Lammhults Design : Stable quarter with improved earnings

Microsoft Word - Delår 2015 03 ver3-ENG Press Release from Lammhults Design Group AB (publ), corp. reg. no. 556541-2094

(The interim report for January-March 2015 is distributed as part of this press release.)

Stable quarter with improved earnings

 Net sales SEK 179.0 million (184.2)

 Operating profit SEK 5.2 million (5.0)

 Earnings per share before and after dilution SEK 0.37 (0.27)

 Order bookings SEK 186.4 million (188.3)

 Order backlog SEK 129.6 million (136.3)

Comments on Q1 2015

President and CEO Anders Rothstein comments: "We had a stable start to the year, compared with a strong Q1 in 2014. The first quarter of last year included an order booking of

approximately SEK 14 million for Fora Form in Office & Home Interiors. This comprised

around SEK 9 million relating to an unusually large inventory order for Japan - which also came in earlier than usual - and a major project in Norway worth about SEK 5 million. Excluding these two orders, the Group's order bookings rose by 7%. Despite lower net sales, we still delivered improved earnings via a higher gross margin and reduced overheads."

Early 2015 was characterized by a certain degree of uncertainty in the Norwegian market, although demand in our other main markets was stable. Net sales for the Group were down 3 percent and its order bookings fell by 1 percent. The Group's growth ambitions are driven partly by successes in securing major projects. The respective periods of these projects may affect revenue comparisons between individual quarters. The gross margin improved, above

all in after-market sales for Public Interiors; operating profit rose by 5% and earnings per share by 37%. The sales organization at Ire was expanded and responsibility for sales of the Voice range was integrated with the Ire range during the quarter as part of the Group's closer focus

on Retail.

Lammhult, 29 April 2015

Lammhults Design Group AB

Anders Rothstein

President and CEO

For more information, please contact Anders Rothstein, President and CEO, on [phone]

96 71/[phone],

or Thomas Jansson, CFO, on [phone]/[phone].

This information is such that Lammhults Design Group AB is required to publish in accordance with the Swedish Capital Markets Act, the Swedish Financial Instruments Trading Act and requirements stated in listing agreements. This information was submitted for publication at 3.00 p.m. on 29 April 2015.

Lammhults Design Group AB (publ), corp. reg. no. 556541-2094 Interim Report 1 January-31 March 2015

 Net sales SEK 179.0 million (184.2)

 Operating profit SEK 5.2 million (5.0)

 Profit before tax SEK 4.4 million (3.4)

 Profit after tax SEK 3.2 million (2.3)

 Earnings per share before and after dilution SEK 0.37 (0.27)

 Order bookings SEK 186.4 million (188.3)

 Order backlog SEK 129.6 million (136.3)

 Equity/assets ratio 62.6% (58.9)

 Debt/equity ratio 0.25 (0.32)

Group's net sales and profit

The start to the year was stable, compared with a strong Q1 in 2014. The Group's net sales totalled SEK 179.0 million (184.2), 3 percent lower than last year. Net sales for both Office & Home Interiors and Public Interiors business areas fell 3 percent in Q1. In Office & Home Interiors, net sales declined most notably at Fora Form. The company's sales to the culture segment declined, as did its sales of contract-manufactured health/social care products for the Japanese market. In Public Interiors, the highest fall was in project sales to France and the UK. The Group's order bookings in Q1 fell by 1 percent to SEK 186.4 million (188.3). The

Group's growth ambitions are driven partly by successes in securing major projects. The respective periods of these projects may affect quarter-on-quarter revenue comparisons. Order bookings for Office & Home Interiors fell 2 percent in Q1. In Q1 last year, Fora Form secured an inventory order valued at around SEK 9 million from Japan and a project worth approximately SEK 5 million in Norway. No similar order has been received in 2015. Excluding these orders, order bookings for the business area increased by 9 percent in Q1, mainly thanks to increases for Lammhults and Ire. Order bookings for Public Interiors rose 2 percent in Q1, mainly as a result of higher order bookings in Denmark and Germany. At the end of the quarter, the Group's order backlog of SEK 129.6 million (136.3) was 5 percent lower than at the same time last year. At unchanged exchange rates relative to the preceding year, net sales would have been SEK 4.0 million lower and order bookings SEK 4.4 million lower, while the order backlog would have been SEK 2.6 million lower at SEK 127.0 million.

