievements during

2013 and our focus as we

move ahead.

How we work to achieve our goals


O u r S t r a t E g y

Achievements 2013

Entered new market: Austria

Launched revised pricing strategy in Finland, Sweden and the UK

Established Pro Tec as new brand in the UK and Ireland

Decided on export-focused strategy for the Russian market

Launched new brand concept Hemmafönster in Sweden and Austria

Expanded new, innovative products, for example InVent, a ventilation concept that saves energy and improves indoor ventilation, and Hajom Step, a series of sliding doors, windows and doors with an innovative, sleek design

Developed and consolidated a common platform for three products in Finland

Launched Energy Frames in Denmark, window frames that combine energy efficiency with dynamic façade expression

Further implemented LEAN thinking in all production units. All sites have now done value stream mapping and lean self-assessment

Harmonized the group’s production sites with the same KPIs regarding productivity, lead-time and cost

Initiated further consolidation regarding product platforms

Focus 2014

Further develop sales competence

Further investigate entry opportunities in selected markets

Intensified consumer channel strategy

Prioritize pricing initiatives

Focus on strengthening positions in existing markets

Launch new products and accessories

Develop new technologies

Define and develop future product areas

Increase LEAN thinking in the organization

Increase and further coordinate group synergies

Consolidate product platforms within the group

Strive to reduce production costs by 5 percent in each factory, every year

Harmonize processes to encourage cross-border projects

When we develop new products, we always start with consumer insight. However, since Inwido

is active in several markets our consum-ers can differ in preferences, culture and economy. To manage this situation, Inwido has developed an organization that ensures one-group efficiency while enabling local flexibility.

An international group with a local edge

Our responsibility structure is decen-tralized, allowing operating companies to make the necessary decisions based on local consumer insight and market circumstances. At the corporate level, central support functions ensure that synergies, innova-tions, brands and processes are handled with a group perspective.

The support functions work closely with representatives from local businesses. This gives us a solid ground when it comes to spreading new ideas and identifying cross-border opportunities.

This organization also provides Inwido with the opportunity to work with in-novation in a disciplined and structured way. Innovation is always at the heart of a company like Inwido, and we take pride

Inwido has developed a business model that combines one-group efficiency

with local flexibility, and decisions taken at the lowest possible level.

This, in addition to our consumer-oriented strategy, makes us

unique in the European market for windows and doors.

O u r b u s i n e s s m O d e l


in being at the forefront of the industry with products such as InVent, a window that actually improves the indoor air, and Energy Frames, window frames that are both energy efficient and that allow an ar-chitecturally dynamic façade expression.

However, innovation is not just about developing smart future products. An inno-vative mind-set can lead to market innova-tions and efficiency enhancements that can significantly improve results even during

tough market circumstances. Inwido has shown several examples of this ability to do more with less over the past few years, for instance by implementing a lean produc-tion approach throughout the group.

Another essential part of the Inwido way is platform thinking. Just as in the automotive industry, different brands of windows and doors can be developed from the same platform. The advantages

of this method are many: With fewer platforms, production can be further rationalized. If more plants can handle the same type of product platforms, factory capacity may be balanced more efficiently and more easily moved else-where if necessary. Furthermore, having mutual platforms for different brands makes expansion into new markets easier. A consolidation process to reduce the number of existing platforms has begun.

Group support functions: Finance and

AdministrationHR, organization and Sustainability

Marketing, Sales and Communication

operations and development

Business areas:Sweden • • • •denmark • • • •europe • • • • Holds business units uK, Ireland, poland, Russia and Austria

Finland • • • •norway • • • •Supply • • • •

O u r b u s i n e s s m O d e l


S t r a t e g i c g r o u p p e r S p e c t i v e

da

ily

lo

ca

l o

pe

ra

tio

nS

Major trends in the home sectoru nesting for togetherness: People

seek belonging and shelter from the

turbulent times ahead.

u light and landscaping windows:

When space becomes a scarcity,

the importance of light increases.

u Making everything smarter:

technology shapes the future.

u downscaling: urbanization leads

to more compact living.

u Return of craftsmanship and tradition:

the handmade and the old is back.

u Rurbanism rules: City people long

for the countryside.

u personal energy is the new currency:

Stressed-out consumers are won-over

by solutions that simplify life, saving

them their personal energy.

More than 70 percent of our busi-ness derives from the consumer market, with many purchase deci-

sions literally being made in the consum-er’s home. Consequently, the global trends concerning people’s home environment are an important factor in our market decisions.

Inwido’s operations are affected by several different external forces, three of which in particular have a major impact on us: The increased focus on environ-mentally friendly and energy efficient solutions, the global urbanization process and the growing focus on high-tech solu-tions for the smart home.

As a consequence of this, a new trend is that alliances are forming between companies from different disciplines in the home sector. The idea is to comple-ment each other in taking a more holistic view of the home and offering complete solutions – not just products. Naturally, Inwido is deeply involved in similar processes. In 2013, Inwido acquired a small Swedish IT company as a result of this trend. Another sign of this is that, in recent years, Inwido has developed several new smart products. One of these is In-

Vent, a window with a built-in ventilation system, which has, to date, been launched in Finland and Sweden. Another example is an accessory: a blind that can be oper-ated with a smartphone. This product is planned to be launched in Denmark during 2014.

To stay on top of these complex market situations, Inwido continuously moni-tors and evaluates trends in consumption patterns, brand development and market circumstances. At least once a year, we conduct in-depth market surveys. These surveys help us gather new information to develop our business and serves as tools when we measure our performance. Our target when it comes to customer loyalty is a Net Promoter Score (NPS) of 65 percent.

In 2012, we conducted an extensive consumer trend report. The report result-ed first in a list of important trends for the home sector (see summary at left). It also indicated seven consumer archetypes (see next pages). These archetypes now serve as our marketing guides throughout the group’s operations.

We also use a similar archetype system to categorize our brands. These brand archetypes can be described as our answers

O u r m a r K E t S


Inwido’s markets differ from each other in many ways.

However, they are all largely affected by the same mega

trends that shape the future of the global home sector.

Managing the trends that shape our markets

to the consumer’s different needs. Each of our brands is mapped to them and fits into at least one. This allows for great local flexibility and lets local brands keep their identity while still fitting into the group’s brand range. Furthermore, we are always looking for new ways to spread brand awareness among our end-users. One example is how our Swedish brand Elitfönster took the opportunity to sponsor the film based on the best-selling Swedish novel “The Hundred-Year-Old Man Who Climbed out the Window and Disappeared”. Of course, in the film the old man climbs out of an Elitfönster product.

Our archetype system has another advantage. It helps us in the complex task of navigating the different market channels. A major challenge in every one of our markets is the mere number of players that can participate in the products’ path from the factory to the end-consumer: Builder merchants, DIY retailers, carpenters, “man in the van”, etc. Picking the right channels and pricing strategies for each brand is essential for success, and close knowledge of the trends that influence our consum-ers makes these decisions easier.

our largest window markets

approx. approx. inwido market value, wood, wood/alu market Market eur million share, % position

Sweden 550 90 1Denmark 590 90 2Norway 400 95 4Finland 300 100 1UK 1,950 15 5*Poland 1,100 20 3*Russia 4,500 10 3*Ireland 100 20 3*Austria 800 35 start-up

Sources: Local industry organizations information, Inwido’s estimates. * In wood.

window market overview 2013Inwido’s strongest markets are in the Nordic region, where wood and wood/aluminium products dominate. In other European countries, such as the UK and Poland, plastic products still dominate. Generally, the Nordic markets are more consolidated with two to four local players dominat-ing, while the rest of the European markets are fragmented (Read more about the local characteristics in the Business segment section on pages 16-25).

The market outlook continues to be generally weak in all markets. However, Inwido has a positive view on the demand for our products and services in the long term. There is an underlying need for new and improved homes in several European markets and the environmental debate further enhances this trend. Several possibilities also exist to grow the share of wood products in existing markets and segments and to continue capturing market shares.

Furthermore, in October 2013, Inwido entered a new market – Austria. This is our first greenfield market entry.

our marketsInwido has operations in Sweden,

Norway, Finland, Denmark,

the UK, Ireland, Poland, Lithuania,

Austria and Russia (divested

during Q1 2014).

O u r m a r k e t s


O u r m a r k e t s

Inwido AB | Annual Report 2013 14

the consumers We have identified a number of consumer archetypes*

that are applicable across all of our markets. Naturally,

real homeowners display more than one archetype

characteristic, hence the overlapping shares.

We manage our markets by knowing our consumersthe marketWe utilize a number of market

channels to ensure our products

reach the end-consumer. Below

are some of the most common.

Direct sales

Inwido u Consumer

DIY retailers

Inwido u DIY retailer u

Consumer

each market channel has its own players that facilitate

the products’ path from the factory to the end-consumer.

The biggest bunch: “My home is my castle”Born 1950-60s. They want to feel safe and relaxed, and be close to family and friends. 66% of all homeowners.

The ruralist: “Real quality of life is found in the countryside”Born 1950-60s. They prefer an older house and enjoy conversations about homes. 35% of homeowners.

The social gatherer: “Welcome to my home”Born 1970s or later. They see their homes as extensions of themselves and like to impress. 33% of all homeowners.

The economist: “Energy waste is a sin”Born 1950-60s. A smaller energy bill is a good reason to make modifications to their home. 33% of homeowners.

The status seeker: “One day my home will stun you all”Born 1970s or later. Always on the house hunt, waiting to find their own style and identity. 27% of homeowners.

The indifferent: “More important things in life than the home” Born 1950-60s. As long as the house is clean and rational, they are happy. 22% of all homeowners.

The home connoisseur: “I set the trend”Born 1970s or later. Quite obsessed house hunters with home improvement as a constant topic with friends. 13% of all homeowners.

1

2

3

4

5

6

7

* Survey conducted with consultancy agency Kairos Future, 2012.

Builder merchants

Inwido u Builder merchants u

Carpenter/small builder u Consumer

O u r m a r k e t s


We manage our markets by knowing our consumersthe marketWe utilize a number of market

channels to ensure our products

reach the end-consumer. Below

are some of the most common.

our brandsInwido has a large range of differentiated and local

brands, but each one fits into one or more of the

following brand archetypes. This allows us to manage

customers’ brand expectations in a structured way.

Value for money Low/mid end brandPromise: Basic and it works fine. Position: Often holds the position of challenger in the market.

Popular reassurance Mid-end brandPromise: High performance, excellent function and good design. Position: Often holds market leading position.

Personal statement High-end brandPromise: Demonstrating that you can afford and appreciate the very best. Position: Often a niche or a specialist brand.

Ready to use Mid-end brandPromise: Best comfort in the most comfortable way. Position: When the con-sumers wants to buy both service and products in one package/from one supplier.

B2B-brandsPosition: Serves industry customers only or is a branded distribution channel for Inwidos windows and doors.

E-commerce

Inwido u On-line retailer u

Consumer

House manufacturers

Inwido u House manufacturer u

Consumer

“Man in the van”

Inwido u Man in the van u

Consumer

Construction companies

Inwido u Construction company u

Consumer

I n w I d o s e g m e n t s


Inwido segmentsThe generally weak market trend continued in 2013. However, Inwido

strengthened its position in several areas with future potential, and is still the

top performer in the business. On the following pages, you will find in-depth

information about our performance and achievements in all of our markets,

as well as local characteristics and variations.

These four segments reflect Inwido’s regions and functions:

SupplyEurope• Poland

• Russia

• UK

• Ireland

• Austria

Nordic• Denmark

• Norway

• FInland

Sweden

I n w I d o s e g m e n t s – s w e d e n


SWEDEN

maintaining our position as market leaderThe market for windows and doors in Sweden

remains weak, illustrated by the fact that window

volumes declined by 5 percent in 2013. Inwido’s

sales in Sweden also weakened during 2013 but

we managed to defend our market-leading position.

Furthermore, innovative products and concepts

were launched during the year.

T he market for windows and doors in Sweden remains weak, illustrated by the fact that window volumes

declined over 9 consecutive quarters until the third quarter of 2013. Inwido’s sales in Sweden also weakened during 2013 but we managed to defend our market-leading position. Furthermore, innovative products and concepts were launched during the year.

Inwido is the market leader in Sweden, the group’s largest individual market. Wood and wood/aluminium products dominate, and Inwido has throughout the years established a number of well-known brands. The market itself is relatively mature and consolidated, with three dominating suppli-ers. The rest of the market consists of a sub-stantial number of small and medium-sized competitors, many of them family-owned.

The consumer market is slightly larger than the industry market for Inwido sales in Sweden. The 55 percent of the turnover that derives from the consumer market consists of end-consumers that normally live in villas or housing societies. In the industry segment Inwido sells directly to major building companies. In addition to this, Inwido has long-term supplier relationships with several manufacturers

37%

SwedenSEK 1,737 m

48%

NordicSEK 2,260 m

5%

EuropeSEK 243 m

10%

SupplySEK 468 m

Inwido Sweden in brief

Key data 2013 2012

Net sales, SEKm 1,737 1,815

Excl items affecting comparability

Operating profit (EBITA), SEKm 198 181

Operating margin (EBITA), % 11.4 9.9

Incl items affecting comparability


Operating margin (EBITA), % 11,4 8.6

Factories: Lenhovda (2), Bjurträsk,

Hajom, Vetlanda (2), Hånger, Väröbacka

Brands: Elitfönster, Outline, Hajom,

SnickarPer, Diplomat, Erafönster,

Hemmafönster

Sweden share of total net sales


I n W I d O S E g m E n t S – S W E d E n

of well-known prefabricated homes, such as Fiskarhedenvillan, Eksjöhus, Trivselhus, Myresjöhus and Götenehus.

To reach the important end-user group, Inwido uses several different channels and differentiation strategies. The builder’s merchants are one important way to reach end- users. They sell the brands Elitfönster, Outline, Hajom, SnickarPer and Diplomat. DYI stores focus on Outline, Erafönster and Diplomat. Direct sales to end-consumers are conducted via the brand Hemmafönster. Hemmafönster offers both sales and instal-lation and specifically targets home owners and housing societies through a network of sales representatives throughout Sweden.

Swedish key events 2013

u Improved profitability due to efficiency

improvements and cost reductions.

u Launch of the Hemmafönster brand,

a concept aimed at home owners

and housing societies with new a

pay-off – craftsman included – which also

helps end-users with installation services.

u In cooperation with construction company

Skanska developed green Window,

a new, innovative, low-energy product.

u Hajom launched Hajom Step, a series of

sliding doors, windows and doors with an

innovative, sleek design.

u SnickarPer launched a new series of doors.

u Elitfönster launched the Elit retro product,

a solution that combines modern energy

efficiency with classic design.

u In January 2014, mikael Carleson was

appointed new Senior Vice President of

Inwido Sweden.


Increased market share in tough marketDenmark: Inwido is the second-largest window company in the country. A few large players account for about half of the market. The remaining companies are rela-tively small and local. About 80 percent of Inwido’s sales in Denmark come from the consumer market, with renovation as a ma-jor driving market force. The industry mar-ket accounts for the remaining 20 percent of sales. The Inwido brands in Denmark are Outline, KPK, Frovin and Pro Tec.

danish key events 2013

u 2013 was a tough year in general, with the

market still focused on budget alternatives.

u government decision in december 2012 to

remove subsidies affected sales significantly

during early part of the year. a new subsidy

programme was approved by the govern-

ment in may.

u Increased market share and the best

result ever due to continued strong product

offerings.

u a new, innovative window solution, Energy

Frames, was introduced by Pro tec at the

end of 2013. Energy Frames are energy ef-

ficient while also enabling an architecturally

dynamic façade expression.

In the Nordic markets, wood and wood/aluminium-products dominate. This makes the region a traditional strong-

hold for Inwido. The markets are rela-tively mature and consolidated. Many of Inwido’s main competitors in the Nordic countries are family-owned companies.

I n W I d O S E g m E n t S – n O r d I C

NORDIC

Best results ever in denmark and FinlandThe Nordic markets continued to face tough

circumstances during 2013, mainly because of

a generally weak economy. On the bright side,

Denmark and Finland delivered their best

results ever.

Inwido nordic in brief

Key data 2013 2012

Net sales, SEKm 2,260 2,358







Factories: Farsø, Holstebro, Nykøbing,

Uglerlose, Os, Frekhaug, Ruovesi (2),

Eskopuu, Haapajärvi

Brands: KPK, Outline, Pro Tec, Frovin,

Diplomat, Lyssand, Frekhaug, Tiivi, EP, Phila

nordic share of total net sales

37%

SwedenSEK 1,737 m

48%

NordicSEK 2,260 m

5%

EuropeSEK 243 m

10%

SupplySEK 468 m

I n W I d O S E g m E n t S – n O r d I C

declining market but improved profitabilityFinland: Inwido is the market leader among the few companies that dominate the market for windows and doors. Together, they account for approximately 80 percent of the total Finnish market. About 70 percent derives from the con-sumer market. The rest is the industry segment, where Inwido partners with sev-eral well-known brands in prefabricated homes, like Kannustalo, Kastelli-talot and Designtalo. The Inwido brands in Finland are EP, Pihla and Tiivi.

Finnish key events 2013

u gained market shares and improved

profitability in a declining market generating

the best result ever.

u Consolidated platforms for three window

products, affording Inwido increased

flexibility in production.

u Fully commercialized InVent ventilation

concept, a window that combines energy

savings with indoor air quality by means

of a new technology.

u In January 2014, the main competitor

Fenestra was declared bankrupt.

new product launches and organizational improvementsNorway: In contrast to the Finnish and Danish markets, the Norwegian market is more fragmented, with Inwido as the fourth-largest supplier of windows. About 90 percent of Inwido’s Norwegian sales come from the consumer market through retailers. The rest derive from the industry market. The Inwido brands in Norway are Lyssand, Diplomat, Elitfönster and Frekhaug.

norwegian key events 2013

u decision to move door storage from

norway to Lenhovda, Sweden, due to

challenging door market.

u Launch of new Frekhaug window and

Lyssand sliding door at norway’s largest

trade fair Byg reis dej.

u Continued implementation of lean

approach in organization.

u decision in February 2014 to move the

production in Os to Lenhovda/Vetlanda

in Sweden.


I n W I d O S E g m E n t S – n O r d I CI n W I d O S E g m E n t S – n O r d I C



I n W I d O S E g m E n t S – E u r O P E

EUROPE

Prepared to explore new market possibilitiesInwido Europe reached several important ambitions

during 2013, in spite of continued tough market

circumstances. Ireland showed continued improvement

and in October, Inwido entered Austria as its first

new market, pursuing the organic growth strategy

that was established 2012. 37%

SwedenSEK 1,737 m

48%

NordicSEK 2,260 m

5%

EuropeSEK 243 m

10%

SupplySEK 468 m

Inwido europe in brief

Key data 2013 2012

Net sales, SEKm 243 267


Operating profit (EBITA), SEKm –29 -13

Operating margin (EBITA), % –12.1 -4.9


Operating profit (EBITA), SEKm –36 -16

Operating margin (EBITA), % –14.6 -6.0

Factories: Sokolka, Berwick-Upon-Tweed

Brands: Sokolka, Allan Brothers, Carlson,

Pro Tec, Hemmafönster

europe share of total net sales



T he Inwido Europe business embraces the operations in Poland, the UK, Ireland, Russia and, since October

2013, Austria. Generally, the markets are fragmented, particularly in the consumer market, with a low level of consolidation. Plastic windows still dominate the European sector. In the current markets for wood products, Inwido is generally among the top five companies. This situation offers significant potential for growth, considering Inwido’s cross-border possibilities in launches and activities.

Our current brands and production platforms makes us well-prepared to grow in present markets and able to quickly meet demand for high-quality, environ-mentally friendly wood products when new market possibilities arise.

During 2013, a new holding company was established, Inwido Europe AB, responsible for the operations in the UK, Ireland, Russia, Poland and Austria. This organizational change will further increase synergies and efficiency enhancements.

Focus on salesPoland: Plastic windows dominate in Poland, but Inwido is an established player in wood products. The market is in an increased state of consolidation, however, the fragmentation is still high. Inwido sells to the consumer market under the Sokolka brand, both through proprietary show-rooms and through external dealers. The industry segment focuses on premium residential building projects.

polish key events 2013

u Positive trend continued on cross-border

sales to other Inwido units. domestic sales

remained weak due to weak industry market.

u Production efficiency gains through lean im-

provements and new machinery equipment.

u Launch of new energy-efficient window,

thermo 80.

u Established Poland as a hub for export sales

to russian market via new distributor model.

Gained market share in challenging marketIreland: The Irish market is showing clear signs that the economy is improving. Consumer confidence is slowly on the rise, albeit at a slower pace than in the UK. In Ireland, Inwido is represented by the Carl-son brand, which offers high-performance windows and patio doors. Inwido serves both the consumer and industry markets with a significant level of repeat business and referrals.

Irish key events 2013

u gained market share under difficult

market conditions.

u Pro tec brand launched during 2013

and several new orders booked.

u dedicated focus on price management

has improved margins.


launch of pro tecUK: The UK was struck hard in the general downturn in the economy a couple of years ago, and market growth has been weak ever since. However, consumer confidence is now on the rise after several governmen-tal stimulation programs, and the effects are beginning to show especially in the south of England. The main Inwido UK brands are Allan Brothers and Pro Tec.

British key events 2013

u Slight recovery of the market for

windows and doors towards year-end,

with government stimulation programmes

as important market drivers.

u Continued growth in the targeted

middleman segment.

u new pricing strategy launched focusing

on enlarged price differentiation between

segments and channels.

u Successful re-launch of the Pro tec

brand towards architects.

new russian business modelRussia: Russia is a fast growing consumer market primarily managed through an external dealer network focusing on the Moscow and St Petersburg areas. Inwido Russia is sourcing its products from our group units in Poland and Finland. Our products are traded under the Skandiokna and Eurotiivi brands.

Russian key events 2013

u decision to change business model in

russia from local representation towards

a distributor model managed by our

Polish entity.

u Selectivity in the industrial market,

alongside an enhanced focus on the

consumer market

u geographical focus on fast-growing

mega-cities such as moscow and

St. Petersburg.

Succesful first greenfield launchAustria: Inwido made its first greenfield launch in Austria in October 2013 when a new showroom was inaugurated (photo above) in Vienna. Austria is a market with a high potential for Inwido’s premium wood/aluminium products, a product cat-egory which is gaining importance in the country. The market is partly fragmented, with four main players claiming about 45 percent of the total market.

The renovation segment is the main market force in the Austrian market. The main channel to the market is through retailers, representing some 65 percent of the market sales. However, Inwido is primarily covering the market through a direct sales approach via the Hemma-fönster brand, a branding concept that satisfies customers’ needs for quality, design and hassle-free installation.

