ProfilGruppen 2007

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2007 was, in several respects, an important year for ProfilGruppen.

We achieved very good results in attaining a more favourable sales

mix, both geographically and product-wise..

Nils Arthur, presideNt ANd CeO

ProfilGruppen ²⁰⁰⁷

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This is ProfilGruppen

An innovative company with a focus on the customer

ProfilGruppen develops and manufactures customised processed components and extrusions in aluminium.

During 2007, the share of exports exceeded 50 percent of the volume for the first time. The products are used within many industries, for example the automotive industry, electronics, furnishings and construction.

ProfilGruppen is characterised by quality, efficiency, customer focus and entrepreneurship. Development work is done in close collaboration with the customers, often in project form. The Group has relevant quality and environmental certificates according to ISO and meets the international automotive industry's TS standards.

The number of employees was 472 at the end of 2007.

Competitive advantages of aluminium Aluminium has excellent properties. The low weight of the material is combined with great strength. It is corrosion-resistant and conducts both heat and electricity well. It is supple and easy to work with and re-use.

Because aluminium is so malleable, many different functions can be built into extrusions when power-pressing aluminium. Thus, the need for post-processing and assembly is reduced. The cost of tools is relatively low and set-up times in production are short.

Processing for profitability and added value By increasing the products' degree of processing, Profil- Gruppen produces added value for the customers while improving its own profitability.

Processing is performed both in-house and by a network of external suppliers.

Extrusions are manufactured in three press lines at ProfilGruppen Extrusions. Subsidiaries ProfilGruppen Manufacturing and ProfilGruppen Components perform cutting processing, friction welding, bending, surface treatment and mounting.

Profit every year

ProfilGruppen has been profitable ever since it was founded in 1981, thus presenting 26 years of uninter- rupted profitability. Sensitivity to economic trends is balanced by the fact that customers are found in different industries and in different markets. No single customer represented more than seven percent of turnover in 2007.

ProfilGruppen is listed on the OMX Nordic Exchange Small Cap list. The overall aim is to give shareholders a high total yield, partly through share dividends and partly through increased share value.

The dividend policy prescribes that 40–50 percent of the profit after tax is to be distributed as dividends, calculated over one economic cycle.

Martela is one of the Nordic countries' leading makers of high-quality, ergono-

mic, designed interior fitting solutions, with production facilities in Finland, Sweden and Poland. ProfilGruppen has had a long, successful collaboration with Martela for over 20 years. ProfilGruppen makes approximately 20 customised

extrusions that are processed as components for screen walls, desks and roll-front cabinets. The extrusions are processed through cutting, punching, machining, bending and painting or anodising. The extrusion illustrated to the left covers one side of a screen wall shown on the right.

SAAB is one of Sweden's leading automotive manufacturers. ProfilGruppen

makes, among other things, a load- securing rail for the luggage compart- ment of the SAAB 9-5 Estate. The rail is extruded, cut, machined and surface-

treated before delivery to the customer.

The challenge for ProfilGruppen has been to reduce the cost by 25 percent and the detail weight by 20 percent while maintain- ing properties at impact deformation and securing of loads.

Radio Components Sweden AB develops solutions for improving performance and operating economy in mobile systems.

Radio Components develops, among other things, solutions for amplifying signals with a booster that is placed in base stations for mobile systems. Together

with the customer, ProfilGruppen has developed a cooling extrusion for these base stations. The product is one of the biggest that ProfilGruppen extrudes and also involves complex processing followed by painting.

Component for a screen wall from Martela

Load-securing rail for SAAB 9-5

Cooling extrusions for Radio Components Examples of areas of use for aluminium extrusions.

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The year in brief

KEY FIGURES 2007 2006

Net turnover MSEK 1 179.4 1 086.9

Operating profit/loss MSEK 63.3 44.2

Operating margin % 5.4 4.1

Profit before tax MSEK 57.0 19.3

Return on equity % 25.1 4.4

Return on capital employed % 22.8 9.3

Cash flow from current operations MSEK 78.4 72.5

Investments MSEK 24.7 38.3

Equity ratio % 28.0 24.5

Net debt/equity ratio times 0.38 0.74

Average number of employees 475 477

Earnings per share SEK 8.15 1.53

Dividend per share SEK 3.60¹⁾ 2.80

1) Dividend proposed by the board.

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2 CEO'S ANNuAl REvIEW

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CEO'S ANNuAl REvIEW 3

2007 was, in several respects, an important year for Profil- Gruppen. We achieved very good results in attaining a more favourable sales mix, both geographically and product-wise.

Sweden is our single most important market, and we have strengthened our position further during the year by way of several major agreements. For the first time in the company's history, the export share exceeded 50 percent as a conse- quence of our having strengthened our presence in important export markets, primarily in Germany and Poland during the year. At the same time as the development towards a higher export share, we have increased the tempo in our efforts to raise the degree of processing. An important aspect of this ambition is to orient our business development resources towards industries and customer groups whose needs and requirements match our structure, competences and long- term strategy. One tangible result is our continued increase within the automotive and electronics segments, whose great demands on application knowledge, quality, efficiency and delivery reliability strongly contribute to ProfilGruppen's own technical development and continued competitiveness.

Our new agreement with REC ScanModule, one of Europe's biggest makers of solar panels, is an illustrative example.

The agreement, which is valued at MSEK 130 and runs for three years starting in 2008, makes ProfilGruppen REC ScanModule's main supplier of aluminium components. This deal is completely in line with our ambition to develop the business and increase volumes within automated processing.

We also bolstered our positions in the automotive segment during the year, not least through our agreement with BOS, a German maker of advanced components for the automotive industry. Allow me to also comment on our present business relationship with the previously part-owned German com- pany PWG, a leading subsupplier of aluminium products for sunroofs for the automotive industry. In connection with the restructuring of PWG during 2007, ProfilGruppen's share was sold. At the same time, a new delivery agreement was signed, fortifying our position in an attractive customer segment.

Our successes in the market contributed strongly to the continued growth of our turnover, which was also driven by higher raw material prices. Turnover amounted to MSEK 1 179, which represents an increase of 9 percent compared to 2006. Cash flow was strengthened at the same time that we exceeded the goal for return on capital employed and re- ported the largest operating profit in ProfilGruppen's history, MSEK 63.3. We work systematically to increase the operat- ing margin through changes in both the product mix and the customer structure in addition to productivity-raising meas- ures. While our operating margin has developed in a positive direction in recent years, we must observe that we have yet to achieve our goal of 6 percent. During 2007, we intensified therefore our efforts to achieve a satisfactory margin and at the same time create a solid structure and efficient processes

in order to be able to continue to grow profitably. This initia- tive stands on three legs: a change in our customer structure, a special profitability improvement programme and finally an investment programme whose aim is to increase efficien- cy and at the same time create room for increased volumes.