The Group's gross margin was somewhat higher than last year, at 36.2% (36.0). The gross margin improved above all at Public Interiors, especially in after-market sales. At Office & Home Interiors, the gross margin was level with last year's, despite the fact that production overheads were spread over lower sales volumes.

Sales and administration costs in Q1 totalled SEK 59.6 million (61.0). Operating profit in Q1 totalled SEK 5.2 million (5.0), representing an operating margin of 2.9% (2.7). Finance income/costs in Q1, totalling SEK -0.8 million (-1.6,) were affected by negative exchange rate differences of SEK 0.1 million, compared with negative exchange rate differences of SEK 0.8 million in the corresponding period last year. Profit before tax totalled SEK 4.4 million (3.4)

Group's financial position and cash flow

The equity/assets ratio was 62.6% (58.9) on 31 March 2015, while the debt/equity ratio ended the quarter at 0.25 (0.32), indicating that the Group's financial position strengthened in the past year. The Group's cash flow from current operations during Q1 was SEK -9.1 million

(4.7). The decline relative to Q1 in the preceding year was attributable to a reduction in current liabilities. Cash flow for the quarter amounted to SEK -12.2 million (-24.0)

Per-share data

Earnings per share for the Group in Q1 totalled SEK 0.37 (0.27) before and after dilution. Equity per share on 31 March 2015 was SEK 46.88 (44.37) before and after dilution.

Business areas Office & Home Interiors

The business area develops, markets and sells products for interiors for public and home environments under the Lammhults, Abstracta, Fora Form, Voice and Ire brands.

Net sales totalled SEK 126.6 million (130.4). Net sales rose for the Abstracta and Ire brands, were level with the previous year for Lammhults, but declined for Fora Form. In order to boost the Group's retail sales, a sales-oriented managing director and an additional salesperson have recently been recruited to Ire. In addition, Ire's sales organization has assumed responsibility for sales of the Voice product range to the retail sector. The business area's order bookings in Q1 fell by 2 percent. Excluding Fora Form's two major orders, valued at a total of approximately SEK 14 million, order bookings for the business area increased by 9 percent in Q1. Order bookings rose for the Abstracta and Ire brands, were level with the previous year

for Lammhults, but declined for Fora Form. At the end of the quarter, the order backlog was

13% lower than at the corresponding time last year. The gross margin in Q1 was level with last year's, despite the fact that production overheads were spread over lower sales volumes. Efficiency measures reduced sales and administration costs compared with the preceding year. Operating profit totalled SEK 7.5 million (7.4) and the operating margin was 5.9% (5.7).

Public Interiors

The business area develops, markets and sells interiors and product solutions for public environments under the Eurobib Direct, BCI and Schulz Speyer brands.

Net sales totalled SEK 52.8 million (54.3). Product sales to France and the UK fell in Q1, but Eurobib Direct (after-market sales) reported an increase of around 15 percent, following successes in Belgium and Germany in particular. Order bookings in the business area rose 2% in Q1. At the end of the quarter, the order backlog was 7% higher than at the same time last year, mainly because of strong order bookings in the Denmark and Germany. The gross margin improved in Q1, above all in after-market sales. Sales and administration costs for business area were in line with those of the previous year. Operating profit totalled SEK 2.7 million (3.1) in Q1, and the operating margin was 5.1% (5.7).

