Sanistål A/S : Interim Financial Report for 1st half 2022

| Management's Review | Consolidated Financial Statements | Statement

Sanistål Interim Financial Report H1 2022

2

Contents
Management's Review
CEO-letter ...................................................................................	3
Financial review......................................................................	5
Financial Highlights and Key Ratios..........................	7
Forecast for the year 2022 .........................................	8
Significant risks......................................................................	9
Events after the half year............................................	9
Consolidated Financial Statements
Income statement and Comprehensive
income statement............................................................	10
Balance sheet.......................................................................	11

Cash flow statement.....................................................	12
Definition of supplementary financial
highlights .................................................................................	13
Statement
Management's statement .........................................	14

| Management's Review | Consolidated Financial Statements | Statement

Sanistål Interim Financial Report H1 2022

3

CEO-letter

CEO-letter

| Management's Review | Consolidated Financial Statements | Statement	Sanistål Interim Financial Report H1 2022	4
CEO-letter

H1 2022

We have laid the groundwork for the further development of Sanistål through our new business strategy, Accelerate, and we are well on our way to obtaining an new owner who can assist Sanistål on its next journey of growth in terms of industry competences and purchasing volumes. Ahlsell - Northern Europe's leading distributor of installation products, tools and supplies - has entered into conditional agreements to buy the shares of the majority shareholders and has submitted a purchase offer to the minority share- holders.

Rising level of activity

Sanistål got off to a good start in Q1 and we maintained this momentum in Q2. As a result, revenue rose 11% in H1 to DKK 1,876 million. All our markets saw higher levels of activity, and our suppliers' price increases have compelled us to increase our own selling prices.

The operating profit (EBITDA) nearly doubled to DKK 144 million as a result of a higher level of activity primarily borne by price increases, better margins and increased efficiency.

We could never have achieved these results without an enormous effort by all our employees who demonstrated their team spirit and adaptability and who help ensure our success on a daily basis by playing to one another's strengths for the benefit of our customers and Sanistål.

We increased sales in Denmark by almost 11% in H1. This growth appears to be slightly higher than general market growth, and we are obviously pleased by this vote of confidence from both existing and new customers.

Our east European business also saw fine progress by achieving 18% revenue growth. We increased our sales of steel to customers who decided to stop buying Russian steel after Russia invaded Ukraine.

Strategic focus

We have almost completed our divestment of non-strategic assets. We sold our domicile property in Aalborg and our subsidiary Serman & Tipsmark A/S during the first half year, and we are currently in the process of divesting our small Polish business so we can focus on developing our core businesses in Denmark, Lithuania and Latvia.

In the first half year we established a new Go2Market model with an HVAC and Technical Market, which has proven very effective in terms of enhancing our ability to serve our respective customers.

Continued development

We are well on our way to focusing and developing the organisation - a way of modernising Sanistål. In the first half year, we had 6% fewer employees to manage 11% higher sales, which requires more than just adapting. It's a question of organising correctly and strengthening our expertise in areas of strategic importance.

In March, HR Manager Svend Pedersen was named director of People & Culture to upgrade our efforts targeting employer branding and staff development.

In June, we engaged Natascha Schøtt as director of Digital Sales & Engagement to accelerate our digital transformation. We need to be more productive. We need to use digital technology to collect and assess data to improve our decision-

making and develop new business models. And we must make it easier and more efficient for our customers to do business with Sanistål digitally. During the half year, the digital share of the parent group's revenue lines amounted to 48%, a 4 percentage-point increase.

In July, Gitte Østergaard Futtrup was appointed as our new Head of Sustainability to boost our efforts in the area of climate and environment. Measured in terms of revenue, we have reduced our carbon emissions this year by 18% by optimising distribution to customers and other measures. Our sustainability efforts remain a strategic focus for Sanistål, in terms of both the greening of our own operations and by assisting our customers on their own journey.

Uncertain market conditions

The market conditions are challenging. The global economy is balancing on a razor's edge: high inflation, rising prices for energy and raw materials, strained supply lines, labour shortages, war and slower growth.

We are carefully monitoring the developments in construction and industry. We've seen the first signs of a slowdown in the construction industry, and it is highly uncertain what autumn will bring.

We must also deal with any market-related challenges that might arise to the best of our ability. We must continue developing Sanistål at the same time. This autumn, we will start to enlarge our high-tech robotic system at the Billund central warehouse. In addition to this, we are also opening two new stores based on a new concept keenly focused on digital commerce and locally focused product ranges and advice.