During 2008 and 2009, the organisation will focus strongly on implementing these profitability improving measures.

With regard to customer structure, our goal is primarily to increase collaboration with customers who have a need of qualified construction and processing services while we reduce the number of minor customers. These are important steps in a gradual change in our customer structure, which is a prerequisite both for increasing productivity and creat- ing conditions for developing and deepening our strategic customer relations.

In August 2007, we launched a profitability improve- ment programme, whose goal was to achieve considerable rationalisation effects before the end of 2009. The project encompasses all functions, and all fundamental processes in the business will be reviewed. Employees at all levels are involved in identifying, prioritising and implementing profitability-raising measures. Allow me to take this oppor- tunity to thank all employees for their commitment and hard work during the year.

In addition to these important activities, we will carry out an extensive investment programme in order to rationalise pro- duction at the main factory in Åseda. The programme will run for two years with considerable result-effect successively starting in 2009. In addition to considerable rationalisation, an efficient and flexible platform for meeting future volume increases will be created. The first stage in investment will be carried out during 2008 and primarily encompasses an automated production stockroom, automation of material flows in the factory, extension and remodelling of surface treatment and an extension of our production halls.

Thanks to these investments for the future, in combination with ProfilGruppen's strong financial position, our customer base in attractive industries of the future and, not least, our committed and competent employees, I look forward with great confidence.

A few words from the CEO

Åseda, 29.02.2008

Nils Arthur President and CEO

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Strategy and targets

ProfilGruppen's strategy is aimed at profitable growth.

Strategy

In order to achieve good profitability and growth, ProfilGruppen must:

• intensify its presence on priority export markets and strengthen the position it occupies on the domestic Swedish market

• develop its investment in advanced processing services and reinforce its image as an innovative component supplier

• secure capacity and cutting edge expertise throughout the value chain by further developing networks with leading companies and organisations

• make overseas acquisitions that augment existing core expertise.

Intensified presence on priority markets ProfilGruppen's main market is Western Europe, and our goal is to grow at a faster rate than the market, which requires increased market presence. Dur- ing the year, sales resources on important export markets were fortified. Also, important deliveries to

companies in the German automotive industry were secured. During the year, positions on the Polish market have been pushed forward, which facilitates a more active work-up of the market there.

During 2007, for the first time over half of the Group's products were delivered to markets outside of Sweden. At the same time, several important orders were signed, which fortified the Group's position as one of the leading suppliers on the important Swedish market.

Investment in processing

ProfilGruppen strives to increase the degree of processing of the products. It creates added value for the customers and it creates conditions for increased profitability. The proportion of products that are processed has increased in recent years and amounted to 77 percent (74) in 2007. Part of the Group's strategy is developing the investment in qualified processing, and during the year several project groups have worked with broadening the range of processing services.

ProfilGruppen's prioritisation of customer groups with particularly highly set requirements on their suppliers, for example the automotive and electronics industries, has fortified the image of the Group as a quality supplier.

Secure capacity and competence ProfilGruppen has access to capacity for the processing of extrusions both via our own processing companies and via collaboration with some ten Swed- ish companies and a number of foreign suppliers. The combination of internal and external suppliers affords ProfilGruppen increased flexibility and strengthens levels of expertise and competitiveness.

As ProfilGruppen grows, the need of new collabo- rating partners arises, primarily companies with high- quality machinery and the necessary quality certifica- tions. During the year, the network was strengthened through new collaboration with qualified suppliers in processing and surface treatment in Sweden, Poland and the Czech Republic. Actively contributing to the process development of the suppliers is an important way for ProfilGruppen to increase capacity and competence throughout the value chain.

During the year, new collaborations were established on the raw material side, providing broader metallurgical knowledge and securing increased raw material deliveries.

Collaboration has been initiated with pressing plants outside of Sweden. The purpose is to be able to offer a supplementary assortment that also includes sizes

4 STRATEGy AND TARGETS

Assembly Processing

Anodisation Extrusion

Mill-finished

extrusions Processed products

VALUE

DEGREE OF PROCESSING

IncREaSInG thE dEGREE oF pRocESSInG produces added value for the customers and creates conditions for increased profitability for ProfilGruppen. It is common that extrusions are anodised, and it is becoming more and more common that extrusions are processed through bending, milling and turning.

VISION

ProfilGruppen's vision is to have a broad international presence and be considered one of the leading suppliers in Europe of innovative solutions using aluminium extrusions and components. ProfilGruppen is characterised by the entrepreneurship of the small company and the broad competence of a major company.

MISSION STATEMENT ProfilGruppen markets, develops and manufactures customised extrusions and components of aluminium.

Profitable and long-term growth will be ensured by focusing on customer requirements, efficient processes, and total quality assurance. ProfilGruppen will provide value for its owners by creating value for its customers, suppliers and employees.

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of extrusions that are not optimal for ProfilGruppen's production facilities.

Growth through acquisitions

Historically, ProfilGruppen has primarily grown organically, but the company's ambitions for growth also mean that acquisitions are continuously evaluated.

During 2006, the ProfilGruppen acquired an 18 percent share in the German company PWG, which is a supplier of aluminium products for sunroofs for the automotive industry. After the company suffered prob- lems, this holding was sold during 2007, but remains one of ProfilGruppen's major customers.

Financial targets

ProfilGruppen guides its business towards profitability and growth, and the board of directors has established financial targets for return on capital employed, operating margin and net debt/equity ratio. The financial targets are based on the company:

• having the financial strength that provides conditions for both organic growth and growth through acquisitions

• generating cash flow that enables investments without reducing financial strength.

• providing shareholders with a market-adjusted dividend The targets regard an average over one economic cycle.

taRGEtS dEScRIptIon taRGEt attaInMEnt

operating margin is to reach at least 6.0 percent.

In order to attain the target, a continued improved customer and product mix is required.

Rising raw material prices have a negative effect on the key figure. Turnover rises without the corresponding effect on operating profit.

Operating margin for 2007 amounted to 5.4 percent (4.1). Operating margin in 2006 amounted to 5.1 percent adjusted for the effects of depreciation in connection with German PWG. This improvement has been achieved primarily through increased volumes and improved sales margins.

In the last five-year period, operating margin has been an average of 4.7 percent per year.