Furthermore, the Austrian entry will give Inwido valuable insights regarding further market entries in the future.



I n w I d o s e g m e n t s – s u p p ly

SUPPLY

Continued increase in sales to external customersInwido Supply worked hard during 2013 to implement

the lean approach in its production units. In addition to

this, the segment continued with product development

and experienced a large boost in sales to external clients.

Inwido Supply consists of five special pro-duction companies that provide different kinds of components and services within

windows and doors. Principal products are aluminium profiles, glass, fittings and doors. Supply functions both as a supply organization to the Inwido Group and as an independent business that also serves other players in the industry.

The products that Inwido Supply provides are all of strategic importance to the rest of the Group’s production. By owning the manufacturing of these prod-ucts, Inwido not only secures unrestricted access to the products, but also learns and take part in the innovation processes that can be essential in developing other products within the Group. Secondly, by allowing Inwido Supply to deliver to outside players, Inwido makes sure that the products are competitive and that processes are up to market standards.

Supply key events 2013

u Significant rise in sales to customers

outside the Inwido group.

u market launch of new fire and noise-resistant

door manufactured for Inwido Sweden.

u Continued efficiency enhancements in

all production units.

u decision to merge aBC Snickerier i Hindås

with Inwido Produktion dörrar in Bankeryd,

effective from January 2014.

u decision to merge the two production units

in Sävsjö into a single unit during 2014.

37%

SwedenSEK 1,737 m

48%

NordicSEK 2,260 m

5%

EuropeSEK 243 m

10%

SupplySEK 468 m

Inwido Supply in brief

Key data 2013 2012

Net sales, SEKm 468 588 (of which Supply, SEKm) (468) (457) Excl items affecting comparability

Operating profit (EBITA), SEKm 28 42 (of which Supply, SEKm) (28) (31) Operating margin (EBITA), % 6.1 7.1 (of which Supply, %) (6.1) (6.7) Incl items affecting comparability

Operating profit (EBITA), SEKm 26 42 (of which Supply, SEKm) (26) (31) Operating margin (EBITA), % 5.5 7.1

(of which Supply, %) (5.5) (6.7)

companies: A-lackering AB, Alakiernia

Sp. z o.o., Inwido Produktion Dörrar AB,

IP Glass Sp. z o.o., Steelform Scandinavia AB.

Supply share of total net sales


• Merger of Myresjöfönster and Elitfönster• New management team

• Add-on acquisitions• Focus on brands and product portfolio

>>>>>> >>>>>>>>>>>>How it all began: 1996-99 Swedish expansion: 2000-04the Inwido journey so far


>>>>>>>>>>>> >>>>>>• Acquiring leading local companies• Sourcing synergies• Entry into selected European markets

• Consolidation• Revitalizing strategy

• Competence shift• Consumer focus emphasized

nordic expansion: 2005-08 one Group: 2009-today

Inwido strongly believes in the connection

between our employees’ competences

and the results we achieve.

Consequently, HR work is a strategic

priority for Inwido and a platform

for future success.

O u r e m p l O y e e s

Employees at Inwido are a multi- facetted group. We have people in different kinds of markets, with

different kinds of tasks, operating under different local circumstances. Further-more, our employees possess very different sets of skills and competences. They are also often separated geographically from each other because we are an internation-al company with a strong local presence. Many of our group executives have to master both intercultural leadership and “remote management” – leading from a distance, without losing the ability to gen-erate trustworthiness and teambuilding.

Inwidos three HR pillarsTo manage this complex situation from an HR perspective, our work rests on three principal pillars: Group culture, competence development and leadership. With this as its foundation, Inwido’s HR team ensures that the current workforce is continuously assessed and that future hu-man capital needs are charted – in short, it prepares the organization for long-term success, and prepares it for change.

Preparing the organization for long-term success

pIllAR one

Core values

Since 2011, Inwido applies three core val-ues to establish a foundation for a group culture. This is an important pillar because culture drives our behaviour and our behaviour drives the way we do business. The values below act as our basic guide-lines in everything we do, from develop-ing products to business negotiations.

• Consumer in mind. Our goal is to understand consumer expectations and needs and to then act on them. In order to live up to what our consumers and business associates expect of us, we need to be personally involved and behave with honesty and respect.

• Courage to improve. We are proac-tive and strive to be at the leading edge of innovation in everything we do. We pro-mote an innovative mind-set to reach our goals and always find the best solutions.

• Competent people at hand. Through the right competences, we want to engender involvement and inspira-tion, helping minds grow. We encourage each other to share knowledge and work together in teams. Through our way of working, we build motivation and trust.

pIllAR two

Competence development

Finding and developing the right people for the future is crucial to any business. Inwido uses several tools to secure compe-tence and succession:

• Encourage internal mobility. We believe in developing our existing talents, not least because they already have a strong sense of our culture. Therefore, we encourage our employees to cross borders, both geographically and professionally.

• Identify necessary skills. We repeatedly chart and analyse our present and future competence needs. In 2012, we initiated a management audit process for the business areas and business units’ management teams and their lower level managers. The audits are performed with a group-wide perspective on competence development, talent management and succession plans. The audits will be per-formed every second year.

• Strive for gender balance and cultural diversity. A workforce that reflects society as a whole makes us dy-namic and helps us develop new consumer insights. For example, one of our long-term goals is to have 25 percent women in senior positions. During 2013, we saw a slight decrease in the number of women in senior positions, but we are continuing our efforts to even out the gender balance.


O u r e m p l O y e e s

pIllAR tHRee

leadership

Strong leadership is a critical factor for suc-cess, but it is also important in the process of attracting, developing and retaining talent. These are the cornerstones in our view on leadership:

• Identifying leaders. When we recruit leaders, we take more into account than just the applicant’s formal background – we want to find people with personalities that match Inwido’s culture and values. We recruit leaders both from within and outside the organization. Our long-term goal is to fill 50 percent of our executive positions with internal candidates.

• Educating leaders. Investing in leadership education is of great importance to us, on many levels. At the top-60 level, leaders receive training that is tailor-made for Inwido, covering company culture and values, as well as team building knowledge, recruiting issues and leadership behaviour. The training is divided into three steps – one per year. Following completion of the third step, a two-day refresher course is attended at least every second year. In 2014, we plan to produce an Inwido leadership handbook, a document that can serve as a hands-on, everyday educational tool regarding vision, ambition and leadership.

• Best practice sharing. We aim to be a learning organization. Good ideas and insights should be spread across the or-ganization so others can also learn. The group’s support function managers have a great responsibility in this task. Cross-border working groups in, for example, sales and marketing, operations, and R&D meet on a regular basis. In addition to this, we use our intranet as a strategic support tool.


Major achievements in 2013u Step three of leadership training

programme implemented.

u Employee satisfaction survey conducted

for the fourth consecutive year, showing

continuing improvement in satisfaction

levels.

u new cross-border phone-meeting

structure for Hr team, enabling a better

flow of information and insights that they

can, in turn, transfer further to the right

leaders.

u Introduced exit interviews for executive

group. When individuals in leading

positions decide to leave the group,

Hr will perform a structured interview

with them, to catch positive and negative

feedback from which we can learn.

u Introduced pilot project with data-based

Hr system in Finland.

u to further build the Inwido culture, we

conducted a group-wide storytelling

challenge, encouraging employees

to share their most compelling and

interesting Inwido stories. the ones

with relevance to the whole group

were published on the intranet.

Supply

10%

Europe

14%

Nordic

45%

Sweden

31%

0

1,000

2,000

3,000

4,000

2009 2010 2011 2012 2013

number

employees per segment 2013

Average number of employees

S u S ta i n a b i l i t y

W hen, like Inwido, you work primarily with wood, sustainable thinking naturally becomes part

of the strategy. First of all, wood as a mate-rial makes environmental sense: It is renew-able, recyclable and carbon absorbing. But it also makes good business sense. In many markets, this environmental aspect dif-ferentiates us from competitors who work primarily with plastic. We develop smart products that help customers consume less energy, reducing both their environmental impact and their energy bills.

However, Inwido’s responsibility is not limited to its products. Our overall objective is that group’s operations should be characterized by great care for the environment and for our consumers and employees. We sort our responsibilities into three focus areas (see below).

A strategic view of corporate responsibilityCorporate responsibility is central for Inwido. By helping our consumers with

products that reduce energy consumption, we can contribute to a better

environment while at the same time reaching strategic advantages.

During 2013, we focused particularly on accidents, sickness leave, and waste and energy. Regarding accidents, we strive for a zero vision – we accept no accidents at all. To reach that goal we are now develop-ing a method to assess incidents, includ-ing cuts and bruises, for example. This way we may be able to identify risk areas and prevent accidents from happening.

We also initiated extensive efforts to reduce sickness leave by identifying problem areas, making action plans and increasing the level of experience sharing across the group in terms of actions and efforts aimed at reducing sickness leave.

Waste and energy is another important area – less waste means less environmental impact. It also means a way for us to save costs, which makes it a win-win situation. Several improvements have been initiated

during 2013. Our goal is to reduce waste per unit by 5 percent every year. We also measure our energy consumption per unit, and are on the right track – we can see a steady decline in our consumption.

Consolidating our product platforms is another way of further minimizing the energy and resources used in produc-tion. Furthermore, we are continuing our on-going work to minimize transports, with optimized route systems, combining transports for windows, doors and acces-sories for all of our brands.

Finally, during the year, we revised and updated the group’s Code of Conduct. Our employees need support in the form of policies and guidelines, and the Group Code now covers all aspects, from human rights and business ethics to the environ-ment and safety.


Responsibility focus areasSustainable products and businessWe use wood from sustainable forestry,

maintain a sustainable procurement process,

and produce products that contribute to

a sustainable living environment.

Safe and stimulating work environment We want our employees to feel safe and

to evolve. We therefore strive to have no

work-related accidents, to decrease sick

leave and to develop our people.

decreasing negative impact on the environment from our production Constantly reducing our impact on the

environment is a necessity. We find ways

to decrease energy consumption and

carbon dioxide emissions and we also

monitor waste carefully.

S u S ta i n a b i l i t y

A strategic view of corporate responsibility


Sustainability summary 2013u Increased share of third party-certified

wood from 80 percent to X percent,

to further ensure sustainable forestry.

u Focus on implementing lean production

with less energy consumption.

u Worked to optimize platforms for win-

dows and doors to use fewer materials,

decreasing the impact on environment.

u revised and updated the group’s Code

of Conduct. during 2014, the new code

will be communicated across the group.

u Increased security focus by mapping

minor incidents, aiming to develop

methods for accident prevention.

u the danish Inwido production unit

that manufactures the Outline brand

was elected Company of the year 2013

by the local municipality. the prize was

earned because of a social responsibility

project, Outline plus, described as a

“factory inside the factory”. In this

project, Inwido and the municipality’s

local job centre cooperate closely to

help vulnerable citizens in finding ways

back to the labour market.

Key messages from the Code of ConductHuman rights. Inwido expresses support

and respect for fundamental human rights

and will endeavour to ensure that we do

not violate the United Nations Declaration

of Human Rights.

Business ethics. Inwido requires

honesty and integrity in all of its business

and expects the same from all of its

business associates.

Work ethics. The relationship with our

employees is built on mutual respect and

dignity. We strongly believe in the connection

between the competence of our employees

and the results we achieve.

Environment and safety. Environmental

issues are an integrated part of Inwido’s

business operations and overall sustainabil-

ity shall continuously be the guiding principle

in all processes throughout the lifecycle of

our products and services.

Communication. Inwido will strive to

maintain open communications with those

affected by our operations, whether they

are employees, customers, suppliers,

investors or the public and representatives

of these stakeholders.

2012 2013

20% 15%

Share ofpurchased

wood verified by 3rd party

80% 85%

2012 2013 2012 2013

Lost daysAccidentsnumber number

0

80

100

120

140

0

700

800

900

1,000

0

3,0

3,5

4,0

4,5

5,0

5,5

2012 2013

% GOAL: Max 3%

5.25% 5.22%

wood from sustainable forestry

Accidents and lost days

total sick-leave

Inwido increased its share of purchased wood

verified by a third party from 80 percent to

85 percent. Our goal is to have 100 percent

verified by third party.

In terms of accidents, our goal is to have

none at all. We continuously try to find new

and better ways to avoid accidents.

Inwido’s goal is to have a maximum of

3 percent sick-leave. Systematic efforts to

reduce the number of days of sick leave were

made throughout the Group in 2013.

C o r p o r a t e g o v e r n a n C e


Anders C KarlssonChairman of the Board until March 2014

Born: 1950

education: Bachelor of Science in Business

and Economics, Uppsala University

Member of the Board since: 2004

Chairman 2004-2014

other assignments: Chairman of IPEG AB and

Industrial Advisor in Anders C Management SARL

previous positions: Leading positions in the AB

Nils Dacke Group, President and CEO of Bilsom

AB. Member of Skanska’s Senior Management

Team with responsibility for Industry and Europe.

Various board chairmanships and directorships

in Sweden, Denmark and the UK

Arne FrankChairman of the Board from March 2014

Born: 1958

education: Master of Science in Industrial

Engineering and Management, Linköping


Chairman since 2014

other assignments: CEO AarhusKarlshamn AB.

Chairman Contex. Board member Alfa Laval.

previous positions: Senior Advisor Schneider

Electric. Chairman and CEO, TAC. Chairman

and CEO Carl Zeiss Vision. Board member Nibe.

Senior Industrial Advisor EQT.

Benny ernstsonBoard member

Born: 1949


and Economics, Lund University


other assignments: Business consultant, Board

member of AB Gustaf Kähr, Chairman of Svensk

Husproduktion

previous positions: President of Universal

Hardwood Flooring, President and Business Area

Manager for Tarkett AB, Business Area Manager

for Nobia AB, divisional manager for Perstorp AB

and LB Invest AB

Board of Directors and auditors

Henrik lundhBoard member

Born: 1972

education: MSc Economics


Deputy Board member since 2010

other assignments: Senior Investment Manager,

Ratos AB, Board member of Scandinavian

Business Seating Group AS

previous positions: Keystone Advisers,

UBS Warburg

per FranklingBoard member

Born: 1971

education: MSc Economics and MSc Engineering


other assignments: Investment Director,

Ratos AB, Board Member of Jøtul AS, Nebula Ltd

and Nordic Cinema Group Holding AB

previous positions: McKinsey & Co, Arkwright

ulf JakobssonUnion representative

Born: 1960

Member of the board since: 2012

other assignments: Member of Inwido Sweden

AB board, chairman of GS Bjurträsk trade-union



eva S HalénBoard member

Born: 1966

education: Master of Science in Engineering,

Royal Institute of Technology, Stockholm


other assignments: Sales & Service Director

at Etac AB

previous positions: President of Electrolux Home

AB, Program Director, Consumer Innovation

Program at Electrolux AB, senior sales positions

at Electrolux HemProdukter AB, President of

Elektroservice AB/Electrolux Service

leif JohanssonBoard member

Born: 1949

education: Advanced degree in business

administration


other assignments: Deputy CEO and COO

of Ratos AB, Board member of Arcus A/S,

Euromaint AB and Profura AB

previous positions: President and CEO of

LB Invest AB and Executive Director of

PE Procuritas

Anders wassbergBoard member

Born: 1965


Chalmers University of Technology


other assignments: President and CEO of

Ballingslöv International AB, Board member of

AB Gustaf Kähr

previous positions: President of AB Gustaf Kähr,

President of Beijer Byggmaterial AB

Robert wernerssonUnion representative

Born: 1965

Member of the board since: 2012

other assignments: Member of the board

Inwido Produktion AB and Elitfönster AB,

chairman of Unionen Lenhovda

Annika nicklassonUnion representative

Born: 1968

deputy member of the board since: 2012

other assignments: Chairman GS section 4,

Eastern Småland trade-union, chairman of GS

Vetlanda trade-union

tony JohanssonUnion representative

Born: 1967

deputy member of the board since: 2012

other assignments: Member in the GS section 3

Halland/Kronoberg trade-union

eva Melzig HenrikssonAuthorized Public Accountant, KPMG AB

Born: 1961

auditor for inwido aB since: 2007



Group management

Håkan JeppssonPresident and Chief Executive Officer, CEO

and acting Senior Vice President, Europe

Born: 1961



employed since: 2009

Member of Group Management since 2009

other assignments: Chairman of Malmö FF,

Board member of Handelsbanken Malmö City and

member of the Advisory Council, Lund University

School of Economics and Management

previous positions: President & CEO of BE Group

AB (2002-2009), President of Papyrus AB (1999-

2002), where he has also been a Board member

peter welinChief Financial Officer, CFO

Born: 1973

education: Master of Arts, Economics,

Lund University



previous positions: Business Area manager

within Inwido Sverige AB (2003-2004), President

of Allmogefönster i Sverige (2000-2003)

Jonna opitzSenior Vice President, Marketing, Sales & Communication

Born: 1969

education: Bachelor of Arts, Media and

Communications, University of Växjö



previous positions: Vice President Corporate

Communications for ReadSoft (2006-2009).

Corporate Communications Manager for

PartnerTech (2001-2006)

Mikael CarlesonSenior Vice President, Sweden

Born: 1962

education: Bachelor, Economics, Lund University



previous positions: Cardo, President Region

EMEA & Global Manager Service Operations Cardo

Flow solutions (2009-2011), Höganäs, President

Region Europe (2008-2009), VP Alfa Laval Process

Technology (2002-2008)

lena wessnerSenior Vice President, Human Resources, Organisation & Sustainability

Born: 1961





other assignments: Board member of

Resources On Internet Sweden AB

previous positions: HR Manager E.ON ES

(2009-2010), Head of HR Operations Sony

Ericsson Mobil Communication AB (2006-2009)

lars peterssonSenior Vice President, Operations & Development

Born: 1969

education: Master of Science in Engineering and

Management, Chalmers University of Technology.

Sales and Marketing, HEC Lausanne.



other assignments: Partner and Board Member

Ergosafe AB

previous positions: Vice President Commercial

and EMEA Divisions Tarkett, Managing Director

Tarkett AB (2004-2013). General Manager South

Sweden, Flextronics (1998-2003)



espen HoffSenior Vice President, Norway

Born: 1965

education: Business and Administration,

Handelsakademiet/Handelshöyskolen BI.



previous positions: Managing Director/CEO

Byggmakker Norge AS (2006-2012),

Managing Director RIMI Norge/Vice President

ICA Norge AS (2002-2006)

timo luhtaniemiSenior Vice President, Finland

Born: 1963


Helsinki University of Technology and Master

of Business Administration, Helsinki School of

Economics



other assignments: Board member of Siili Solu-

tions AB, Päätoimija AB and Träproduktindustrin rf

previous positions: President of Siili Solutions AB

(2005-2006), President of Endero Abp (2001-2005)

Mads Storgaard MehlsenSenior Vice President, Denmark

Born: 1971

education: Master of Arts, Economics,

Aalborg University



other assignments: Chairman of the board of

Celebert A/S, Chairman of the board of Dansk

Profilteknik A/S, Chairman of the Board of Dansk

Byggeri (”Industry section” and ”Danish Building

materials”)

previous positions: Board assistant, Aalborg

Industries A/S (2004-2007), Authorised Public

Accountant at KPMG (1993-2004)



2013 Financial Statements



The Board of Directors and the President of Inwido AB, corporate identity number 556633-3828, domiciled in Sweden and with registered offices in Malmö, hereby present their annual report and consolidated annual accounts for the 2013 financial year.

Group RelationshipsInwido AB is the Parent Company for the Inwido Group. Since December 2004, Inwido AB has been a subsidiary of Ratos AB (publ), corporate identity number 556008-3585.

operationsInwido is Northern Europe’s largest producer of innovative, environmentally friendly window and door solutions. The company has operations in Sweden, Denmark, Finland, Norway, Poland, Russia, Austria, the UK and Ireland, as well as exports to a large number of other countries. Inwido’s primary segments are Sweden, the Nordic region, Europe and Supply, which in turn comprise six business areas.

Inwido operates in both the consumer and industry markets. In 2013, sales to the consumer market accounted for about 70 percent of the total, while sales to the industrial market accounted for the remaining approximately 30 percent.

The consumer market is dominated by residential renovation, remodelling and extension projects. Sales to industry customers, such as major building companies and manufacturers of prefabricated homes, are generally conducted through framework agreements or larger volumes for specific building projects.

development of the Group’s operationsOver the year, the continued weak economic trend in general had a subduing effect on private consumption, which affected consumer sales negatively. The uncertain economic trend has also had a negative impact on sales to the industry market. Mar-ket volumes in the Nordic Region have fallen dramatically since 2008, with Sweden and Denmark being impacted hardest with volumes declining 25 and 40 percent respectively. At the same time, Inwido has defended its market leading position through successful sales efforts and a continuously improved customer offering. During 2013, Inwido was able to report an improved operating margin (EBITA) despite lower sales. Sweden, Denmark and Finland in particular reported improved profitability.

In recent years Inwido has made a number of structural changes to its operations. This work will continue as part of our strategy to achieve synergies in a gradually more coordinated group. Since the current strategy was launched in 2009, Inwido has improved its gross margin by a couple of percentage points, primarily as the result of a more efficient production structure and the cost savings that have been implemented.

It was decided in the fourth quarter of 2013 to discontinue ownership of the distribution in Russia. A variety of measures have been taken in Russia in recent years to turn the negative performance around, including the closure of the Murmansk factory in 2011. Inwido has made the assessment that our profitability requirements cannot be realistically met within the near future, as this would require significant investments in marketing and personnel. The aim is instead to establish a sales

partnership with exports to Russia from existing Inwido units. In the fourth quarter, a decision was also made to close the

door storage facility in Stokke, Norway and move it to the exist-ing storage facility in Lenhovda.

As part of the process of continuously enhancing the effi-ciency of our production structure, work has begun to reduce the number of product platforms. An initial step was taken in 2013, when three product platforms were consolidated in Finland.

In Sweden, Hemmafönster was launched in 2013. Hemma-fönster is a window and door concept targeting house owners and tenant-owner housing associations and includes installation.

During 2013, Inwido commenced its first greenfield venture and in October a sales office and showroom were opened in central Vienna, Austria under the Hemmafönster brand. The Austrian market has a considerable proportion of wood and wood/aluminium products.

As part of Inwido’s strategy to increase its presence in the consumer market by continuously being able to offer products and solutions for enhanced well-being, a number of product launches took place during the year within the new IQ concept. Products in this concept are combined with smart technologies. Among other ventures, the InVent concept was launched in Fin-land. InVent is a ventilation concept – a window that combines energy savings with improved efficiency indoor air. For 2014 we have intensified our focus on developing even better and smarter products. Some of these were exhibited at the Stock-holm Furniture Fair, in February 2014, where we launched new smart windows, doors and sliding doors under the IQ concept for Hajom’s and SnickarPer’s products.

