1. Follow-up Structure BS & CF
KA/Group Business Control

2. Document Information Title: Follow-up Structure BS & CF Description:
Responsible: KA/Robert Burning
Valid as of: 1 September 2010
Reviewed: 1 September 2012

3. Transparent Follow-up Structure

4. Net Working Capital and Cash Flow Follow-up
Definiton of working capital in balance sheet and cash flow
The volume-based change in working capital should match the change of working capital in the cash flow
Follow up monthly and quarterly
Group
Working Capital
Long term receivables should be excluded from working capital
Interest bearing liabilities should be excluded from working capital
Structural adjustment of acquired working capital should be calculated on an average rate when calculating volume change
Business Areas
Balance Sheet
Interest bearing liabilities excluded
Pre paid notes are included into working capital as accounts receivables
Short term financial leasing receivables are added in working capital as others
Long term noninterest-bearing liabilities to associated companies should be added into working capital as others
Structure change of acquired working capital should be calculated on an average rate when calculating volume change
See Appendix 1-6 for a detailed list of effects for the Group and the Business Areas

5. Monthly Net Working Capital Follow-up
Monthly follow-up in reports, business area comments and CEO comments to the board
NWC in MSEK, based on R-322
Stock
Accounts Receivables
Accounts Payables
Other
Relative NWC, %
Change compared to last quarter, which
Structure (acquisitions and divestments to be confirmed by BA)
Volume compared to last period (as reported in cash flow)
Currency (calculated as a residual of the above)
(OB Quarter + CB Monthly) / 2
Last 3 months *4
OB = Opening Balance CB = Closing Balance

6. Monthly Cash Flow Follow-up
Monthly cash flow model
EBIT
+ Financial net *
+ Adjustment for depreciation and impairment losses (as reported in R-300)
+/- Adjustment for items that do not require the use of cash (when applicable)
+ Paid tax *
Cash flow from operating activities before change in working capital
+/- Changes in working capital (volume as reported in NWC)
Cash flow from operating activities
Cash conversion ratio
Cash flow from operating activities / EBIT
* Calculated according to monthly forecast on Group level

7. Appendix Appendix 1 Appendix 2 Appendix 3 Appendix 4 Appendix 5
NWC Calculation Instruction
Appendix 2
NWC Reporting Differences, Monthly versus Quarterly
Appendix 3
Follow-up Structure and Changes - Group
Appendix 4
Follow-up Structure and Changes – Business Area
Appendix 5
Principles and Definitions - Group
Appendix 6
Principles and Definitions – Business Area

8. NWC Calculation Instruction
Appendix 1
Monthly NWC %
NWC monthly volume change
(CB in LC - OB in LC) x average currency rate for the period
OB should always be December 31 previous year
NWC volume change is always calculated year to date
Monthly and quarterly volume change is derived by subtracting previously reported volume change from YTD figure
NWC, MSEK
Invoicing
January
(Dec + Jan) / 2
Last 3 months *4
February
(Dec+ Feb) / 2
March
Quarterly Calculation
April
(Mar + Apr) / 2
May
(Mar + May) / 2
June
July
(Jun+Jul)/2
No closing
August
(Jun + Aug) / 2
September
October
(Sep + Oct) / 2
November
(Sep + Nov) / 2
December
NWC, MSEK
Invoicing
= NWC %
OB = Opening Balance CB = Closing Balance LC = Local Currency

9. NWC Reporting Differences, Monthly versus Quarterly
Appendix 2
NWC Reporting Differences, Monthly versus Quarterly
Less detailed group consolidation
No monthly adjustments on group level (ECONS)
No monthly ICM-matching

10. Follow-up Structure - Group
Appendix 3
Follow-up Structure - Group

11. Follow-up Structure – Business Areas
Appendix 4
Follow-up Structure – Business Areas

12. Principles and Definitions - Group
Appendix 5
Principles and Definitions - Group
Principles
Changes of any items in the balance sheet should be matched in the cash flow from operating activities, investing activities or financing activities
The only exception is postponed tax, which doesn’t affect the cash flow
Volume based change of working capital should comply with the change of working capital in the cash flow
Balance sheet
All accounts in the balance sheet
Capital employed
Total assets minus non interest-bearing liabilities
Working capital
Non interest-bearing current assets minus non interest bearing liabilities, exkluding taxes and provisions
Cashflow
From operating activities
Result after financial items, deduction of depreciaton- and writedowns, adjustment for items that do not require cash and paid tax and change of working capital
Change in working capital is matched with the volume based change in working capital in balance sheet
From investing activities
Investments and disposals of intangible and tangible assets, changes in long term receivables and acquisitons as well as disposal of businesses
From financing activities
Change in interest-bearing loans and investments, personnel related redemptions and share option programs

13. Principles and Definitions – Business Area
Appendix 6
Principles and Definitions – Business Area
Comprehensive principles
Follow up at Business Areas is based on the operational activities according to the BA responsibilities
Items where the responsibility lies within the ownership is not reported on a business area level, for exampel tax (See appendix 4)
Changes of any items in the balance sheet should be reflected in the cash flow from operating activities and investing activities
The volume based change in working capital should comply with the change of working capital in the cash flow
Balance sheet
Capital employed in additon to provisions for pensions
Capital employed
All assets excluding taxes, derivatives, pre paid financial items and liquid funds deducted with non interest-bearing liabilities excluding taxes, derivatives and accrued financial income and expenses
Working Capital
Current assets excluding taxes, derivatives, deferred financial income and expenses and liquid assets deducted with non interest bearing liabilities, excluding taxes and provisions
Cash Flow
Fom operating activities
Operating result after less depreciations and write downs, adjustment for items that do not require cash and change of working capital
Changes in working capital should match with the volume based change of working capital in the balance sheet
No impact from net financial income/expenses or taxes
From investing activities
Investments and disposals of intangible and tangible assets, changes in long term receivables as well as acquisitions and disposals of businesses
From financing activities
Is not reported on a Business Area level