Return on capital employed is to reach at least 15 percent.

This level has been selected against the background of ProfilGruppen's assets.

During 2007, return on capital employed amounted to 22.8 percent (9.3). In the last five-year period, return on capital employed has been an average of 13.6 percent per year.

net debt/equity ratio is to be within the range of 0.75-1.00 times.

The target has been set with consideration taken, among other things, to ProfilGruppen's ability to generate cash flow over an economic cycle and with the intention of achieving a balance between financial risk and return.

At the end of 2007, net debt/equity ratio was 0.38 times (0.74). This is outside of the range, which is motivated by future investments. During 2006, a programme for the redemption of our own shares was carried out, which affected the capital structure and the net debt/

equity ratio. It has been possible during 2007 to pay off a great part of the borrowing that took place then, thanks to adequate cash flow. In the last five-year period, net debt/equity ratio has been an average of 0.36 times.

2003 2004 2005 2006 2007 5.3 4.7

4.2 4.1

5.4 Target 6.0

2003 2004 2005 2006 2007 13.2 13.0

9.7 9.3

22.8 Target 15

2003 2004 2005 2006 2007 0.44

0.23 0.40

0.74

0.38 Target 0.75–1.00

STRATEGy AND TARGETS ⁵ Profit development

For the financial years 2004 and 2005, the Group reported a considerably improved profit, which is primarily explained by reduced production costs in combination with increased volume. During 2006, volumes and sales margins were improved, but profits were charged with a one-off cost of MSEK 31.8 related to the German company PWG.

During 2007, the highest profit in the company's history was reported, which was primarily achieved with the aid of continued high volumes and improved sales margins.

Growth targets

Since 2003, the Group's internal growth targets have been to increase annual sales over a five-year period by a few percent more than general growth in the market. During the years 2003-2007, ProfilGruppen's delivery volumes increased in total by approximately 35 percent on the European market, which is judged to have grown by approximately 19 percent during the same period.

PROFIT BEFORE TAX, MSEK

2003 2004 2005 2006 2007 37.5 38.7

22.5 19.3

57.0

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6 ^MARKET

Competence and flexibility in one and the same offer

ProfilGruppen's marketing and sales efforts encompass several functions in the company. By coordinating different functions, the company can at the same time offer the competence of the large company and the flexibility and responsiveness of the small company.

In most deals, from query to finished extrusion, salespersons, designers and technical project managers are involved. The job is to create added value for the customer using knowledge of technology and materials, commitment and responsiveness. These added values usually consist of innovative constructions that solve several functions, reduce costs and reduce the customer's need to carry out processing himself.

Ready for challenges

ProfilGruppen is facing ever greater challenges and growing demands in the market. Frequent contacts and large deliveries to the automotive and electronics industries benefit the development of ProfilGrup- pen's internal working method. The cross-functional methods create confidence and secure quality, in both production and deliveries. One good example of this is

the important order received from REC ScanModule in 2007. ProfilGruppen will be REC ScanModule's main supplier of aluminium components for solar panels for three years. The aggregate order value is approximately MSEK 130.

ProfilGruppen would like to accompany priority customers as supplier when they establish themselves in new markets in Europe. Recent successes in Poland are examples of such developments and the broad customer base contains potential for continued growth.

Growing processing

ProfilGruppen has a competitive advantage in being able to offer a broad range of services in processing, which is less common among Southern and Central European extruders. The fact that the greater part of export volume in 2007 consisted of processed extrusions underlines the growing desire of customers to solve several tasks with a single supplier. The network of specialised processing companies surrounding Åseda is an asset. ProfilGruppen strives to further increase the share of processed extrusions.

COuNTRy SHARE OF THE GROuP’S NET TuRNOvER, 2007 (2006)

The export portion has increased. Turnover in Poland has increased, which is the main reason that other countries show an increase.

1 2

3 4

5 6

Sweden 52 % (54)

Germany 15 % (13)

Norway 9 % (11)

Denmark 6 % (6)

united Kingdom 5 % (5) Other countries 13 % (11) 1

2 3 4 5 6

PROFIlGRuPPEN'S DElIvERIES OF PROCESSED GOODS, MSEK

The proportion of processing in turnover is increasing, both in Sweden and on export.

2003 2004 2005 2006 2007 337 377

353 417 432

250 329 218

390 479 587

706 571

807 911

Sweden Export

PROFIlGRuPPEN'S DElIvERIES OF EXTRuSIONS, TTON

Delivery volumes are constantly increasing. Since 2003, they have increased by 32 percent. For the first time, export volume exceeded Swedish delivery volumes in 2007.

2003 2004 2005 2006 2007 11.9 12.5

11.1 12.8 12.1

10.2 11.5 8.2

12.6 13.4 24.0 25.4 19.3 22.1

25.5

Sweden Export

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MARKET ⁷ cUStoMER

SEGMEnt

ShaRE oF nEt tURnovER

WhY alUMInIUM

ExaMplES oF

applIcatIonS IMpoRtant 2007

Automotive

With their durability, malleability, corrosion resistance, recyclabi- lity and low weight, aluminium extrusions are an increasingly common choice for the automotive industry. low weight means low fuel consumption, better running economy and better environmental properties.

Extrusions are used in a great number of applications in cars, lorries, buses and other vehicles, among other things in engines, supporting constructions, wheel suspensions, seat constructions, roof racks and sunroofs.

The share has increased further during 2007, due in part to several new contracts with German customers, for example BOS, which delivers advanced components to several of the major vehicle manufacturers.

Further deliveries to German PWG were secured through delivery agreements.

Electronics

Aluminium is a good conductor of electricity and heat/cooling in all types of electronic and telecommunications equipment.

Where there are stringent requirements on conductive and cooling abilities, low weights, minimal volumes and durability, aluminium extrusions are the right choice.

Telecom and power are also included in this segment.

Examples of areas of application within telecommunications are cooling fins for base stations, device boxes and front panels. Solar panels are examples of use within the power segment.

Three-year contract, valued at MSEK 130, signed with REC ScanModule, maker of solar panels. The agreement makes ProfilGruppen the customer's main supplier of aluminium components.

Several new customers in the solar energy industry were contracted.

Several new customers have shown interest in ProfilGruppen's competence in the field of cooling extrusions.

Interiors

With aluminium, a furniture designer can make almost any concept a reality. The fact that aluminium is a maintenance- free, durable and beautiful material makes designing even easier.

For hospital equipment, which is also included in this segment, the low weight is particularly appreciated.