The process of establishing a Group-wide business culture and shared values continued in 2013. Inwido’s Great-place-to-work index improved for the fourth consecutive year. Creating a secure and stimulating working environment is an on-going process and, in 2013, this included the revision of Inwido’s Code of Conduct. The Code of Conduct now contains all relevant aspects, from human rights and business ethics to the environ-ment and safety.

Inwido’s sustainability work during 2013 focused primarily on accidents, absence due to illness, waste and energy.

With regard to accidents, Inwido is striving towards the goal of zero accidents. To achieve this objective, we are now develop-ing a method for the assessment and follow-up of accidents. In this way, we can identify areas of risk and prevent accidents from occurring. We also commenced extensive efforts to reduce absence due to illness by identifying problem areas, developing plans of action and increasing knowledge sharing within the Group with regard to measures and ventures to reduce absence due to illness.

Waste and energy represent other important areas – less waste means less impact on the environment. This is also a way for us to save money – making it a win-win situation. Several improvement measures were initiated during 2013. Our objective is to reduce the amount of waste per unit by 5 percent. We also measure our energy consumption per unit and are able to observe a steady decline in our consumption.



Directors’ Report 2013

Consolidating our product platforms is another way of further minimising the energy and resources used in produc-tion. In addition, we are continuing our on-going work to reduce transports by means of an optimized route system and by combining transports for windows, doors and accessories for all of our brands.

Corporate acquisitions and divestmentsIn the first quarter of 2013, Inwido Denmark A/S acquired shares in the part-owned company Frovin Vinduer og Døre A/S cor-responding to 30 percent of the total number of shares. Inwido Denmark A/S subsequently holds 100 percent of the shares in Frovin Vinduer og Døre A/S.

Net sales and profitConsolidated net sales amounted to SEK 4,300 million (4,607) for 2013. Adjusted for currency and structural effects, this cor-responds to a decline of 3 percent.

In the Swedish segment, net sales fell by 4 percent while net sales in the Nordic segment reported a decline in sales of 3 percent, adjusted for currency effects. In the European segment, adjusted net sales decreased by about 6 percent. The Supply seg-ment reported an increase in net sales of 2 percent.

Operating profit (EBITA) rose to SEK 299 million (288). The operating margin (EBITA) increased to 7.0 percent (6.2). Operat-ing profit for 2013 was burdened by SEK 51 million (70) mainly attributable to restructuring expenses in Norway, Russia and Poland. The operating margin (EBITA) increased to 8.1 percent (7.8), despite a decline in sales of 3 percent.

Net financial items amounted to SEK -79 million (-41). Lower interest-bearing net debt and low market interest rates re-sulted in lower interest expenses. At the same time, the financial net was affected by negative currency effects. The Group’s profit before tax amounted to SEK 220 million (246) and profit after tax amounted to SEK 150 million (172).

Cash flowCash flow from operating activities was SEK 376 million (248). Cash flow before changes in working capital was in line with the preceding year and the higher cash flow was mainly linked to improved management of working capital. Net investments for the year amounted to SEK -74 million (109). Total amortization, depreciation and impairment for the period amounted to SEK 108 million (113).

Financing activities generated cash flow of a negative SEK 323 million (541), primarily attributable to a reduction in finan-cial liabilities.

Financial statusAs per 31 December 2013, consolidated net debt totalled SEK 971 million (1,131). At year-end, equity amounted to SEK 2,539 million (2,367). At the end of the year, the equity/assets ratio was 54 percent (49) and the net debt/equity ratio was 0.4 (0.5). Consolidated cash and equivalents were SEK 99 million (283) at the end of the year. Non-appropriated funds, including unexer-cised credits, amounted to SEK 558 million (553).

StaffThere was an average of 3,077 (3,287) employees in the Inwido Group during the year.

Inwido’s employees are a multi-faceted group. We have em-ployees in different markets, with different kinds of duties and who work under different local conditions. Our employees also have different talents and skills.

Efficient HR work forms an important part of our strategy. To achieve our ambitious business targets, we must make sure we have the right employees for both current and future assign-ments. Our HR work is based on three principal areas: corporate culture, competence development and leadership.

Core values – Since 2011, Inwido applies three core values that form the foundation of a shared corporate culture. These values act as basic guidelines to how we should conducts busi-ness: consumer in mind, courage to improve and competent people at hand.

Competence development – Attracting and developing the most competent, committed and best suited employees for the future is decisive for all companies. Inwido uses several tools to secure competence and succession, including encouraging internal mobility, identifying necessary skills and working for an even gender distribution and cultural diversity.

Leadership – strong leadership is a decisive success fac-tor, particularly in a changeable and growing organization like Inwido. In the recruitment of managers both inside and outside the organization, we place considerable emphasis on attributes beyond the applicant’s formal background. Training our manag-ers is another important factor. In 2011, we initiated a tailored management programme to train and support Inwido’s current and future leaders. With time, this programme will create a Group-wide management platform.

In 2013, an employee survey was carried out for the fourth consecutive year.

environmentThe Group ascribes great importance to adhering to and exceed-ing legal requirements in the area of the environment and con-forming to the Group’s environmental policy. Of the Group’s to-tal net sales in Sweden, a large proportion derive from activities requiring permits or compulsory registration. The Group’s other production units in Denmark, Finland, Norway, Poland and the UK have been inspected by local environmental authorities and meet local environmental legislation.

The subsidiary Inwido Sverige AB and its subsidiaries, as well as Inwido Supply AB and its Swedish subsidiaries, are affili-ated to an active and goal-oriented environmental programme. Inwido’s Swedish units operate in a network, working together on environmental issues and improvement projects. Inwido Sweden’s production units in Vetlanda and Lenhovda have been certified in accordance with ISO 14001 since 1999.

All production units within Inwido Sweden conduct opera-tions requiring permits or registration in accordance with Swedish environmental legislation. The obligation to undergo testing ap-plies to the use of solvents and the operation of solid fuel furnaces.



Inwido Supply’s production units at Bankeryd and Sävsjö con-duct operations requiring permits or registration in accordance with Swedish environmental legislation. In Sweden, Inwido con-ducts operations requiring permits at five operational locations: Lenhovda in Kronoberg County, Vetlanda, Hånger, Bankeryd and Sävsjö in Jönköping County. The permit for Lenhovda ap-plies to the manufacture of windows and sealed glass panes. The permit for Vetlanda applies to the manufacture of windows. The permits for Hånger and Bankeryd apply to the manufacture of doors. The probationary permit for Sävsjö applies to the pre-treatment and powder coating of aluminium profiles. Operations requiring registration are conducted at four sites: Vetlanda in Jönköping County, Bjurträsk in Västerbotten County, Hajom in Västra Götaland County and Väröbacka in Halland County. The facilities for which permits are required

adhere to the decisions made by the environmental committees of the relevant municipalities.

The operations primarily affect the environment through emissions of solvents and dust to the atmosphere as a result of surface treatment and impregnation, as well as the operation of solid fuel furnaces. Solvent-filtration plants have been installed in Lenhovda, Vetlanda, Hånger and Bankeryd. In Hajom and Väröbacka, solvents are used to such a minor extent that filtra-tion is not required. At the other facilities, surface treatments are carried out using water-based paints and filtration is not required. Flue-gas filtration to reduce dust emissions has been installed at all operation facilities.

Current permits cover the production volumes budgeted for 2014.

Risks and risk managementThe significant risks that have been identified are managed continuously at various levels in Inwido and in its overarching strategic planning. This allows Inwido to identify and manage risks at an early stage. In addition, the Group

continuously reports risk related matters to the Board of Inwido, which bears the ultimate responsibility for the company’s risk management. Inwido divides risks between financial, operational and external risks.

Financial risksRISK MAnAGeMent/e xpoSuRe

Financial credit risks

In the Group’s treasury management, credit risk mainly occurs as counterparty risk in connection with futures contracts and other derivative instruments. The Group is a net borrower and surplus liquidity is primarily to be used to amortize external loans.

In treasury management, credit risks are limited by engaging counterparties with a high credit rating who chiefly participate in the Group’s mid and long-term financing.

In 2013, no credit losses were incurred as a consequence of investments in cash equivalents or financial instruments.

Currency risks

Transaction exposureThe Group is exposed to currency risk in the form of transaction exposures arising through purchases and sales of goods and services in currencies other than each subsidiary’s local currency.

The Group applies a finance policy adopted by the Board of Directors.

In the event that the transaction exposure for an individual business unit should exceed EUR 500,000 on an annual basis, 40-60 percent of the individual currency concerned shall be hedged with a maturity of up to 6 months.

Translation exposureWhen subsidiaries’ balance sheets in local currency are trans-lated into SEK, a translation difference arises as a consequence of the current year being translated at a different closing rate than the previous year. The income statement is translated at the average exchange rate for the year while the balance sheet is translated at the exchange rate as per 31 December. The translation exposure forms the risk represented by the translation difference as the change in equity.

The Group does not hedge this risk. However, an analysis of these risks is made once a year to ensure that they do not in-crease. See Note 2.

Interest rate risks

Interest rate risk represents how changes in market interest rates affect cash flow and the Group’s earnings, as well as the value of financial instruments.

Management of the Group’s interest exposure is centralized, meaning that the central finance function is responsible for identifying and managing this exposure. A minimum of 50 percent of gross borrowing shall be at variable interest rates. The average period of fixed interest on the Group’s gross borrowing may not exceed three years.



Financial risks cont.RISK MAnAGeMent/e xpoSuRe

Financing and liquidity risks

Financing and liquidity risks represent the risk that it will be difficult or costly to refinance loans reaching maturity or that it will not be possible to meet payment obligations due to insuf-ficient liquidity or difficulties in obtaining external financing.

To safeguard adequate payment capacity, Inwido’s objective is to secure sufficient liquidity or credit facilities. In addition, to reduce financing risk, maturity dates shall be evenly distributed over time to avoid a large proportion of loans maturing for repay-ment at a single point in time. The Group’s debt/equity ratio and forecasts of its liquidity are followed up on an on-going basis.

Operational risksRISK MAnAGeMent/e xpoSuRe

Risk of losses on trade and other receivables

The risk that the Group’s customers fail to meet their payment obligations for trade and other receivables constitutes a customer credit risk.

Credit checks are performed on the Group’s customers with information regarding their financial status being obtained from various credit information agencies. In certain cases, the risk of losses on trade and other receivables is mitigated by means of credit insurance. Bank guarantees or other sureties are required of customers with low credit ratings or insufficient credit history. The assessment of credit risk is primarily managed by each subsidiary.

As per the balance sheet date, there were no significant concentrations of credit exposures. See Note 2.

Refund and product liability risks

Inwido could incur expenses in correcting faults in delivered products and, in certain cases installation, and could be found liable for damages to individuals or property.

Inwido seeks to limit these risks by following locally adapted procedures for quality assurance and through extensive test-ing of the Group’s products. In 2013, compensation expenses incurred as a consequence of complaints amounted to approxi-mately 2 percent of net sales.

Risk of loss of key expertise

The loss of key individuals could negatively affect the Group’s earning capacity.

Inwido works actively to safeguard regeneration and identify future leaders. Senior executives are regularly assessed to iden-tify needs vis-à-vis on-going in-service training and competence development. In addition to applying a market-based salary structure, Inwido also uses various forms of incentives for key individuals within the Group.

Risk of operational interruptions

Inwido could be affected by operational interruptions due to equipment failure, fire, strikes or natural disasters, for example.

Together with its insurance advisors, Inwido conducts regular risk inspections of its production units. The results of these inspections are used to implement preventative measures to re-duce the risk of disruptions and accidents in operations. Inwido is able to transfer production to other units, mainly within each respective market, in the event that a unit becomes inoperative.

Inwido also strives to maintain well-functioning coopera-tion with local trade union organizations, thereby reducing the risk of conflicts and strikes in which Inwido is directly involved.

Risk associated with product development

Inwido’s sustained earnings and competitive vigour is to some extent dependent on its capacity to develop and sell new innovative products and solutions demanded by customers.

Through Inwido’s strong market presence, shifts, trends and new requirements from customers and other stakeholders are caught, providing a basis for the focused, on-going development of the product portfolio.

Business development risks

Risks associated with business development such as corporate acquisitions and the Group’s long-term strategic focus.

Inwido establishes and develops procedures for the analysis, implementation and review of acquisitions, including due diligence. Risks associated with the Group’s long-term planning are primarily addressed once a year when the Board adopts the Group’s strategic plan.



Operational risks cont.RISK MAnAGeMent/e xpoSuRe

Corporate governance and policy risks

In the event of inadequate internal control, the Group risks being exposed to a crisis of confidence.

Inwido develops internal control procedures on an on-going basis. Examples include the division of duties between the Board and the President and reporting instructions.

Insurance risks

These risks involve the expenses that Inwido could incur due to inadequate insurance cover for products, property, disruptions, liability, transport, life and pensions.

The Group strives to maintain insurance cover that keeps risk at an acceptable level for a Group of Inwido’s size and that is, at the same time, cost-efficient. At the same time, continuous ef-forts are made to minimize risks in operations through proactive measures. Insurance cover is also maintained for Inwido’s senior executives and Board members. Inwido takes the view that its in-surance protection is appropriate for the risks normally associated with its operations. There is naturally no guarantee that Inwido will not incur losses beyond the scope of its insurance cover.

Customer dependency risk

Inwido operates in a market that is exposed to competition and existing customers may choose to use competing suppliers.

Inwido has a broad customer structure divided between the consumer and industry markets, as well as a presence in a number of different geographical markets.

External risksRISK MAnAGeMent/e xpoSuRe

Market risk

Demand for Inwido’s products is primarily affected by activity in the market for residential building. The new building market is more cyclical than the renovation market. In a general economic downturn with lower building activ-ity, demand for Inwido’s products and services could decrease. Political decisions can also influence customer demand indepen-dently of economic trends (see Political decisions below).

Inwido maintains a presence in a large number of countries and in different market segments, thereby balancing, to a certain extent, various country-specific risks. Inwido’s operations are also affected favourably by the debate on climate change and increasing demands for energy-efficient housing, which are not particularly affected by economic trends.

Competition

Inwido operates in markets that primarily comprise a large number of local competitors but that also include companies that operate internationally.

Today, Inwido is Europe’s largest supplier of environmentally friendly window and door solutions with a strong market posi-tion in most of its current markets. Inwido’s size allows it to derive economies of scale and benefit from best practices in areas including purchasing, product development, production and processes. Inwido constantly strives to meet customer needs with new, innovative, energy-efficient and attractively designed products. This is one of the most important prerequisites for the Group’s future competitiveness.

prices for raw materials

Inwido relies on on-going deliveries of wood, glass, aluminium, fittings, etc. Inadequate supply could entail increased expenses and, in certain cases, disrupted production. Normally, there is a certain displacement between purchase and sales price adjust-ments due to agreements entered with suppliers and customers. Altered price levels affect Inwido’s purchasing prices with a delay of up to six months.

Inwido has built up its relations with key suppliers over many years. Inwido’s central purchasing organization coordinates pur-chases of the major material categories. By centralising its pur-chasing, Inwido is able to enhance its negotiating position and cut expenses for materials. To safeguard supply and to increase its control of the value chain, the Inwido Group also includes a number of companies that produce sealed window panes and fittings and refine aluminium profiles.



External risks cont.RISK MAnAGeMent/e xpoSuRe

political decisions

Political decisions can affect demand positively or negatively. This includes changes in tax legislation in countries where Inwido operates. Changes in taxation and subsidies for homes and residential building can, in the long term, affect demand for Inwido’s products and services. In addition, changed standards and regulations regarding residential building can impose re-quirements for changes in the product range in specific markets.

The Group mostly operates in countries where the risk of political decisions that would drastically change its market conditions is judged to be relatively low. In addition, Inwido is active in local industrial organizations that often provide Inwido with early insight into external changes that may affect its business operations.

Risk of legal disputes

This risk involves the expenses that the Group could incur as a consequence of pursuing legal processes, expenses associated with settlements and expenses for any damages it is required to pay.

Inwido’s assessment is that there are currently no disputes that could have a material impact on the Group’s financial position. Where necessary, Inwido makes provisions for perceived risks of possible losses.

environmental risks

Inwido’s operations mainly affect the external environment through noise and emissions of solvents to the atmosphere, as well as through transport emissions. Inwido could incur in-creased expenses in adjusting to new or stricter environmental legislation. This could also involve soil decontamination at currently or previously owned industrial facilities, waste management, securing continued permits, etc.

Inwido’s operations cannot be described as having a heavy impact on the environment. The Group works in accordance with and adheres to national and international environmental legislation.

Significant events after the end of the yearEffective from 3 January 2014, Inwido Denmark A/S acquired the rights to the brand and product Xframe through the acquisi-tion of the associated assets and liabilities. The acquisition includes the rights to the Xframe product, including the produc-tion equipment. The product line will be integrated into the Pro Tec brand. Xframe has a unique window design with insulating characteristics and top-class energy values in the Danish market.

In January, Inwido’s principal competitor in Finland was declared bankrupt.

In February, Inwido resolved to move the production of windows at its manufacturing unit in Os, Norway to Lenhovda/Vetlanda in Sweden. The motivation behind the decision is to safeguard the long-term position in the Norwegian market of the Lyssands brand by improving the cost structure while retaining quality and lead times.

On 3 March 2014, Inwido Denmark A/S signed an agreement regarding the acquisition of 100 percent of the shares and votes in the operations JNA Vinduer & Døre A/S and Säästke OÜ with sales of approximately DKK 155 million in 2013. The acquisi-tion also includes three subsidiaries to Säästke OÜ (SparVinduer ApS, SpareVinduer AS and SparFönster AB). The acquisition is in line with Inwido’s strategy of seeking growth both organically and through acquisitions. The acquisition is also motivated by the ambition of being represented in the growing market for windows and doors on the Internet – an area where Inwido cur-rently needs to grow. The acquisitions are conditional on the ap-proval of the competition authority and the takeover is expected to take effect as of April 2014.

On 7 March 2014, an agreement was signed regarding the divestment of Inwido’s operations in Russia to a private investor. The divestment is expected to be completed in the third quarter of 2014.

prospects for 2014Challenges remain in the global economy, although overall con-sumer confidence in Inwido’s markets has strengthened slightly. There are signs suggesting an economic recovery going forward, which would benefit export-dependent Nordic markets and, in the long term, demand for new windows and doors in both new construction and renovation of existing housing stock.

parent CompanyThe Parent Company is a public limited company with regis-tered offices in Sweden. The operations of the Parent Company consist of joint Group functions and ownership of the subsidiar-ies. The loss after financial items amounted to SEK 102 million (10) and consisted primarily of the net of income from intra-Group services less administration and interest expenses.

ownership structure Ratos AB (publ) holds 96.7 percent of the capital and votes, while senior executives in the Inwido Group together hold 3.3 percent of the capital and votes.

Proposed treatment of the profit or loss of the parent CompanyThe Board of Directors and President propose that the available profit, SEK 1,403,086,000, be distributed in the following manner:

Brought forward to new account . . . . . . SEK 1,403.1 million Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . SEK 1,403.1 million

The profit and position of the company and Group in other regards are presented in the financial statements below and in the supplementary disclosures.





Consolidated statement of comprehensive income1 January – 31 december, SeKm note 2013 2012

Net sales 3 4,300.0 4,607.4Cost of goods sold 9 -3,324.0 -3,588.6

gross profit 976.0 1,018.8

Other operating income 5 13.8 32.6Selling expenses 9 -405.4 -421.0Administrative expenses 8, 9 -244.1 -267.6Research and development expenses 9 -27.3 -17.5Other operating expenses 6, 9 -14.4 -58.6Participations in the profit/loss of associated companies and joint ventures 9 0.5 1.0

operating profit 7, 24 299.1 287.7

Financial income 10 9.7 36.7Financial expenses 10 -88.5 -78.0

net financial items -78.9 -41.3

profit before tax 220.3 246.4

Taxes 11 -70.7 -74.0

profit after tax 149.6 172.4

other comprehensive incomeItems reallocated to, or that can be reallocated to profit for the yearTranslation differences, foreign operations 44.7 -31.7Tax attributable to other comprehensive income - -

other comprehensive income for the year 44.7 -31.7

comprehensive income for the year 194.3 140.7

profit for the year attributable to:Parent Company shareholders 149.5 170.8Non-controlling interests 0.1 1.6

149.6 172.4

comprehensive income for the year attributable to:Parent Company shareholders 194.2 139.2Non-controlling interests 0.1 1.5

194.3 140.7



Consolidated statement of financial positionas per 31 december, SeKm note 2013 2012

assets 2Other intangible assets 12 2,975.9 2,928.5Tangible assets 13 573.8 599.6Participations in associated companies and joint ventures 14 5.5 5.3Financial investments 16 20.9 20.1Deferred tax assets 11 57.0 51.0Other non-current assets 16 15.2 14.5

total non-current assets 3,648.3 3,619.0

Inventories 17 408.6 416.0Current tax assets 18.5 17.2Trade and other receivables 16 389.4 450.4Receivables from Group companies 16 89.7 76.3Prepaid expenses and accrued income 44.3 34.3Other receivables 16 54.9 64.7Cash and equivalents 16, 18 76.6 98.7

total current assets 1,082.0 1,157.6

total assets 4,730.3 4,776.6

Shareholders’ equity 19Share capital 231.9 231.9Other capital provided 943.4 943.4Other reserves -40.3 -85.0Profit brought forward including profit for the year 1,403.1 1,272.5

Shareholders’ equity attributable to parent company shareholders 2,538.1 2,362.8

non-controlling interests 1.0 4.3

total shareholders’ equity 2,539.1 2,367.1

liabilities 2Non-current interest-bearing liabilities 20 845.1 1,028.4Deferred tax liabilities 11 67.5 74.2Other liabilities 16.7 20.9

total non-current liabilities 929.3 1,123.5

Other current interest-bearing liabilities 20 227.9 224.1Other provisions 22 68.7 31.3Trade and other payables 311.3 348.6Liabilities to Group companies 116.3 168.6Current tax liabilities 66.4 49.6Other liabilities 134.7 131.0Accrued expenses and prepaid income 23 336.6 332.8

total current liabilities 1,261.9 1,286.0

total liabilities 2,191.2 2,409.5

total equity and liabilities 4,730.3 4,776.6 For information on the Group’s pledged assets and contingent liabilities, see Note 25.