Group's investments and depreciation

The Group's investments in property, plant and equipment amounted to SEK 2.1 million (1.8) while investments in intangible assets totalled SEK 0.4 million (2.0). Total depreciation according to plan during Q1 was SEK 3.6 million (3.2).

Group's liquidity and financing

Cash and cash equivalents for the Group, including unused overdraft facilities, totalled SEK

121.3 million (109.9) on 31 March 2015.

Parent Company

The Parent Company's business activities consist of Group management and certain Group- wide functions. Net sales amounted to SEK 6.3 million (6.3), with a loss before tax of SEK -

3.8 million (-5.2). Investments totalled SEK 0.0 million (0.1). Cash and cash equivalents, including unused overdraft facilities, totalled SEK 80.9 million (72.4) on 31 March 2015.

Forthcoming financial reports

Interim reports 2015: 17 July, 27 October 2015

Accounting policies

This summary interim report for the Group was prepared in accordance with IAS 34 Interim Financial Reporting and relevant provisions of the Swedish Annual Accounts Act. The interim report for the Parent Company was prepared in accordance with Section 9, Interim Reports, of the Swedish Annual Accounts Act. For both Group and Parent Company, the same accounting policies and bases of calculation were used as in the Company's most recent annual report. In accordance with IFRS 11 Joint Arrangements, joint ventures are accounted for on the basis of the equity method. These were accounted for in the financial reports presented for the first half of 2014 and earlier in accordance with the proportional method of accounting. The

comparative figures in this report have been recalculated in accordance with the equity method. The new and revised accounting standards that entered into force in 2015 are not considered likely to have any impact on the Group's accounting.

Risks and uncertainties

The significant risks and uncertainties faced by the Group and Parent Company include business risks in the form of high exposure to certain sectors. The Group is also exposed to financial risks. Chief among these are currency risks relating to fluctuations in exchange rates in conjunction with exports and imports, interest risks in connection with liquidity and debt management, and credit risks in connection with sales. The Group is also exposed to a certain extent to commodities risk. Other than the risks described in the 2014 Annual Report (see Note 27 for a more detailed description of the Group's and Parent Company's risk exposure

and risk management), it is not believed that any significant new risks have arisen. The market remains uncertain, and a downturn in both the Nordic region and Europe may impact negatively on the Group's future sales.

Lammhult, 29 April 2015

Anders Rothstein

President and CEO

This interim report has not been subject to a general review by the Company's auditor.

CONSOLIDATED STATEMENT OF INCOME

Remaining businesses Jan-Mar Jan-Mar April-Mar Jan-Dec

Amounts in SEK m. 2015 2014 2014/2015 2014

Net sales 179,0 184,2 750,8 756,0

Cost of goods sold -114,3 -117,9 -479,1 -482,7

Gross profit 64,7 66,3 271,7 273,3

Other operating income 1,7 1,3 5,9 5,5
Sales and administration costs -59,6 -61,0 -239,8 -241,2
Other operating costs -1,7 -1,1 -5,0 -4,4

Share in results of joint ventures 0,1 -0,5 1,1 0,5

Operating profit 5,2 5,0 33,9 33,7

Net finance income/costs -0,8 -1,6 -3,6 -4,4

Profit/loss before tax 4,4 3,4 30,3 29,3

Tax -1,2 -1,1 -7,7 -7,6

Profit from remaining business for the period 3,2 2,3 22,6 21,7

Profit from discontinued business, net after tax 0,0 0,0 0,0 0,0

Profit/loss for the period 3,2 2,3 22,6 21,7

Profit/loss for the period attributable to:
Shareholders in Parent Company 3,2 2,3 22,5 21,6
Non-controlling interests 0,0 0,0 0,1 0,1