Our new Accelerate business strategy lays the groundwork for Sanistål's development beyond 2022, by focusing on Digital Transformation, Sales & Customer Excellence, Profitability & Cost-efficiency, Sustainability and People & Cul- ture. The framework is in place, the priorities are clear, but the implementation will await the anticipated change of ownership to ensure that we are aligned with Ahlsell's plans.

We are looking ahead to a busy autumn with multiple challenges in store, but there will definitely be many opportunities to leave our mark on the market and make a difference to our customers and in our own teamwork. The results and developments of the first half year make us well prepared for what lies ahead.

Claudio Christensen,

CEO

| Management's Review | Consolidated Financial Statements | Statement Financial Review

Financial review

Sanistål Interim Financial Report H1 2022

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Net revenue - DKK million

The interim financial report for 2022 includes discontinued operations comprising the divested subsidiary Serman & Tipsmark A/S, as well as the Polish subsidiary, which is expected to be divested in the course of the year. Information about the operating profit for discontinued operations is found in note 5 for the consolidated financial statements. Numerical data and comments in this financial review are based on the continuing operations.

Income Statement

Revenue in H1 2022 amounted to DKK 1,876 million, compared to DKK 1,684 million for the same period of 2021, equating to 11.4% growth.

Revenue generated in Denmark rose 10.7%, whereas Eastern Europe revenue rose 17.2%. The increase is due to higher revenue from pro-

GROUP - CONTINUING OPERATIONS

DKK million	Q2 2022	Q2 2021	H1 2022	H1 2021
Net revenue	940.6	867.9	1,875.9	1,683.8
Gross profit	232.1	210.2	463.2	406.7
Other operating income	31.0	5.7	31.7	6.2
Other external costs	-39.2	-29.3	-71.3	-55.8
Payroll costs	-136.2	-150.2	-279.4	-282.8
EBITDA	87.7	36.4	144.1	74.3
One-off effects	-27.2	2.7	-8.7	8.6
EBITDA before one-off effects	60.5	39.1	135.4	82.9
Gross profit. %	24.7 %	24.2 %	24.7 %	24.2 %
EBITDA-margin before one-off effects. %	6.4 %	4.5 %	7.2 %	4.9 %

1.900

1.800

1.700

1.600

1.500

1.400

H1:20 H2:20 H1:21 H2:21 H1:22

		EBITDA before one-off
			effects - DKK million
150												9%
125
7%
100
75
5%
50

jects in east European, as well as group-wide price increases.

The gross profit ratio was to 24.7%, a 0.5% increase compared to H1 2021. In Denmark, the gross profit ratio within digital sales increased while distribution costs fell. In terms of our customer categories, the increase in Process and Security in particular had a positive effect on gross profit. In Eastern Europe, higher profits on steel in particular favorably affected the gross profit ratio.

Other operating income amounted to DKK 32 million in H1 2022, compared to DKK 6 million in the same period of 2021. Both periods were positively affected by profit from the divestment of properties. In 2021, this involved the divestment of a property in Lithuania for a profit of

DKK 5 million. This year is affected by the divestment of our head office in Aalborg. The property in Aalborg was divested as a sale and leaseback agreement, and the accounting profit amounts to DKK 30 million.

Other external costs amounted to DKK 71 million in H1 2022, DKK 16 million higher than the same period of the previous year. The increase is primarily due to consulting fees for a new strategy, and costs related to Ahlsell's purchase offer.

Payroll costs declined from DKK 283 million to DKK 279 million in H1 2022. This decline is primarily due to the streamlining and optimising of workflows and processes by means of continuously organisational adaptations. The payroll expense ratio, adjusted for one-off effects, fell 1.7% in relation to revenue.

The one-off effects in H1 2022 were income in the amount of DKK 9 million, but were an expense of DKK 9 million in H1 2021. One-off effects under other operating income comprise profit from property divestments in both periods. The severance expenses for reorganising the sales organisation in February are recognised under payroll costs. Other external costs comprise consulting fees for drafting a new strategy and costs relating to Ahlsell's purchase offer.

ONE-OFF EFFECTS

	DKK million	H1 2022	H1 2021
	Other operating income	30	5
	Payroll costs	-10	-12
	Other external costs	-12	-1
	Total	9	-9

25									3%
	H1:20	H2:20	H1:21	H2:21	H1:22
				EBITDA			EBITDA-margin

Interest-bearing debt, net -

DKK million

500

400

300

200

100

-

H1:20 H2:20 H1:21 H2:21 H1:22