Aluminium extrusions are used in chairs and tables, as well as in kitchen and bathroom fittings.

In healthcare, aluminium is common, for example, in lifting devices and wheel- chairs.

During the year, a number of new interior applications have been developed. In close collaboration with the customers for example radiators and towel driers have been developed for French customers.

construction

It is important to the construction industry that extrusions are maintenance-free and malleable and weigh very little.

ProfilGruppen's customised extrusions are used in do- ors, windows and balconies, for example.

During the year, the proportion of deliveries to construction whole- salers has diminished.

10%

23%

28%

21%

Four foreign sales companies

ProfilGruppen's sales are directed in part from Swe- den, in part from the four foreign sales companies in Denmark, United Kingdom, Norway and Germany.

The company has customers mainly in Northern and Western Europe. During the year, extrusions and components were delivered to over 20 countries.

Delivery volumes during the year were on a level with 2006 and amounted to a total of 25,500 tonnes (25,400).

priority customer segments

ProfilGruppen's customers are to be found in many different lines of business, and they use aluminium for various reasons and for different applications. In order to better focus on the different needs, ProfilGruppen has defined four main customer segments, where the automotive, electronics and interior fittings segments have the highest priority. The segments' preferences for aluminium and important applications are as follows:

2006: 24%

2006: 22%

2006: 26%

ESTIMATED EXTRuSION MARKET IN WESTERN EuROPE, 1000 TON

The extrusion market in Western Europe is estimated to have increased during the year by over three percent.

2003 2004 2005 2006 2007 2810 2800

2570 2950 3050

2006: 11%

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8 ^PRODuCTION

Capacity for the future

ProfilGruppen is a company of modern machinery and efficient production.

In the last five years, technical productivity has increased by 22 percent, measured in kilos per hour.

This in spite of the fact that the customers' demands on tolerances and surfaces constantly increase and make the extrusions more difficult to produce.

Three efficient press lines

The basis of production is three lines for extruding profiles of aluminium, which are all in Åseda. All presses can manufacture a broad spectrum of complex extrusions with very narrow tolerances.

The two smaller presses can be run using the same tools, where one focuses on optimal productivity and

the other on optimal flexibility. The third press works with larger tools, but for certain products there are double tools, enabling production on any press. Set-up times are short on all presses.

Increased volumes

Production capacity amounts to 30,000 tonnes per year with the present shifts. The production of aluminium extrusions in the company's press lines amounted to 25,800 tonnes during 2007. This is a marginal increase from 2006, but since 2003 volume has increased by approximately 35 percent.

In order to further increase volumes in the main factory in Åseda, it was decided at the beginning of 2008 to implement an extensive investment

pRElIMInaRY WoRK. The customer discusses with ProfilGruppen's sales staff and designers their ideas for creating a solution that will meet the customer's unique extrusion needs.

A drawing of the extrusion is pro- duced so that a customised tool can be ordered .

ExtRUdInG thE pRoFIlE. The raw material, in the form of aluminium ingots, is purchased in various different alloys . The ingots are cut into suitable lengths and heated to approximately 500 degrees Celsius . After this they are forced through the customer's tool at high pres- sure and then shaped to match the cross-sectional design in the extrusion drawing . ProfilGruppen has three

presses, which can each extrude up to eight extrusions simultaneously. After extruding, the extrusions are cooled using air and/or water, depending on the alloy. Then the extrusions are straightened using hydraulic stretch- ing equipment and cut into suitable lengths. Finally, the extrusions are hardened for five to eight hours at approximately 180 degrees Celsius in an aging furnace .

EXTRUSION

SURFACE TREATMENT

PROCESSING

Automotive

Interior design

Electronics Industry & construction

1

4

5

6 3 2

ProfilGruppen's production process

1

2 3

4

5 6

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PRODuCTION ⁹ programme of approximately MSEK 80. The first stage

of the investment, comprising approximately MSEK 46, will be carried out during 2008 and consists mainly of the installation of an automated production stockroom and the automation of material flows. The surface treatment plant will also be remodelled and the production building extended to accommodate the new investment. The total investment will bring a considerable rationalisation and create conditions for volume growth in the current facility.

Increased share of processing

Developing processing services and increasing the share of processed products in the Group's deliveries is central to the company's strategy.

Advanced machine processing in-house is performed by the ProfilGruppen Manufacturing subsidi- ary, and surface treatment of aluminium components

by ProfilGruppen Components, while much of the other further processing is handled by independent companies in the geographical environs of ProfilGruppen.

ProfilGruppen Manufacturing specialises in automated processing for long runs. The company also has a high level of expertise in the bending of aluminium extrusions. The company's main focus is on products for the automotive and telecommunications industries.

The investment risk is limited through the Group using standard machines as far as possible. These can be reset for use in other projects following completion of specific customer assignments. Due to the agreement entered during 2007 with REC ScanModule, Profil- Gruppen will make a directed investment of approximately MSEK 8 in an automated machine cell.

The Group has one of Europe's most modern surface treatment facilities in ProfilGruppen Components.

ACCuMulATED DEvElOPMENT OF PRODuCTIvITy, PERCENT

Productivity measured in pressed kilo per hour has risen in recent years, but reverted in 2007 to the same level as in 2005, mainly due to a change in the product mix.

5 10 15 20 25

2003 2004 2005 2006 2007 Performs power-press extrusion and surface treatment, and is responsible for administration, development, marketing and sales.

Number of full-time employees including sales companies as of 31 December 2007: 398.

Processes components through surface treatment.

Number of full-time employees as of 31 December 2007: 26.

Processes components, including bending and machining.

Number of full-time employees as of 31 December 2007: 47.

GROuP COMPANIES

anodISatIon. Some of the extru- sions are anodised. Anodisation is an electrochemical surface modifi- cation method that strengthens the surface of the extrusion up to 3000 times. The extrusions are lowered, after careful cleaning, into a number of baths of sulphuric acid and a DC current is passed through the extrusions . During the anodisation process the metal can also be dyed a variety of colours. The extrusions

can be anodised before or after further processing.

pRocESSInG. Once the extrusions have been pressed, anodised, if required, and cut, they leave ProfilGrup- pen's main factories and are further processed at one of the wholly-owned subsidiaries or by ProfilGruppen's network of external suppliers . This processing may consist of bending, turning, milling or painting, for example.

End USE. ProfilGruppen compo- nents are delivered to customers' production lines and may end up in a lorry, for example, or a chair, a cooling system or a window .