Earnings per share before and after dilution

Remaining businesses 0,37 0,27 2,68 2,57

Discontinued businesses - - - -

Total, Group 0,37 0,27 2,68 2,57

Number of shares at end of period, thousands 8 448 8 448 8 448 8 448

CONSOLIDATED STATEMENT OF INCOME AND OTHER COMPREHENSIVE INCOME

Jan-Mar Jan-Mar April-Mar Jan-Dec

Amounts in SEK m. 2015 2014 2014/2015 2014

Profit/loss for the period Other comprehensive income	3,2	2,3	22,6	21,7
Items transferred or transferrable to profit for the period Translation differences for the period	-3,4	0,9	7,2	11,5
Cash flow hedging	0,2	-0,1	-0,1	-0,4
Other comprehensive income for the period	-3,2	0,8	7,1	11,1
Total comprehensive income for the period Total comprehensive income for the period attributable to: Shareholders in Parent Company	0,0 0,0	3,1 3,1	29,7 29,6	32,8 32,7
Non-controlling interests	0,0	0,0	0,1	0,1
Notes to consolidated statement of income

Depreciation/amortisation

Depreciation is distributed over the following lines in the income statement:

Cost of goods sold	-1,8	-1,6	-6,9	-6,7
Cost of sales	-0,5	-0,4	-1,9	-1,8
Administrative expenses	-1,3	-1,2	-6,7	-6,6
Total	-3,6	-3,2	-15,5	-15,1

Jan-Mar Jan-Mar April-Mar Jan-Dec

Amounts in SEK m. 2015 2014 2014/2015 2014

Other operating income

Exchange rate gains 1,4 1,1 4,7 4,4

Other operating income 0,3 0,2 1,2 1,1

Total 1,7 1,3 5,9 5,5

Other operating costs

Exchange rate losses -1,4 -0,6 -4,6 -3,8
Reversals of order backlog acquired 0,0 -0,3 -0,3 -0,6

Other operating costs -0,3 -0,2 -0,1 0,0

Total -1,7 -1,1 -5,0 -4,4

Net finance income/costs

Finance income 0,9 0,9 3,8 3,8

Finance costs -1,7 -2,5 -7,4 -8,2

Total -0,8 -1,6 -3,6 -4,4

CONSOLIDATED STATEMENT OF FINANCIAL POSITION, SUMMARY

Amounts in SEK m. 31 Mar 2015 31 Mar 2014 31 Dec 2014

Intangible non-current assets 239,6 235,4 241,9
Property, plant and equipment 114,7 109,5 115,7
Participations in joint ventures 3,6 2,5 3,5
Financial investments 0,3 0,2 0,2
Deferred income tax assets 3,6 3,1 3,7
Inventories 104,4 104,7 99,2
Current accounts receivable 151,8 161,4 170,3

Cash and cash equivalents 15,0 20,5 27,9

Total assets 633,0 637,3 662,4

Equity attributable to shareholders in Parent Company 396,1 374,8 396,1
Equity attributable to non-controlling interests 0,4 0,3 0,4
Non-current interest-bearing liabilities 46,1 64,4 50,9
Provisions 2,0 2,2 2,1
Deferred tax liabilities 8,5 7,8 8,7
Current interest-bearing liabilities 51,7 56,7 49,1

Other current liabilities 128,2 131,1 155,1

Total equity and liabilities 633,0 637,3 662,4

CONTINGENT LIABILITIES, GROUP

Amounts in SEK m. 31 Mar 2015 31 Mar 2014 31 Dec 2014

Surety bonds	3,4	3,5	3,4
Warranties	3,8	5,4	2,9
Other contingent liabilities	1,6	1,7	1,7
Total contingent liabilities	8,8	10,6	8,0

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY, SUMMARY

Jan-Mar Jan-Mar Jan-Dec

Amounts in SEK m. 2015 2014 2014

Opening balance, equity attrib. to sharehold. in Parent Co. 396,1 371,7 371,7
Total comprehensive income for the period 0,0 3,1 32,8

Dividend paid - - -8,4
Closing balance, equity attrib. to shareh. in Parent Co. 396,1 374,8 396,1
Opening balance, equity attrib. to non-controlling interests 0,4 0,3 0,3