Consolidated statement of changes in shareholders’ equity Shareholders’ equity attributable to Parent Company shareholders

other capital non- Share contri- translation retained controlling total 2012, SeKm capital butions reserve earnings total interests equity

equity, opening balance, 31 Jan. 2012 231.9 943.4 -53.4 1,101.7 2,223.6 3.6 2,227.2

profit for the year 170.8 170.8 1.6 172.4

other comprehensive incomeChange in translation reserve for the year (exchange rate difference) -31.6 -31.6 -0.1 -31.7

other comprehensive income for the period -31.6 -31.6 -0.1 -31.7

Total comprehensive income for the period, excluding transactions with the company’s owners -31.6 170.8 139.2 1.5 140.7

transactions with the group’s ownersUnconditional shareholder’s contribution 76.2 76.2 76.2Group contributions paid -103.5 -103.5 -103.5Tax attributable to Group contributions 27.3 27.3 27.3Dividend 0.0 0.0 -0.9 -0.9Acquisition/divestment of participation in non-controlling interests 0.0 0.0 0.0 0.0Other changes in net wealth 0.1 0.1

total transactions with the group’s owners - - - 0.0 0.0 -0.8 -0.8

equity, closing balance, 31 dec. 2012 231.9 943.4 -85.0 1,272.5 2,362.8 4.3 2,367.1

Shareholders’ equity attributable to Parent Company shareholders

other capital non- Share contri- translation retained controlling total 2013, SeKm capital butions reserve earnings total interests equity

equity, opening balance, 31 Jan. 2013 231.9 943.4 -85.0 1,272.5 2,362.8 4.3 2,367.1

profit for the year 149.5 149.5 0.1 149.6

other comprehensive incomeChange in translation reserve for the year (exchange rate difference) 44.7 44.7 0.0 44.7

other comprehensive income for the period 44.7 44.7 0.0 44.7

Total comprehensive income for the period, excluding transactions with the company’s owners 44.7 149.5 194.2 0.1 194.3

transactions with the group’s ownersUnconditional shareholder’s contribution 89.7 89.7 0.0 89.7Group contributions paid -116.3 -116.3 -116.3Tax attributable to Group contributions 26.6 26.6 26.6Dividend 0.0 0.0 0.0 0.0Acquisition/divestment of participation in non-controlling interests -18.9 -18.9 -3.6 -22.5Other changes in net wealth 0.2 0.2

total transactions with the group’s owners - - - -18.9 -18.9 -3.4 -22.3

equity, closing balance, 31 dec. 2013 231.9 943.4 -40.3 1,403.1 2,538.1 1.0 2,539.1



Consolidated cash flow statement1 January – 31 december, SeKm note 2013 2012

operating activities 18Profit before tax 220.3 246.4Adjustment for items not included in cash flow: Depreciation/amortization and impairment of assets 107.9 112.8 Provisions 38.7 -24.2 Unrealized exchange rate differences 26.8 -5.1 Capital gains -3.6 44.8 Change in provision for synthetic option -1.1 -13.2- Changes in value of derivatives -4.9 -0.4- Participations in profit/loss of associated companies -0.5 -1.0- Participations in taxes of associated companies 0.1 0.2Income tax paid -45.5 -23.3

cash flow from operating activities before changes in working capital 338.2 336.9

cash flow from changes in working capitalIncrease(-)/decrease(+) in inventories 4.9 5.4Increase(-)/decrease(+) in operating receivables 72.3 3.4Increase(+)/decrease(-) in operating liabilities -39.9 -97.8

cash flow from operating activities 375.5 248.0

investing activitiesAcquisitions of tangible non-current assets -73.3 -75.8Divestments of tangible non-current assets 8.4 2.3Acquisitions of intangible assets -14.2 -11.4Divestments of intangible assets - 0.7Divestments of subsidiary companies/businesses, net effect on liquidity 4 - 190.5Divestments of financial assets 4.7 2.9

cash flow from investing activities -74.4 109.3

Financing activitiesAcquisition of non-controlling holding 4 -18.9 -Dividends paid to non-controlling holding - -0.9Loans raised 48.1 29.1Amortization of loans -253.8 -508.7Amortization of leasing liability -6.2 -9.0Shareholders’ contributions received 76.3 145.0Group contributions paid -168.3 -196.8

cash flow from financing activities -322.8 -541.2

cash flow for the year -21.8 -183.9Cash and equivalents at beginning of the year 98.7 282.7Exchange rate difference in cash and equivalents -0.3 -0.1

cash and equivalents at end of the year 76.6 98.7

Interest paid -51.9 -71.0Interest received 2.7 9.1



Income statement, Parent Company1 January – 31 december, SeKm note 2013 2012

Net sales 3 54.8 55.8

gross profit 54.8 55.8

Administrative expenses 8 -59.2 -61.7Other operating income 5 0.6 19.4Other operating expenses 6 -3.1 -1.1

operating profit/loss 7 -6.9 12.4

result from financial items:Profit from participations in Group companies 10 -73.3 -48.7Profit from participations in associated companies 10 0.0 0.0Gain from other securities and receivables that are non-current assets 10 0.0 0.0Other interest income and similar profit items 10 23.1 42.0Interest expense and similar profit items 10 -45.1 -15.9

profit after financial items -102.2 -10.2

appropriationsGroup contributions received 181.6 192.3Group contributions paid -7.5 -22.7

profit before tax 71.9 159.3

Taxes 11 -33.0 -47.1

profit for the year 38.9 112.2

Statement of comprehensive income, Parent Companyitems reallocated to, or that can be reallocated to profit for the yearProfit for the year 38.9 112.2Other comprehensive income for the year

other comprehensive income for the year - -




Balance sheet, Parent Companyas per 31 december, SeKm note 2013 2012

assetsnon-current assetsIntangible non-current assets 12 1.4 1.8Tangible non-current assets 13 0.2 0.3

Financial non-current assets:Participations in Group companies 27 1,885.8 1,890.7Participations in associated companies 14 1.0 1.0Receivables from Group companies 15 668.4 538.0Deferred tax assets 11 2.1 2.1

total financial non-current assets 2,557.3 2,431.8

total non-current assets 2,558.9 2,433.9

current assetscurrent receivables:Current tax assets - -Receivables from Group companies 89.7 76.3Prepaid expenses and accrued income 7.4 0.8Other receivables 0.0 0.1

total current receivables 97.1 77.2

cash and equivalents 0.0 0.0

total current assets 97.1 77.2

total assets 2,656.0 2,511.1

equity and liabilitiesShareholders’ equity 19restricted equity:Share capital (231,870,112) 231.9 231.9Statutory reserve 55.3 55.3non-restricted equity:Share premium reserve 888.1 888.1Accumulated profit 501.3 358.8Profit for the year 38.9 112.2

total shareholders’ equity 1,715.5 1,646.3

non-current liabilitiesLiabilities to credit institutions 21 115.1 113.3Liabilities to Group companies 627.1 525.6Other liabilities 18.7 12.5

total non-current liabilities 760.9 651.4

current liabilitiesLiabilities to Group companies 76.3 168.6Liabilities to credit institutions 21 57.0 9.2Trade and other payables 2.4 2.4Current tax liabilities 29.1 18.6Other liabilities 7.2 4.5Accrued expenses and prepaid income 23 7.6 10.1

total current liabilities 179.6 213.4

total equity and liabilities 2,656.0 2,511.1

Pledged assets and contingent liabilities, Parent Companyas per 31 december, SeKm note 2013 2012

Pledged assets 25 1,893.2 1,896.6Contingent liabilities 25 861.4 1,090.6



Summary of changes in equity, Parent Company Restricted equity Non-restricted equity

Share accumu- profit Share Statutory reserve lated for the total 2012, SeKm capital reserve premium profit year equity

equity, opening balance, 31 Jan. 2012 231.9 55.3 888.1 231.3 127.6 1,534.2Profit for the year 112.2 112.2Other comprehensive income for the year - -


Appropriation of profit 127.6 -127.6 -transactions with the group’s ownersUnconditional shareholder’s contribution 76.2 76.2Group contributions paid -103.5 -103.5Tax attributable to Group contributions 27.3 27.3

equity, closing balance, 31 dec. 2012 231.9 55.3 888.1 358.8 112.2 1,646.3

Restricted equity Non-restricted equity

Share accumu- profit Share Statutory reserve lated for the total 2013, SeKm capital reserve premium profit year equity

equity, opening balance, 31 Jan. 2013 231.9 55.3 888.1 358.8 112.2 1,646.3Profit for the year 38.9 38.9Other comprehensive income for the year - -


Appropriation of profit 112.2 -112.2 -transactions with the group’s ownersUnconditional shareholder’s contribution 89.8 89.8Group contributions paid -76.3 -76.3Tax attributable to Group contributions 16.8 16.8

equity, closing balance, 31 dec. 2013 231.9 55.3 888.1 501.3 38.9 1,715.5



Cash flow statement, Parent Company1 January – 31 december, SeKm note 2013 2012

operating activitiesProfit after financial items -102.2 -10.3Adjustment for items not included in cash flow:- Depreciation/amortization and impairment of assets 74.1 3.6- Capital loss/gains on sales of fixed assets - 45.2- Other provisions 5.4 -- Capitalized interest on receivables from Group companies -1.6 -0.3- Change, synthetic option -0.9 -12.1- Unrealized exchange rate differences -25.1 10.6Income tax paid -5.8 -0.1

cash flow from operating activities before changes in working capital -56.1 36.7

Cash flow from changes in working capitalIncrease(-)/decrease(+) in inventories - -Increase(-)/decrease(+) in operating receivables -45.7 186.7Increase(+)/decrease(-) in operating liabilities 22.7 -123.0

cash flow from operating activities -79.1 100.4

investing activitiesAcquisitions of intangible assets - -1.8New share issue and shareholder contributions to subsidiaries -65.4 -313.8Acquisitions of subsidiaries, net effect on liquidity 27 -3.1 -25.0Acquisitions of associated companies, net effect on liquidity 14 - -1.0Divestments of subsidiaries, net effect on liquidity - 187.4Investments in financial assets -20.1 -Divestments of financial assets - 260.7

cash flow from investing activities -88.6 -154.2

Financing activitiesOption premium - -Dividends paid - -Loans raised 260.0 -Amortization of loans - -314.2Shareholders’ contributions received 76.3 145.0Group contributions paid -168.6 -196.8

cash flow from financing activities 167.7 -366.0

Cash flow for the year 0.0 -159.2Cash and equivalents at beginning of the year 0.0 159.2

cash and equivalents at end of the year 0.0 0.0

Interest received 16.6 16.5Interest paid -11.5 -11.4



NOTE 1 Accounting principles

Agreement with standards and legislation The consolidated accounts have been prepared in accordance with the International Financial Reporting Standards (IFRS) pub-lished by the International Accounting Standards Board (IASB) as adopted by the EU. In addition, the Swedish Financial Reporting Board’s recommendation, RFR 1 Supplementary accounting rules for groups, has also been applied. The Parent Company applies the same accounting principles as the Group except in the cases stated in the section The deviations arising between the princi-ples applied by the Parent Company and the Group are caused by limitations to the opportunities to apply IFRS in the Parent Company as a consequence of the Annual Accounts Act and the Pension Obligations Vesting Act (Tryggandelagen) and, in certain cases, tax considerations. The Annual Report and the consoli-dated accounts were approved for publication by the Board of Directors and President on 30 March 2013. The consolidated statement of comprehensive income and the Parent Company’s income statement and balance sheet are subject to the approval of the Annual General Meeting on 30 March 2013.

Valuation principles applied in the preparation of the financial accounts of the Parent Company and the consolidated financial accounts Assets and liabilities are reported at historical cost with the exception of certain financial assets and liabilities, which are reported at fair value. Financial assets and liabilities measured at fair value consist of derivatives and financial assets classified as financial assets recognized at fair value through profit.

Functional currency and reporting currencyThe functional currency of the Parent Company is SEK and this is also the reporting currency of the Parent Company and the Group. Consequently, the financial accounts are presented in SEK. All amounts are rounded off to the nearest thousand unless otherwise stated.

Assessments and estimates in the financial accountsPreparation of the financial accounts in accordance with IFRS requires management making assessments, estimations and assumptions that affect the application of the accounting princi-ples and the figures reported for assets, liabilities and expenses. The actual outcome may deviate from these estimations and assessments. The estimations and assessments are reviewed regularly. Changes in estimations are reported in the period in which they are made if they only affect that period, or in the period in which they are made and future periods if they affect both the period concerned and future periods. Assessments made by management in the application of IFRS that have a significant effect on the financial statements and estimates that may cause material adjustments to the financial statements of the ensuing year are described in greater detail under note 30.

Changes in accounting principlesDetailed below are the changed accounting principles applied by the Group effective as of 1 January 2013. Other changes to IFRS applicable as of 2013 have had no material effect on the Group’s reporting.

Amended IAS 1 – Presentation of Financial Statements with regard to the reporting of items within comprehensive income. The change means that items within Other comprehensive income have been divided into two categories – items that have

or can be reallocated to profit for the year and items that cannot be reallocated to profit for the year. Items that have or can be reallocated include, for example, translation differences and gains/losses on cash flow hedges. Items that cannot be reallocat-ed are revaluations of defined-benefit pension plans and revalu-ations in accordance with the revaluation method for intangible and tangible assets. The comparison figures are presented in accordance with the new format.

new IFRS and interpretations yet to be appliedIFRS 9 Financial Instruments is intended to replace IAS 39 Financial Instruments: Recognition and measurement. The date for obligatory initial application has not yet been set. IASB has published the first two parts of what will ultimately comprise the final IFRS 9. The first phase deals with classification and valuation of financial assets. The categories for financial assets that are included in IAS 39 are being replaced by two categories, with valuation being carried out at fair value or amortized cost. Amortized cost is used for instruments held in a business model, the aim of which is to receive contractual cash flows compris-ing payments of principal and interest on principal on specified dates. Other financial assets are recognized at fair value with the possibility of applying the fair value option, which is retained in IAS 39. Changes to fair value should be recognized in the income statement, with the exception of changes in value in equity instruments that are not held for sale and for which it is initially decided to recognize changes in value under other com-prehensive income. Changes in value for derivatives in hedge ac-counting are not affected by this phase of IFRS 9, but are instead reported in accordance with IAS 39 until further notice.

In October 2010, the IASB also published the sections of IFRS 9 that address the classification and measurement of finan-cial liabilities. These mainly agree with the former rules includ-ed in IAS 39, except with regard to financial liabilities that are voluntarily measured at fair value according to the “Fair Value Option”. For these liabilities, the change in value is divided into changes attributable to the company’s own creditworthiness and to changes in the reference interest rate.

In November 2013, rules on hedge accounting were pub-lished. No date has currently been set for when IFRS 9 will start being applied. IASB has announced that the date of application will be 1 January 2017 at the earliest.

Other new and amended IFRS for future application, as listed below, are not expected to have any significant impact on the consolidated accounts.• Changes to IAS 32 Financial instruments: Classification.

The amendment clarifies the rules regarding where financial assets and liabilities may be offset.

• IFRS 10 Consolidated Financial Statements• IFRS 11 Joint Arrangements• IFRS 12 Disclosure of Interests in Other Entities • Amended IAS 27 Consolidated and Separate Financial

Statements• Amended IAS 28 Investments in Associates and Joint Ventures• Amended IAS 19 Employee Benefits: Defined Benefit Plans:

Employee Contributions• Amended IAS 39 Financial Instruments: Recognition

and Measurement: Novation of derivatives and on-going application of hedge accounting

• IFRIC 21 Levies• Transitional guidelines (amendments to IFRS 10-12) • Investment companies (amendments to IFRS 10, 12, IAS 27)• Annual improvements to IFRS (2010-2012), (2011-2013)



operating segment reportingOperating segment reporting in accordance with IFRS 8 is only obligatory for listed companies. Consequently, the Inwido Group provides no segment reporting.

Classifications, etc.Non-current assets and non-current liabilities essentially consist of amounts that are expected to be recovered or paid more than 12 months after the balance sheet date. Current assets and current liabilities essentially consist of amounts that are expected to be recovered or paid within 12 months of the balance sheet date.

Consolidation principlesSubsidiaries

Subsidiaries are companies over which Inwido AB has a controlling influence. Controlling influence entails a direct or indirect right to determine a company’s financial and operational strategies with the purpose of benefiting financially. The assessment of whether a controlling influence prevails takes into account potential voting shares that can be exercised or converted without delay.

Acquisitions on or after 1 January 2010

Subsidiaries are reported in accordance with the acquisition method. The method entails acquisitions of subsidiaries being viewed as transactions through which the Group indirectly acquires the subsidiary’s assets and assumes its liabilities. The acquisition analysis determines the fair value of the acquired identifiable assets and assumed liabilities, as well as any possible non-controlling interests on the date of acquisition. Transaction expenses that arise, with the exception of transaction expenses attributable to the issue of equity instruments or liability instru-ments, are recognized directly in profit for the year.

For business combinations for which payment made, possi-ble non-controlling interests and fair value of previously owned participations (in the event of gradual acquisitions) exceed the fair value of the acquired assets and assumed liabilities that are recognized separately, the difference is reported as goodwill. When the difference is negative, what is known as a bargain purchase, this is recognized directly in profit for the year.

Payment made in connection with the acquisition does not include payments that relate to the settlement of previous busi-ness connections. This type of settlement is recognized in the profit.

Conditional purchase prices are recognized at fair value at the point of acquisition. In cases where the conditional purchase price is classified as an equity instrument, no revalua-tion or settlement is carried out under equity. Other conditional purchase prices are revalued on each report date and the change is recognized in profit for the year.

Acquisitions that do not relate to 100 percent of the subsidi-ary give rise to non-controlling interests. There are two options for reporting non-controlling interests. The two options are to recognize the percentage of non-controlling interests that makes up proportional net assets, or to recognize non-controlling in-terests at fair value, which means that non-controlling interests form a percentage of goodwill. The choice between the two al-ternatives for recognizing non-controlling interests can be made on a case by case basis. For acquisitions that are made in stages, goodwill is determined on the day the controlling interest arises. Previous interests are valued at fair value and the change in value is recognized in profit for the year. For divestments that

lead to the loss of a controlling influence, but where an interest remains, this interest is valued at fair value and the change in value is recognized in profit for the year.

Acquisition of non-controlling interests

Acquisitions from non-controlling interests are recognized as transactions under equity, i.e. between the Parent Company’s owner (under profit brought forward) and non-controlling interests. Consequently no goodwill arises as a result of these transactions. The change in non-controlling interests is based on their proportional share of net assets.

Sales to non-controlling interests

Sales to non-controlling interests where a controlling interest re-mains are recognized as transactions under equity, i.e. between the Parent Company’s owner and non-controlling interests. The difference between proceeds received and the non-controlling interest’s proportional share of acquired net assets is reported under retained profit.

Associated companies

Associated companies are those in which the Group has a significant, but not controlling, influence over operational and financial control, commonly through holdings corresponding to between 20 and 50 percent of votes. From the point at which a significant influence is obtained, holdings in associated com-panies are reported in the consolidated accounts in accordance with the equity method. The equity method entails the value of holdings in associated companies reported in the consolidated accounts being equivalent to the Group’s share of the associated companies’ equity, as well as consolidated goodwill and any other consolidated surplus or deficit. In the consolidated income statement, participations in the earnings of associated companies include the Group’s participations after tax in the net earnings of associated companies, adjusted for possible amortization/depreciation and impairment or reversals of acquired surpluses or deficits. Dividends received from an associated company decrease the reported value of the investment. The Group’s participation in the other comprehensive income of its associ-ated companies is reported as a separate item in the consolidated statement of comprehensive income. Any discrepancy at the point of acquisition between the cost of the holding and the owning company’s share of the net fair value of the associated company’s identifiable assets, liabilities and contingent liabilities is reported in accordance with IFRS 3 Business Combinations. Transaction expenses that arise, with the exception of transac-tion expenses attributable to the issue of equity instruments or liability instruments, are included under expenses. Where the Group’s share of losses reported by the associated company exceeds the reported value of the Group’s holdings, the value of the holdings is reduced to zero. Losses are also offset against non-current balances without security, the financial significance of which forms part of the owning company’s net investment in the associated company. Continued losses are not recognized unless the Group has given guarantees to cover losses arising in the associated company. The equity method is applied until the time the significant influence ceases. Transactions eliminated on consolidation Intragroup receivables and liabilities, income and expenses and unrealized gains or losses arising from intragroup transactions between Group companies are eliminated in full when preparing the consolidated accounts. Unrealized gains arising from transactions with associated companies and joint ventures are eliminated to a degree corresponding to the Group’s



ownership of those companies. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no indication that any impairment is necessary.

Foreign currencytransactions in foreign currencies

Transactions in foreign currencies are translated into the func-tional currency at the exchange rate in force on the transaction date. The functional currency is the currency of the primary economic environments in which the Group’s companies carry out their business. Monetary assets and liabilities in foreign cur-rencies are translated to the functional currency at the exchange rate in force at the balance sheet date. Exchange rate differences arising from the conversions are recognized in profit for the year. Non-monetary assets and liabilities recognized at their his-torical costs are translated at the exchange rate applicable at the time of the transaction. Non-monetary assets and liabilities rec-ognized at fair value are converted to the functional currency at the rate in effect at the time of the fair value assessment.

Foreign businesses financial statements

Assets and liabilities in foreign businesses, including goodwill and other groupwise surplus or deficit values, are translated from the foreign operation’s functional currency into the Group’s reporting currency, SEK, at the exchange rate applicable on the balance sheet date. Income and expenses in a foreign operation are translated into SEK at an average exchange rate approximating the currency exchange rates applicable on the relevant transaction dates. Translation differences arising in connection with the translation of foreign operations are reported in other comprehensive income and accumulated in a separate component in equity titled translation reserve.

RevenueSales of goods and execution of service assignments

Income from the sale of goods is recognized in profit or loss when significant risks and rewards associated with the owner-ship of the goods are transferred to the buyer. Income from service assignments is recognized in profit or loss on the basis of the degree of completion on the balance sheet date. The degree of completion is determined by means of an assessment of the work carried out based on surveys. Revenue is not recognized if it is likely that the economic benefits will not accrue to the Group. If there is significant uncertainty regarding payment, accompa-nying expenses or the risk of returns and if the seller retains a commitment in the on-going administration which is usually associated with ownership, no revenue is recognized. Income is recognized at the fair value of what has been received or is ex-pected to be received with deductions for discounts granted. The degree of completion is determined on the basis of the expenses hitherto incurred for the assignment in relation to the total cal-culated expenses for the assignment. Only expenses correspond-ing to work that has been carried out may be included in the expenses incurred as per the balance sheet date. Only expenses corresponding to work that has been carried out or that will be carried out may be included in the total calculated expenses.