EXTRUSION

SURFACE TREATMENT

PROCESSING

Automotive

Interior design

Electronics Industry &

construction 7

8

9

0 5 10 15 20 25 30

2003 2004 2005 2006 2007 19.2 22.2 24.0 25.6 25.8 NET PRODuCTION, 1000 TON

Production increased further during 2007, and in 2008 investments in material management enabling further volume growth are planned.

ProfilGruppen's production process

7 8

9

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10 DIRECTORS' REPORT PROFIlGRuPPEN AB (PuBl.) 556277-8943

Directors' report

The board of directors and the CEO of ProfilGruppen AB (publ.), corporate identity number 556277-8943, hereby submit the parent company and consolidated accounts for the period 1 January–31 December 2007, which is ProfilGruppen's twenty-seventh year of activ- ity. ProfilGruppen runs operations in the form of a limited company (publ.) and has its registered office in uppvidinge municipality, Kronoberg county. The company address is: Box 36, SE-360 70 Åseda, SWEDEN.

thE GRoUp

ProfilGruppen develops, markets and manufactures customised aluminium extrusions and components.

Sales are conducted through a sales organisation at the head office in Åseda and through wholly-owned sales companies in Denmark, the united Kingdom, Norway and Germany. ProfilGruppen has a presence in China through a representative office.

ProfilGruppen Extrusions AB is responsible for design, product development and the manufacture of extrusions. Processing is performed by two wholly- owned companies, ProfilGruppen Components AB and ProfilGruppen Manufacturing AB, as well as in close cooperation with a number of independent companies.

Turnover and results

ProfilGruppen's net turnover amounted to MSEK 1179.4 in 2007, which is an increase on the previous year of over 8.5 percent. This increase can be explained primarily by a higher degree of processing in the product mix and increased raw material prices.

Delivery volumes for the whole of 2007 were on a level with the previous year and totalled 25,500 tonnes (25,400) of aluminium extrusions. ProfilGruppen’s share of exports amounted to 53 percent (50) of the volume, and 48 percent (46) of the turnover.

The Group's operating profit amounted to MSEK 63.3 (44.2), which is equivalent to an operating margin of 5.4 percent (4.1). The income after financial items amounted to MSEK 57.0 (19.3), and profit after tax to MSEK 40.2 (8.6). Earnings per share totalled SEK 8.15 (1.53). The average number of shares in thousands amounted to 4933 (5624). The change in the number of shares from last year is attributable to the redemption programme that was carried out in 2006.

Investments and depreciation

Investments during the year amounted to MSEK 24.7 (38.3), of which MSEK 4.8 (21.9) comprised investments for expansion. Total investments over the past five years

have amounted to MSEK 164.6. Depreciation and write- downs during the corresponding period have amounted to MSEK 166.9, including last year's write-down of MSEK 16.4 for the holding in PWG. Total depreciation according to plan amounted during the year to MSEK 31.5 (31.7). During the year, a write-down of MSEK 0.8 was implemented for a customer-specific packaging machine.

Financial position and cash flow

ProfilGruppen's net debt/equity ratio has decreased during the year to 0.38 (0.74), compared with the target interval of 0.75-1.00. Return on capital employed amounted to 22.8 percent (9.3) for the year. The profitability target for capital employed is set at 15 percent.

The equity ratio amounted to 28.0 percent (24.5) at the end of the year.

liquid assets amounted to MSEK 38.7 (28.8) at the end of the year, while the Group's non-utilised credit facilities, excluding liquid assets, amounted to MSEK 173.4 (134.8).

The cash flow from current operations amounted to MSEK 78.4 (72.5) and the corresponding amount after investments was MSEK 60.2 (42.9).

The balance sheet total amounted to MSEK 615.9 (606.3). The increase is attributable mainly to increased tie-up of capital in stocks.

Risk

ProfilGruppen is exposed to financial risks, which are described in detail in note 20.

In the balance sheet for 2006, exposure towards the part-owned German company PWG was judged to comprise a risk and the entire holding and related receivables were written down. During 2007, the holding was transferred to new owners, eliminating the risk.

Market

The seasonal variation in demand on the West European market for aluminium extrusions has been considerable during 2007. Demand during the first half of the year led to long lead times in the industry, which is judged to have led to the customers increasing their safety stocks. During the second half of the year, demand levelled out as customers reduced their stocks, while a certain degree of weakening was noted in the market, in particular in the German construction industry.

For 2007 as a whole, deliveries of aluminium extrusions on the European market are judged to have grown by approximately three percent.

(14)

DIRECTORS' REPORT 11 PROFIlGRuPPEN AB (PuBl.) 556277-8943

Manufacturing

The cornerstone of ProfilGruppen's production is the power pressing of aluminium extrusions at ProfilGruppen Extrusions AB. The company has three press lines for the manufacture of extrusions. The Group's production of aluminium extrusions amounted to 25800 tonnes (25625), an increase of one percent compared with 2006.

The Group's processing companies have at their disposal advanced machinery used mainly for cutting processing, bending and surface treatment.

ProfilGruppen Components AB specialises in surface treatment. ProfilGruppen Manufacturing AB focuses on bending and cutting processing, mainly for larger runs, using automated production lines.

Development work

Constant improvement of processes and products is an important aspect of ProfilGruppen's work. The Group creates new products and product models for existing or potential customer assignments on a daily basis.

Close cooperation between the Group and its customers helps to broaden knowledge of a customer's products, and constructive ideas can be put forward concerning possible improvements to the product's properties. During the design phase, the Group has excellent opportunities to improve the product's environmental impact, life cycle economy and potential for recycling.

Process development work is carried out in partner- ship with, among others, customers, metal suppliers and tool and machinery manufacturers. The costs asso- ciated with this kind of work do not normally meet the criteria for reporting as assets, but are recorded as cost of goods sold and selling expenses in the consolidated profit and loss account (see note 7). For each development project there is an assessment of whether or not the costs should be set up as assets. During the year no development costs have been set up as assets.

Quality

ProfilGruppen Extrusions AB was certified in accordance with the quality assurance system ISO 9002 back in 1991. In 2003, ProfilGruppen also transferred to the new standard ISO9001:2000. In 1999, ProfilGruppen was the first Scandinavian company in its sector to be certified in accordance with QS9000, which was then the automotive industry's requirement. Since 2006, ProfilGruppen has been certified in accordance with ISO/TS 16949:2002, which is the new quality system developed by the global automotive industry.

ProfilGruppen has also been approved since 1998 in accordance with environmental management system ISO 14001.