Total comprehensive income for the period 0,0 0,0 0,1

Closing balance, equity attrib. to non-controlling interests 0,4 0,3 0,4

Total closing balance, equity 396,5 375,1 396,5

CONSOLIDATED STATEMENT OF CASH FLOWS, SUMMARY

Jan-Mar

Jan-Mar

April-Mar

Jan-Dec

Amounts in SEK m. 2015 2014 2014/2015 2014

Cash flow from operating activities before
changes in working capital 4,3 4,7 36,9 37,3

Changes in working capital -13,4 0,0 1,0 14,4

Cash flow from operating activities -9,1 4,7 37,9 51,7

Purchases of property, plant and equipment -2,1 -1,8 -14,0 -13,7
Sale of property, plant and equipment 0,1 0,1 0,7 0,7
Purchases of non-current intangible assets -0,4 -2,0 -4,4 -6,0

Investments in financial assets -0,1 - -0,1 - Sale of subsidiaries, net impact on liquidity 1,9 - 1,9 - Cash flow from investing activities -0,6 -3,7 -15,9 -19,0
Borrowings 10,1 - 18,9 8,8
Repayments of loans -12,7 -25,0 -43,3 -55,6

Dividend paid to parent company owners - - -8,4 -8,4

Cash flow from financing activities -2,6 -25,0 -32,8 -55,2

Cash flow for the period -12,3 -24,0 -10,8 -22,5

Cash and cash equivalents at beginning of period 27,9 44,5 20,5 44,5

Translation difference in cash and cash equivalents -0,6 0,0 5,3 5,9

Cash and cash equivalents at end of period 15,0 20,5 15,0 27,9

KEY FIGURES FOR THE GROUP

Jan-Mar	Jan-Mar	April-Mar	Jan-Dec
2015 2014 2014/2015 2014
Growth, %	-3	22	17	26
Gross margin, %	36,2	36,0	36,2	36,1
Operating margin, %	2,9	2,7	4,5	4,5
Net margin, %	2,5	1,8	4,0	3,9
Return on equity, %	0,8	0,6	5,9	5,7
Return on capital employed, %	1,2	1,2	7,6	7,4
Debt/equity ratio, times	0,25	0,32	-	0,25
Equity/assets ratio, %	62,6	58,9	-	59,9
Equity per share before dilution, SEK	46,88	44,37	-	46,88
Equity per share after dilution, SEK	46,88	44,37	-	46,88
Average number of employees	352	358	352	353

Growth is defined as percentage change in net sales during the current period relative to net sales
during the equivalent comparative period. For further definitions, see the Group's 2014 Annual Report.

THE GROUP'S OPERATING SEGMENTS

Public Interiors develops, markets and sells interiors and product solutions for public environments. The business area is partly dedicated to selling total interior systems on a project basis and partly to after-market sales of furniture and consumables. The business area is made up of the companies Lammhults Biblioteksdesign AB (Sweden), Lammhults Biblioteksdesign A/S (Denmark) and Schulz Speyer Bibliothekstechnik AG (Germany) and subsidiaries. The business area includes the Eurobib Direct, BCI and Schulz Speyer brands.
Office & Home Interiors develops and markets products for interiors in public and domestic environments. The business area has three brands with high design values, focusing on public environments: Lammhults and Fora Form, which offer
visually strong, timeless furniture, and Abstracta, with acoustic products, products for visual communication and storage. The business area has two brands focusing on home interiors, namely Voice, which offers innovative storage solutions, and Ire, which produces upholstered furniture featuring timeless design, clean lines and durable quality. Both the Voice and Ire product ranges are being gradually extended to include public environments. The business area is made up of the companies Lammhults Möbel AB (Sweden), Ire Möbel AB (Sweden), Fora Form AS (Norway), and Abstracta AB and subsidiaries (Sweden).
The Parent Company, Group-wide functions, dormant companies and eliminations are accounted for under the heading
"Group-wide costs and eliminations".