Contract assignments

Where the outcome of a construction contract can be calculated in a reliable manner, the income and expenses attributable to the assignment are recognized in consolidated profit or loss as income and expenses in relation to the assignment’s degree of completion. This is known as successive income recognition.

The degree of completion is determined by calculating the rela-tionship between the expenses hitherto incurred for the assign-ment and the total calculated expenses for the assignment. For assignments where the outcome cannot be reliably calculated, revenue corresponding to the expenses incurred is recognized. A feared loss on a contract assignment is recognized immediately in consolidated profit or loss.

Government subsidies

Government subsidies are recognized in the statement of finan-cial position as deferred income when there is reasonable cer-tainty that the subsidy will be received and that the Group will meet the conditions associated with the subsidy. Subsidies shall be systematically periodized in profit or loss in the same way and across the same periods as the expenses that the subsidies are intended to offset. Government subsidies associated with assets are recognized in the statement of financial position as a reduction in the recognized value of those assets.

leasingoperating leasing agreements

Expenses relating to operating lease agreements are recognized in profit or loss on a linear basis over the leasing period. Benefits received in connection with the signature of an agreement are recognized in profit or loss as a reduction of the lease payments on a linear basis over the leasing period. Contingent rents are expensed in the periods in which they arise.

Financial leasing agreements

The minimum lease payments are apportioned between interest expense and reduction of the outstanding liability. The interest expense is distributed over the lease term so that each account-ing period is assigned an amount corresponding to a fixed interest rate for the liability in the respective period. Contingent rents are expensed in the periods in which they arise.

Financial income and expensesFinancial income consists of interest income from invested funds (including financial assets available for sale), dividend income, profit from the divestment of financial assets available for sale and value gains from financial assets/liabilities valued at fair value in profit. Interest income from financial instruments is recognized according to the effective interest method. Effective interest is the rate at which the net present value of all future in-ward and outward payments during the anticipated term of the fi-nancial instrument is equal to the carrying amount of the receiv-able or liability. Dividend income is recognized when the right to receive the dividend has been established. Results from the sale of financial investments are recognized when the risks and rewards associated with ownership of the instruments have in all essen-tials been transferred to the buyer and the Group no longer has control of the instruments. Financial expenses consist of interest expenses on loans, the effect of the resolution of present value calculations for provisions, value losses on financial assets/liabili-ties valued at fair value via profit and the impairment of financial assets. Borrowing expenses are recognized in profit applying the effective interest method, except where they are directly attribut-able to the acquisition, construction or production of assets that take considerable time to complete for their intended use or sale, in which case they are included in the cost of those assets. Ex-change rate gains and losses are reported net. Interest is expensed as at is incurred, since, in the Group’s assessment, it does not have any assets that qualify in accordance with IAS 23.



taxesIncome taxes consist of current tax and deferred tax. Income taxes are recognized in profit or loss unless the underlying transaction is recognized in other comprehensive income or in equity, whereby the associated tax effect is recognized outside profit or loss. Current tax is tax due for payment or receipt in respect of the financial year, using tax rates decided or virtually decided upon on the balance sheet date. Adjustment of current tax related to earlier periods is also included. Deferred tax is cal-culated in accordance with the balance sheet method, proceed-ing on the basis of temporary differences between the carrying amounts and taxable values of assets and liabilities. Temporary differences arising upon the initial recognition of goodwill are not taken into consideration, nor is the initial recognition of assets and liabilities that are not business combinations affect reported or taxable profit at the time of the transaction. Nor are temporary differences taken into account that are related to investments in subsidiaries and associated companies which are not expected to be reversed in the foreseeable future. The valua-tion of deferred tax provided is based on how carrying amounts of assets or liabilities are expected to be realized or settled. De-ferred tax is calculated by applying the tax rates and regulations decided or virtually decided upon at the balance sheet date. Deferred tax assets for tax-deductible temporary differences and loss carryforwards are recognized only to the extent it is likely that these items will be able to be utilized. The value of deferred tax assets is derecognized when it is no longer deemed likely that they can be utilized. Any additional income tax arising from a dividend is recognized at the same time as the dividend is recognized as a liability.

Financial instrumentsFinancial instruments recognized as assets in the statement of financial position include cash and cash equivalents, loan receiva-bles and trade and other receivables. Liabilities include trade and other payables and borrowing. Derivatives are also included among financial instruments, both on the asset and liability side.

Recognition in and derecognition from the statement of financial position

Liabilities are recognized once the counterparty has completed its task and there is a contractual obligation to pay, even though an invoice may not yet have been received. Trade and other receivables are recognized in the statement of financial position once an invoice has been sent. Liabilities are recognized once the counterparty has completed its task and there is a contrac-tual obligation to pay, even though an invoice may not yet have been received. Trade and other payables are recognized once the invoice has been received. A financial asset is removed from the statement of financial position when the rights in the agreement are realized, fall due or the company loses control over them. This also applies for parts of a financial asset. A financial li-ability is removed from the statement of financial position when the commitment in the agreement is fulfilled or extinguished in some other manner. The same applies for part of a financial liability. A financial asset and a financial liability are offset and recognized as a net amount in the statement of financial position only when a legal entitlement to offset the amounts is in place, and where there is an intention to balance the items with a net amount or to simultaneously realize the asset and settle the liability. The acquisition or sale of financial assets is reported on the transaction date, which is the date on which the company pledges to acquire or sell the asset.

Classification and measurement

Financial instruments which are not derivatives are initially recognized at a cost corresponding to the instrument’s fair value with an addition for transaction expenses. Exceptions are those categorized as financial assets recognized at fair value via profit, which are recognized at fair value excluding transac-tion expenses. On first recognition, a financial instrument is classified based on the reason for its purchase. The classification determines how the financial instrument is measured after the first recognition as described below. Derivative instruments are initially recognized at fair value, which means that any transac-tion expenses are charged against the profit for the period. After the initial recognition, derivative instruments are accounted for as described below. Hedge accounting is not applied. Value gains and losses on derivatives are reported as income or expense in operating profit or in net financial items based on whether the use of the derivative is related to an operating or financial item. Cash and cash equivalents comprise cash and instantly acces-sible balances at banks and equivalent institutions as well as current investments with a term from the acquisition date of less than three months which are exposed to only a negligible risk of fluctuations.

Financial assets recognized at fair value in profit

This category consists of two sub-groups: financial assets held for sale and other financial assets that the Group has initially chosen to place in this category. A financial asset is classified as being held for sale if it is retained with the intention of being sold in the near future. Derivatives with positive fair value are classified as being held for sale. Assets belonging to this category are continuously recognized at fair value with changes in value recognized in profit for the year.

Changes in loans and trade and other receivables

Loan receivables and trade and other receivables are non-deriv-ative financial assets with fixed or determinable payments that are not quoted in an active market. These assets are measured at the amortized cost. The amortized cost is determined based on the effective interest calculated at the time of acquisition. Trade and other receivables are recognized at the amount estimated to be paid, i.e. with a deduction for doubtful receivables.

unlisted shares and participations

The company’s holdings of unlisted shares and participations are valued at cost in accordance with the exemption rule in IAS 39 for equity instruments for which fair value cannot be reliably determined. These are classified as financial assets available for sale.

Financial liabilities recognized at fair value in profit

This category consists of two sub-groups: financial liabilities held for sale and other financial liabilities that the Group has in-itially chosen to place in this category. Derivatives with negative fair value are classified as being held for sale, with the exception of derivatives that are identified and effective hedging instru-ments. Fair value changes are recognized in profit for the year.

Other financial liabilities

Loans and other financial liabilities, such as trade and other payables, are included in this category. The liabilities are meas-ured at the amortized cost.



derivatives and hedge accounting

The Group’s derivative instruments have been acquired to financially hedge its interest and exchange rate exposures. Currency forward contracts are used to hedge forecast sales in foreign currencies. To hedge the uncertainty in highly probably forecast interest flows in borrowing at variable rates, interest rate swaps are used whereby the company receives variable interest but pays fixed interest. Derivatives are initially recognized at fair value, which means that any transaction expenses are charged against profit for the period. The Group has elected not to apply hedge accounting, meaning that on-going changes in the fair value of the derivatives are reported in profit for the year.

tangible assetsowned assets

Tangible assets are stated in the Group at cost less accumulated depreciation and any impairment. The cost includes the pur-chase price and expenses directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended. Borrowing expenses directly attributable to the purchase, construction or production of assets that take considerable time to complete for the in-tended use or for sale are included in cost. Accounting principles for impairment of assets are shown below. The cost for self-constructed non-current assets includes expenses for materials, employee benefits, other manufacturing expenses considered directly attributable to the non-current asset where applicable, as well as estimated expenses for dismantling and removing the asset and restoring the site or area where it is located. Tangible assets comprising parts with different useful lives are treated as separate components of tangible assets. The carrying amount for a tangible non-current asset is derecognized from the statement of financial position on scrapping or sale, or when no future economic benefits are expected from the use, scrapping or sale of the asset. Gains or losses arising from the sale or scrapping of an asset constitute the difference between the sale price and the asset’s carrying amount less direct sales expenses. Gains and losses are recognized as other operating income/expense.

leased assets

Leases are classified in the consolidated accounts as either finan-cial or operating leases. A financial lease is a lease whereby the financial risks and rewards associated with the ownership are in all essentials transferred to the lessee. If this is not the case the lease is considered an operating lease. Assets leased through financial leasing agreements are reported as assets in the state-ment of financial position and initially valued at the lower of the fair value of the leased item of the current value of the mini-mum leasing fees at the commencement of the agreement. Ob-ligations to pay future lease payments have been recognized as non-current and current liabilities. The leased assets are depreci-ated according to plan while the lease payments are recognized as interest and reduction of the liabilities. For operating leases, the lease payment is expensed over the lease term in accordance with the usage, which may differ from what is de facto paid in leasing fees during the year .

Subsequent expenses

Subsequent expenses are only added to the cost if it is probable that the future economic benefits associated with the asset will flow to the company and the cost can be measured reliably. All other subsequent expenses are expensed in the period

they arise. The question of whether a subsequent expense is attributable to the replacement of identified components, or parts thereof (whereby such expenses are capitalized) plays a decisive role in determining if that expense should be added to cost. Even in cases where new components are constructed, the expense is added to the cost. Any non-depreciated carrying amounts for replaced components, or parts of components, are scrapped and derecognized in connection with replacement. Repairs are expensed as they are incurred.

depreciation principles

Depreciation is carried out on a linear basis over the asset’s estimated useful life. Leased assets are also depreciated over their estimated useful life or over the agreed lease term, whichever is shorter. The Group applies the component approach, whereby the component’s assessed useful life forms the basis for depreciation.

Estimated useful lives:• Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25–50 years• Land improvements . . . . . . . . . . . . . . . . . . . . . 20–27 years• Machinery and technical plant . . . . . . . . . . . . . . . 10 years• Equipment, tools, fixtures and fittings . . . . . . . . 3–5 years

Land is not depreciated. Depreciation methods used and the residual value and useful life of assets are reviewed at each year-end.

Intangible assetsGoodwill

Goodwill represents the difference between the cost of the busi-ness combination and the fair value of acquired assets, assumed liabilities and contingent liabilities. Since the Group’s inception on 28 December 2004, all acquisitions have been reported in accordance with IFRS 3. Goodwill is stated at cost less any accu-mulated impairment. Goodwill is distributed to cash generating units and is tested annually to determine possible impairment needs. Goodwill arising from acquisitions of associated com-panies is included in the carrying amount for participations in associated companies. For business combinations where the cost is less than the net value of the acquired assets and assumed liabilities and contingent liabilities, the difference is recognized directly in profit or loss.

product development expenses

Where research results or other knowledge are applied to achieve new or improved processes, product development expenses are reported as an asset in the statement of financial position if the product or process is technically and commer-cially viable and the company has sufficient resources to com-plete development and subsequently use or sell the intangible asset. Most of the Group’s product expenses pertain to unique customer adaptations or updating existing products in line with technical advances. For such expenses, the criteria for capitaliza-tion stipulated by IAS 38 are not considered to have been met and the expenses are recognized as expenses against profit for the year in which they are incurred.

other intangible assets

Other intangible assets mainly include customer agreements and software acquired by the Group. These assets are recognized at cost less accumulated amortization and impairment. Expenses for internally generated goodwill and internally generated trade-marks are recognized in profit or loss as they are incurred.



Subsequent expenses

Subsequent expenses for capitalized intangible assets are only recognized as assets in the statement of financial position if they increase the future economic benefits for the specific assets to which they refer. All other expenses are expensed as they are incurred.

depreciation principles

Amortization is charged to statement of comprehensive income on a linear basis over the intangible assets’ estimated useful lives, provided the useful life is not indefinite. The useful lives of assets are reassessed at least once per year. Goodwill has an indefinite useful life and is therefore tested for possible impair-ment annually, or as soon as indications arise that the asset in question has decreased in value. Intangible assets which are amortized are amortized from the date they are available for use.

The estimated useful lives are:• Customer agreements . . . . . . . . . . . . . . . . . . . . . . . . 5 years• Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10–20 years

Inventories Inventories are stated at the lower of cost and net realizable value. The cost for inventories is based on the first-in first-out principle (FIFO) and includes expenses arising upon acquisition of the inventories and their transport to their current location and condition. For manufactured goods and work in progress, the purchase value includes a reasonable proportion of indirect expenses based on normal capacity. Net realizable value is the estimated sales price in the ordinary course of business, less esti-mated expenses for completion and bringing about a sale.

ImpairmentCarrying amounts of the Group’s assets are reviewed at each balance sheet date to assess whether there is any indication of impairment. IAS 36 is applied in impairment testing for assets other than financial assets which are tested in accordance with IAS 39, inventories and deferred tax assets. For the exceptions stated above, the carrying amount is assessed according to the relevant standard.

Impairment tests for tangible and intangible assets, and holdings in subsidiaries, associated companies, joint ventures, etc.

If a need for impairment is indicated, the recoverable amount of the asset is calculated in accordance with IAS 36 (see below). The recoverable amount for goodwill, other intangible assets with indefinite useful lives and intangible assets that are not yet ready for use is calculated annually. If, in connection with impairment testing, largely independent cash flows cannot be established for an individual asset, assets are grouped at the lowest level at which largely independent cash flows can be identified – this is known as a cash generating unit. Impairment is recognized when an asset’s or cash generating unit’s carrying amount exceeds the recoverable amount. Impairment is charged to the statement of comprehensive income. Impairment of as-sets attributable to a cash generating unit is primarily allocated to goodwill. After this, a proportional impairment of all other assets included in the unit is implemented. The recoverable amount is the higher of fair value less expenses to sell and value in use. Upon calculating the value in use, future cash flows are discounted at a discount rate that takes into account risk-free interest and the risk associated with the specific asset.

Impairment tests for financial assets

At each reporting date, the company evaluates whether there is objective evidence that any impairment is necessary for a financial asset or group of assets. Objective evidence constitutes observable events that have an adverse impact on the potential to recover the cost, and a significant or long-term decrease in the fair value of a component of a financial investment classi-fied as a financial asset available for sale. The company classifies trade and other receivables as doubtful when: 1) the customer is insolvent or subject to bankruptcy proceedings, 2) the pay-ment is more than 60 days overdue (whereupon the financial position of the individual customer is assessed and provisions are implemented as deemed necessary). For impaired trade and other receivables, the amount of the expected future payment is reported. Short-term receivables are not discounted. The recoverable amount of loans, trade and other receivables and as-sets classed as investments held to maturity is calculated as the present value of future cash flows discounted by the effective interest rate applicable on the initial recognition of the asset. Short-term assets are not discounted. Impairment is charged to the statement of comprehensive income.

Reversal of impairment

Impairment is reversed if there is an indication that it is no longer necessary, and there has been a change in the assump-tions which formed the basis of the calculation of the recovera-ble amount. However, impairment of goodwill is never reversed. A reversal is only made to the extent that the asset’s carrying amount after reversal does not exceed the carrying amount that the asset would have had, with a deduction for amortization, if no impairment had been recognized. Impairment losses on loan receivables and trade and other receivables reported at accrued cost are reversed if the former grounds for impairment no longer apply and full payment from the customer is expected. Impair-ments of interest-bearing instruments classified as financial assets available for sale are reversed through the statement of comprehensive income if the fair value increases and the in-crease can objectively be attributed to an event which occurred after the impairment was implemented.

Share capital dividends

Dividends are recognized as a liability once approved by the Annual General Meeting.

Employee benefitsDefined contribution plans

The Group only has defined-contribution pension plans. Defined contribution pension plans are those for which the Group only pays fixed fees and is under no obligation to pay additional fees if plan assets are insufficient. Consequently the employee bears the risk regarding future pension levels. Obliga-tions regarding defined contribution plans are recognized as an expense in the statement of comprehensive income at the rate at which they are earned by employees performing services for the company.

Remuneration on termination of employment

An expense for remuneration in connection with termination of employment for employees is recognized only if the company is demonstrably obliged in a formal detailed plan to terminate employment ahead of the normal point in time, with no realistic



possibility of withdrawal. When remuneration is paid as an in-centive for voluntary departure, an expense is recognized if it is likely that the offer will be accepted and the number of employ-ees accepting the offer can be reliably estimated.

Short-term employee benefits

Current employee benefits are calculated without discounting and are expensed as the relevant services are received. Expected expenses for profit sharing and bonus payments are recognized as liabilities when the Group has a present legal or constructive obligation to make such payments as a consequence of services being received from employees and that obligation can be calcu-lated reliably.

Stock option scheme

Stock options settled in cash (synthetic options) give rise to an obligation towards employees that is recognized at fair value and reported as an expense with a corresponding increase in liabilities. Fair value is initially calculated at the time of alloca-tion and is distributed across the vesting period. The fair value of the stock options settled in cash is calculated according to the Black-Scholes model, taking into account the terms and condi-tions of the allocated instrument. The liability is reassessed on each balance sheet date and upon settlement. All changes in the fair value of the liability are reported under profit for the year as a financial expense.

provisions A provision is recognized in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic resources will be required to settle the obligation and a reliable estimation of the amount can be made. When the effect of the timing of the payment is important, provisions are calculated by discount-ing the expected future cash flow at a pre-tax interest rate which reflects current market assessments of the time value of money and, if applicable, the risks associated with the liability.

Guarantees

A provision is made for guarantees when the underlying prod-ucts or services are sold. The provision is based on historical data regarding guarantees and a total appraisal of conceivable outcomes in relation to the probabilities with which those out-comes are associated.

Restructuring

Restructuring provisions are recognized when the Group has adopted a detailed formal restructuring plan and the restructur-ing has been commenced or publicly announced. No provisions are made for future operating expenses.

Group contributionsInwido AB is a subsidiary of listed company Ratos. Group con-tributions to and from Ratos and sister companies within the Ratos Group are reported in the Group as a transaction with the company’s owners directly in the statement of changes in equity in accordance with IAS 1, which requires all transactions with the owners, in their capacity as owners, to be recognized di-rectly against equity. This means that Group contributions made with the aim of minimizing the Group’s total tax are recognized directly against profit brought forward after deductions for their current tax effect.

the parent Company’s accounting principlesThe Parent Company has prepared its Annual Report in accord-ance with the Swedish Annual Accounts Act (1995:1554) and Recommendation RFR 2 of the Swedish Financial Accounting Standards Council, on Accounting for Legal Entities. State-ments issued by the Swedish Financial Reporting Board are also applied. RFR 2 means that the Parent Company in the annual report for the legal entity shall apply all EU-approved IFRS standards and statements as far as possible within the frame-work of the Annual Accounts Act, taking into consideration the relationship between accounting and taxation. The recommen-dation stipulates which exceptions and additions to IFRS shall be applied.

differences between the Group’s and parent Company’s accounting principlesThe differences between the Group’s and Parent Company’s ac-counting principles are shown below. The accounting principles shown below for the Parent Company have been applied consist-ently to all periods presented in the Parent Company’s financial statements. Effective from 2012, Group contributions received and paid are recognized as appropriations in the income state-ment. The comparison figures for 2011 have been adjusted according to the new principles. Previously, Group contribu-tions were reported in accordance with statement UFR 2 from the Swedish Financial Reporting Board regarding shareholders’ contributions directly against equity

Classifications and presentationThe income statement and statement of comprehensive income are produced separately for the Parent Company, whereas for the Group these two reports are combined into a single statement of comprehensive income. In addition the titles ‘balance sheet’ and ‘cash flow statement’ are used for the Parent Company for statements that for the Group are titled ‘consolidated statement of financial position’ and ‘consolidated statement of cash flows’ respectively. The Parent Company income statement and bal-ance sheet have been prepared in accordance with regulations stipulated in the Annual Accounts Act, while the statement of comprehensive income, summary of changes in equity and cash flow statement is based on IAS 1 Presentation of Financial State-ments and IAS Cash Flow Statements.

The differences compared with the consolidated statements that are evident in the Parent Company’s income statement and balance sheet comprise mainly the reporting of financial income and expenses, non-current assets and equity.

Subsidiaries, associated companies and joint venturesInvestments in subsidiaries, associated companies and joint ven-tures are accounted for in the Parent Company in accordance with the cost method. This means that transaction expenses are included in the carrying amount for holdings in subsidiaries, associated companies and joint ventures. In the consolidated accounts, transaction expenses attributable to subsidiaries are recognized directly in profit as they are incurred. Conditional purchase prices are valued based on the likelihood that the purchase price will be paid. Possible changes in the provision/receivable are added to/reduce the cost. In the consolidated ac-counts, conditional purchase prices are recognized at fair value with changes in value over profit. Bargain purchases that cor-respond to expected future losses and expenses are resolved over



the anticipated periods during which losses and expenses arise. Bargain purchases that arise due to other reasons are recognized as provisions, to the extent that they do not exceed the fair value of the acquired identifiable non-monetary assets. The por-tion that exceeds this value is immediately taken up as income. The portion that does not exceed the fair value of the acquired identifiable non-monetary assets is systematically taken up as in-come over a period that is calculated as the remaining weighted average useful life for the acquired identifiable assets that are amortized. In the consolidated accounts, bargain purchases are reported directly in profit.

untaxed reservesUntaxed reserves including deferred tax liabilities are recognized in the Parent Company. In the consolidated accounts however, untaxed reserves are divided into deferred tax and equity.

Group contributionsGroup contributions received by the Parent Company from its subsidiaries are reported in the Parent Company according to the same principles as normal dividends from subsidiaries, in other words, as a financial income item in the income statement. Group contributions paid by the Parent Company to its subsidiaries are recognized as an appropriation in the income statement.