Environmental information

ProfilGruppen contributes to positive development in the area of the environment by offering customers aluminium extrusions and surface treatments using anodisation. This is better from a lifecycle perspective and means that envi- ronmentally harmful materials and processes are replaced.

The Group conducts operations that require a permit under the Swedish Environmental Code. Within the Group there are plants for the manufacture of aluminium extrusions and for processing using surface treatment and machining. These activities have an impact on the external environment, mainly in the form of discharges into water and noise. All waste water from activities is purified before being discharged.

In 2006, ProfilGruppen Extrusions AB was granted a renewed permit for existing and expanded activities concerning pressing and the surface treatment of aluminium extrusions.

The environmental policy can be viewed on the Internet at www.profilgruppen.com.

personnel

The average number of employees in the Group amounted to 475 (477), of whom 71 (79) relate to the processing companies ProfilGruppen Components AB, ProfilGruppen Manufacturing AB and, in last year's figure, the Group's share in Realpro Bv up until its sale on 30 September 2006. Of the total number of employees in the Group, 26 percent (25) were women. Staff turnover during the year amounted to 5.7 percent (3.3).

Payroll expenses amounted to MSEK 162.9 (152.5).

A remuneration committee, appointed by the board, prepares proposals for principles for remuneration for the Group's CEO and other senior executives. The group's seven senior executives, including the CEO, have agreements today concerning variable remuneration in addition to a fixed salary. The amount of variable remuneration is linked to the Group's profit after financial items and defined personal targets. variable remuneration may amount to a maximum of 25 percent of the fixed salary, which corresponds to a maximum cost of MSEK 1.6 for 2008. On the termination of an employ- ment contract on the part of the company, a period of notice of two years applies for the CEO and normally six months for other senior executives. Agreements for pensions are entered individually and the cost for pensions may reach a maximum of 35 percent of the fixed and variable portions. The Board of Directors proposes that these principles remain in effect also in 2008 and that the Board be given the mandate to depart from the

guidelines if there are special reasons in an individual case. ³⁾Dividend proposed by the board.

1, 2)The figures in the diagram for 2003 were

calculated according to the then applicable Swedish accounting principles and from 2004 according to IFRS.

2)The number of shares has been recalculated historically with reference to the redemption scheme implemented during 2006.

2003 2004 2005 2006 2007 473

37.5 514 38.7 461

22.5

585 613

19.3 57.0 340

413 283

502 566 813

927 744

1 179 1 087

2003 2004 2005 2006 2007 2.00

2.30

1.25

2.80 3.60³⁾ 2003 2004 2005 2006 2007

4.49 4.48 2.64

1.53 8.15 EARNINGS PER SHARE²⁾, SEK

NET TuRNOvER AND PROFIT¹⁾, MSEK

DIvIDEND PER SHARE, SEK Sweden

Profit before tax Export

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Other important events during the year or after its end

Investment in the main factory

The Board decided on 7 February 2008 to approve an extensive investment programme to streamline production at the main factory in Åseda. In addition to considerable rationalisation, conditions for considerable increases in volume are created.

The first stage of the investment, comprising MSEK 45.6, will be carried out during 2008 and consists mainly of the installation of an automated stockroom and the automation of material flows, extension and remodelling of surface treatment and the extension of premises.

The two stages of the total investment are estimated to amount to approximately MSEK 80.

The investment programme will run for two years with considerable result effect successively from 2009. The investment will lead to a reduction in the workforce at the main factory by approximately 45 jobs, where the main part will take place in the second half of 2009.

Disposals

During the year, ProfilGruppen sold its 18 percent share in the German company PWG as part of a restructuring of the loss-ridden company. A long-term delivery agreement has been signed with the restructured PWG at a level with previous years' deliveries.

One-off items relating to German company PWG The balance sheet for 2006 was charged with a one-off cost of MSEK 31.8 of which MSEK 16.4 was with reference to the share owned in PWG and the remaining part was with reference to trade debtors.

During the fourth quarter of the year, it has been possible to report some recovery of previous write-downs.

Profit for the year after financial items have thus been affected positively by MSEK 3.2, of which MSEK 1.9 affected the operating profit.

Corporate governance

The work of the board of ProfilGruppen AB is regulated by the formal work plan, which is established annually at the board meeting following election at the Annual General Meeting. Issues concerning an audit or internal control are prepared by the board's audit committee, while issues concerning remuneration are prepared by the remuneration committee. Prior to the 2008 Annual General Meeting, an election committee will be responsible for proposing board members and fees for the board, committees and auditors. More information on the work of the board and corporate governance at ProfilGruppen is available at www.profilgruppen.com.

Share capital and the board's authorisation to make decisions regarding a new share issue

Share capital in ProfilGruppen is composed of 4,932,517 shares, of which 10,623 class A shares that entitle to ten

votes each. Other shares correspond to one vote each.

lars Johansson disposes of 14.1 percent of the votes in the company.

In order to finance potential company acquisitions using the company's own shares, the board was author- ised at the Annual General Meeting in March 2007 for the period until the next ordinary Annual General Meeting to make decisions on the new issue of class B shares. The number of shares must not exceed 400,000 and new issues may be carried out on one or more occasions.

Deviations from the shareholders' preferential rights are permitted. The issue price must correspond to the assessed market value of the shares. In the event of full exploitation of the authority, this corresponds to eight percent of the total number of shares. This authority has yet to be invoked.

outlook for 2008

Increased interest in the market in energy savings and cli- mate-related environmental efforts favour the use of light, strong, recoverable aluminium extrusions. ProfilGruppen judges that the trend will continue during 2008.

ProfilGruppen's growth will continue to be dependent on the development of its key customers.

thE paREnt coMpanY

Net turnover in the parent company, ProfilGruppen AB, consists of rent from companies in the Group. No pur- chases were made from Group companies.

The parent company has one (1) employee.

Dividend

The board is proposing to the Annual General Meeting an increased dividend per share of SEK 3.60 (2.80) for the 2007 financial year. Dividends amount to MSEK 17.8 (13.8), which is equivalent to a pay-out ratio of 44 percent (183).

proposed appropriation of profits

The board and the CEO propose that standing profits available as per the balance sheet, SEK 19,768,608, be disposed of in the following manner:

dividends to shareholders,

SEK 3.60 x 4,932,517 shares SEK 17,757,061 to be carried forward SEK 2,011,547

SEK 19,768,608

Details of the company and the Group's profits and overall financial position may be found in the following profit and loss account and balance sheet with the notes to the accounts.