Net sales per business segment

Jan-Mar Jan-Mar April-Mar Jan-Dec

Amounts in SEK m. 2015 2014 2014/2015 2014

Public Interiors	52,8	54,3	235,5	237,0
Office & Home Interiors	126,6	130,4	516,6	520,4
Group-wide costs and eliminations	-0,4	-0,5	-1,3	-1,4
Total net sales	179,0	184,2	750,8	756,0

Operating income per business segment

Jan-Mar Jan-Mar April-Mar Jan-Dec

Amounts in SEK m. 2015 2014 2014/2015 2014

Public Interiors 2,7 3,1 19,9 20,3
Office & Home Interiors 7,5 7,4 37,0 36,9

Group-wide costs and eliminations -5,0 -5,5 -23,0 -23,5

Total operating profit 5,2 5,0 33,9 33,7

Finance income 0,9 0,9 3,8 3,8

Finance costs -1,7 -2,5 -7,4 -8,2

Profit/loss before tax 4,4 3,4 30,3 29,3

PARENT COMPANY INCOME STATEMENT, SUMMARY

Jan-Mar Jan-Mar April-Mar Jan-Dec

Amounts in SEK m. 2015 2014 2014/2015 2014

Net sales 1,6 1,6 6,3 6,3

Gross profit 1,6 1,6 6,3 6,3

Administrative expenses -5,0 -5,5 -22,1 -22,6

Operating profit -3,4 -3,9 -15,8 -16,3

Result from financial items -0,4 -1,3 24,8 23,9

Profit after financial items -3,8 -5,2 9,0 7,6

Appropriations 0,0 0,0 20,7 20,7

Profit/loss before tax -3,8 -5,2 29,7 28,3

Tax 0,8 1,1 -1,3 -1,0

Profit/loss for the period -3,0 -4,1 28,4 27,3

PARENT COMPANY STATEMENT OF INCOME AND OTHER COMPREHENSIVE INCOME, SUMMARY

Jan-Mar Jan-Mar April-Mar Jan-Dec

Amounts in SEK m. 2015 2014 2014/2015 2014

Profit/loss for the period Other comprehensive income	-3,0	-4,1	28,4	27,3
Items transferred or transferrable to profit for the period Translation differences for the period	-	-	-	-
Other comprehensive income for the period	-	-	-	-
Total comprehensive income for the period	-3,0	-4,1	28,4	27,3
PARENT COMPANY BALANCE SHEET, SUMMARY

Amounts in SEK m. 31 Mar 2015 31 Mar 2014 31 Dec 2014

Intangible non-current assets 0,7 0,0 0,8
Property, plant and equipment 0,0 0,9 0,0
Financial non-current assets 421,9 422,6 421,9
Current accounts receivable 182,8 186,0 199,3

Cash in hand and on deposit 0,0 0,0 0,0

Total assets 605,4 609,5 622,0

Equity 278,7 258,8 281,7
Non-current liabilities to credit institutions 19,4 27,4 21,5
Current liabilities to credit institutions 39,5 48,0 29,8

Other current liabilities 267,8 275,3 289,0

Total equity and liabilities 605,4 609,5 622,0

PLEDGED ASSETS AND CONTINGENT LIABILITIES - PARENT COMPANY

Amounts in SEK m. 31 Mar 2015 31 Mar 2014 31 Dec 2014

Pledged assets	202,5	202,5	202,5
Contingent liabilities	3,4	3,5	3,4

ADDRESSES

Lammhults Design Group AB (publ) Box 75, SE-360 30 Lammhult, Sweden.
Telephone [phone]. Telefax: [phone]. Street address: Lammengatan 2, Lammhult
E-mail: [e-mail] www.lammhultsdesigngroup.com