NOTE 2 Financial risks and financial policies

through its operations, the group is exposed to various kinds of financial risks Financial risks are those involving fluctuations in the Group’s earnings and cash flow as a consequence of changes in exchange rates, interest rate levels, and refinancing and credit risks. The Group’s financial policy for the management of financial risks has been designed by the Board of Directors and provides a framework of guidelines and regulations in the shape of risk mandates and limits for financing activities. To read more about the Company’s financial risks, please see the Financial Risks section in the Directors’ Report.

Responsibility for the Group’s financial transactions and risks is managed centrally by the Parent Company’s finance department. The overarching objective for risk management efforts is to provide cost effective financing and to minimize the negative effects of market fluctuations on the Group’s earnings.

liquidity risks Liquidity risk (or financing risk) refers to the risk that it will not be possible to secure financing or that it will only be pos-sible to do so at considerably increased expense. Consequently, it is the Group’s objective that there will always be sufficient cash and equivalents, as well as guaranteed lines of credit to cover the next six months. Furthermore loan maturities have been spread out over time to limit the liquidity risk.

To ensure that the Group always has access to external financing, the finance department shall make sure that com-mitments to grant credit, both short and long-term, are avail-able. Efforts shall be made to maintain the highest level of cost efficiency possible within the set framework. The Group has a financial strong owner, which reduces the liquidity risks.

At the end of the year, the Group’s financial liabilities amounted to SEK 1,652 million with the maturity structure indicated in the table below.

Interest rate risks Interest rate risk refers to the risk that the value of a financial instrument may fluctuate due to changes in market rates. The Group’s interest rate risk consists of that entailed by its borrowing. Management of the Group’s interest exposure is cen-tralized, meaning that the central finance function is respon-sible for identifying and managing this exposure. Derivative instruments, such as interest swap contracts, are used to manage the credit risk. Interest swap contracts are recognised in the Group company whose interest-bearing liabilities are hedged.

The Group is mainly exposed through its interest-bearing financial liabilities, which are indicated in the table in Note 20. The total exposure for the credit risk corresponds to the value of the receivables in the balance sheet. At 31 December 2013, the fair value of these swaps amounted to a negative SEK 4.8 million (neg 9.6) consisting of liabilities of SEK 4.8 million (9.6).

As per 31 December 2013, interest-bearing liabilities, exclud-ing financial leasing amounted to SEK 1,056 million (1,231). The average period of fixed interest, excluding derivatives was approximately 1 month (1). The average period of fixed interest, including derivatives was approximately 4 months (6).

Maturity structure, financial liabilities – undiscounted cash flows 2013 2012

nominal amount, functional 0-6 6-12 1-5 5 years 0-6 6-12 1-5 5 years SeKm currency months months years or later total months months years or later total

Bank loans 945.6 66.5 64.7 869.9 12.3 1,013.4 61.8 70.1 1,038.7 11.3 1,181.9Overdraft facilities 111.0 3.6 3.6 118.1 125.3 1.8 1.8 125.8 129.5Derivatives 4.9 0.7 0.2 4.5 0.2 5.6 2.1 1.7 6.1 9.9Synthetic instrument 10.3 10.6 10.6 11.4 11.4Trade and other payables 311.4 311.2 0.2 311.4 348.2 0.4 348.6Liabilities to Group companies 116.3 116.3 116.3 168.6 168.6Financial lease liabilities 16.5 3.6 3.3 11.1 0.0 18.0 4.1 3.7 16.4 0.2 24.4Other liabilities 136.1 123.1 3.4 9.6 136.1 131.0 131.0

total 508.8 191.7 1,003.6 32.6 1,736.7 418.0 208.7 1,355.7 23.0 2,005.3



Sensitivity analysis - interest riskThe impact on interest income and interest expenses over the coming 12-month period from an increase in interest of 1 per-centage point on the balance sheet date amounts to an increased expense of SEK 10 million (12) – given the interest-bearing assets and liabilities held as of the balance sheet date and that no liabili-ties and assets have been hedged. Taking implemented hedging into account, the impact on interest income and interest expenses amounts to an increased expense of SEK 10 million (5).

Credit risks in trade and other receivables The risk that the Group’s/company’s customers fail to meet their obligations, that is, that no payment is obtained for trade and other receivables, constitutes a customer credit risk.

Credit checks are performed on the Group’s customers with information regarding their financial status being obtained from various credit information agencies. For certain types of customers, the risk of credit losses is limited by means of credit insurance. Bank guarantees or other sureties are required for customers with low credit ratings or insufficient credit history. The credit quality of non-provisioned trade and other receiva-bles is deemed to be good.

As per the balance sheet date, there were no significant concentrations of credit exposures. The maximum exposure for an individual credit risk as per 31 December 2013 amounted to SEK 15.9 million (6.5), corresponding to 4 percent (1) of total trade and other receivables. The maximum exposure for credit risk is the same as the gross value of the trade and other receiva-bles in the balance sheet.

Currency riskstransaction exposure

The Group applies a finance policy adopted by the Board of Di-rectors. Each business area manager is responsible for identify-ing and hedging flows in line with Inwido’s finance policy. In the event that the transaction exposure for an for an individual business unit should exceed EUR 500,000 on an annual basis, 40-60 percent of the individual currency concerned shall be hedged with a maturity of up to 6 months. The Parent Company is responsible continuously monitoring the business areas’ ad-herence to the Group’s guidelines regarding currency hedging.

The Group is not exposed to transaction risks to any great extent because sales and purchasing are mainly conducted in the functional currencies of the countries concerned. Transac-tion exposure shall primarily be minimized through internal measures, such as matching of flows, choice of invoicing cur-rency and the use of currency clauses, and secondarily through financial instruments.

The table below shows the net flows and hedge volumes of the Group companies in each currency.

2013 2012

12 months total 12 months total group, SeKm net flows hedges net flows hedges

SEK -138.5 -89.5 -210.6 -92.5EUR -140.1 -18.6 -143.9 -22.1NOK 10.7 - -3.0 -DKK -8.2 - -9.8 -GBP -0.8 - 2.2 -USD -2.6 - 0.0 -Other -0.1 - -17.5 -

total -279.6 -108.1 -382.7 -114.6

Transaction exposure has been hedged through currency deriva-tives. The derivatives used are mainly forward rate contracts.

translation exposure

The hedging of translation exposure is guided by the Group’s finance policy. Translation exposure is not currently hedged as the risk is relatively limited. However, an analysis of these risks is made once a year to ensure that they do not increase. Foreign net assets in the Group are mainly distributed among the following currencies:

group, SeKm 2013 2012

local currency currency amount % amount %

SEK 2,364.8 2,364.8 93.2 2,230.0 94.4NOK -39.7 -45.8 -1.8 22.2 0.9DKK 198.4 218.6 8.6 146.8 6.2EUR 41.2 368.5 14.5 290.9 12.3GBP -10.1 -116.7 -4.6 -100.7 -4.3LTL 0.1 0.3 0.0 0.2 0.0PLN -78.8 -179.2 -7.1 -162.5 -6.9RUB -334.9 -72.4 -2.9 -64.1 -2.7

total 2,538.1 100 2,362.8 100

A 10 percent strengthening of the SEK against other currencies as of 31 December 2013 would entail a negative change in equity of SEK 21.9 million (19.5) and a negative change in profit of SEK 0.1 million (6.6). This sensitivity analysis is based on all other factors (e.g. interest rates) remaining unchanged. The same conditions were applied for 2012.

Fair valueIn all instances, fair value corresponds to the financial instrument’s carrying amount. Fair values and carrying amounts are detailed in the statement of comprehensive income (next page):

Specification of trade and other receivables 2013 2012

provision provision Book for losses Book for losses invoice on accounts Book invoice on accounts Book group, SeKm amount recievable amount amount recievable amount

Not overdue 287.9 - 287.9 342.6 -1.3 341.3Overdue 0-60 days 83.2 -0.5 82.7 85.2 -0.1 85.0Overdue 61-180 days 16.0 -2.2 13.8 13.9 -0.7 13.2Overdue 181-365 days 5.8 -2.5 3.3 8.9 -2.3 6.6More than 1 year 18.3 -16.6 1.7 19.9 -15.5 4.4

total trade and other receivables 411.2 -21.8 389.4 470.4 -20.0 450.4



The Group enters into derivative contracts under the Interna-tional Swaps and Derivatives Association’s (ISDA) master netting agreement. According to this agreement, when a counterparty fails to settle its obligations under all transactions, the agreement is cancelled and all outstanding balances are settled with a net amount. No derivatives have been offset in the balance sheet.

The table at right presents a reconciliation of opening and closing balances for financial instruments recognized at fair value in the statement of financial position using valuation techniques based on non-observable in-data (level 3).

A change in value of SEK 1.0 million regarding instruments measured according to class 3 affected profit for the year. On an increase in the share price of 5 percent, the market value of the options would increase by SEK 1.7 million (1.7) if volatility remains unchanged.

group, SeKm long-term liability total

opening balance, 1 Jan. 2012 28.0 28.0Options/shares redeemed -4.4 -4.4Options/shares issued 1.0 1.0Total recognized gains and losses:Reported in profit for the year -13.2 -13.2

closing balance, 31 dec. 2012 11.4 11.4

opening balance, 1 Jan. 2013 11.4 11.4Options/shares redeemed -0.2 -0.2Options/shares issued 0.1 0.1Total recognized gains and losses:Reported in profit for the year -1.0 -1.0

closing balance, 31 dec. 2013 10.3 10.3

Held for trade Financial Financial Financial assets liabilities account assets recognized recognized total and loan available at fair value value in other carrying Fair group 2013, SeKm receivables for sale in profit profit liabilities amount value

Financial investments 17.9 3.0 20.9 20.9Other non-current assets 15.2 15.2 15.2Trade and other receivables 389.4 389.4 389.4Receivables from Group companies 89.7 89.7 89.7Other current assets 54.9 54.9 54.9Cash and equivalents 76.6 76.6 76.6

total 643.8 - - - - 646.8 646.8

Non-current interest-bearing liabilities 845.1 845.1 845.1Other non-current liabilities 14.8 1.9 16.7 16.7Current non-current liabilities 227.9 227.9 227.9Trade and other payables 311.3 311.3 311.3Liabilities to Group companies 116.3 116.3 116.3Other current liabilities 0.4 134.3 134.7 134.7

total - - - 15.2 1,636.8 1,652.0 1,652.0

group 2012, SeKm

Financial investments 17.3 2.8 20.1 20.1Other non-current receivables 14.5 14.5 14.5Trade and other receivables 450.4 450.4 450.4Receivables from Group companies 76.3 76.3 76.3Other current assets 64.7 64.7 64.7Cash and equivalents 98.7 98.7 98.7

total 721.9 2.8 0.0 - - 724.8 724.8

Non-current interest-bearing liabilities 1,028.4 1,028.4 1,028.4Other non-current liabilities 20.9 20.9 20.9Current interest-bearing liabilities 224.1 224.1 224.1Trade and other payables 348.6 348.6 348.6Liabilities to Group companies 168.6 168.6 168.6Other liabilities 0.6 130.4 131.0 131.0

total - - - 21.5 1,900.1 1,921.7 1,921.7

disclosures regarding determination of fair value

2013 2012

group, SeKm level 1 level 2 level 3 total level 1 level 2 level 3 total

Non-current liability - derivative 4.4 4.4 9.3 9.3Non-current liability - options 10.3 10.3 11.4 11.4Current liability - derivative 0.5 0.5 0.8 0.8

total - 4.9 10.3 15.2 - 10.1 11.4 21.5

Level 1 is according to prices noted in an active market for the same instrument. Level 2 is based on directly or indirectly observable market data not included in Level 1. Level 3 is based on input data not observable in the market.



Calculation of fair value The following is a summary of the main methods and assump-tions used to establish the fair value of the financial instruments presented in the table above (previous page).

Securities For listed securities, fair value is determined on the basis of the asset’s quoted bid price on the balance sheet date, not including transaction expenses incurred on acquisition. Nor are potential transaction costs on the divestment of an asset taken into account.

The fair value of unlisted financial assets is determined by calculating future discounted cash flows in the company. The resulting value is then compared to assessments of similar shares, participations or other financial instruments that are judged comparable but that are listed. The comparative valua-tion is made by applying relevant multiples to the key figures of the company concerned (for example, EBITDA) less deductions for individually determined adjustments due to factors such as differences in size between the company concerned and com-parable companies. An additional factor taken into account in the valuation is the value in connection with any transactions in each company and any external valuations that have been made, usually on the basis of discounted cash flows.

derivative instruments For foreign exchange forward contracts, fair value is determined on the basis of quoted prices where available. If these are not available, fair value is calculated by discounting the difference between the contracted forward rate and the forward rate that can be signed on the balance sheet date for the remaining contract period. Discount-ing is applied at a risk-free interest rate based on government bonds.

For interest rate swaps, fair value is based on the valuation made by the mediating credit institute, with the fairness of this being tested by discounting calculated future cash flows in accordance with the terms and maturity dates of the contract and on the basis of market interest rates for similar instruments on the balance sheet date.

Where discounted cash flows are applied, future cash flows are calculated based on company management’s best assessment. The interest rate applied in discounting is based on market rates for similar instruments on the balance sheet date. Where other valuation methods have been applied, input data are based on market related data on the balance sheet date.

Interest-bearing liabilities For financial liabilities that are not derivative instruments, fair value is calculated by discounting future cash flows on principals and interest applying market interest rates on the balance sheet date.

Financial lease liabilities Fair value is based on the present value of future cash flows discounted at market interest rates for similar lease agreements.

trade and other receivables and payables For trade and other receivables and payables with a remaining maturity of less than six months, the carrying amount is considered to reflect fair value. Trade and other receivables and payables with a maturity of more than six months are discount-ed in connection with the determination of fair value.

parent Company The Parent Company conducts certain Group-wide services and is therefore not exposed to any substantial financial risks.

NOTE 3 Distribution of income

Income by major income category group parent company

SeKm 2013 2012 2013 2012

Sale of goods 4,040.3 4,331.9 - -Service assignments 259.7 275.5 54.8 55.8

net sales 4,300.0 4,607.4 54.8 55.8

Net sales include no income in connection with the exchange of goods and services, either in the Group or the Parent Company.

Income by geographical marketSeKm 2013 2012

Sweden 1,780.8 1,922.4Norway 407.0 536.0Denmark 651.0 691.0Finland 1,151.9 1,124.4Poland 81.6 94.5United Kingdom 125.6 161.1Russia 23.9 26.9Ireland 34.8 22.4Japan 20.8 11.7Netherlands 0.0 0.4Germany 10.0 9.6Estonia 2.3 1.3Lithuania 1.4 1.0Belgium 0.4 0.4France 0.5 0.4Other countries 8.0 4.0

4,300.0 4,607.4

NOTE 4 Acquisitions and divestments

Acquisitions and divestments in 2013In the first quarter of 2013, Inwido acquired 30 percent of the shares from non-controlling interests in Frovin Vinduer og Døre A/S. Ownership thus increased from 70 percent to 100 percent.The investments totalled SEK 23.2 million, of which SEK 18.9 million was paid in cash. The carrying amount for Inwido Den-mark’s net assets in the consolidated accounts amounted at the time of acquisition to SEK 4.1 million. The Group recognizes a decrease in its non-controlling interests of SEK 4.1 million and a decrease in profit brought forward of SEK 18.9 million.

During the year, Inwido Danmark A/S established the company TB Europe A/S, in which Inwido Denmark A/S holds 80 percent of the shares. This has affected the non-controlling interest in the Group in the amount of SEK 0.5 million.

divestments in 2012On 15 May 2012, Inwido signed an agreement regarding the divestment of all shares in its subsidiary Inwido Home Improve-ment AB to private equity fund Priveq Investment Fund IV. The sale was completed on 15 June. The businesses have a combined total of some 80 employees and in 2011, sales amounted to SEK 274 million with an operating profit (EBITA) of SEK 25.8 million.

The purchase consideration amounted to SEK 191.5 million. A consolidated loss before tax of SEK 51 million was reported. The loss was reported under other operating expenses in the consolidate accounts and as a financial expense in the accounts of the Parent Company.



Profit/loss from divested businessgroup, SeKm 2012

Profit/loss from operations in the divested businessRevenue 131.3Expenses -123.4

profit before tax 7.9Taxes -2.1

profit/loss after tax 5.8Profit on divestment of businessCapital gains/losses on divestment of business -51.3Taxes attributable to capital gains above -Profit/loss on divestment after tax -51.3

profit/loss from divested business after tax -51.3

Of the profit of the divested business, SEK 5.8 million (-2.2) was attributable to owners of the Parent Company.

effect on individual assets and liabilities in the Group of the divestmentgroup, SeKm 2012

Goodwill 193.1Intangible non-current assets 0.7Tangible non-current assets 0.8Inventories 45.8Trade and other receivables 58.9Cash and equivalents 1.0Deferred tax liabilities -3.4Trade payables and other liabilities -58.3

divested assets and liabilities, net 238.7Net purchase consideration received in cash and equivalents 191.5Less: Cash and equivalents in the divested business -1.0

net effect on cash and equivalents 190.5

NOTE 5 Other operating incomegroup, SeKm 2013 2012

Rental income 0.9 1.0Gain on sale of non-current assets 4.3 2.3Exchange gains on operating receivables/liabilities - 1.3Insurance compensation 0.7 0.8Reversed provision for additional purchase consideration - 19.2Other 7.9 7.9

total 13.8 32.6

parent company, SeKm

Exchange gains on operating receivables/liabilities 0.6 0.2Other 0.0 19.2

total 0.6 19.4

NOTE 6 Other operating expensesgroup, SeKm 2013 2012

Loss on sales of non-current assets 0.6 0.0Exchange losses on operating receivables/liabilities 3.0 2.9Divestment of business 2.9 51.3Other 7.9 4.4

total 14.4 58.6

parent company, SeKm

Exchange losses on operating receivables/liabilities 0.0 1.1Other 3.1 -

total 3.1 1.1

NOTE 7 Employees and personnel expensesgroup, SeKm 2013 2012

Wages/remunerations, etc. 1,057.7 1,117.4(of which, wages/remunerations to the Board of Directors, CEO and senior management) (54.0) (55.6)(of which, bonuses to the Board of Directors, CEO and senior management) (5.0) (-4.5)Pension expenses, defined contribution plans 90.4 98.2(of which, to the Board of Directors, CEO and senior management) (9.8) (9.8)Social security contributions 201.4 208.6

1,349.5 1,424.2

Average number of employees 2013 Men 2012 Men

Parent Company (Sweden) 17 71% 18 67%

total, parent company 17 71% 18 67%Subsidiaries:Sweden 1,169 70% 1,287 70%Norway 202 63% 221 66%Finland 658 76% 698 76%Denmark 489 80% 513 76%Ireland 10 50% 9 56%Lithuania 20 40% 10 50%Poland 324 73% 339 73%United Kingdom 170 95% 173 94%Russia 14 50% 17 65%Austria 4 75% 0 0%China 0 0% 2 50%

total, subsidiaries 3,060 74% 3,269 73%

total, group 3,077 74% 3,287 79%

Gender distribution in executive managementparent company Women, 2013 Women, 2012

Board of Directors 18% 14%

total, group

Board of Directors 13% 15%Other senior executives 19% 20%

Salaries, other remunerations and social security expenses 2013 2012 Wages Wages and Social and Social parent company, remune- security remune- security SeKm rations expenses rations expenses

Board of Directors, CEO and senior management 11.4 7.4 13.4 9.3(of which, bonuses) (0.6) (0.9)Other employees 8.8 5.1 10.8 4.8

Of social security expenses, SEK 3.7 million (3.9) represent pension expenses for members of the Board of Directors, the CEO and sen-ior management, and SEK 2.2 million (1.3) for other employees.

Benefits to senior managementBoard fees are not paid to members employed by the Inwido Group or Ratos AB. Other, external members receive fees as follows:• Chairman of the Board. . . . . . . . . . . . . . . . . SEK 360 thousands • Remaining three members, each . . . . . . . . SEK 175 thousands

Severance agreementsIn the event that the employment contract is terminated by the company, the CEO is entitled to remuneration over a period of 18 months. In the event of termination by the CEO, a notice period of six months applies. For other senior executives, the corresponding periods are twelve and six months respectively.



NOTE 8 Auditors’ fees and reimbursements group parent company

SeKm 2013 2012 2013 2012

KpMgAudit assignments 3.8 3.8 0.4 0.5Other assignments 0.3 0.7 - 0.4Tax advisory services 0.2 0.4 - 0.1Other advisory services - 0.2 - 0.2

other auditorsAudit assignments 0.3 0.3 - -Other assignments - - - -Tax advisory services - 0.1 - -Other advisory services - 0.0 - 0.0

4.6 5.5 0.4 1.2

Auditing assignments refer to the audit of the annual report and accounting as well as the administration of the Board and CEO, other tasks undertaken by the company’s auditors in order to complete the assignment. Auditing activities beyond the auditing assignment refers to reviews such as certificates, interim reports etc. that have resulted in a report from the auditor. Consultancy services taxes refers to assignments that have been carried out in relation to taxes and fees. Consultancy services other refers to all other assignments that are not included in the above.