12 DIRECTORS' REPORT PROFIlGRuPPEN AB (PuBl.) 556277-8943

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DIRECTORS' REPORT ¹³ PROFIlGRuPPEN AB (PuBl.) 556277-8943

2003 2004 2005 2006 2007

Net turnover MSEK 743.9 809.6 926.7 1 086.9 1 179.4

Profit/loss before depreciation and write-downs MSEK 67.2 73.0 79.2 76.6 95.6

Operating profit/loss MSEK 31.2 42.7 43.2 44.2 63.3

Operating margin % 4.2 5.3 4.7 4.1 5.4

Profit before tax MSEK 22.5 37.5 38.7 19.3 57.0

Profit margin % 3.0 4.6 4.2 1.8 4.8

Return on equity % 8.1 12.5 11.6 4.4 25.1

Return on capital employed % 9.7 13.2 13.0 9.3 22.8

Cash flow from current operations MSEK 87.8 34.9 78.7 72.5 78.4

Investments MSEK 18.9 45.9 36.8 38.3 24.7

liquidity reserves MSEK 195.6 192.2 221.7 163.6 212.1

Net debt MSEK 80.2 99.0 55.1 109.4 65.0

Interest-bearing liabilities

and interest-bearing provisions MSEK 108.8 126.7 98.5 138.2 103.6

Net debt/equity ratio times 0.40 0.44 0.23 0.74 0.38

Balance sheet total MSEK 506.4 560.6 616.9 606.3 615.9

Equity ratio % 39.7 39.9 38.5 24.5 28.0

Capital turnover rate times 2.2 2.4 2.7 3.5 4.2

Proportion of risk-bearing capital % 49.1 49.0 47.3 33.1 36.9

Interest coverage ratio times 3.2 6.9 7.7 3.0 9.0

Average number of employees 462 468 492 477 475

Key figures for 2003 were calculated according to the then applicable Swedish accounting principles.

As of 2004, key figures are calculated according to IFRS.

Definitions of economic terms may be found on the inside of the rear flap.

FIvE-yEAR SuMMARy FOR THE PROFIlGRuPPEN GROuP

During 2008, investments will increase due to the investment programme the board approved in February, 2008.

INvESTMENTS, MSEK

2003 2004 2005 2006 2007 45.9

36.8 18.9

38.3 24.7

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14 FINANCIAl REPORTS 2007

(MSEK) Note 2007 2006

Net turnover 2, 3 1179.4 1086.9

Cost of goods sold -1016.1 -935.0

Gross profit 163.3 151.9

Other operating income 4 1.4 1.2

Selling expenses -51.8 -70.0

Of which write-downs of trade debtors 0.0 -13.1

Administrative expenses -49.6 -38.9

operating profit/loss 5, 6, 7 63.3 44.2

Financial income 8 0.8 1.2

Write-downs of financial fixed assets 8 0.0 -16.4

Other financial expenses 8 -7.1 -9.7

Net financial income/expense -6.3 -24.9

profit before tax 57.0 19.3

Tax 10 -16.8 -10.7

profit for the year 40.2 8.6

Earnings per share. SEK 17 8.15 1.53

(Recalculated with reference to the redemption scheme implemented in 2006. No dilution.)

Consolidated profit and loss account

Consolidated balance sheet

(MSEK) Note 2007-12-31 2006-12-31

assets Intangible fixed assets 11 10.0 10.0

Tangible fixed assets 12 260.9 275.9

Financial investments 13 0.2 0.2

total fixed assets 271.1 286.1

Stocks 14 133.4 101.6

Trade debtors 15 145.7 163.2

Prepaid expenses and accrued income 5.9 6.2

Other receivables 21.1 20.4

liquid assets 23 38.7 28.8

total current assets 344.8 320.2

total assets 3 615.9 606.3

Equity Share capital 24.7 24.7

Other paid-up capital 1.4 1.4

Reserves -0.4 2.3

Profit brought forward. plus profit for the year 146.6 120.0

total equity 16 172.3 148.4

liabilities long-term interest-bearing liabilities 18, 20 94.4 129.6

Provisions for pensions 5 8.5 8.3

Deferred tax liabilities 10 55.1 52.1

total long-term liabilities 158.0 190.0

Current interest-bearing liabilities 18, 20 0.7 0.3

Trade creditors 219.4 206.3

Tax liabilities 3.9 4.6

Other liabilities 9.1 7.9

Accrued expenses and deferred income 19 52.5 48.8

total current liabilities 285.6 267.9

total liabilities 443.6 457.9

total equity and liabilities 615.9 606.3

For pledged assets and contingent liabilities, see note 21.

PROFIlGRuPPEN AB (PuBl.) 556277-8943

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(MSEK) Note 2007 2006

current operations 23

Profit after financial items 57.0 19.3

Adjustment for items not included in the cash flow 25.3 61.2

Paid income tax -13.3 -9.5

cash flow from current operations prior to changes in working capital 69.0 71.0

cash flow from changes in working capital

Stocks ¹⁾ -31.7 -20.5

Operating receivables ¹⁾ 20.4 -26.2

Operating liabilities ²⁾ 20.7 48.2

cash flow from current operations 78.4 72.5

Investment activities

Acquisition of tangible fixed assets -25.2 -20.3

Sale of tangible fixed assets 7.0 1.5

Sale of share in joint venture 0.0 5.6

Acquisition of financial assets 0.0 -16.4

Cash flow from investment activities -18.2 -29.6

Financing activities

Dividend to shareholders -13.8 -13.2

Redemption of shares 0.0 -87.9

loans raised³⁾ 0.0 61.8

Amortisation of loans -36.4 -16.9

Amortisation of leasing liabilities -0.7 -0.5

Cash flow from financing activities -50.9 -56.7

cash flow for the year 9.3 -13.8

liquid assets, opening balance 28.8 43.4

Exchange rate differences in liquid assets 0.6 -0.8

liquid assets, closing balance 38.7 28.8

1) increase - / decrease + ²⁾ increase + / decrease - ³⁾ includes change in bank overdraft facility utilised