NOTE 9 Operating expenses by typegroup, SeKm 2013 2012

Raw materials and input goods 1,483.1 1,651.6Changes in inventories of finished products and products in progress 37.7 26.0Personnel costs 1,406.1 1,487.1Depreciation and impairment 107.9 112.9Transport 129.2 185.6Energy 38.3 52.8Repairs and maintenance 38.9 57.7IT and telephony 58.1 88.7Other external expenses 715.9 690.0

total 4,015.2 4,352.4

NOTE 10 Financial income and expensesgroup, SeKm 2013 2012

Financial incomeInterest income* 2.7 9.1Assets and liabilities valued at fair value - Held for trade 5.6 13.7Exchange rate difference 1.1 14.0Other financial income 0.3 0.0

total 9.7 36.7

Financial expensesInterest expenses* -51.9 -71.0Assets and liabilities valued at fair value - Held for trade - -Exchange rate difference -30.2 -2.8Other financial expenses -6.4 -4.3

total -88.5 -78.0


* Interest income and expenses are attributable in their entirety to financial assets and liabilities measured at accrued cost.

parent company, SeKm 2013 2012

profit/loss from participations in subsidiariesCapital gains/loss on divestment of participations - -45.2Impairment of shares in subsidiaries -73.3 -3.5

total -73.3 -48.7

loss from other non-current financial assets Impairment of shares from Group companies - -

total 0.0 0.0

other interest income and similar profit/loss itemsInterest income 0.1 0.7Interest income, Group companies 16.5 15.8Exchange rate difference 4.0 13.1Change in synthetic options 0.9 12.1Change in value of derivatives 1.6 0.3

total 23.1 42.0

interest expense and similar profit/loss itemsInterest expenses -10.0 -9.6Interest expenses, shareholders’ loan -1.5 -1.8Exchange rate difference -29.8 -2.5Other financial expenses -3.9 -2.0

total -45.1 -15.9


NOTE 11 Taxesgroup, SeKm 2013 2012

current tax expense (-) / income (+)Tax expense/income for the period -83.7 -82.1Adjustment for taxes attributable to previous years -3.1 6.0Taxes on participation in profit/loss of associated companies -0.1 -0.2deferred tax expense (-) / income (+) Deferred tax on temporary differences 7.5 -2.4Deferred tax expense /income due to changes in tax rates 2.3 4.0Deferred tax income on tax value of loss carryforwards capitalized during the year 15.3 13.1Utilization of previously capitalized loss carryforwards -9.0 -12.4

total consolidated tax recognized -70.7 -74.0


current tax expense (-) / income (+) Tax expense (-) / income (+) for the period -33.1 -46.7Adjustment for taxes attributable to previous years - -0.3deferred tax expense (-) / income (+)Deferred tax expense /income due to changes in tax rates - -0.4Deferred tax on temporary differences 0.1 0.3

total reported tax expense in the parent company -33.0 -47.1

Reconciliation of effective taxgroup, SeKm 2013 2012

Profit before tax 220.3 246.3Less participations in profit/loss of associated companies -0.5 -1.0

calculated profit before tax 219.8 245.3




Tax according to the current tax rate for the Parent Company, 22.0% -48.4 -64.5Effect of different tax rates for foreign subsidiaries 0.4 1.2Non-deductible expenses -6.0 -16.7Non-taxable income 0.7 9.2Increase in loss carryforwards with no equivalent capitalization of deferred tax -7.7 -1.9Impairment of previously capitalized loss carryforwards -8.2 -11.5Effects of changed tax rates and regulations 2.3 4.1Taxes attributable to previous years -3.1 6.0Other -0.6 0.4Taxes for associated companies -0.1 -0.2

recognized effective tax -70.7 -74.0


Profit before tax 71.9 159.3Tax according to the current tax rate for the Parent Company -15.8 -41.9Non-deductible expenses -17.5 -12.8Non-taxable income 0.3 8.3Taxes attributable to previous years - -0.3Deferred tax expense /income due to changes in tax rates - -0.4

recognized effective tax -33.0 -47.1

tax items recognized directly in equity 2013 2012

parent company, SeKm Before tax taxes after tax Before tax taxes after tax

Current tax on Group contributions paid/received -76.3 16.8 -59.5 -103.5 27.3 -76.2

-76.3 16.8 -59.5 -103.5 27.3 -76.2

deferred tax receivables and liabilities recognizedRecognized deferred tax receivables and liabilities relate to the following: Deferred tax receivables Deferred tax liabilities Net

group, SeKm 2013 2012 2013 2012 2013 2012

Intangible assets 0.7 2.8 -7.2 -7.1 -6.5 -4.3Tangible non-current assets 2.1 2.7 -32.3 -65.3 -30.2 -62.6Financial assets - 0.1 -0.3 -0.3 -0.3 -0.2Inventories 3.7 1.7 -0.5 -0.6 3.2 1.2Trade and other receivables 1.0 0.7 -0.1 -0.1 0.9 0.6Other receivables - 1.5 -0.1 -0.2 -0.1 1.2Pensions 2.2 2.0 - - 2.2 2.0Provisions 6.5 0.8 - - 6.5 0.8Other 1.5 2.1 - - 1.5 2.1Tax loss carryforwards 37.8 34.1 - - 37.8 34.1Tax allocation reserve 1.5 2.5 -27.0 -0.7 -25.5 1.9

tax assets/liabilities, net 57.0 51.0 -67.5 -74.2 -10.5 -23.2

Deferred tax assets/liabilities maturing within one year 4.5 0.9 -3.0 -0.1 1.6 0.8Deferred tax assets/liabilities maturing after one year 11.4 17.8 -6.9 -3.6 4.5 14.1Deferred tax assets/liabilities without maturity 41.0 32.3 -57.6 -70.4 -16.6 -38.1 parent company, SeKm 2013 2012 2013 2012 2013 2012

Other non-current liabilities 2.1 2.1 - - 2.1

tax assets/liabilities 2.1 2.1 - - 2.1 2.3

temporary difference between recognized value and tax base for participations etc. directly owned by the parent companyFor both years, the temporary differences in the Parent Company’s directly owned participations amount to zero. For the Group, the amount is not material.

deferred tax assets not recognizedDeductible temporary differences and tax loss carryforwards for which deferred tax assets have not been recognized amount to: Group Parent Company

SeKm 2013 2012 2013 2012

Tax losses 11.1 5.0 - -

11.1 5.0 - -

Nearly all of the Group’s tax loss carryforwards have an indefinite period of applicability. According to current tax regulations, de-ductible temporary differences do not expire. Deferred tax assets have not been recognized for these items as the Group is likely to use them to offset future taxable profits.



2013 2012 Balance reported Balance Balance reported Balance at 1 Jan in profit for divested translation at 31 dec at 1 Jan in profit for divested translation at 31 dec group, SeKm 2013 the year business difference 2013 2012 the year business difference 2012

Intangible assets -4.3 -1.8 - -0.4 -6.5 -4.1 -0.4 - 0.2 -4.3Tangible non-current assets -100.4 2.7 - -0.8 -98.5 -67.7 -34.4 0.6 1.1 -100.4Financial assets -0.2 -0.1 - 0.0 -0.3 -0.1 -0.1 - 0.0 -0.2Inventories 1.1 2.2 - -0.2 3.1 2.1 -1.0 - 0.0 1.1Trade and other receivables 0.7 0.3 - 0.0 1.0 0.8 -0.1 - 0.0 0.7Other receivables 1.3 -1.4 - 0.0 -0.1 1.9 -0.6 - -0.1 1.3Interest-bearing liabilities - - - - - 0.8 -0.8 0.0 0.0 -Pensions 1.9 0.2 - 0.0 2.1 2.0 -0.1 - 0.0 1.9Provisions 0.8 6.0 - -0.3 6.5 0.8 - - 0.0 0.8Other liabilities 4.8 -0.6 - 0.0 4.2 5.2 -0.3 - -0.1 4.8Tax loss carryforwards 34.1 5.4 - -1.7 37.8 33.9 -0.2 - 0.4 34.1Tax allocation reserve 37.0 3.2 - -0.1 40.1 -6.1 40.4 2.8 -0.1 37.0

total -23.3 16.2 - -3.5 -10.6 -30.5 2.4 3.4 1.5 -23.3

NOTE 12 Intangible assets acquired intangible assets

customer other group, SeKm relations intangible assets goodwill total

accumulated cost costOpening balance, 1 January 2012 35.1 139.2 3,163.2 3,337.5Other investments - 11.4 - 11.4Disposals and scrappings - -35.2 -193.1 -228.3Disposals of operations - -1.1 - -1.1Reclassifications - 2.0 - 2.0Exchange rate differences for the year - -3.3 -53.3 -56.6

closing balance, 31 december 2012 35.1 113.0 2,916.8 3,064.9

Opening balance, 1 January 2013 35.1 113.0 2,916.8 3,064.9Other investments - 14.2 - 14.2Disposals and scrappings - -10.3 - -10.3Disposals of operations - - - -Reclassifications - -1.5 - -1.5Exchange rate differences for the year - 2.7 41.0 43.6

closing balance, 31 december 2013 35.1 118.1 2,957.8 3,111.0

accumulated amortization and impairmentOpening balance, 1 January 2012 -35.1 -121.6 -8.3 -165.1Disposals and scrappings - 35.1 - 35.1Disposals of operations - 0.4 - 0.4Amortization for the year - -8.5 - -8.5Reclassifications - -1.5 - -1.5Exchange rate differences for the year - 2.8 0.3 3.1

closing balance, 31 december 2012 -35.1 -93.3 -8.0 -136.5

Opening balance, 1 January 2013 -35.1 -93.3 -8.0 -136.4Disposals and scrappings - 10.3 - 10.3Disposals of operations - - - -Amortization for the year - -6.7 - -6.7Reclassifications - - - -Exchange rate differences for the year - -2.0 -0.3 -2.3

closing balance, 31 december 2013 -35.1 -91.7 -8.3 -135.1

carrying amounts, SeKm

As of 1 January 2012 - 17.6 3,154.9 3,172.5As of 31 December 2012 - 19.7 2,908.8 2,928.5

as of 1 January 2013 - 19.7 2,908.8 2,928.5as of 31 december 2013 - 26.4 2,949.5 2,975.9

Impairments for the year are included in the following items in the income statement for 2013 (SEK million): Cost of goods sold -6.7Impairments for the year are included in the following items in the income statement for 2012 (SEK million): Cost of goods sold -8.5

All intangible assets, except goodwill, are amortized. For information on amortization, see the accounting principles detailed in Note 1.



Impairment testing for cash generating units containing goodwillgroup, SeKm 2013 2012

goodwill amounts by cash generating unit:Inwido Sweden 990.2 991.3Inwido Nordic 1,764.4 1,718.8Inwido Europe 85.5 82.1Supply 116.7 116.6

total 2,956.8 2,908.8

In impairment testing, the recoverable amount consists of the assessed value in use of the cash generating units. The pre-tax discount rate is 8.1-8.7 percent (8.5). This amount is based on cash flow calculations, of which the first four years are based on the four-year business forecast approved by company management. The cash flows calculated for periods after the first four years are based on 3 percent (3) annual growth. The key assumptions in the four-year business forecast are detailed in the table at right.

The recoverable amount for the Group exceeds the carrying amount of the tested assets of the cash-generating units by SEK 1,325 million (1,174). This represents a margin whereby reason-able possible changes in key assumptions would not entail the recoverable amount for the unit being lower than its carrying amount.

Key variables assessment method

Market

Expected market growth is based on a transition

Growth

from the current competitive situation to the expected long-term growth trend. The forecast includes the strategy to increase the proportion of sales generated within the consumer segment, increased demand for energy-efficient products and the expected demographic trend. The fore-cast agrees with previous experience and external sources of information.

purchasing The forecast for purchasing costs is based on

of goods expected inflation, changes in choice of material,

and services volume advantages and other synergies within

the Group. The forecast agrees with previous experience and forecasts.

personnel Forecast personnel costs are based on expected

costs and wage increases, planned efficiency measures and

efficiency other synergies within the Group. The forecast

agrees with previous experience and forecasts.

acquired intangible assets other intangible assets


accumulated costOpening balance 1.8 -Other investments - 1.8

closing balance 1.8 1.8

accumulated amortization and impairmentOpening balance - -Amortization for the year -0.4 -

closing balance -0.4 -

carrying amounts 1.4 1.8

NOTE 13 Tangible non-current assets land and Machinery construction group, SeKm buildings and equipment in progress total

costOpening balance, 1 January 2012 435.8 1,438.7 9.3 1,883.7Other acquisitions 14.2 50.0 11.5 75.8Re-classification 1.6 3.9 -8.1 -2.7Disposals -1.5 -39.2 - -40.7Disposals of operations - -8.1 - -8.1Exchange-rate differences -1.3 -13.1 0.1 -14.4

closing balance, 31 december 2012 448.8 1,432.1 12.8 1,893.6

Opening balance, 1 January 2013 448.8 1,432.1 12.8 1,893.6Other acquisitions 4.7 45.7 23.0 73.4Re-classification 1.9 11.4 -12.1 1.2Disposals -16.2 -88.6 - -104.8Disposals of operations - - - -Exchange-rate differences 3.2 5.9 0.3 9.4

closing balance, 31 december 2013 442.4 1,406.5 24.0 1,872.8

depreciation and impairmentOpening balance, 1 January 2012 -202.0 -1,046.2 -1.6 -1,249.8Depreciation for the year -12.7 -84.2 - -96.9Impairment for the year -6.0 -1.4 - -7.4Re-classification - 0.7 1.5 2.2Disposals 1.2 38.9 - 40.1Disposals of operations - 7.3 - 7.3Exchange-rate differences 0.6 9.7 0.1 10.4

closing balance, 31 december 2012 -218.9 -1,075.2 - -1,294.1




depreciation is included in the following items in the income statement:Cost of goods sold -88.0 -89.4Selling expenses -1.9 -0.4Administrative expenses -6.2 -7.1

total -96.1 -96.9

impairment is included in the following items in the income statement:Cost of goods sold -5.3 -7.4

total -5.3 -7.4

The restructuring of production in Poland necessitated impairment of tangible non-current assets.

equipment


accumulated costOpening balance 1.8 1.8Acquisitions 0.0 0.0


accumulated depreciationOpening balance -1.5 -1.4Depreciation for the year -0.1 -0.1

closing balance -1.6 -1.5

carrying amounts 0.2 0.3

Financial leasing (leased production equipment)The Group leases production equipment and production buildings through several different financial leasing agreements. The variable fees consist of non-fixed interest rates linked to local reference rates in Denmark, Norway and Poland. As the leasing agreements expire, the Group has the option of buying the equipment at favourable prices. There are options to extend the leasing agreements at lower than current prices. The leased assets act as collateral for the leasing liabilities.


Book value 21.4 25.0Minimum lease fees paid during the year 6.6 6.0


Future payment obligations for calculated calculated non-cancellable leasing contracts: current value current value

Within 1 year 6.8 6.0 7.8 6.72-5 years 11.1 10.5 16.4 14.7Later than 5 years - - 0.2 0.2

17.9 16.5 24.4 21.6

NOTE 14 Participations in associated companies


Carrying amount at start of year 5.3 5.0Acquisitions of associated companies 0.3 1.0Participations in profit/loss of associated companies 0.5 1.0Share in taxes of associated companies -0.1 -0.2Impairment -0.3 -Dividend -0.2 -1.5Translation difference - -

carrying amount at end of year 5.5 5.3

land and Machinery construction group, SeKm buildings and equipment in progress total

Opening balance, 1 January 2013 -218.9 -1,075.2 - -1,294.1Depreciation for the year -13.0 -83.0 - -96.0Impairment for the year - -5.3 - -5.3Re-classification - 0.0 - 0.0Disposals 12.6 87.4 - 100.0Disposals of operations - - - -Exchange-rate differences -0.8 -2.9 - -3.7

closing balance, 31 december 2013 -220.1 -1,079.0 - -1,299.1

carrying amounts, SeKm

As of 1 January 2012 233.8 392.4 9.3 635.5As of 31 December 2012 229.9 356.9 12.8 599.6

as of 1 January 2013 229.9 356.9 12.8 599.6as of 31 december 2013 222.3 327.5 24.0 573.8

Including government subsidies in the amount of: - - - -



Specified below are the consolidated values for the ownership proportion of income, profit/loss, assets and liabilities. partici- associated companies ownership pation in share profit/loss value if carrying 2013, SeKm country revenue earnings assets liabilities equity in % after tax listed amount

parent company’s: WeBe Home AB* Sweden 4.5 0.2 1.8 1.4 0.4 30.0 0.0 - 1,0Windowdrezz AB Sweden 0.0 -0.1 0.1 0.0 0.1 30.0 0.0 - 0.0Subsidiaries’:UAB Panorama Nordic Ltd Lithuania 12.4 1.0 8.1 0.9 7.2 40.0 0.4 - 4.5

0.4 5.52012, SeKm

parent company’s: Abell AB* Sweden 2.1 0.8 0.9 0.7 0.2 30.0 0.0 1.0Subsidiaries’:UAB Panorama Nordic Ltd Lithuania 15.5 2.6 7.9 1.4 6.5 40.0 0.8 - 4.3

0.8 5.3*During 2013, Abell AB changed name to WeBe Home AB.

NOTE 15 Receivables from Group companiesparent company, SeKm 2013 2012

accumulated costOpening balance 538.0 630.4Additional receivables 484.4 455.5Settled receivables -354.0 -547.9

closing balance, 31 december 668.4 538.0

NOTE 16 Financial investmentsgroup, SeKm 2013 2012

Financial investments that are non-current assetsFinancial assets available for sale - Unlisted shares and participations 3.0 2.8Loans and trade and other receivables 33.1 31.8

36.1 34.6

investments that are current assetsLoans and trade and other receivables 610.7 690.1

610.7 690.1

Shares and participationsOpening balance 2.8 3.1Acquisitions 0.5 -Transferred assets -0.3 -0.3Translation difference 0.0 0.0


NOTE 17 Inventoriesgroup, SeKm 2013 2012

Raw materials and consumables 184.5 180.3Products in progress 43.4 45.2Finished goods and goods for resale 180.6 190.5

408.6 416.0

Operating expenses include impairment of inventories in the amount of SEK 0.2 million (11.6)

NOTE 18 Cash and equivalentsgroup, SeKm 2013 2012

cash and equivalents include the following sub-components:Cash and bank balances 76.6 98.7

total according to statement of financial position and statement of cash flows 76.6 98.7

NOTE 19 EquityAs per 31 December 2013, registered share capital amounted to 231,870,112 shares (231,870,112) at a par value of SEK 1 per share.

Holders of ordinary shares are entitled to dividends determined in due course and to one vote per share at Annual General Meetings. All shares carry equal entitlement to a share in the company’s remaining net assets.

other capital providedPertains to capital contributions from shareholders. This includes premiums paid in connection with share issues.

Reservestranslation reserve

The translation reserve encompasses all exchange rate differences arising from the translation of the financial statements of foreign operations prepared in a currency other than that in which the Group’s financial statements are presented. The Parent Company and the Group present their financial statements in SEK.

Profit brought forward including profit for the yearIncluded in profit brought forward and profit for the year are the profits earned by the Parent Company and its subsidiaries, associated companies and joint ventures. This equity item includes earlier provisions to the reserve fund, excluding transferred share premium reserves.

dividendNo dividend was paid in 2013. No dividend is proposed for payment in 2014.

Capital managementAccording to Board policy, the Group’s financial objective is to maintain a favourable capital structure and financial stability, enabling it to retain the trust of creditors and the market, while also providing the basis for continued business development. Capi-tal is defined as total equity, not including non-redeemable prefer-ential shares and minority interests, as well as the rate of dividends to shareholders. The Board’s ambition is to maintain a balance between the high return that increased borrowing permits and the advantages and security offered by a sound capital structure.

During the year, no changes have taken place in the Group’s capital management. The Group has an agreement with its bank regarding capital requirements, or covenants. The company and the Group meet the current covenant terms.



NOTE 20 Interest-bearing liabilitiesThe following presents details of the company’s agreement terms for interest-bearing liabilities, without taking the company’s inter-est rate swaps into account. For further details of the company’s exposure to interest rate risks and currency risks, please see Note 2.


non-current liabilitiesLiabilities to credit institutions 834.6 1,013.5Financial lease liabilities 10.5 14.9

total 845.1 1,028.4

current liabilitiesOverdraft facilities 111.0 122.2Current liabilities to credit institutions 110.9 95.2Current portion of financial lease liabilities 6.0 6.7

total 227.9 224.1

liabilities maturing later than five years after the balance sheet dateBank loans 7.5 8.3Financial leasing - 0.2

terms and repayment periods 2013 2012 nominal nominal nominal book Book book Book group, SeKm currency interest, % Matures value value value value

Credit institute SEK 3.1 2016-02-02 235.6 235.6 262.4 262.4Credit institute EUR 1.5-3.3 2016-02-02 166.2 166.2 239.3 239.3Credit institute NOK 4.1 2017-07-18 3.3 3.3 4.6 4.6Credit institute DKK 3.5-4.0 2016-02-02- 2028-06-30 499.1 499.1 483.7 483.7Credit institute PLN - - - - 52.3 52.3Credit institute GBP 3.0 2016-02-02 41.3 41.3 43.5 43.5Credit institute RUB - - - - 22.6 22.6Financial lease liabilities DKK, NOK, PLN, EUR 1.5-5.8 - 16.5 16.5 21.6 21.6Overdraft facilities utilized GBP, NOK, PLN 2.25-4.2 2016-02-02 111.0 111.0 122.2 122.2

interest-bearing liabilities 1,073.0 1,073.0 1,252.2 1,252.2

NOTE 21 Liabilities to credit institutionsparent company, SeKm 2013 2012

non-current liabilitiesBank loans 115.1 113.3 current liabilitiesOverdraft facilities 57.0 9.2Current portion of bank loans - -Liabilities maturing later than five years after the balance sheet date - -

NOTE 22 Provisions guarantee restructuring group 2013, SeKm reserve measures total

carrying amount at start of period, 1 January 2013 29.6 1.7 31.3Provisions made during the period 5.0 41.6 46.6Amounts utilized -7.2 -0.7 -7.9Re-classification -0.2 -1.0 -1.2Translation difference 0.0 - 0.0

carrying amount at end of period, 31 december 2013 27.2 41.6 68.8 of which, amounts due for payment: - after 12 months - 12.2 12.2- within 12 months 27.1 29.4 56.5

guarantee restructuring group 2012, SeKm reserve measures total

carrying amount at start of period, 1 January 2012 24.7 30.8 55.5Provisions made during the period 6.0 12.6 18.6Amounts utilized -0.9 -42.2 -43.0Re-classification -0.1 0.9 0.8Translation difference -0.2 -0.4 -0.6

carrying amount at end of period, 31 december 2012 29.6 1.7 31.3 of which, amounts due for payment: - after 12 months - - -- within 12 months 29.6 1.7 31.3

GuaranteesProvisions for guarantees and refunds are mainly attributable to sales of windows and doors during the 2012 and 2013 financial years. The provision was made on the basis of calculations in-volving historical expense data for guarantees and refunds.

RestructuringOf the restructuring measures adopted within Inwido, SEK 50.6 million has impacted the earnings for the year negatively. Of these restructuring expenses of SEK 50.6 million, provisions of SEK 41.6 million remained at 31 December 2013. The majority of these provisions were made to cover the expected expenses for the closures of units in Norway, Sweden and Russia. Most of the measures in Norway and Sweden are expected to be complet-ed in the second quarter of 2014, while the measures in Russia are expected to be completed in the first quarter of 2015.



NOTE 23 Accrued expenses and deferred incomegroup, SeKm 2013 2012

Accrued liabilities for wages and vacation compensation 173.3 165.1Accrued social security contributions 36.4 45.4Customer bonuses 80.0 89.9Accrued interest expenses 0.2 1.1Other 46.7 31.2

total 336.6 332.8


Accrued liabilities for wages and vacation compensation 4.7 5.4Accrued social security contributions 1.4 2.2Accrued interest expenses 0.0 0.1Other 1.5 2.4

total 7.6 10.1

NOTE 24 Operational leasing

leasing agreements where the group is the lessee


non-cancellable leasing payments amounts to:Within 1 year 53.1 34.12-5 years 138.1 110.9Later than 5 years 140.4 84.3

total 331.6 229.3

Fees expensed for operational lease agreements amount toMinimum lease fees 36.3 17.2Variable fees 19.0 20.0

total lease expenses 55.3 37.2

The Group leases certain machinery and equipment for produc-tion and IT-related investments. Leasing agreements are normally valid for five to ten years with an extension option. No agree-ments include extension requirements. As the leasing agreements expire, the Group has the option of buying the equipment at cur-rent market prices. The leasing agreements include index clauses.

The Group leases a number of warehouse and production units in accordance with operational lease agreements. The vari-able fees for these have been set in accordance with index clauses.

NOTE 25 Pledged assets, contingent liabilities and contingent assets group parent company

pledged assets, SeKm 2013 2012 2013 2012

in the form of assets pledged for the company’s own liabilities and provisionsProperty mortgages 287.6 316.5 - -Chattel mortgages 1,372.2 1,231.5 - -Assets with ownership reservation 22.0 23.3 - -Shares 38.1 118.9 1,885.8 1,890.7Receivables 48.3 41.4 - -Endowment insurance 7.7 6.0 7.4 5.9Pledged receivables - - - -Other 24.9 85.6 - -

1,800.9 1,823.2 1,893.2 1,896.6

Other pledged assets and collateral - - - -

total pledged assets 1,800.9 1,823.2 1,893.2 1,896.6

contingent liabilitiesGuarantee obligations for the benefit of subsidiaries - - 861.4 1,090.6Factoring - - - -

total contingent liabilities - - 861.4 1,090.6



NOTE 26 Related parties

Relations with related partiesThe Group has an affiliate relationship with its parent company, Ratos AB and its subsidiaries. The Parent Company has an affiliate relationship with its parent company, Ratos AB, and with subsidiaries of the Parent Company and of Ratos AB, see Note 27.

Summary of transactions with related parties Sales of receivables from liabilities to closely goods/services interest related parties at interest related parties years to related parties income 31 december expenses at 31 december

group related parties, SeKm

Parent Company 2013 - 0.5 89.7 - - 2012 - 1.6 76.3 - -

Group companies 2013 - - - - 116.3 2012 - - - - 168.6

Associated companies 2013 - - - - - 2012 - - - - -

Transactions with closely related parties are priced on market terms. Terms for receivables and liabilities to the Parent Company are STIBOR 12-month plus a 1 percent margin, terms for Group companies are according to market price. The receivable of SEK 89.7 million pertains to a shareholder contribution from the Parent Company and the liability of SEK 116.3 million pertains to group contributions to other Ratos Group companies. Repayment by 31 December 2014.

parent company related parties, SeKm

Parent Company 2013 - 0.5 89.7 - - 2012 - 1.6 76.3 - -

Subsidiaries 2013 54.8 16.0 668.5 1.5 627.1 2012 55.8 14.2 538.0 1.8 525.6

Group companies 2013 - - - - 76.3 2012 - - - - 168.6

Associated companies 2013 - - - - - 2012 - - - - -

Sales by the Parent Company to subsidiaries pertain to services. These are priced and allocated in accordance with the Group’s internal pricing documentation. Other transactions with closely related parties are priced on market terms. Terms for receivables and liabilities to the Parent Company are STIBOR 12-month plus a 1 percent margin, terms for Group companies are according to market price. The receivable of SEK 89.7 million pertains to a shareholder contribution from the Parent Company and the liability of SEK 76.3 million pertains to group contributions to other Ratos Group companies. Repayment by 31 December 2014.

transactions with key individuals in senior positionsMembers of the company’s Board of Directors control 0.3 percent of votes in the company. No loans have been provided to Board members. For details of remunerations to key individuals in senior positions, see Note 7. Total remunerations are included under “personnel expenses” (see Note 7):

SeKm 2013 2012

Board members 0.9 0.9

NOTE 27 Group companies ownership %

Holdings in subsidiaries, direct and indirect ownership Subsidiary’s domicile/country 2013 2012

Inwido Denmark A/S Denmark 100 100 - Clean Factory A/S Denmark 100 100 - Dansk Vindues Industri A/S Denmark 100 100 - Frovin Vinduer og Døre A/S Denmark 100 70 - Outline Vinduer A/S Denmark 100 100 - Inwido Produktion Syd A/S Denmark 100 100 - KPK Døre og Vinduer A/S Denmark 100 100 - Pro Tec Windows UK Ltd United Kingdom 100 100 - Pro Tec Vinduer A/S Denmark 100 100 - UAB Inwido Support Lithuania 100 100 - TB Europe A/S Denmark 80 0Inwido Europe AB Sweden 100 100



ownership %

Holdings in subsidiaries, direct and indirect ownership Subsidiary’s domicile/country 2013 2012

- Inwido CE GmbH Austria 100 0Inwido Ireland Ltd. Ireland 100 100 - Carlson Contracts Ltd. Ireland 100 100 - Carlson & Co Ltd. Ireland 100 100Inwido Finland Oy Finland 100 100 - Eskopuu Oy Finland 100 100 - Pihlavan Ikkunat Oy Finland 100 100 - Tiivituote Oy Finland 100 100Inwido Norge AS Norway 100 100 - Diplomat Norge AS Norway 100 100 - Diplomat Prosjekt AS Norway 100 100 - Frekhaug Vinduet AS Norway 100 100 - Lyssand Treindustri AS Norway 100 100Inwido Polska S.A. Poland 100 100 - Sokolka Okna i Orzwi S.A. Poland 98 98OJSC Inwido Russia 100 100Inwido Supply AB Sweden 100 100 - ABC Snickerier i Hindås AB Sweden 100 100 - A-Lackering AB Sweden 100 100 - Alakiernia Sp z o.o Poland 100 100 - Inwido Produktion Dörrar AB Sweden 100 100 - IP Glass Sp z o.o Poland 100 100 - Steelform AB Sweden 100 100Inwido Sverige AB Sweden 100 100 - Outline i Sverige AB Sweden 100 100 - Elitfönster AB Sweden 100 100 - ERA Fönster AB Sweden 100 100 - Etrifönster AB Sweden 100 100 - Hajom Skjutdörrar AB Sweden 100 100 - Hångerdörren AB Sweden 100 100 - Inwido Produktion AB Sweden 100 100 - Lenhovda Fönster AB Sweden 100 100 - Norsjökomponenter AB Sweden 100 100 - Temafönster AB Sweden 100 100 - SnickarPer AB Sweden 100 100 - Hemmafönster Sverige AB Sweden 100 100Inwido UK Ltd United Kingdom 100 100 - Allan Brothers Ltd. United Kingdom 100 100


accumulated costOpening balance 1,890.7 1,787.9Purchases and issues 65.4 313.8Disposals - -232.5Impairment -73.4 -3.5Intra-Group changes 3.1 25.0

closing balance, 31 december 1,885.8 1,890.7

During the year, the Parent Company took over ownership of Inwido Europe AB from a subsidiary, which entailed a Group-internal change.

Subsidiaries (directly owned) corporate Subsidiary’s number Holding SeKm identity number domicile /country 2013 2012 of shares in %

Inwido Sverige AB 556583-4693 Vetlanda 881.3 881.3 400,000 100Inwido Finland OY 1882624-9 Finland 223.2 223.2 532,130 100Inwido Norway AS 988381063 Norway 51.6 51.6 1,700,000 100Inwido Denmark A/S 28 84 36 15 Denmark 528.6 528.6 75,000,000 100Inwido Polska S.A. 0000082682 Poland 51.0 51.0 12,200,000 100Inwido UK Ltd 1110137 United Kingdom 21.4 21.4 560,000 100Inwido Supply AB 556625-4412 Sävsjö 100.6 100.6 20,000 100Inwido Ireland Ltd 465489 Ireland 25.0 25.0 2 100Inwido Europe AB 556565-5767 Vetlanda 3.1 - 1500 100OJSC Inwido 1037821039057 Russia - 8.0 4600 100

1,885.8 1,890.7



NOTE 28 Share related benefitsThe Group has a programme for synthetic share options extending until 31 December 2019. All programmes extend until 31 December 2019 but can be redeemed early in the event that operations are transferred or publicly listed. Since market-based remuneration is paid to obtain stock options, the Group’s stock option scheme is not deemed to meet the criteria for share-related remuneration in accord-ance with IFRS 2. The programmes are therefore reported in accordance with the regulations for financial instruments.

date of allocation/personnel category number of instruments vesting terms/market value contract duration

parent company

Allocation of share options to 6,890,000 December 2009 SEK 1.10 each 10 years shareholders and senior based on share value. executives on 18 December 2009 SEK 8.77 each Strike 31 December 2019 SEK 18.54 each.

Allocation of synthetic shares to 160,110 December 2009 10 years shareholders and senior based on share value. executives on 12 March 2010 SEK 8.77 each.

Allocation of share options to 1,221,933 March 2011, SEK 2.63 each 8.5 years shareholders and senior based on share value. executives on 30 November 2011 SEK 12.11 each Strike 31 December 2019 SEK 18.54 each.

Allocation of share options to 471,000 December SEK 1.88 each 7 years shareholders and senior based on share value. executives on 1 December 2012 SEK 10.67 each Strike 31 December 2019 SEK 18.54 each.

Allocation of share options to 127,500 December SEK 1.88 each 6 years shareholders and senior based on share value. executives on 1 December 2013 SEK 10.67 each Strike 31 December 2019 SEK 18.54 each.Subsidiaries

Allocation of share options to 900,000 December 2009, SEK 1.10 each 10 years shareholders and senior based on share value executives on 15 February 2010 SEK 8.77 each Strike 31 December 2019 SEK 18.54 each.

total number of share options, group

Total number of options in the Group settled in cash 9,610,433Total number of synthetic shares in the Group settled in cash 160,110

number of share options and weighted average strike prices 2013 2012

Weighted average number of Weighted average number of parent company strike price SeK options strike price SeK options

Outstanding at the start of the period 1.02 8,759,033 2.32 9,546,033Options issued 1.02 127,500 1.88 471,000Options issued - - - -Redeemed during the period 1.02 -176,100 1.88 -1,258,000Matured during the period - - - -

outstanding at the end of the period 0.90 8,710,433 1.02 8,759,033

redeemable at the end of the period 8,710,433 8,759,033

Subsidiaries -

Outstanding at the start of the period 1.02 900,000 2.88 900,000Options issued - - - -

outstanding at the end of the period 0.90 900,000 1.02 900,000

redeemable at the end of the period 900,000 900,000

number and weighted average strike prices of synthetic sharesparent company

Outstanding at the start of the period 9.93 160,110 12.09 311,832Options issued - - - -Redeemed during the period - - 11.95 -121,722Redeemed during the period - - 12.09 -30,000

outstanding at the end of the period 8.77 160,110 9.93 160,110

redeemable at the end of the period 160,110 160,110



NOTE 29 Significant events after the end of the period.Effective from 3 January 2014, Inwido Denmark A/S acquired the rights to the brand and product Xframe through the acquisi-tion of the associated assets and liabilities. The acquisition includes the rights to the Xframe product, including the produc-tion equipment. The product line will be integrated into the Pro Tec brand. Xframe has a unique window design with insulating characteristics and top-class energy values in the Danish market.

In February, Inwido resolved to move the production of windows at its manufacturing unit in Os, Norway to Lenhovda/Vetlanda in Sweden. The motivation behind the decision is to safeguard the long-term position in the Norwegian market of the Lyssands brand by improving the cost structure while retaining quality and lead times.

On 3 March 2014, Inwido Denmark A/S signed an agreement regarding the acquisition of 100 percent of the shares and votes

in the operations JNA Vinduer & Døre A/S and Säästke OÜ with sales of approximately DKK 155 million in 2013. The acquisition also includes three subsidiaries to Säästke OÜ (SparVinduer ApS, SpareVinduer AS and SparFönster AB). The acquisition is in line with Inwido’s strategy of seeking growth both organically and through acquisitions. The acquisition is also motivated by the ambition of being represented in the growing market for win-dows and doors on the Internet – an area where Inwido currently needs to grow. The acquisitions are conditional on the approval of the competition authority and the takeover is expected to take effect as of April 2014.

On 7 March 2014, an agreement was signed regarding the divestment of Inwido’s operations in Russia to a private investor. The divestment is expected to be completed in the third quarter of 2014.

NOTE 30 Key estimates and assessmentsCompany management has discussed with the Audit Committee the development, selection and details of the Group’s key accounting principles and estimates, as well as the application of these principles and assessments.

Impairment testing of goodwillIn the calculation of cash generating units’ recoverable value for the assessment of possible goodwill impairment, several assump-tions of parameters have been made. These are accounted for in Note 12. However, it is management’s view that considerable changes in conditions would be necessary for these assumptions in 2013 and estimations to have a significant impact on goodwill.

NOTE 31 Details of the Parent CompanyInwido AB is a company registered in Sweden with its domicile in Malmö. The address of the head office is Engelbrektsgatan 15, SE-211 33 Malmö.

The consolidated accounts for 2013 comprise the Parent Company and its subsidiaries, together called the Group.

Inwido AB is owned to 96.7 percent (96.7) by Ratos AB, with corporate identity number 556008-3585 and its domicile in Stockholm. The remainder is held by senior executives within the Group.

Ratos AB prepares a set of consolidated accounts which includes Inwido AB.

M A LM ö, 26 M A RCH 2014

My audit report was submitted on 26 March 2014.

Eva Melzig Henriksson Authorized Public Accountant

The consolidated statement of comprehensive income and statement of financial position and the Parent Company’s income statement and balance sheet are subject to the approval of the Annual General Meeting on 26 March 2014.

Anders C Karlsson Chairman of the Board

Anders Wassberg Board member

Benny Ernstson Board member

Leif Johansson Board member

Per Frankling Board member

Henrik Lundh Board member

Eva S Halén Board member

Håkan Jeppsson President and CEO

Ulf Jacobsson Board member

Employee representative

Robert Wernersson Board member

Employee representative


Net financial income/expense as a consequence of share-related benefits 1.0 13.2 parent company, SeKm

Total carrying amount regarding liabilities for options settled in cash 1.0 8.9Total carrying amount regarding liabilities for synthetic shares settled in cash 0.0 1.6 Subsidiaries, SeKm

Total carrying amount regarding liabilities for options settled in cash 0.0 0.9

total carrying amount regarding liabilities for options settled in cash 1.0 28.0



Report on the annual accounts and consolidated accounts

I have audited the annual accounts and consolidated accounts of Inwido AB for the year 2013. The annual accounts and consolidated accounts of the company are included in the printed version of this document on pages 39-77.

Responsibilities of the Board of directors and the Managing director for the annual accounts and consolidated accounts

The Board of Directors and the Managing Director are respon-sible for the preparation and fair presentation of these annual accounts in accordance with the Annual Accounts Act and of the consolidated accounts in accordance 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 responsibility

My responsibility is to express an opinion on these annual accounts and consolidated accounts based on my audit. I con-ducted my audit in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. Those standards require that I 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 evi-dence about the amounts and disclosures in the annual accounts and consolidated accounts. The procedures selected depend on the auditor’s judgment, 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 company’s preparation and fair presentation of the annual accounts 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 effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonable-ness of accounting estimates made by the Board of Directors and the Managing Director, as well as evaluating the overall presenta-tion of the annual accounts and consolidated accounts.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinions.

opinions

In my 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 com-pany as of 31 December 2013 and of its financial performance and its cash flows for the year then ended in accordance with the Annual Accounts Act. The consolidated 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 December 2013 and of their financial per-formance 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. The statutory admin-istration report is consistent with the other parts of the annual accounts and consolidated accounts.

I therefore recommend that the annual meeting of share-holders adopt the income statement and balance sheet for the parent company and the statement of comprehensive income and statement of financial position for the group.

Report on other legal and regulatory requirements

In addition to my audit of the annual accounts and consolidated accounts, I have also audited the proposed appropriations of the company’s profit/loss and the administration of the Board of Directors and the Managing Director of Inwido AB for 2013.

Responsibilities of the Board of directors and the Managing director

The Board of Directors is responsible for the proposal for appropriations of the company’s profit/loss, and the Board of Directors and the Managing Director are responsible for administration under the Companies Act.

Auditor’s responsibility

My responsibility is to express an opinion with reasonable assurance on the proposed appropriations of the company’s profit/loss and on the administration based on my audit. I conducted the audit in accordance with generally accepted auditing standards in Sweden.

As basis for my opinion on the Board of Directors’ proposed appropriations of the company’s profit/loss, I examined whether the proposal is in accordance with the Companies Act.

As basis for my opinion concerning discharge from liability, in addition to my audit of the annual accounts and consolidated accounts, I examined significant decisions, actions taken and circumstances of the company in order to determine whether any member of the Board of Directors or the Managing Director is liable to the company. I 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.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinions.

opinions

I 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.

M A LM ö, 26 M A RCH 2014

Eva Melzig Henriksson Authorized Public Accountant

Auditor’s reportTo the annual meeting of the shareholders of Inwido AB, corp. id. 556633-3828



k e y r a t i o s

2013 2012 2011 2010 2009Income measures

Net sales, SEKm 4,300 4,607 5,050 5,149 5,026

Gross profit, SEKm 976 1,019 1,130 1,170 1,045

Operating profit (EBITDA), SEKm 407 400 541 625 508

Operating profit (EBITA), SEKm 299 288 407 446 348Operating profit (EBITA), excluding items affecting comparability, SEKm 350 358 476 527 389

Operating profit (EBIT), SEKm 299 288 395 439 341

Profit before tax, SEKm 220 246 315 328 125

Profit after tax, SEKm 150 172 208 207 52

Margin measures

Gross margin, % 22.7 22.1 22.4 22.7 20.8

Operating margin (EBITDA), % 9.5 8.7 10.7 12.1 10.1

Operating margin (EBITA), % 7.0 6.2 8.1 8.7 6.9Operating margin (EBITA), excluding items affecting comparability, % 8.1 7.8 9.4 10.2 7.7

Operating margin (EBIT), % 7.0 6.2 7.8 8.5 6.8

Cash flow

Cash flow from operating activities, SEKm 376 248 547 383 510

Investments, SEKm 88 87 81 68 84

Capital structure

Net debt, SEKm 979 1,131 1,371 1,501 1,992

Net debt/equity ratio, multiple 0.4 0.5 0.6 0.6 0.8

Interest coverage ratio, multiple 3.5 4.2 4.1 3.2 1.5

Equity, SEKm 2,539 2,367 2,227 2,340 2,416

Total assets, SEKm 4,730 4,777 5,476 5,754 6,231

Equity/assets ratio, % 54 50 41 41 39

Capital employed, SEKm 3,612 3,620 3,904 4,382 5,061

Operating capital, SEKm 3,518 3,504 3,599 3,841 4,409

Return measures

Return on equity, % 6.1 7.4 9.2 9.2 3.2

Return on capital employed, % 8.5 8.6 10.1 10.1 6.9

Return on operating capital, % 8.5 8.1 10.6 10.7 7.3

employees

Average number of employees 3,077 3,287 3,523 3,759 3,604

Five year summary


f i n a n c i a l d e f i n i t i o n s

Definitions of key figures

Income measures

Gross profit Net sales less costs of goods sold.

Operating profit (EBITDA) Operating profit before depreciation, amortization and impairment

(Earnings Before Interest, Tax, Depreciation and Amortisation).

Operating profit (EBITA) Operating profit after depreciation, amortization and impairment but before

deductions for impairment of goodwill as well as amortisation and impairment of

other intangible assets that arose in conjunction with company acquisitions

(Earnings Before Interest, Tax and Amortisation).

Operating profit (EBIT) Profit before net financial items and tax (Earnings Before Interest and Tax).

Margin measures

Gross margin Gross profit as a percentage of net sales for the period.

Operating margin (EBITDA) Operating profit (EBITDA) as a percentage of net sales for the period.

Operating margin (EBITA) Operating profit (EBITA) as a percentage of net sales for the period.

Operating margin (EBIT) Operating profit (EBIT) as a percentage of net sales for the period.

Capital structure

Net liabilities Interest-bearing liabilities and interest-bearing provisions less interest-bearing assets,

including cash and equivalents.

Net debt/equity ratio Net debt in relation to shareholders’ equity.

Interest coverage ratio Profit after net financial items plus financial expenses in relation to financial expenses.

Equity/assets ratio Shareholders’ equity including non-controlling interests as a percentage of total assets.

Capital employed Total assets less non-interest-bearing provisions and liabilities.

Operating capital Total assets less cash and equivalents, other interest-bearing assets and

non-interest-bearing provisions and liabilities.

Return measures

Return on shareholders’ equity Profit after tax for the period attributable to the Parent Company’s shareholders

as a percentage of average shareholders’ equity, excluding non-controlling interests.

Return on capital employed Profit after net financial items plus financial expenses as a percentage of

average capital employed.

Return on operating capital Operating profit (EBIT) as a percentage of average operating capital.




Inwido Sverige AB Post: Box 153 SE-574 22 Vetlanda Sweden Visitors: Brogårdsgatan 1 Telephone: +46 10 451 40 00 Fax: +46 10 451 40 01

Inwido Denmark A/S Post: Box 80 DK-9640 Farsø Denmark Visitors: Fabriksvej 4 Telephone: +45 98 63 24 44 Fax: +45 98 63 34 15

Inwido Finland OY Kivääritehtaankatu 8C FI-40100 Jyväskylä Finland Telephone: +358 20 7690 213 Fax: +358 14 449 8951

Inwido Ireland Ltd G1 Calmount Park, Ballymount IE-Dublin 12 Ireland Telephone: +353 1 462 57 77 Fax: +353 1 462 57 37

Inwido Norway AS Grenseveien 92 NO-0663 Oslo Norway Telephone: +47 56 30 33 00

Inwido Polska S.A. ul. Warszawska 163 PL-05-520 Konstancin-Jeziorna Poland Telephone: +48 85 722 02 50 Fax: +48 85 722 02 51

Inwido UK Ltd Allan House Ord Road Berwick-Upon-Tweed GB-Northumberland TD15 2XU United Kingdom Telephone: +44 1289 334600 Fax: +44 1289 334601

Inwido CE GmbH Altmannsdorfer Straße 91 AT-1120 Wien Austria Telephone: +43 810 900 300

www.inwido.com

Inwido AB Engelbrektsgatan 15 SE-211 33 Malmö Sweden Telephone: +46 10 451 45 50 Fax: +46 10 451 45 60 e-mail: [email protected]

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Inwido Annual Report 2013