Consolidated cash flow statement Changes in consolidated equity

FINANCIAl REPORTS 2007 15 PROFIlGRuPPEN AB (PuBl.) 556277-8943

(MSEK) Share capital Other paid-up Reserves Profit brought forward Total

equity plus profit for the year equity

Equity 01-01-2006 28.7 79.8 -0.9 130.2 237.8

Change in translation reserve for the year -0.2 -0.2

Change in hedging reserve for the year 4.8 4.8

Difference for the year when recalculating subsidiaries -0.1 -0.1

Costs for implementation of redemption scheme -3.0 -3.0

Tax attributable to items reported directly against equity -1.4 -1.4

Total changes in wealth reported 0.0 0.0 3.2 -3.1 0.1

directly against equity, excl. transactions with owners

Profit for the year 8.6 8.6

Total changes in wealth, excl. transactions with owners 0.0 0.0 3.2 5.5 8.7

Dividend SEK 2.30/share -13.2 -13.2

Redemption of shares -4.0 -78.4 -2.5 -84.9

closing equity 31-12-2006 24.7 1.4 2.3 120.0 148.4

Equity 01-01-2007 24.7 1.4 2.3 120.0 148.4

Change in translation reserve for the year 0.1 0.1

Change in hedging reserve for the year -3.9 -3.9

Difference for the year when recalculating subsidiaries 0.2 0.2

Tax attributable to items reported directly against equity 1.1 1.1

Total changes in wealth, reported directly against 0.0 0.0 -2.7 0.2 -2.5

equity excl. transactions with owners

Total changes in wealth, excl. transactions with owners 0.0 0.0 -2.7 40.4 37.7

Dividend SEK 2.80/share -13.8 -13.8

closing equity 31-12-2007 24.7 1.4 -0.4 146.6 172.3

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16 FINANCIAl REPORTS 2007

(MSEK) Note 2007 2006

Net turnover 18.6 18.3

Cost of goods sold -2.9 -2.6

Gross profit 15.7 15.7

Administrative expenses -5.6 -5.7

Other operating income 4 0.0 0.0

operating profit/loss 5, 6 10.1 10.0

Profit from shares in Group companies 8 0.0 0.0

Interest income and similar profit/loss items 8 0.1 0.6

Write-down of financial fixed assets 8 0.0 -16.4

Interest expenses and similar profit/loss items 8 -3.5 -1.9

profit after financial items 6.7 -7.7

Appropriations 9 -4.8 -4.9

profit before tax 1.9 -12.6

Tax 10 -0.6 -1.1

profit for the year 1.3 -13.7

The parent company's turnover comprises rent from Swedish companies in the Group.

For dividend per share, see note 16.

Profit and loss account - the parent company

Balance sheet - the parent company

(MSEK) Note 2007-12-31 2006-12-31

assets Tangible fixed assets 12 82.0 82.7

Shares in Group companies 22 108.9 108.9

Total financial fixed assets 13 108.9 108.9

total fixed assets 190.9 191.6

Receivables from Group companies 0.8 0.7

Prepaid expenses and accrued income 0.4 1.3

Total current receivables 1.2 2.0

Cash and bank balances 23 0.4 0.4

total current assets 1.6 2.4

total assets 192.5 194.0

Equity and liabilities

Restricted equity

Share capital (4,932,517 shares. of which 10,623 class A shares and 4,921,894 class B shares) 24.7 24.7

Statutory reserves 1.3 1.3

Non-restricted equity

Profit brought forward 18.4 32.7

Profit for the year 1.3 -13.7

total equity 45.7 45.0

Untaxed reserves 9 19.3 14.4

Provisions for taxes 10 3.0 2.7

long-term interest-bearing liabilities to credit institutions 18, 20 50.3 66.2

current liabilities

Interest-bearing liabilities to credit institutions 18, 20 11.7 1.9

Non-interest-bearing liabilities

liabilities to Group companies 58.9 60.5

Current tax liabilities 0.5 0.3

Other liabilities 0.7 0.5

Accrued expenses and deferred income 19 2.4 2.5

total current liabilities 74.2 65.7

total equity and liabilities 192.5 194.0

pledged assets for liabilities to credit institutions

Property mortgages 64.7 64.7

Shares in subsidiaries 101.2 101.2

contingent liabilities

Guarantees for Group companies 8.9 8.8

PROFIlGRuPPEN AB (PuBl.) 556277-8943

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Changes in the parent company's equity

(MSEK) Note 2007 2006

current operations 23

Profit after financial items 6.7 -7.7

Adjustment for items not included in the cash flow 2.5 18.7

Paid income tax -5.3 -5.4

cash flow from current operations prior to changes in working capital 3.9 5.6

cash flow from changes in working capital

Operating receivables ¹⁾ 0.8 -1.2

Operating liabilities ²⁾ 18.7 66.2

cash flow from current operations 23.4 70.6

Investment activities

Acquisition of tangible fixed assets -3.5 -5.3

Sale of share in joint venture 0.0 5.6

Acquisition of financial assets 0.0 -16.4

Cash flow from investment activities -3.5 -16.1

Financing activities

Dividend to shareholders -13.8 -13.2

Redemption of shares 0.0 -87.9

loans raised³⁾ 9.8 47.1

Amortisation of loans -15.9 -0.5

Cash flow from financing activities -19.9 -54.4

cash flow for the year 0.0 0.0

liquid assets, opening balance 0.4 0.4

liquid assets, closing balance 0.4 0.4

1) increase - / decrease + ²⁾increase + / decrease - ³⁾ includes change in bank overdraft facility utilised

Cash flow statement - the parent company

FINANCIAl REPORTS 2007 17 PROFIlGRuPPEN AB (PuBl.) 556277-8943

(MSEK) Restricted equity

Share capital Statutory reserves

Equity 01-01-2006 28.7 79.7 44.1 152.5

Group contribution received 10.0 10.0

Costs for implementation of redemption scheme -3.0 -3.0

Tax attributable to items reported against equity -2.7 -2.7

Total changes in wealth reported directly against

equity, excl. transactions with owners 0.0 0.0 4.3 4.3

Profit for the year -13.7 -13.7

Total changes in wealth, excl. transactions with owners 0.0 0.0 -9.4 -9.4

Dividend -13.2 -13.2

Redemption of shares -4.0 -78.4 -2.5 -84.9

closing equity 31-12-2006 24.7 1.3 19.0 45.0

Equity 01-01-2007 24.7 1.3 19.0 45.0

Group contribution received 13.2 13.2

Tax attributable to items reported against equity 0.0

Total changes in wealth reported directly against 0.0 0.0 13.2 13.2

equity, excl. transactions with owners

Total changes in wealth, excl. transactions with owners 0.0 0.0 14.5 14.5

Dividend -13.8 -13.8

Redemption of shares 0.0

closing equity 31-12-2007 24.7 1.3 19.7 45.7

Proposed dividend for 2007 -17.8 -17.8

Non-restricted

equity Total

equity

ProfilGruppen 2007

2007 was, in several respects, an important year for ProfilGruppen.

We achieved very good results in attaining a more favourable sales

mix, both geographically and product-wise..